Propel Quarterly Autumn 2015

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Make your pub the home of UEFA Champions League MEANS BUSINESS

www.propelinfonews. com


ISSUE 12 • AUTUMN 2015

Pack your pub mid-week with Europe’s best talent The drama of the UEFA Champions League group stage is about to kick off. With every game live on BT Sport, make sure your venue is not missing out on the action and the profits. Sign up to the BT Sport Total pack now and get 1 month free.

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MEANS BUSINESS Pub Offer – First Month Free contract: This Offer is available, at BT’s discretion, to new BT Sport Commercial customers (Single and Group Premises) who sign up for a 12-month Minimum Period for the Service on BT Sport Total between 1 September 2015 and 30 September 2015 (inclusive). BT will waive the Monthly Subscription Charges due from the Recipient under Clause 7 for (i) one calendar month from and including the Activation Date. Standard monthly subscription charges will apply outside the Offer Period. If the Recipient terminates the Service during the Minimum Period, the Recipient will incur early termination charges. Additional charges like paper billing, will still apply. This Offer is subject to BT’s Agreement for BT Sport – Commercial Premises which can be found at 12 UEFA Champions League matches will be shown Free To Air on BT Showcase. © British Telecommunications plc 2015. We’re registered in England at 81 Newgate Street, London EC1A 7AJ (company number 1800000). All this information correct at time of print, August 2015 and may change. See our terms and conditions at

uarterly The essential information resource for pub, restaurant & foodservice operators

The micro-brewer and pub with big ideas

Inside: Kris Gumbrell interviewed Is the premium offer paying off? The zero-waste restaurant Standalone gourmet hotdog concepts Mastering the changes of management Chain pubs face new competition Investing in the sector by Luke Johnston Marketing to operators


ISSUE 12 • AUTUMN 2015

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Editor’s Opinion

Editor’s Opinion

Dear Reader, The economic recovery has now blossomed into what can only be called benign economic conditions with relatively low unemployment, low inflation, rising disposable income and a much more confident consumer. Some commentators have wondered why these conditions are not producing stronger like-for-like sales growth. These comments refer to the Coffer Peach Tracker which tends to show 2-3% like-for-like growth among the 20-odd largest companies. But the Coffer Peach Tracker doesn't cover the swathes of smaller and emerging operators for whom like-for-likes are outstripping the largest quoted companies by a factor of two or three. In many ways, this is a golden era for smaller companies who have the ideas, the people, the offer and the following economic wind – it's just a case now of finding properties in a market that's hotting up. It's a golden era, too, in terms of the sheer numbers of new branded concepts being launched into the marketplace – one estimate is that a remarkable 800 new brands launched in the UK in the last year, an astonishing 16 a week. In fact, the emergence of so many high quality multi-site operators may be why larger operators are, broadly, struggling to post meaningful like-for-like sales growth. Greene King is earning broadly favourable coverage from the analyst community at the moment, but it is based very largely on the possibilities of synergy capture offered by the acquisition of Spirit Pub Company than the inherent growth potential of its brands. In this respect, the UK market is starting to resemble the US market where older legacy brands are, broadly, being outflanked by smaller, newer brands. Every rule has its exception and each market provides examples of older brands that are successfully bucking the dangers of sales stagnation. In the UK, Wagamama, for example, posted an extraordinary 10% rise in like for-like sales last year thanks to a keen focus on service standards and an ever-improving menu. In the US, Starbucks is achieving meaningful out-performance through product innovation and aligning itself with broader issues like race, education and social out-reach. One key thing making life a lot easier for the sector's phalanx of emerging companies is that investment has become easier to find. The major banks might be as awkward as ever but other investment routes have opened up. There's investment funds like Downing, private equity investors, angel investors, crowdfunding possibilities and funders like the Business Growth Fund. If you are a craft brewer with a growth story, you can name your own valuation on your own crowdfunding platform – ten times turnover in the case of BrewDog. Over at Camden Town Brewery, things are a little more sensible. It's valuing itself at ten times turnover - £50m, revised down from the even more eye-watering sum of £75m. A sense check should have been available with SABMiller's acquisition in May of Meantime brewery. However, no sale price was disclosed, but the rumour was that it was significantly north of £30m – more than twice the £16.6m turnover or 15 times Ebitda. Some of the craft brewers might provide more extreme examples of the trend towards self-valuation but the democratisation of funding, via crowdfunding, is to be welcomed – although this avenue is bound to throw up clattering failures and investment disappointments over the medium term. Two new areas are emerging as key business practice differentiators in these uniquely competitive times. Marketing has become a multi-dimensional tool where share-of-voice is no longer linked to budget size. Imagination and creativity in the era of social media have never been so important – and BrewDog is an example of what's possible when it comes to shaping a public persona. Similarly, emerging technologies of all sorts create a unique range of possibilities for operators. Discovering and harnessing the most useful technologies is one key to success – and will only become more important as the National Living Wage turns labour into a substantially more expensive commodity. As ever, this edition of Propel Quarterly provides coverage of many of the key emerging trends and operators shaping the market. We hope you enjoy it and any feedback is very welcome. Best wishes,

Paul Paul Charity ¡ AUTUMN 2015 ¡ PROPEL QUARTERLY







Street food and pubs by Sonya Hook


Investing in the sector


The zero-waste restaurant


Standalone gourmet hotdog concepts


Brewhouse & Kitchen


Burger & Lobster


Is the premium offer paying off?


Argument for lowering drinking guidelines just doesn’t hold water

by Luke Johnston

by Sonya Hook

by John Porter

John Porter interviews Kris Gumbrell

John Porter interviews Simon King

by Kate Nicholls

by Paul Chase

18 8

Published by Propel Hospitality The Goose House, Brighton Road Lower Beeding West Sussex RH13 6NQ



Mastering the changes of management


Sacla’ report reveals key trends and habits


Propel Multi Club Conference


Propel Multi Club Conference highlights


Why brands perish


Giving an insight into insight


Making it personal


Chain pubs face new competition


Delivering consistency


Making action plans really ‘smart’


Making opinion matter


Marketing to operators


Ethnic food trends grow in the UK

by Chris Muller

by Claire Blampied

in pictures

by Sonya Hook

by Chris Edger

by James Hacon

by Steven Pike

by Jack MacIntyre

by Gareth Powell

by Lee Sheldon

by David Martin

by Ann Elliott

by Sarah Janssen

Director Jo Charity T: 01444 810304 E:

T: 01444 810304 W:

Commercial Director Sharon Dickinson T: 01444 810305 E:

Managing Director Paul Charity T: 01444 810306 E:

Events & Marketing Executive Adam Dickinson T: 01444 817691 E:

Deputy Editor Paul Bishop T: 01444 817690 E:

Design & Production Jonathan Taylor T: 01444 817689 E:


Contributors Claire Blampied, Paul Chase, Chris Edger, Ann Elliott, James Hacon, Sonya Hook, Sarah Janssen, Luke Johnston, Jack MacIntyre, David Martin, Chris Muller, Kate Nicholls, Steven Pike, John Porter, Gareth Powell, Lee Sheldon Printing and Distribution Evonprint, Mackley Estate, Henfield Road, Small Dole, West Sussex, BN5 9XR


uarterly ©Propel Hospitality Ltd. 2015


Street food and pubs – is it a recipe for success? Street food concepts are expanding their offering by setting up in pubs, particularly in London. But does it work equally well for both parties and is it something likely to become more common in the UK? Sonya Hook finds out more The street food trader: Cristiano Meneghin, who left his career in marketing to set up his street food business Tongue ‘n Cheek, says the pub environment didn’t work for him. About 18 months ago he was invited to install his business, which specialises in ox tongue and ox cheek dishes, as a residency kitchen at The Joker of Penton Street in Islington, London. “I think that from a pub’s point of view, it is a good option because you can manage your own business and keep a percentage of the kitchen profits – even if the residency doesn’t go well the pub gets some money,” he says. “I was on a good percentage at The Joker and we did make a bit of money; it was a good experience but I wouldn’t go for a pub residency again.” For starters, he says, the work pattern is very different from a market, with long hours and different peak periods. It’s also only useful for the market trader during the winter months – in the summer it doesn’t make sense to be indoors, he adds. “I had to keep pulling out of events when I was at The Joker and really it’s more profitable to be outside as there are fewer overheads,” he says. “In the pub I had to increase staff numbers and this cut into our costs. “Once upon a time it would have been a good launch platform and it did work like this for businesses such as MeatLiquor, but now I don’t think it’s a partnership that can make both parties successful.”

As an experience, he says it helped him learn the challenges of running a more permanent business. “It taught me a lot about things like writing a menu for a sitting crowd, dealing with suppliers and deliveries,” he adds. “I get a lot of requests by pubs for residencies, maybe a couple a month; I think there are some relationships that could work out well but not many.”

The pub: One pub that does work hard to get this relationship working well is the Duke’s Head in Highgate, London. Manager Tom Harrison says the secret to the pub’s success with its food offer has been its efforts in doing a monthly rotation properly and consistently. “We’ve had the pub for two years and when we started out the pub just did bar snacks,” he says. “From the start we’ve had a real focus on beer and we’ve been gradually moving away from mainstream brands. Meanwhile, we have been working with street food traders in our kitchen since November 2013.” This started when the team was approached by Bel Shapiro from the Bell & Brisket, enquiring about a kitchen residency for the winter. Harrison says: “She ended up staying a whole year, but in the end we mutually agreed to end the relationship, although we’d like to have her back at some point. Her business was so successful that she won an award for Best Restaurant, even though she was operating from our pub.” ▲

Pictures by Matthew Curtis

Dishes from the Duke's Head, in Highgate, London



We’ll cover the bill for big ticket items.

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Feature The Temple Bar, Brighton, incorporating Curry Leaf Café

After Bel, the pub decided to set up a monthly schedule More than a residency… of residencies. “We are now on our seventh resident, and we The UK’s street food scene is not only moving into pubs but it are nearly booked up now until the end of January 2016,” says is also spreading out of London. Seaside resort Brighton has a Harrison. “We have no outdoor space here so it means people small but growing street food community but alongside this, must really want to come in for the food and drink, whatever street food-style restaurant and café concepts have captured the weather. The kitchen here is small but it is perfect for street the hearts of many locals. traders as it offers a bit of luxury compared to the spaces they Two popular street food-style restaurants, La Choza and are used to. We have invested in a bit of equipment but if they Curry Leaf Café, have now both opted for the pub for their need specialist stuff then they bring their own.” second venue in the city. La Choza is a small unit serving The pub takes a percentage of the trader’s weekly takings. authentic Mexican street food. The restaurant, which has The pub’s bar staff take orders and clear the tables, been named one of the UK’s best “cheap eats” in the but they don’t work in the kitchens. Harrison Observer food monthly awards, is rarely empty adds: “It’s a symbiotic relationship – we wanted and often has queues waiting for a table. people to feel that the kitchen has been there Last year the team opened up its second “The UK’s a while and it needs to feel part of the pub.” venture within the revamped pub the Hare street food scene is not The other benefit for both parties, Harrison & Hounds, which specialises in craft beers. only moving into pubs but says, is there is a “massive element of The large Indigo Pub Company venue it is also spreading out cross promotion for both”. He adds: “Both was redesigned with La Choza in mind as of London. Seaside resort parties tend to have a good reputation and a long-term partner, with areas such as its Brighton has a small this helps the other – it’s a big platform for “Day of the Dead-themed garden” and but growing street food some traders and we tend to choose small brightly-coloured booths. and newer traders. We like small companies community” The relationship proved so successful with two or three people as we can give them a that Indigo has been replicating this concept step up.” across the city, and it recently redesigned another The pub also now has a network of street trader Brighton pub, the Temple Bar, incorporating the friends for events. Harrison adds: “It has definitely Curry Leaf Café, which specialises in south Indian street increased footfall and certain traders have helped boost beer food. “We were looking to expand in some way this year and sales; we had a Catalan kitchen here recently and it brought so when we were approached by Indigo which was renovating in loads of Spanish people over lunchtimes for example.” The a craft beer pub, it was an opportunity we couldn’t resist,” says co-owner Euan Sey. “I was a fan of what they had done downside to a rotating kitchen offer is it is time consuming from at the Hare & Hounds, and also from our point of view, craft a management point of view, he says. “There is a lot of back beer has always been a big part of our business. Also, they said and forth because we like to build relationships in advance of they were planning to include exposed brick in the pub with the residency,” he adds. “We can also help with things such graffiti – it’s a perfect fit for what we wanted to do.” The awardas menu design. It’s hard to compare this format to employing winning Curry Leaf is different to other curry places, in that permanent kitchen staff though – it just works well for us like it is a café not a restaurant, and it has a focus on street food ▲ this, and the feedback from customers has been great.” ¡ AUTUMN 2015 ¡ PROPEL QUARTERLY


Feature and beer. Sey adds: “We have people coming in with laptops for coffee sometimes – it’s a bit different. We had already done pop-ups at the Craft Beer Company so we could see the potential, although we have had to create a special menu that would work in a pub.” The menu includes dishes such as Masala-Battered Fish & Spiced Chips, and the sharing plate: Street Food Platter, which comprises vegetable pakoras, mirchi bhajis and gobi 65 served with chutneys. “On a commercial level we won’t ever make anything like what we do in the café within the pub, but it does offer our business model a new opportunity to explore and try out; we could even buy our own pub one day,” says Sey. “We don’t want to cannibalise sales at the café so it also allowed us to do a different menu of Indian pub grub, and we set up a street food sharing-orientated menu.” Opening at the same time as the pub revamp has been important for its success, he says, because it encouraged a different clientele to try it out. The food is simpler, he adds, to take into account a quicker turnaround. “It’s a fun thing to do from a branding point of view, but it’s also helped drive people into the café,” he says. “Working with Indigo has been fantastic, and we may not have been so keen if it wasn’t a Brighton-based independent company with such a good reputation.“ The café team has been well supported throughout the early stages, Sey says, and they are now ready to take on more hours at the pub including a bespoke Sunday lunch menu. “We’ve learned a few things – Friday night is much bigger than Saturday night for example, but it’s the opposite in the café,” he adds. “We’ve learned about portion sizes and how to write a pub menu, which is different from a café one.” The next stage for Curry Leaf will be a street food kiosk inside Brighton station. “We hope to be in the Temple Bar pub for a long time,

MeatLiquor can attribute some of its rise to stardom on its move from a van into the kitchen of the Florence pub in Herne Hill, London

The Cow, in the Seven Dials, Brighton

but we are also looking to expand,” he adds. “We would like to look at other cities outside of Brighton – people already come from afar to visit us.”

“Opening at the same time as the pub revamp has been important for its success, because it encouraged a different clientele to try it out” It’s clearly a strategy that Indigo wants to “own” in Brighton. The pub company secured another Mexican restaurant, Carlito Burrito, which has opened its second outlet in the Indigo-run craft beer pub, The Cow, in the Seven Dials area of Brighton. Others in the city are following suit. Unconventional bar, The Mesmerist, famous for its inspiration from 1930s gin palaces and the burlesque movement, announced in July it has a new business Bronx Burgers based in its kitchens using brioche buns from the Brighton independent bakery, The Flour Pot.

The street food spread Whether it works for both parties well or not, it’s a concept that is continuing to thrive. Plenty of well-known traders – including the Ribman, Pitt Cue, Mother Flippin and Jamon Jamon – have had a spell in the pub scene, taking advantage of the lower cost short leases. The hugely successful burger business MeatLiquor can attribute some of its rise to stardom on its move from a van into the kitchen of the Florence pub in Herne Hill, London, about five years ago. More recently street food operation Lucky Chip Burgers took up residency at the Sebright Arms in Bethnal Green, London, while in August Masterchef winner Tim Anderson introduced his Southern Japanese soul food venture Nanban London to the customers of the Market House in Brixton. And also this year Pulled, a street food operator specialising in slow roasted meats, is now branching out with two pop-ups and a residency at the Horse & Groom in Shoreditch.



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Sector Luke Johnson explains the original attractions of Patisserie Valerie and its history under his involvement

Come on over, Patisserie Valerie I

got involved with Patisserie Valerie nine years ago when it had become a lot more competitive and that, to an extent, it was a Soho evergreen. It has extraordinary brand supply was outstripping demand. Rents and rates and taxes recognition considering it operated only six companyand other costs were rising faster than profits and a lot of this owned branches at the time. We bought it semi-blind was property-related. We felt during the nine or ten years that because it was a family business and the three brothers who I was involved with Giraffe you could see that, steadily, the cost owned it weren’t building it to sell – so they weren’t doing all of taking hold of three or four thousand square feet, a classic those adjustments and so forth that you are always advised 100-odd seat unit, was getting higher and higher and there was to do in order to maximise the proceeds of a sale. So it obviously a scarcity of A3 licensed premises relative to A1 on was actually very difficult to interpret what the underlying the high streets of Britain. There is probably at least 20 times as profitability was. But, nevertheless, we believed in the many A1 as A3 sites so I was particularly attracted to the brand and we saw the potential. idea of obtaining a business that, like Pret and many I think the fact that it was an institution was others, is A1 and not A3. These, A1 sites, account very important because I think one of the great for the large majority of Patisserie Valerie's sites “I think secrets of this industry is to try to create or buy – a much smaller footprint. Finding three/four one of the great or own a classic. An extraordinary number thousand square foot sites is that much harder secrets of this of businesses don’t outlive their founders. than finding a 1,200 square foot site. Many companies in other industries last for industry is to try A distinctive offering decades or more but remarkably few do in and create or the restaurant and bar business. I am not Patisserie Valerie is vertically integrated, buy or own entirely sure why this is. Perhaps it's because which has its complications, obviously, because a classic” our customers want something new and different you are producing your own items. We have and there is a fashion element to it. But also it's our own bakeries but it means you can potentially only really the founders who have the obsessive capture more of the margin, you control your products passion that makes the business tick and when they better, you can innovate in-house more easily. I am not leave the soul goes out of it and so often it fades – and then as dependent on external suppliers so again I felt that was an someone else comes along and rebrands it and it’s all change. attraction and we have exactly the same model at another bakery So I am always on the look-out for something that’s sustainable business I am involved in with – Gail's Bakery. I think that gives and enduring. We certainly had it with PizzaExpress which you a competitive advantage. Another key point I felt was that the started in 1965 and appears to still be going strong. But those offering at Patisserie Valerie was distinctive. Already, by that time, sorts of businesses are very rare – and indeed you only have nine years ago, you had a very great many Costas, Starbucks, to go to many of Britain’s towns and you will see a few others Caffe Nero and various sandwich chains like Pret and EAT. But no on the way out. So that was one of the things that attracted us one else was doing what we were doing in the cake/patisserie to Patisserie Valerie. A second thing was that, having been for space. If you go on the Continent there are thousands and some years in the casual dining space, it had struck me that thousands of such outlets, albeit they tend to be retail-focused. ▲ ¡ AUTUMN 2015 ¡ PROPEL QUARTERLY


Feature One of the reasons I think why Patisserie Valerie was well known is because for, arguably, many years, it was almost the only outlet of its kind in the whole of the West End. Unusually we brought in a management team because the vendors wanted to step down. I had worked with Paul May and Chris Marsh (currently Patisserie Valerie’s chief executive and finance director respectively), my partners in the venture, twice before for many years, so I knew them very well. I had great respect for them and their abilities and I was confident that if anyone could make the business work it was them. Since the beginning we’ve also undertaken a series of what might be called “opportunistic” acquisitions – we’ve bought Druckers, Flour Power City, Philpotts and indeed a batch of sites in railway stations from Paul. That model of making acquisitions where it make sense, we’ll continue with – it’s obviously allowed us to grow a lot faster. Being experienced in the sector means we are a relatively reliable buyer. In theory, we know what we are doing, not scared off by the features that might put off people who haven’t been in the trade before. And, obviously, there are potentially integration benefits, purchasing benefits, savings in central costs and so forth – so acquisitions have been and will continue to be part of our business plan.

There are obviously many other issues. You’ve got to dance to the City’s tune, you’ve got to show rising earnings and so on but having a fragmented shareholder base that the stock market gives you has its advantages. You don’t have to face your co-owner across the table at a board meeting once a month and explain every intricate issue. So I hope that rather more companies in the sector go public in the next six to 12 months, I think that would be a good thing. I think it’s a good thing where the British public can invest in British businesses like this. And I think there are advantages to be had in terms of options for staff, in terms of covenants with landlords. These things go in and out of fashion. I remember after we took PizzaExpress public in 1993 a whole raft of restaurant and bar businesses went public and then they all got taken private. I wouldn’t be surprised if the same thing happens again in the next year or two. What we’ve essentially done, is the same as all the successful chains over the years, in Patisserie Valerie. We’ve perfected the retail formula in terms of sales, profits, margins, return on capital and then replicated it and that is the advantage of a format business like a brand. One of the characteristics we’ve noticed about Patisserie Valerie is that it is fairly adaptable.

Going public

So our core estate is in high streets, but we are also in shopping centres, retail parks, motorway service stations and transport hubs. There are one or two other different types of retail location that we are also looking at and I think that’s a strength – it obviously allows us more locations to choose from in terms of how we grow the business. Stating the obvious, Patisserie Valerie is a all-day trading concept from seven until seven, seven days a week, trading almost every day of the year if we possibly can. I think I learnt the merits of that, in other words, working your assets, in Giraffe. It’s rather a contrast to a business I got involved with a couple of weeks ago, which is a nightclub business, where you have to do everything in about six hours a week; not what you would call sweating assets, although some of the customers might be sweating I suppose. We try to improve as we go, so be it property, IT, marketing, HR, procurement, training or production, the objective must always be to do better, improve and be more efficient, more professional. I think underlying that sort of approach is a philosophy that I think the Japanese call Kaizen, which means a policy of constant, small, incremental improvements. I think it also is an attitude that the best entrepreneur partners I’ve ever worked with displayed – a restlessness and a constant dissatisfaction with performance. I think particularly in our industry which is ferociously competitive, much more competitive than it used to be, facing more supply than demand these days, lots of new capital coming in, unless you are paranoid about the competition catching you up and always looking to do better, then the risk is you will fall behind.

The more recent step was going public last year. I think part of the reason we did that was because we wanted to realise some capital from our ownership, but we didn’t want to give up control and going public felt the best way of combining those two objectives. I have taken companies public before, most successfully, I guess, with PizzaExpress but also various others I’ve been involved with like Topps Tiles. The stock market is certainly not for everyone. Indeed, if you want the maximum valuation on your business and it’s not that large then it seems to me you should crowd fund, certainly. I think there are some pitfalls ahead for certain businesses there who seem to me to have rather astronomic valuations. I am a bit nervous that with crowdfunding some of the investors surely can’t know what they are doing, otherwise they wouldn’t be willing to pay the price. I think if it is ill-informed widows and orphans who are putting their money into some of these crowdfunding schemes then it will end in tears probably. But the stock market actually is short of public opportunities in this space so I think there would be ready demand for good businesses in the food and drink sector that chose to go public. What’s happened in the last ten to 15 years is that private equity has gorged on the sector. Generally speaking, with a couple of big notable exceptions, they have done extremely well and so they're constantly passing the parcel, buying and selling chains amongst each other. At some point, eventually there has to be a home, what you might call “permanent capital” as opposed to temporary capital – ultimately, all private equity is temporary. It might be a five or seven year journey but eventually private equity investors have to sell. In theory a company can stay on the stock market for decades – Diageo, which was previously Guinness, has probably been public for 150 years or more as has Whitbread.


This article is an abridged version of Luke Johnson’s presentation to the Propel Multi Conference in July


Advertising Feature

Living wage: afford it, adopt it and stay ahead of the game With the new Living Wage set to start from April 2016, Catton Hospitality explains how using its S4Labour system can help operators become early adopters of the initiative by offsetting the cost through improved labour management efficiency


here has been lots of discussion recently about the announcements relating to the new living wage and the impact this will have on the industry. When the minimum wage was introduced in the UK the hospitality industry saw a boost to trade as the increases in pay were channelled back into the industry. However the benefits took some time to come through and initially the industry saw an inevitable price rise. As a result many companies increased their focus on scheduling and productivity to help offset the initial cost of increased wages. It’s likely that the introduction of the living wage will also bring with it long term benefits but they will also take time to materialise. In the meantime the big question will be whether or not you want to stay ahead of the game and become an early adopter of the living wage to be seen as a preferential employer. But how can you afford it?

“In order to stay ahead of the game, it is more important than ever to get your labour costs in check” Price rises – most likely; reduce other benefits – possibly; save costs elsewhere – unlikely (as most of us are stretched and these savings have been realised through the recession). So what can be done to help offset this future cost? Correct deployment of labour would certainly help. In order to stay ahead of the game, it is more important than ever to get your labour costs in check and ensure you are not spending unnecessarily on wages. S4Labour from Catton Hospitality helps you to do just this. It enables you to cost effectively improve your labour deployment and reduce labour costs and helps you make better spending decisions. Catton is proud that clients such as Anglican Country Inns, Brunning & Price, Drake & Morgan, Loungers, McMullen’s and St Austell, are already using S4Labour for their labour management and there are three main ways in which it can help you offset the cost of the living wage.

Reduce unnecessary labour At the heart of the system is the S4 Graph. This uses a traffic light system to show if you are over staffed (slack), under staffed (stressed), or ‘spot on’. It uses industry averages (known as the ‘standard’ line) to calculate how many team members you need to meet the expected demand of your sales forecast. By visually highlighting your planned hours against your planned sales you can easily see when you are overstaffed and redeploy labour appropriately.

Generate greater revenue Effective labour management isn’t just about minimising the times when you are over staffed. It is also important to ensure you are staffed appropriately to drive sales at key times of the day/week. After all, an over stretched team can miss up to 7% of sales and limits your ability to deliver ‘wow’ customer service and secure repeat business. S4Labour not only highlights when you are stressed but also tells you how many extra hours you need to schedule in order to meet expected demand.

Improved forecasting and budget management Accurate sales forecasting is key to effective labour management. S4Labour not only helps you to improve the

accuracy of your sales forecasting. It compares your daily sales forecast to actual sales for the previous four weeks. This means you can see if you are being over optimistic or under optimistic. Once your sales forecasting is accurate not only will your labour deployment be more effective, but you can adjust your future financial planning so that your proposed budgets reflect your true costs. In the long term the living wage could bring benefit to the industry; lots of people with greater disposable income that are inclined to spend it eating and drinking out, but this will take time to materialise. In the meantime, labour management should be high on the agenda for anyone looking to stay ahead of the game.


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Douglas McMaster, founder of Silo

The restaurant aiming to sustain its place by being zero-waste Zero-waste restaurant Silo trades directly with farmers, has its own compost machine and produces its own flour and beer. Sonya Hook talks to founder Douglas McMaster to see if the model can work


ounger consumers are getting fussier. They want to know what’s in food – or rather, what’s not in food – and they are turning their backs on the packaged, highly processed goods that previous generations lived on. So simple foods are back in favour, but a lack of time still makes it a tough diet to follow at home. It’s inevitable then that a restaurant boasting of a complete return to “ingredients without unnecessary processing” would fit nicely into the trends of the moment. Silo, which is based in the North Laines area of Brighton, uses food sources “that respect the natural order”, with everything created directly on site, reminiscent of a pre-industrial food system. Because of this its menu is impressive, but the zerowaste Silo has also been designed from back to front, “with the bin in mind”, according to its founder Douglas McMaster. By this he means waste has been eliminated from the start, by trading directly with farmers and through the use of an on-site composing machine. Everything has been carefully considered, from the menu to the interior, and it is clearly an impressive project. But is it profitable or too labour-intensive? And are we likely to see more Silo’s across the UK?


Getting off the ground McMaster is a British chef who has a background in fine dining, having cooked in top restaurants such as St John and Noma. He first created the Silo concept in Melbourne, with Dutch-born Joost Bakker. “In Melbourne we had the place for a year and had 23 seats; we created everything from scratch,” he says. After Melbourne, McMaster moved back to the UK and set up a similar, but much more ambitious, project. He notes that he started the Brighton one on a small budget of £50,000, which included a contingency fund. “We needed a massive prep kitchen in the basement, which cost £14,000,” he says. “The plumbing and electrics have crippled me, but we have saved phenomenally in other areas, such as design costs.” The menu is simple but of a high quality, and is broken down into categories of plant, dairy, meat, fish and wild. “You can’t talk about sustainability with a big menu,” he says. “I don’t like the terms ‘vegan’, ‘pescatarian’ and ‘paleo’ – I think they can have negative associations in people’s minds. The word ‘vegan’ doesn’t sound as nice as the word ‘plant’. But Silo’s categories do represent paleo and vegan diets ▲


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Feature nonetheless. As a chef it is pleasing because each one is an but McMaster says he found ways of reducing the figure. equal food system.” “We are an innovative business and innovators want to be Like Melbourne, Brighton as a location has worked well as associated with us, and therefore people will do good deals,” it has a good focus ethically as well as on areas such as healthy he adds. “So many companies have scratched my back to be in and vegetarian foods. But he feels waste is not a big focus in here. I couldn’t afford the compost or water machines so I pay Brighton adding the “recycling is rubbish compared to places suppliers back in other ways, at events for example – it’s a form such as Bristol”. of sponsorship.” There are clever ways to save money in every But Melbourne was a small operation and McMaster admits restaurant, he adds. “The furniture hardly cost us anything, for he just about broke even there. The Brighton Silo is a different example, as we have used all waste materials,” he says. “I know story and the profits have been good, he says. “We are doing people in the waste industry where I could source materials more than breaking even,” he adds. “It’s a seven day a week and I designed it all myself to save money.” The interior has operation here, and the scale is much bigger.” On Saturdays an industrial feel, with bare walls, a chalkboard LED Edison Silo can feed 400 people, and its record has been 500. bulbs and wooden MDF chairs. The space needed The average spend is £20 per head for lunch and a bit of work, he says, but the team did very little £30 in the evenings. The increased footfall in to the wall and floors apart from sandblasting “Our mill Brighton compared to Melbourne has worked to the exposed beams. “There are bags of flour paid for itself his advantage. McMaster points out that when everywhere as I need to store one ton of wheat cooking for 23 people it takes 20 minutes to every two months, but I think they look good,” in four months, churn butter, but for 123 people it takes just he adds. just by buying in Staff is a bigger investment at Silo than at 27 minutes.“ A bigger scale is far more costthe wheat in that a conventional restaurant, as the work is more effective time-wise,” he says. fashion” labour intensive. “Our staff costs can be up Projects within the project: to 40% of profits, but we save money in other Currently the restaurant makes its own yoghurt, ways; our ingredients costs are always good,” says cheese, fermented foods and more; the team also McMaster. Despite this, Silo managed for its first eight brews its own beer, grows mushrooms and roasts coffee. months with just eight team members, and no-one has left “Whole foods have less packaging and they are bio-degradable; the company to date. “I wanted to run it on a skeleton team we mill our own flour and it tastes better, as well as being more because I wasn’t sure how long we would be busy after the environmentally-friendly, so it is a win for us,” says McMaster. Of honeymoon period wore off – plus January is notoriously quiet course milling your own flour is more labour-intensive, although in this industry,” he adds. “But unexpectedly we had a really he points out he expected this task to be more arduous than it busy January, and it has prompted me to bump up the number actually is. “Our mill paid for itself in four months, just by buying of staff to 22 in a matter of months.” in the wheat in that fashion,” he adds. In a similar way, buying a Future aspirations whole animal is about 30% cheaper than buying cuts, he says. McMaster says his life-long mission is to prove the project One of the investments that has been highlighted in the will work but says it’s still a work in progress. Staff training ▲ press is Silo’s composter, which normally costs about £20,000, ¡ AUTUMN 2015 ¡ PROPEL QUARTERLY



“I want to create a food satellite network with Silo as the mothership”

has been a challenge but he has a good team, including a new sommelier to help manage the wine list that will soon be introduced. Logistics is also another area that can be streamlined better, he says. “We have started collecting the waste milk that most cafes pour away each time they have made a latté, and I make cheese with it,” he adds. “It’s great, but the logistics of collecting this milk has been a challenge.” The weather also makes footfall unpredictable as the space is all indoors so days can be quiet when the weather is good. Silo has built up good connections with other similarly minded business in Brighton such as Infinity Foods and


ethical supermarket HisBe, both of which pass on their waste. “Infinity’s foods are all certified organic, which is great,” he adds. “We pickle or ferment it or use it in jams, chutneys, mayonnaise; it’s stuff which is aesthetically imperfect but fine to eat when we use it in these ways.” Another area McMaster is working on is evening service. “We have secured a longer licence so we can now open longer and do evenings properly,” he says. “We will have a massive launch with a spectacular wine list, and a menu that is somewhere between small plates and a tasting menu.” But there won’t be any more Silos in the UK, confirms McMaster. “I have been pushed to the edge of sanity,” he adds. It’s not the end of his Silo project though. “I want to create a food satellite network with Silo as the mothership,” he says. “This space is the key.” With this he visualises offering his roasted coffee to other cafes, or the other way around, and the same with baked goods if he can work with a bakery, “and bean to bar chocolate produced from the seed, which can supply the whole network”. The brewery has already hit a wall with production because it can only produce enough for Silo; this might be one of the areas he needs to find a partner business to work with, he says. To achieve this Silo needs to be able to function without McMaster. “When all the vision comes from one man’s head it is hard to develop and evolve – you need to be released from the daily grind,” he says. Silo is likely to pair up with HisBe when it expands across Sussex (the ethical supermarket has announced a plan to expand to ten further stores). “We have nailed a zero-waste coffee system, which has no carbon footprint and no waste,” McMaster says. “We get a big profit on coffee, so a coffee area in HisBe would work well for us, while staying true to our zero-waste status.” But for now Silo continues to attract chefs and food critics from around the world, and McMaster is excited about the new evening menu. The venue is a hugely ambitious project that’s still in its infancy; and it’s clearly still only a small part of the bigger picture evolving in McMaster’s head.


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Feature Bubbledogs hotdog

The new gourmet offer that is set to be hot


he vegetarian author Peter Cox, who among other works co-wrote a recipe book with the late Linda McCartney, used to introduce his book signings by reading a list of the ingredients that were legally permitted to be included in frankfurters. His belief was that by listing the various parts of a pig left over once the prime cuts had been allocated elsewhere, consumers would never let a hotdog pass their lips – which coincidentally was one of the parts in question – again. Whichever side of the vegetarian debate one favours, it would be hard to argue that most consumers seem to be in any way deterred by concerns over the contents of their frankfurter, with hotdogs booming in the casual dining sector. At the value end, the offer from operators includes JD Wetherspoon’s Classic Hot Dog, the Mega Pork Chilli Hot Dog on TCG’s King’s Feast menu, and the Chilli Beef Dog at Greene King’s Hungry Horse. Enterprise Inns has added the Banger Bros gourmet hot dog branded offer at a number of wet-led tenanted pub

Sandia Chang and James Knappett, founders of Bubbledogs

New standalone gourmet hotdog concepts are setting up at a rapid pace in the casual dining sector. John Porter talks to some of the operators behind them and how their business has evolved

sites in need of a simple, profitable food offer. More premium, standalone hotdog offers are also proliferating. Herman Ze German, which began as a festival catering brand and opened its first restaurant on Villiers Street in the West End of London in 2010, now also trades in Soho and Fitzrovia. The brand’s German co-founders sell three styles of sausage, all made for the business by an artisan butcher in the Black Forest. Hungerdog, which is led by Tim Mills – former operations director at Pho and head of operations at Paul UK – is due to open in Camden opposite the Koko club by September. The offer will be pork, beef and vegetarian hotdogs with a range of homemade toppings. Mills promises “a dynamic venue whereby the hotdogs are created in front of the customer, served from a smoking grill”. Now looking like a veteran of London’s gourmet hotdog scene is Bubbledogs in Charlotte Street. The business is the brainchild of husband and wife restaurateurs James Knappett and Sandia Chang, who previously worked, as chef and sommelier respectively, at Michelin-starred restaurants including Noma in Copenhagen and Per Se in New York. Bubbledogs, pairing gourmet hotdogs with artisan champagne, opened in August 2012. Kitchen Table, a fine-dining space at the back of the same bar, followed a few months later. Explaining the ostensibly odd pairings not just of champagne and hotdogs, but also of the co-located Bubbledogs and Kitchen Table operations, Chang says: “James and I always wanted to open a restaurant together, but we couldn’t agree on who’d get to open who’s idea – he wanted the fine dining restaurant and I wanted a wine bar, so as a compromise we decided to split the room in half. The hotdog concept was originally a crazy idea I had when I was living in New York. My friends and I used to get together in Chinatown restaurants or in pizzerias and bring amazing wines with ▲ us. Randomly, I said one day I’m going to ¡ AUTUMN 2015 ¡ PROPEL QUARTERLY



Herman Ze German, Soho, London

open a restaurant that sells champagne and hotdogs.” Chang wanted to share her passion for artisanal grower champagne by making it more accessible than the way champagne is traditionally presented on restaurant and bar wine lists. She adds: “So I decided to serve it with hotdogs instead of caviar. A lot of people have the traditional notion that certain food has to go with certain wines and I really wanted to change that view of food matching. Champagne’s especially great with food that has a high oil or salt content.”

Getting it right Chang and Knappett’s reputation gave the Bubbledogs concept enough of a head start to make it stand out in London’s busy casual dining market. Chang says: “We had a following in the industry because we’d both worked in Michelin-starred restaurants, and everybody was watching to see what we’d do next. That really helped, especially when the press release came out and said we were opening a hotdog restaurant. That drew a lot of attention, so all the food bloggers, and all the foodies who’d followed our careers, came to see us.” The hotdog served at Bubbledogs had been sourced using a process that was, says Chang, “the hardest thing we’ve ever had to do”. Kitchen Table was recognised by Michelin in 2014, and “we still joke that opening a Michelin-starred restaurant was much easier than it was to open a hotdog restaurant”. The challenge was that, while a classic English


“We tasted so many versions that we thought maybe we really didn’t want to open a hotdog restaurant any more”


sausage is a coarse mix in which the minced meat and fat are separate, an authentic hotdog is emulsified, with the contents reduced to the consistency of a fine paste which gives the distinctive even texture once cooked. The Bubbledogs team found a German-trained butcher based in Gloucestershire, who works with eight local farms to produce the brand’s authentic frankfurter, made with 100% British pork and beef. Getting the length, width, spice mix, texture, and casing of the Bubbledogs sausage right was a matter of trial and error. Chang says: “We tasted so many versions that we thought maybe we really didn’t want to open a hotdog restaurant any more. Then we had to move on to the buns. It couldn’t be a fancy brioche, it had to be a soft American steamed bun. It had to have the right glaze, the right length, and the right look.” The hard work paid off, building on the popularity of American food concepts in UK foodservice at the time, a trend which continues. Chang says: “It was all about burgers and diners and fried chicken, so it was good time to open. People were looking for less fancy restaurants, more casual, but still with good quality. Once Kitchen Table opened alongside the hotdog concept, added benefits were apparent. We didn’t realise that it would work out so well, but of course Bubbledogs has a much higher turnover, so it helps support the fine dining restaurant that just has 19 covers a night.” The Bubbledogs customer mix is mainly young professionals, with a high proportion of women, along with tourists and lunchtime business trade. Average spend is £19 a head, with the sales split very evenly between wet and dry. “Some people have an extra glass of champagne, some have an extra hotdog,” adds Chang. The current best seller is the Mac Daddy, a hotdog topped with macaroni and cheese, crispy onions, and bacon bits. Chang says: “We come up with new thing every two months or so, and every month at the moment we have a guest chef hotdog – chefs from around the world, usually friends of ours, come up with the recipes and toppings.” Chang’s favourite of these so far is a twice-battered southern fried hotdog created by Matt Orlando, owner of Amass in Copenhagen. On the inevitable question of expansion, Chang says the business plans to open “one more in London and one more outside, and see where that goes.” The concept will be tweaked, though. “It will be a version of it, but not exactly the same – the next one will hopefully have more of a focus on champagne,” she adds.

The Apple revolution Watching London’s hotdog operators multiply with interest is Abiye Cole, who created the Big Apple Hot Dogs brand five years ago, initially operating from an American-style hotdog cart located on Old Street. He started out after returning to London from New York, recalling: “I decided I never wanted to work for anybody else again. I bought the hotdog cart with my last £2,000, and set up on a street corner.” Cole found gourmet hotdogs sold during the hours of daylight were a revelation to Londoners who were more familiar with an inferior product sold from vans outside nightclubs. “Originally I was going to try and import a recognised American hotdog but that just ▲

Over 90% customer response rate HowYa’s simple but effective system allows customers to give feedback in real time Why is it important for restaurants to encourage customers to give feedback? With increasing competition and aggressive price matching, provision of quality and service excellence has become the key measure that customers use when choosing where to dine out. A customer’s feedback provides the restaurant with valuable insight into their needs. This is essential if you want a business that creates a positive experience, exceeds expectations and keeps them coming back for more. By listening to your customers you can gain a real understanding of how they feel about your food and service, and use it to guide your promotional decisions. How can feedback systems be used to monitor individual staɈ performance? They enable you to track individual activity allowing you to spot potential training needs. If staff service scores are consistently low, we can arrange training, but if staff are continuously endorsed by customers then we can praise and reward them. Sometimes staff just need a little coaching on service and then you can watch their scores increase as they get more conÄdent. In our case studies we experienced a very positive customer response to our bill folder survey. Correspondingly, staff moral improved as the bill folder and staff performance metrics resulted in healthy staff competition for the best service scores. Does feedback need to be expensive? We know that many businesses don’t always have the budget for customer feedback and that’s why we launched FREEmium feedback. Ask your customer 5 questions, gather all your demographic data, post any comments from your customers directly to your Facebook page, as well as sending all your customers an email with a link directly to your TripAdvisor review submission page. The bill folder survey does not require the customer to login and is ready for the customer to use when presented with their bill. The feedback

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Feature wasn’t practical,” he says. “I found an artisan maker who could make a quality sausage that wasn’t like anything then on the market. Very quickly, anybody who tasted them recognised that it was a completely different experience. They were used to an over-processed, pretty rank hotdog.” Food writers such as Giles Coren championed the Big Apple hotdog, and Cole found himself wholesaling to chefs such as Heston Blumenthal and Russell Norman, owner of Mishkin’s in Covent Garden. Last year saw the opening of Cole & Sons, a deli-style outlet on Caledonian Road, which sells a range of local artisan produce alongside the takeaway Big Apple hotdogs menu, which now numbers four different sausages with a range of topping and accompaniments. “I’ve got four different familyrun producers across London making products for me,” he says. “The deli came about because I needed prep and storage, and a walk-in fridge, so it made sense to take over this old butchers shop around the corner from my house.” A new permanent Big Apple cart has been set up at Euston station, described by Cole as “my first franchise”, but he is happier supplying the Big Apple range to restaurants and craft beer pubs without trying to micromanage the brand. He says: “I’m happy for outlets to use their own relish, and their own local bakers for the buns. I’m fiercely independent, I hate places that are all exactly the same. They introduce my brand to customers all around the country, but it’s not a controlling traditional franchise model, which I’m not geared up for anyway. A lot of people think that Big Apple is bigger than it actually is, but it’s really just still me and two part time staff.” He jokes: “I thought it would be nice and relaxing, maybe just working at lunchtimes! It’s quite amazing what’s happened.” Cole is happy to be regarded as a pioneer of the gourmet hotdog boom, wryly recalling that Knappett and Chang conducted a fact-finding visit to his Old Street cart before opening Bubbledogs, as well as that he operated a pop-up hotdog stall in one of the first BrewDog bars. The fact that BrewDog is opening its own beer-and-hotdog concept bar on Essex Road in Islington this summer suggests that the pop-up was a success, although the craft brewer has also collaborated with other artisan food brands, including Joe & Seph’s Popcorn, Pieminister and Honest Burger. Dog Eat Dog will be managed by Peter Kennelly, who joined BrewDog in 2014 as part of a trainee manager programme designed to support its ambitious opening programme. Dog Eat Dog is being developed in partnership with hospitality food and beverage consultants Gorgeous Group, and Kennelly makes the point that varying the offer helps to differentiate each bar as the BrewDog brand proliferates. As with the champagne at Bubbledogs, the carbonation in beer makes it an ideal match with a salty and fat-rich hotdog, says Kennelly. He adds: “Every time you have a bite, the beer’s going to clean your palate before the next one. We’re confident about our beer, it’s always going to be the focal point, but the more ways we can get people into our bars the better, and we can put as much passion into food as we do into the beer.” Kennelly sums up the appeal of the hotdog to both consumers and operators. He says: “A hotdog is a blank canvas. It’s like a burgers or pizza in terms of the many different toppings you can use. There’s a lot of room to play with it.”

“Very quickly, anybody who tasted them recognised that it was a completely different experience. They were used to an over-processed, pretty rank hotdog”

Abiye Cole, founder of Big Apple Hot Dogs ¡ AUTUMN 2015 ¡ PROPEL QUARTERLY



The micro-brewer and pub with big ideas As Brewhouse & Kitchen prepares to open its ninth site by the end of the year since launching in 2013, John Porter talks to chairman Kris Gumbrell about how the concept came together, its philosophy and plans for the future


s he sits in the recently-opened Brewhouse & Kitchen (B&K) at Highbury, company chairman Kris Gumbrell recalls his journey to work that morning. “I drove past a railway arch with another new brewery in it,” he says. “I’m not sure how long it’s been there, but it was certainly the first time I’d noticed it. It really made me think about how busy the independent brewing sector is getting. I think it’s great for the consumer, but where’s the route to market for all these guys? My route to market is about 10 metres, from the brewery to the bar.” The British brewpub has a chequered recent history. Consolidation of both pub groups and brewers over a century or so meant that beer production typically became remote from the point of consumption. By the time David Bruce created the Firkin brand in 1979, the idea of a pub with an on-site brewery was novel enough to genuinely excite beer lovers. Sadly, subsequent Firkin owners decided the business of actually brewing was too much trouble, and without the beer the brand faded out. However, it was on a 1998 business trip to the USA in the company of the aforementioned Bruce that Gumbrell came across the burgeoning brewhouse and restaurant scene, at a time when he was working for Scottish & Newcastle Retail on international development projects. “It registered with me, and I’ve been tracking it ever since,” he says. “I thought that one day it would be right for it to come back over here. We’ve had an industry that has been dominated by the tied system with dominant large brewers, and they by definition have controlled what beer brands are in the market, as well as driving consumer taste and consumer expectations.” By 2008, after a stint with Greene King, Gumbrell was running Convivial London Pubs and felt the time was right to give on-site brewing a whirl. Breweries were installed in two Convivial sites in Chiswick and Richmond, with enough success that Gumbrell and Simon Bunn, with similar experience in large managed groups, began developing the B&K concept as a standalone business. Using an Enterprise Investment Scheme (EIS) to raise funds, the freehold of a former JD Wetherspoon pub in the centre of Portsmouth was acquired, and the first B&K opened in Portsmouth in early 2013. The offer, a range of craft beers brewed on site, all given names with a


local resonance, and sold alongside a menu featuring home cooked dishes with a focus on sharing, was different enough to build the concept a following.

Unfazed Gumbrell sums up the challenge: “It was 100m away from another Wetherspoon’s, across the road from a Yates’, and surrounded by nightclubs – but it was a good value for money, freehold and we grabbed it,” he says. “We took out the door staff, took out the discounting, raised the prices, and took out nearly every national brand.” The success of this approach is unarguable. Just two years on, there are B&K sites trading in Portsmouth, Dorchester, Poole, Bristol, and either end of Upper Street at Islington and Highbury in London. In addition, the team was set to open at Gloucester Quays last month and preparing to open sites at Southbourne and Bournemouth, both in Dorset. The £15m raised through EIS leaves headroom for “two or three further sites”, says Gumbrell and beyond that, further expansion can be funded through cash flow. He adds: “Of our current sites; five are within a stone’s throw of a Wetherspoon. It’s very important for us to differentiate ourselves. The competition doesn’t faze us, we just pick up a different kind of market.”

“We took out the door staff, took out the discounting, raised the prices, and took out nearly every national brand” The only minor hiccup to date appears to have been the sale of Convivial London Pubs in October 2013, with four sites including the brewpubs going to Mitchells & Butlers (M&B), and three more to individual buyers. “The two brewpubs in Convivial were extraordinarily successful, and it’s no secret that we tried to buy one of them into Brewhouse & Kitchen, but they had to go



Simon Bunn, founder and director (left) and Kris Gumbrell, founder and chairman (right) to the best buyer,” says Gumbrell. “M&B did well to get those sites, and it freed me to focus on this business.” The fact the in-house brewery at the new Highbury B&K was formally installed at one of the Convivial pubs suggests that, 15 years after the last Firkin pub brewed, the big pub operators still haven’t quite got a grasp of on-site brewing. “I believe I’m right in saying that we’re the biggest brewpub operator by number of sites in the UK,” says Gumbrell. “When we open Gloucester we’ll have just over 100 individual and live beer brands in our business, every one an individual recipe, so we are probably Britain’s most prolific brewer in terms of number of brands.”

International influence The brewery, and just as importantly the brewer, in each B&K are the core of the brand’s success, says Gumbrell. “To me, in terms of bringing in customers, our brewer is our Saturday night karaoke, he’s our Sunday afternoon football,” he adds. A brewer is based at each site, and the team is international, reflecting Gumbrell’s experience that British-trained brewers can struggle with the customer-facing dimension of B&K. “Brewers from overseas also bring new beer styles with them,” he says. “At Highbury, the German brewer will be producing an authentic lager, and in Dorchester we have an American craft brewer about to join us.” B&K group head brewer Pete Hughes “is a brilliant brewer in his own right but is also a very good manager of people,” adds Gumbrell. The opportunity to engage directly with the brewer in each pub is key to B&K’s popularity. “You can’t just expect consumers to emerge,” says Gumbrell. “Particularly with the younger market, you’ve got to engage them or they’ll sit in coffee shops on their iPhones. There are a lot of youngsters out there who are really interested in craft beer. The whole hipster movement has been marvellous for beer, and BrewDog has done wonders engaging young people with beer, far more than the big guys. They’ve made it cool.” Another market unserved by the mainstream pubs has also emerged as a B&K demographic. “One particular group of people that we’ve attracted back to pubs who’ve been staying away is the home brewer,” says Gumbrell. “Pete is chairman

of London Home Brewers Association and has engaged with them. They’re not necessarily CAMRA members either. We’re meeting these guys for the first time. They’ll often come in with a little plastic bottle and ask the brewer to smell it because their brew’s not going right.” This has led to the development of Brewing Experience Days as a lucrative sideline for B&K. For a price that includes breakfast and lunch as well as a day in the brewery, customers can brew their own beer and come back to collect when it’s ready to drink. “They sold really well last Christmas, and we’re planning a record Christmas this year,” says Gumbrell. Training customers to brew beer could also start to bridge that skills gap in indigenous British brewers, he acknowledges. “Other operators talk like we’ve got some sort of black art going on,” he says. “Our sector has been brewing for years, but has just been doing it one place. In the States it’s perfectly normal to brew in a restaurant or bar. Our model is very similar to the US brewpub – the majority of customer occasions are for food.”

Fresh approach As a result, food sales are higher than for most managed operators, with a sales mix across the business of about 40-45% in favour of drink, with a 50/50 spilt at some sites. Gumbrell says: “It’s a fresh menu, it would be incongruent to brew fresh beer, if all the food was bought in. The ribs are trimmed and braised in beer on site, and our signature dish is beer can chicken.” With this dish traditionally made by inserting a can directly into a chicken’s orifice, for demand reasons B&K has developed its own cooking vessel, made of four to six tubes that sit in a gastronorm tray. These are filled with a beer from the site, to make the dish unique to each B&K, and the chickens are steamed upright in them. So popular has this proved that B&K is about to start retailing a cooking vessel for home use. All menus are developed internally, and beer and food matching advice is also offered. “We used to have every dish matched on the menu, but for the latest one Pete has written a set of guidance notes on matching,” adds Gumbrell. “We don’t want to force it on people, we just help them.” ▲ ¡ AUTUMN 2015 ¡ PROPEL QUARTERLY


Feature Despite the relative high skills needed by kitchen staff, and the general kitchen recruitment challenge facing the industry, gross profit on food is maintained at about 70%. “Our wages are where they should be, the guys work hard,” says Gumbrell. Brewers and managers are also given the chance to share in the success of B&K through a share incentive. “We’ve spent a lot of time thinking about efficiencies,” adds Gumbrell. “Simon and I both work in our kitchen and behind our bars. When you do that, you start changing the way you do things. I was astonished when I worked for big organisations how little time the decision makers actually spent working in the business. When you do, it’s amazing how quickly your attitude to a decent kitchen changes.”

“To me, in terms of bringing in customers, our brewer is our Saturday night karaoke, he’s our Sunday afternoon football” On the overall recruitment picture, “finding kitchen teams is definitely getting tougher”, says Gumbrell. He adds: “We find our front-of-house recruitment is generally very good. One of the things we thrive on is that we’ve got something people want to work in. We’ve just recruited two very good managers into our business, from our larger competitors. One of the real draws is to work in a business with a brewery. For general managers bored with the standard operating model, who want to try something different but who still like the security of a branded business, we can give them all of that. We have a very small head office, we outsource a lot of what we do and that keeps it lean.”

Staff investment B&K works with hospitality specialist HIT Training and has developed in-house programmes to progress staff to supervisor and deputy level. “We’ve just appointed a deputy to a general manager role, and I’ve also got an ex-general manager of mine who’s now a brewer,” says Gumbrell. “Success is all about having the right people with the right skill levels; is your offer relevant, current and are you investing in the offer for the customer?


Otherwise you’re going to struggle.” This investment in staff skills is clearly essential as B&K plans the next phase of its expansion. In terms of sites, Gumbrell is confident the opportunities are out there. He says: “They don’t have to be huge, but big enough to take the brewery without compromising on cover space – we need about 120 covers. In fact, it’s a fallacy that the breweries take up too much space, and the thing with pubs is there are ▲


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Kris Gumbrell, founder and chairman ■ Favourite Book: My favourite book keep changing, so I guess Leadership by Rudolph Giuliani, and Losing my Virginity by Richard Branson ■ Favourite Film: My favourite was The Shawshank Redemption, but Interstellar is now up there ■ Favourite beer and food match: Telemark Extra, our 5% American style IPA brewed in B&K Poole, matched with our wonderful Beer Can Chicken

Simon Bunn, founder and director ■ Favourite Book: I have a couple of favourites, Outliers by Malcolm Gladwell and Winners by Alistair Campbell ■ Favourite Film: A very old favourite from 1982 when I first saw it, Once Upon A Time In America. I just love the relationship between the group which all grew up together ■ Favourite beer and food match: We brew terrific beers, but my favourite is Britton, brewed at our Islington branch, an American brown ale, perfectly matched with BBQ ribs


always empty rooms, garages, etc. We tend to be creative. There are operators out there with sites they don’t know what to do with – they should talk to us.” While the two London sites and the Bristol pub came as a package, acquired from GI Capital in the wake of the Orchid sale to M&B, “we’re not planning to buy anything that isn’t a Brewhouse & Kitchen”, says Gumbrell. He adds: “That keeps it very clean, simple and straightforward. The Bristol site would seem to be the runt of the litter, but it was an old pub of mine from 20 years ago, in the right location and it’s shooting the lights out, doing really well for us.” Citing the recycled brewery at Highbury, Gumbrell says: “We get good value for money. We’re not ashamed to go on eBay and buy second hand kitchen or bankrupt stock. Our plan is to get to 18 sites by 2019, and we can certainly get there through cash flow. It’ll be a blend of leaseholds and freeholds, predominantly freehold is the plan, which gives us real strength with the bank.”

“The Bristol site would seem to be the runt of the litter, but it was an old pub of mine from 20 years ago, in the right location and it’s shooting the lights out, doing really well for us” Diversification into related areas such as craft distilling, as some craft beer operators have done, “might be interesting, but not yet,” says Gumbrell. “With distilling, you’ve got be careful in terms of health and safety, and the licensing is a nightmare,” he adds. “To be honest, we’re good at what we do, we love doing it and we get a lot of really good feedback from customers as well as our peers. We also have a responsibility to our shareholders. We’ve raised £15m, and I’ve got a sizeable stake in this business myself. We made a promise in a business plan and we’ve got to deliver on that. You’ve got to make sure you don’t get distracted.” He adds: “We’ve grown very quickly. A year ago we had two pubs, now we’ve got six trading sites, we’re on site in two more. It’s interesting the fear that other operators have of this black art of brewing. In the States you’ve got 80 McMenamins, and you’ve got 152 BJ’s Restaurants and Brewhouse. BJ’s are refinancing and have targeted 400 sites in the next five years. Brewhouse & Kitchen is entirely scalable.”


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With Burger & Lobster having a concept based on a fixed menu of three dishes at a fixed price, director of operations Simon King admits he was somewhat sceptical when it was launched in 2011. Here he tells John Porter how he has been won round, why the idea works and what the future holds for the brand

The brand that’s becoming a real catch


ven the most successful of restaurant operators needs to give customers a gentle nudge from time to time, and when it’s needed, the marketers generally resort to one of two weapons: flex the menu or flex the price. So, a concept that has a fixed menu of just three dishes, all of which are sold at the same fixed price, was bound to have a few seasoned industry hands leafing through the brand rule book. Four years after the first Burger & Lobster opened in Mayfair, in December 2011, the brand has seven London sites trading, as well as one in Cardiff, and opened its first US restaurant in New York at the start of 2015. The company has also opened its first two lobster roll deli takeaways, called Smack, and alongside further planned openings in both the UK and US, has franchise deals signed and sealed in four other territories. For the record, those three menu choices are a whole steamed lobster, a lobster roll in a brioche bun, or a burger, all served with fries, and the price point is £20 – which is pretty good value for a lobster, and probably the top end of what customers expect to pay for a burger. The rapid opening programme suggests something is going very right, although Simon King, Burger & Lobster’s director of operations, concedes he was among the somewhat sceptical observers back in 2011. He says: “When the first one opened, I was really intrigued by it, and like most people, I thought ‘it’s never going to last. How are they going to make any money?’ I just kind of watched from afar.” The Burger & Lobster concept was the idea of Russian restaurant entrepreneur Misha Zelman, who along with colleagues Ilya Dimitchov and George Bukhov, had initially


ventured into the UK with ten of Goodman Restaurants’ steakhouse brand in 2008. King had been one of the driving forces behind Mitchells & Butlers’ (M&B) hugely successful gastro-pub concept Premium Country Dining Group (PCDQ) and had more recently run M&B’s Brown’s Bar and Brasserie brand. He left M&B to set up a Wiltshire-based country pub business with his wife and another business partner, but was missing the broader horizons of branded operations when an approach came from Burger & Lobster in 2013. “The Wiltshire pub was really interesting, but I think I realised quickly that being in one place all the time wasn’t for me,” he says. “We weren’t going to grow quickly enough to keep me occupied. I stared talking to George Bukhov about some consulting, and very quickly that moved to a job offer. The key thing the guys were interested in was putting a strong foundation team in place who could take the business to the next level. At Brown’s, we doubled the size of the estate, while PCDG went from four to 82, so it was a lot of openings.” The Burger & Lobster head office team now numbers 23, including King and executive chef John Cadieux, who has been with the business from the beginning. King concedes the model is currently top-heavy, but also points out that the head-office torestaurant-staff ratio is improving with every opening.

Wave of openings In the UK, sites in Manchester and Bath were due to open before the end of August, followed by three more in London, as well as one in Birmingham, before the end of year. A second New York site is under offer, and of those franchise deals, Burger & Lobster ▲


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Feature opened in Stockholm in July, with Kuwait due to follow in September, Dubai in October, and Saudi Arabia by the end of 2015. As with head office, the existing restaurants are also currently very well staffed in anticipation of the next wave of openings, a lesson that King brings with him from previous roles. “When we started PCDG, Project Orange as it then was, I learnt that the longer you can have somebody training, the better the opening is, because they’ll do the right thing instinctively,” he says. “So, Cardiff isn’t profitable yet because the team from Bath are also working there. You have to get people to trust that you’ll make them general managers, but what you can’t say is precisely when it’ll happen. We still pay them a reasonable salary, and we could open another four sites today and not deplete our existing general manager population. As more sites open, my ambition is to halve our head office costs as a percentage of turnover in the next 18 months.” In general, front of house staffing at Burger & Lobster “is all about personality, there are no airs and graces” says King. He adds: “Tony Hughes (former M&B managing director of restaurants) used to say ‘hire personality, train skill’, and it’s still true today. We don’t care what experience they’ve had up to this point, the personality they put across in the recruitment process decides whether or not we take them on.” Both kitchen and bar staff need proven skill levels, however. King says: “The quality of our bar staff is up there with the best in London. There’s

Simon King, director of operations

■ Favourite Book: I remember the first book I enjoyed was Serpico, I found it in by my father’s bedside and couldn’t put it down ■ Favourite Film: It’s easily The Godfather ■ Favourite place to eat: I’m lucky as there are so many, but Beast has to be up there just for its single minded focus on ingredients. Roka is also a big favourite of mine


nothing worse than charging £8 or £9 for a cocktail and having somebody who’s never really done cocktail training make it.” King has very much come around to the Burger & Lobster way of thinking in terms of the fixed menu/fixed price model. He adds: “Misha calls it the Monoproduct Manifesto, a small range of dishes, but done bloody well. His view is eventually we’ll all go out dining based on what we want to eat, not where we want to go.”

Eye-catching In terms of selecting that eyebrow-raising product range, King says “they saw an opportunity to make lobster accessible as well as to have a burger restaurant that was different to every other – not 15 different burgers, but one burger”. The burgers come from corn-fed Nebraskan cattle, the same source as the steaks served in the Goodman restaurants. The lobster is bought from Nova Scotia fishing fleets through a Canadian brokerage that is now directly owned by Burger & Lobster. King believes there is good reason why lobster has never been a mainstay of the casual dining sector, at least until now. “I think operators are nervous about lobster because of fluctuating market prices,” he says. “They put it on the menu and a day later the price has doubled. It’s a live product. There are high costs, and big mortality rates. At certain times of the year you can lose up to 10% of your catch, at good times it’s down to 2%, so market prices change dramatically. By owning the supply we can flatten the price.” For Burger & Lobster, 40% of the lobster catch is typically of a size that can be sold as a single whole steamed lobster at that £20 price point. Another 10% are above the weight, and so are sold to groups of customers sharing a meal, with the other half processed into the lobster meat served in the rolls sold by the restaurants as well as the Smack deli. While lobster is increasingly appearing on foodservice menus, not least because of the success of Burger & Lobster itself, King believes control of supply will allow the business to maintain its advantage. “I just passed the Spaghetti House in Holborn, and they’ve got live lobster on,” he says. “They’re charging £28, while because of our all-year-around consistency we can keep that £20 price point.” The franchises will keep the set price point. “In Stockholm it’s 260 krone, but the cheapest lobster elsewhere in Stockholm is 320 krone, so were nicely under that,” adds King. On the inevitable question of what sort of margins can be achieved on a product so challenging to handle, King says: “The gross profit on lobster is about 50%, on the burgers it’s obviously better. We work on an overall food cost of around 42-43%. Some of our restaurants are better than others; in Soho 75% of customers have lobster, in Cardiff it’s 35%. Outside of London, people are less used to eating lobster, so


Feature it’s more about persuading them to try it. Having said that, I don’t think Manchester is going to be that way inclined, I think we’ll sell very similar lobster numbers there to London.”

Size matters There are also additional capex costs, with the lobster tanks in which the live creatures are displayed before their inevitable date with destiny costing £50,000 each. There are three such tanks at the Threadneedle Street Burger & Lobster, the brand’s largest site to date with 300 covers, occupying a former oriental restaurant that had been operated by Orchid Group. “We were already doing the deal when M&B bought Orchid, and when that was announced, I went into panic mode, but fortunately it didn’t fit their estate,” King says. The size needed for a Burger & Lobster site inevitably limits the choice of site. “Although Threadneedle Street is a monster, in London you can take a smaller site because you have the sheer volume of people coming through,” he adds. “Our Liverpool site, opening next year, is only about 3,500 sq ft, which isn’t that big for us, although my belief is we’ll do really well in Liverpool. In other cities we’d want a bigger site because you have to capitalise on trade at the weekends.” Threadneedle Street has also pioneered a breakfast offer, priced at £15 including juice and coffee. “We didn’t try and do a full English breakfast, or granola, or pastries, or whatever,” says King. “As with our main menu, we’ve done three things; lobster and scrambled eggs on a toasted muffin, a six-ounce burger with an egg and cheese on a muffin, and we’re doing American-style pancakes, giving us a meat-free option. It’s been really well received.” A lunch offer is also in development, mainly as a result of the franchising drive. “Franchisees aren’t going to build a restaurant, pay us a franchise fee, and have an empty restaurant at lunchtime,” says King. “We can develop that based on the three item principle.” Each franchise deal has been signed directly with a local partner rather than appoint a master franchisee. King says: “It’s been really important for us to find the right people, and if we’d gone with just one partner we’d have limited ourselves. We spent seven months getting the ‘business in a box’ right. You have to protect your brand, the contract has to be air tight. We know we’re going to have challenges in certain countries, for example no alcohol in Saudi, so we wanted to think about that before we went in.”

Keeping it simple In general, the drinks side of the business is important in driving extra revenue, with the wet/dry split ranging from 25% to 40% across the business. There is a strong offer in both wine and cocktails, and a complementary craft beer offer is

in the early stages of development. King says: “Wine is by far the biggest seller, then cocktails. We’re behind the curve on craft beer, but trying to find things that work without overcomplicating it. The beauty of this business is that it’s not complicated. We have to stay true to what we are. For example, it would be very tempting in Cardiff to drop the price of a burger to £12 and put the lobster up to £22. Traditionally that’s what I would have done, but what’s really important to our brand and our customer is the simplicity. Even doing breakfast, there’ll be people out there saying we shouldn’t have.” Another advantage of that simplicity is that Burger & Lobster is not investing resources or distracting key staff with menu development. “In any other role I’ve had you’re in the constant cycle of menu development; by the time you launch a menu you’re already working on the next one,” adds King. “For us, the burger is as good as we want it to be, and the lobster is about supply, not development. The flipside of that is that you can get 1% to 1.5% of growth from menu development. At a single price point, you don’t have that, so your like-for-like growth has to all come from volume growth.”

“We don’t care what experience they’ve had up to this point, the personality they put across in the recruitment process decides whether or not we take them on” While six openings a year in the UK, plus the Smack sites, is challenging, the task is also finite. King says: “None of us think the UK can do much more than 20 to 25 restaurants. There are some great cities out there I’d take a lot of concepts to, but not necessarily this one. Our target for franchises is about 35, and potential restaurant numbers in the US is really ‘how long is a piece of string?’ The US site took $160,000 recently, which is great money in New York by anyone’s standards. Taking burgers to America has been really interesting. We sell more burgers in New York than we do in any of our other restaurants.” While marketing is currently focused on social media, there are plans underway to start promoting offers such as the new breakfast menu and the drinks range directly to a database that already numbers 30,000 customers. King also points to a popular Chinese Facebook fan page for Burger & Lobster as evidence of the brand’s potential. “Our marketing will come from activity around the world,” he says. “I’m not comparing us, but Red Bull is no longer about the products, it’s about the brand. We see Burger & Lobster in a similar vein. I honestly believe this is a global brand.” ¡ AUTUMN 2015 ¡ PROPEL QUARTERLY


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Molson Coors’ senior wine buyer, Gary Keller, explains: “We want to be renowned for being first choice for our customers and their consumers. To achieve this, we’ve worked hard to evolve our range of wine – we had 400 when I joined the business, and the total now stands at 700, and this is continually growing. To make sure we always give you that little bit extra in your range, we work with approximately 40 different wine suppliers and producers, so that we can ensure we’re giving you the best products possible. We’re always looking for the right price and the right quality, to make sure all of our customers have the best wine list possible. Ultimately, we want our customers to be able to send their drinkers home saying ‘I really enjoyed that glass of wine I had with my dinner tonight.’” Adding value to your business Molson Coors has just launched its first wine brochure “The Wine Collection” which details the collection of wines across the portfolio. To complement this, we produce a monthly deals brochure, Hotlines, which is sent out to over 12,000 customers. As well as monthly offers, exclusive ‘flash deals’ are available online and through Molson Coors’ National Contact Centre each week. Through collaboration with suppliers, we can deliver a better consumer experience, which might mean point of sale items or team training to help boost sales. To support our range in outlets, we also provide a free menu printing service, enabling our customers to print drinks menus for free. With menus often the first contact customers have with wine offerings, it’s vital that it works hard to sell your products. Menu Master – our fast and free* wine menu service – is exclusive to Molson Coors customers and means that your individual list will be displayed on your tables or bar, helping to drive sales. Combine this with a 2,000 strong drinks portfolio, the largest sales force in the country, and a one order, one invoice, one delivery system, our goal is clear – to be your first choice, total drinks supplier. *Subject to a minimum order value.

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Is the premium offer paying off? With premiumisation looking set to be the key trend for 2015, ALMR chief executive Kate Nicholls explores what it really means in practice for the industry


was speaking at a number of conferences over the past month – on London property, finance and investment, casual dining and late night, as well as presenting to MPs on business rates and speaking to BBC News – and a few things struck me reviewing them all as I sat down to write this article. Firstly, no wonder I could do with a break but secondly, and more importantly, such is the breadth of the Association of Multiple Retailers’ (ALMR) membership that we are now seen as the authoritative commentator on trends across a wide range of issues. But I was particularly struck by the fact that one buzzword ran like a golden seam throughout all the presentations and discussions about the market generally: premiumisation. It comes through whether you are talking about benchmarking KPIs, the rent and property bubble, responses to the National Living Wage or the challenges and opportunities for future growth. And it looks set to be the key trend for 2015. But what does it really mean in practice?

“At a very basic level, therefore premiumisation is a sector-wide phenomenon that equates to survival of the fittest – a leaner, meaner, more responsive market” The latest industry figures from CGA Peach show a stabilisation in the eating and drinking out market for the first time in over a decade. The total number of outlets has shown a small degree of growth – just 0.8% year-on-year – but when you put it in the context of a net loss of 21,000 pubs and a halving of nightclub numbers since the Licensing Act took effect, even standing still is a positive indicator. True, that growth is fuelled by restaurant and food-led pub openings – over the same period we have seen 8,600 new outlets in that market segment and we are predicting a further 2,000 this year. The overall number of eating out venues grew by 5.4% last year, with restaurant growth particularly strong at just over 8%. In contrast, the number of wet-led venues contracted by just under 3% overall – negative news, but there are also signs that the decline of wet-led pubs has been arrested. There are now three

The Coaching Inn Company's Talbot Hotel in Oundle. The company has moved away from traditional wet-led pubs to premium hotels and coaching inns

food-led openings for every one closure in that segment compared with 11 wet-led closures for every one new opening. Our annual Benchmarking Report, produced in association with Christie + Co, also shows the changing nature of the market place as operators seek to focus on the experiential to deliver a premium offer. This year’s survey showed a record proportion of turnover derived from food, at just under 30%, with wet-led sales dropping dramatically to under two thirds of turnover (63%). And that is across all market segments. And despite the drop in outlet numbers, like-for-likes – and the crucial political measure of productivity – are up. Across the sector as a whole the ALMR Christie + Co Benchmarking Report shows like-for-likes at +4.2% and while this is down slightly on last year’s record figures, for the first time it was consistent across the sector – with only nightclubs flat-lining. Interestingly, coaching inns and food-led pubs achieved higher than average growth at 6% and 5.5% respectively – double that of casual dining operators at 3.2%, suggesting the rapid expansion at the premium end of the casual dining market is coming at a price.

Premium phenomenon What these market trends show is an overall healthy and competitive environment in which entrepreneurial operators can not

only survive but thrive. There are clearly openings and closings in every trading segment and, having gone through the toughest recession and trading period in living memory; it is those with a clear and good value offer that have come through it. Premiumisation here is about giving the customer a premium experience at all price points. At a product level, premiumisation is about customers trading up, seeking to gain a value added experience. It is not all about price point, but the latest M&C Allegra Food Service insights on pricing show customers willing to pay that little bit extra on starters and mains for a premium experiential offer. At a drink level too the rise of craft beer and niche or artisanal products such as hand crafted distillations and personalised matching of mixers highlights the extra margin from nudging customer perceptions and harnessing that desire for the premium in the everyday. At a very basic level, therefore premiumisation is a sector-wide phenomenon that equates to survival of the fittest – a leaner, meaner, more responsive market. As a whole we are offering a better quality experience to the consumer. But of course, this growth is not uniform. The premium end of the fast casual and pub market are seeing the highest levels of growth. Just taking the drinks market as an example, CGA Strategy figures show the market as a whole declining in terms of volume, down 2%, but seeing an almost corresponding increase in terms of value (+1.7%). So people are buying less, but arguably when they do, they buy better. And the highest year-on-year increases in value are coming at the premium end of the market – up 6-7% and it is the only segment showing real volume growth. So, is the flip side of all this premiumisation a further decline in the value or more basic end of the market? Well no, actually. Those CGA figures on the drinks market show value holding up at the bottom end of the market too – volumes may be in decline but value was increasing by about 0.7-1.4%. In food, the rise of the premium fast casual chains – often imports from America – show that customers are still value conscious but willing to pay that little bit extra when the quality of the food, the theatre and added value of the experience and personalised nature of the offer are not compromised by speed of service. The offer may be premium in these outlets, but the turnaround means that the price in cash and more importantly time is not. The flip side of premiumisation is therefore polarisation – and for me, that will be the defining trend of the next year. The ALMR Christie + Co Benchmarking Report and ALMR Liquid Profit Drinks Trends Insight are available on request from

Kate Nicholls is chief executive of the Association of Licensed Multiple Retailers ¡ AUTUMN 2015 ¡ PROPEL QUARTERLY


Oakman Inns and Restaurants have worked with Reynolds for over seven years. Armend Aljo, Procurement Manager, shares his views on why the relationship continues to grow from strength to strength. 1. Armend, why do you continue to use Reynolds? We have been working with Reynolds since the very first days of Oakman Inns. When Peter Borg-Neal and I looked at the list of suppliers we needed to start the Oakman Inns business, Reynolds was one the obvious choices, given our collective experience from previous businesses. To this day, we continue to use Reynolds – not only for fresh produce, but also for dairy, cheese, and other items.

2. What strengths does Reynolds have as a supplier to Oakman Inns

There are many reasons we choose to work with Reynolds, but one in particular is provenance. At Oakman Inns, we pride ourselves on using, as much as is possible, fresh British produce. Reynolds has a vast range of fresh produce that is grown in our country. Our food concept is based on the quality of the products we use, which require little intervention from our chefs. The quality and freshness of the produce supplied by Reynolds, is second to none, which is very important for us. When it comes to service, Reynolds nears perfection. Delivery times are hit almost 100% and there are seldom any issues with availability, damages or indeed product quality. It is frequently forgotten how much good service adds value in business and improves staff motivation.

3. How well do you think Reynolds understands your business?

When constructing our recent spring menu, we benefited greatly from the knowledge and experience of Reynolds food development team. They presented many great ideas to us, specifically emphasising seasonality. One of the new items on our menu, sourced from Reynolds, is our award-winning cheese platter, which is drawing fantastic feedback from customers as well as our own team. In preparation for the menu change we also joined Reynolds’ marketing team on a tour of new and exciting restaurants in London. This insight, coupled with the sharing of some relevant market research, was hugely helpful to us, ensuring we keep up with the latest trends within the food industry. We think this added value support justifies the long term partnership we have with Reynolds and shows that they truly understand our business. We have already in place a schedule of working days planned for the year ahead including visits to growers and menu development sessions for autumn and Christmas menus.

4. Would you recommend Reynolds to other operators and why?

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Argument for lowering drinking guidelines just doesn’t hold water As the government considers revising down the guidelines on alcohol consumption following new research linking it to cancer, Paul Chase says there is actually evidence to safely raise them – and one example comes straight from the tap

“Research has established that people who drink moderate amounts of alcohol on a regular basis are less likely to die prematurely than people who never drink. And to be more specific, they are less likely to die prematurely from cancers or heart disease.” Let’s take a step back: firstly, if the overarching purpose of lower-risk drinking guidelines is to reduce levels of drinking and thereby levels of premature death by reducing the risks of developing fatal diseases, then surely what we should look at is the relationship between various levels of alcohol consumption and the risk of premature death from all causes, not just premature death from one cause – cancers. Here’s where we uncover some inconvenient truths for the health lobby. Research has established that people who drink moderate amounts of alcohol on a regular basis are less likely to die prematurely than people who never drink. And to be


more specific, they are less likely to die prematurely from cancers or heart disease.

Graphic evidence In the graph below we see the risk of all-cause mortality for “never drinkers” represented by the horizontal straight line. If we look at the J-curves for men and women, represented by the solid black line and dotted black line respectively, we can see that risk of premature death from all causes declines at very low levels of consumption (less than one standard drink a day) and then starts to rise. But it only exceeds the risk for people who never drink when it exceeds four standard drinks a day for men and approximately three standard drinks a day for women. An American “standard drink” equates to 1.7 units of alcohol. The current UK lower-risk guidelines were plucked out of the air; they are not based on science. But we can now define a rational basis upon which to calculate such guidelines. It’s ▲

Drinks per Day Alcohol Consumption 1.4

Relative Risk of Total Mortality


t has been reported in the press recently the Department of Health is considering revising down the “lowerrisk” or “sensible drinking” guidelines, on the basis of new evidence linking even very low levels of alcohol consumption to an increase in the risk of developing cancers – particularly breast cancer. The logic of the healthist argument is there is no level of regular alcohol consumption, no matter how low, that doesn’t raise the epidemiological risk factor for a variety of cancers, and therefore there is no “safe level” of alcohol consumption. It follows from this the “lower-risk” drinking guidelines should be reduced, as they have been recently in Canada and Australia. I believe there is actually good evidence, from a health point of view, that we could safely raise the lower-risk guidelines. That’s right – raise them!

1.3 1.2 1.1 1.0 0.9 0.8 0.7 0.6











Confidence Intervals


Opinion about relative risk: if people who drink moderate amounts of There are numerous studies that establish this link alcohol regularly have a lower level of all-cause mortality as between chlorinated water consumption and cancer. Here compared with those who never drink, then the question we is just one example: a study published in the Journal of need to ask, when framing the lower-risk drinking guidelines, the National Cancer Institute in the United States found is: how many units of alcohol consumed per day would raise that “long term drinking of chlorinated water appears to the risk of premature death from all causes above the risk level increase a person’s risk of developing bladder cancer by of those who never drink? as much as 80%”. I’m not trying to start a health scare here We do have an answer to this – represented in the J-curve folks, because the absolute risk of developing bladder graph. Research in the United States has shown that for cancer is very low, so an 80% increase in a very low risk men, two to four “standard drinks” per day, and for women, is still a very low risk. I’m merely pointing out that basing one to three standard drinks per day, keeps the risk factor public health policy on epidemiological risk factors alone of premature death from all causes below that of does not provide the basis for evidence-based “never drinkers”. In the United States a “standard policy-making. Used selectively, as in the drink” is the equivalent of 12 fluid ounces of beer example of alcohol consumption and cancer risk with an ABV of 5%. This translates into 1.7 British factors, it is merely scaremongering and doesn’t units of alcohol. So, two to four standard drinks deserve to be taken seriously. Department of a day represents between 3.4 and 6.8 units of Health, please take note. alcohol consumption for men, and one to three standard drinks gives us a range of 1.7 to 5.1 The food factor units a day of alcohol consumption for women. But if we apply the principle that any elevation The current UK guidelines are three to four units of cancer or other health risk factors renders a day for men, and two to three units a day for women food (as opposed to alcoholic drinks) unsafe, – hence my suggestion that the current guidelines err then we get to an even more untenable position. on the side of caution and could safely be raised. Consumption of red meat; of meat products such But there is another question we need to ask about as bacon, sausages and burgers; consumption of what the healthists have to say concerning safe convenience foods for microwave cooking, levels and risk factors. If we are going to such as spaghetti bolognaise, because define alcohol as “unsafe” because at they contain added sugar and salt, and any level of consumption it raises for the same reason consumption the risk of developing cancers, of fizzy drinks – all these foods then what happens if we apply “How many units of raise disease risk factors. So that principle to other drink what we are left with is fruit alcohol consumed per and food products? and veg – and nothing

An example straight from the tap

day would raise the risk of premature death from all causes above the risk level of those who never drink?”

Let’s take tap water as an example. In the UK we put chlorine in our public water supply. Chlorine is a disinfectant that kills micro-organisms and thereby renders water safe to drink. The chlorination of public water supplies represented a massive step forward in public health and virtually eliminated cholera, typhoid and other water-borne diseases in advanced countries. But we know from research done in the 1970s and the 1990s that chlorine, when added to water, forms Trihalomethanes (THMs), one of which is chloroform. THMs increase the production of free radicals in the body and are highly carcinogenic (cancer causing). Specifically, they raise the risk factor for bladder, colon and breast cancers. THMs may also have an effect on pregnancy and the level of miscarriages and on the development of allergic reactions to certain foods.


to drink! The healthist utopia is the creation of a teetotal, vegetarian society. And this is where you can begin to see that “public health” as a movement is not about public health, but about state regulation of lifestyle. It is an ideology that seeks to use epidemiological research to pressure government to regulate the food and drinks’ industries in order to enforce mass product reformulation. There are of course genuine concerns about the health effects of heavy alcohol consumption and about excessive consumption of foods rich in sugar, salt and saturated fats. But as long as we have free information and there is no market failure in terms of the provision of affordable healthy alternatives, there is no justification for government stepping in with large-scale regulation.

Paul Chase is a director of CPL Training and a leading commentator on alcohol and health policy


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Mastering the changes of management There are a variety of new roles evolving for the manager leading other managers and, as Chris Muller explains, understanding and mastering the changes is key to the business’ success


estaurants have become a crucial part of the global lifestyle so the changes that affect society in general have an impact how they are managed. The universal adoption of new technologies: mobile, social and digital, requires managers to grow and change their work roles accordingly.

The new operations manager The definition of operations excellence is changing quickly. Technology is driving this change as both big data and miniaturisation create new challenges and competency requirements for the leader of managers. Technology is always defined in two realms, hardware – new machines, equipment and utensils; and software – systems, organisations and techniques. Hardware inevitably becomes a commodity and sells on price as new equipment and machines are introduced. Software becomes personalised by the user and creates opportunity with new ways to provide customer service. The cooking line in a kitchen is hardware driven, as is a basic back bar inventory. There is little competitive advantage to be gained by mastery of either. But when that kitchen features a hot new chef and their signature dish, or the bar has the city’s leading mixologist pouring their artisan cocktails, proprietary software drives business. Systems that allow for local product procurement, organic food sourcing, nutritional composition of menu items, tracking of individual customer choices, and basic food safety are becoming part and parcel of the manager’s daily operations workload. To be promoted to a multi-unit level, all of these software skills must be mastered. The balanced multi-unit manager, in order to keep abreast of social media savvy customers, technophile employees and the Internet of Things, will evolve into the information technology manager

for their system of restaurant units. Basically, there will be more technological change at the operations level during the next decade than there has been since Escoffier implemented the kitchen brigade system in 1901. The leader of managers will be required to master both the hardware and the software of this new technology wave.

The new facilities manager In a green-conscious world managers need to master newly emerging physical plant technologies. Today a significant portion of the cost structure for business revolves around energy management. Restaurants need to monitor energy, waste, carbon emissions and other environmental factors, either because of changing laws and government regulation or pressure from their customers. Miniaturisation and efficiency in kitchen equipment through advanced microprocessors is already happening. Where a simple understanding of refrigeration technology used to be a plus for a unit manager, in the very near future they will be required to understand the workings of remote digital wireless sensors, heat pumps, co-generation equipment, and blast chillers just to comply with regulations. The role of the leader of managers will include becoming the manager of environmental engineering for the restaurants in their district.

The new finance manager Today managers are required to manage their business units by understanding not only a simplistic income statement but also how the complete profit and loss statement drives positive cash flows creating increasing values on the balance sheet. Where this level of financial sophistication used to be reserved mainly for senior executives, competencies in all aspects of the business will soon be expected of managers across company units.

The new role of the leader of managers FROM: Operations manager Facilities manager Finance manager Marketing manager Human Resources manager


TO: Information technology manager Manager of environmental engineering Manager of capital investment Regional revenue manager Manager of human capital


“Technologies” HARDWARE Machines Equipment Utensils

SOFTWARE Systems Organisation Techniques

Knowing where to allocate scarce financial resources means the role and responsibility of the leader of managers shifts to mentoring and teaching financial skills. With a portfolio of six to ten strategic business units it is not at all unlikely that the leader of managers will have direct control over more than 250 employees, a combined 25-30 individuals with a “management” title, and annual revenues ranging from £10m to £50m. The leader of managers has transitioned into the manager of capital investment for their restaurant network.

The new marketing manager A big part of this evolution will come with the need to understand the principles of customer relationship management. This means having the ability to create, manage, and track local store social media campaigns while increasing customer loyalty, frequency and per person spend. Promotional activities, especially those that drive average unit sales, become a major component of every area manager’s job. The rapid rise of customer control via social media, specifically WhatsApp, Twitter, LinkedIn, Yelp, Instagram, or whatever is current in the future means there is a need for expertise in a new combined marketing and technology skill set. The leader of managers will become the de facto regional revenue manager for their operating units.

The new Human Resources manager How does a balance between manager and leader get created? Of primary importance is that the leader of managers will have to become a true “generalist” with a strong mastery of organisational complexity and experience managing in a less structured and more insecure market. These leaders will need to move rapidly: from downloading on-line computer reports to meeting with community activists – from conversing bilingually with staff and customers to creating in-store merchandising campaigns. All while dealing with a more mobile employee who sees their job as little more than a temporary stop on the way to somewhere else. To manage a generation of new employees, the leader of managers will need to embrace an evolving role, becoming the manager of human capital for their region. At the end of the week, the most important challenge they have to overcome is finding a way to motivate and retain a team of great people. They are the coach, the mentor, the role model for the entire team, and their team’s success is their success.

Dr Christopher Muller is Professor of the Practice, Hospitality at Boston University

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New eating out report gives food for thought As a new report by Italian food company Sacla’ reveals the key trends and habits among consumers shaping the future of eating out in Britain, the firm’s UK managing director Clare Blampied highlights some of the main findings


oodservice is a real melting pot. A place where the full range of economic, demographic, social, cultural and technological trends play out and inter-relate. Further, because the sector is based on discretionary behaviour and discretionary spend, it so often provides early signals of emerging trends that later become mainstream – across consumer industries and society. With consumers spending a total of £283bn on food and drink each year, of which approximately a third goes to the out-of-home market (including snacking), having the ability to recognise and respond to these key emerging trends is part of the necessary skillset for today’s successful pub and casual dining operator. The research findings within our report Eating Out – Today and Tomorrow examine the key trends driving the future of the UK eating-out market, identifying four key elements shaping consumer behaviour when eating out-of-home –


time, place, individualism and mobile technologies (see deregulation of life box). We all know that today’s consumers are increasingly demanding, expecting both food and service quality to be faultless and tailored to their own individual needs. The central changes to daily routines are illustrated by the changing nature of work; such that the traditional working day no longer dominates the frame as it once did – as the graph below demonstrates, almost half of our 2,000 respondents described their working hours as regular, routine and predictable, a figure that falls to 44% for London workers.

Greater expectations Today part-time work, full-time shift patterns, flexible hours, contract work, on-demand work, self-employment and home working all serve to complicate the traditional picture of the working day, with obvious ramifications for when, where and how people eat-out. Food is increasingly

Non-London versus London respondents – self description of working experience Source: Sacla’ Eating Out – Today and Tomorrow Consumer Survey (Base: 1056/127) (all working)

Times are changing

important to UK consumers. In the research, upon which the report is based, more than 60% of our 2,000 respondents said they were “passionate� about food. For many people, their relationship with food and drink is an important part of their identity. What we eat and where we frequent says something about who we are. As such we are significantly more demanding as consumers, increasingly expecting service delivered on our individual terms, making personalisation ever more important. It probably explains why we are far more comfortable in moving between outlets than ever before. Consumers may take one meal at a kiosk or street food stall, the next at a quick service restaurant, another at a casual dining outlet, while still others could be at a full service venue or at a fine dining destination. This mercurial behaviour is an essential component of today’s market, and it offers opportunities for those brands and outlets that can navigate this new “market map� effectively, often by understanding and targeting the occasions or contexts driving the appeal of different offers. Mercurial behaviour is also reflected in consumer’s daily diets, as fixed meal times become less relevant. More than 30% of all consumers regularly skip breakfast, rising to 40% of 18 to 24-year-olds. Beyond breakfast, almost one in five of all adults report regularly skipping lunch, a figure that rises to a quarter of both the self-employed and London respondents.

30 years ago, a time-motion study would have revealed a nation eating at three set meal times (7am-8am; noon-1pm; 6pm-7pm). Things have clearly changed. In graph two (page 52), the fluidity of displaced, or deregulated eating is demonstrated by the 23% who said they ate in the afternoon: a quarter said they were having a late lunch, a third said it was afternoon tea, another quarter labelled the meal an early dinner, and the rest said they were snacking. For comparison, of those 24% of respondents eating mid-morning, 41% called it late breakfast, 33% said it was brunch, and 8% described it as early lunch, with the rest, again, saying they were snacking. While this commonly reflects the pressures of working culture, it is widely â–˛ ÂĄ AUTUMN 2015 ÂĄ PROPEL QUARTERLY


Insight understood to be an unhealthy practice. To try to counter this, we see in some of the most successful and sophisticated modern businesses the return of communal lunchtime dining, which is now increasingly being introduced by smaller businesses too. That being said, today people are free to make their own decisions as to how and where to spend their time, money and energy. In fact our consumer choices play a key role in contemporary identity. As such we are significantly more demanding as consumers, increasingly expecting service delivered on our individual terms, making personalisation ever more important. For example, tomorrow’s consumers are likely to demand both an optimum blend of authenticity, service and technology.

Digital dilemmas Technology would seem particularly important around the occasion logistics of identifying, booking, finding a place to eat, and then, as has been well trailed in recent times, paying the bill (witness the march of businesses such as Flypay, Velocity et al). Our respondents reported that the most important feature of a restaurant mobile application (or digital service) is the inclusion of recent visitor reviews, representing a logical extension from the shift to independent reviews and away from social media recommendations among Generation Y (18-34-year-olds). The opportunity to pre-book is also a clear requirement, which sounds very simple, but the suggestion is to add value to the service by including live updates. The opportunity to pre-select a table is also an important feature, particularly for the over-65s, while among a smaller group (20%) the opportunity to pre-order a meal and drinks would also be well received. While consumers favour technologies that make their dining experience quicker and easier, operators are still wrestling with the role of technology inside the venue. For example, there have been a number of high-profile restaurants from around the world introducing bans on mobile phone use, sometimes rewarding participants for their co-operation – demonstrating a

All adults – meals taken outside traditional meal times

Source: Sacla’ Eating Out – Today and Tomorrow Consumer Survey (Base: 2034)

clear preference for a mobile phone-free setting. This is clearly an extreme example, but it is clear that not everyone wishes to be glued to their handset whilst dining. At the other end of the spectrum is the growing interest in the possibilities of, for example, table-to-table communications. What makes it more difficult is that currently there are conflicting consumer opinions over a digital/mobile enabled environment (versus a tech-free eating space). In our research overall, 37% of consumers would prefer a tech-free environment, three times as many as those who said they would prefer a tech-enabled one. Even among Generation Y there is similar ambivalence, with 32% saying yes to tech but also one in three against it. As in so many aspects of the market, it is important for operators to really understand their customer base before pushing ahead with initiatives – they have to navigate an increasingly complex picture. Ultimately it is about maximising visibility, thus ensuring that your operation makes the short-list for all these types of deregulated occasions and that you’re front of mind for both planned occasions and those spontaneous moments too.

All adults versus Generation Y – desired features of a pub or restaurant mobile app

Source: Sacla’ Eating Out – Today and Tomorrow Consumer Survey (Base: 2034/195)



What is the deregulation of life? The deregulation of life refers to one of the biggest trends of recent times. It’s about consumers not feeling constrained by social norms and the traditional way of behaving. It’s driven by a breaking down of traditional boundaries around time, place, work and (mobile) technology. It’s about the blurring of boundaries between home and work – if you’re a hospitality executive who often can be found catching up on emails in the weekday evenings or working weekends, you’ll be able to relate. People no longer eat in set patterns or work in set patterns. We can work in the coffee shop, we can do the Tesco shop from a smartphone, we can tweet our food order from the bus or train. One of the manifestations of this deregulation trend in hospitality can be seen at the upper end of the market with emergence of businesses like The Pig hotel chain, the STK restaurant brand and Soho House: they combine premium product and experience with informal, relaxed service. But the trend is everywhere – and smartphone technology is serving to turbocharge its impact on hospitality and leisure.

Clare Blampied is managing director of Sacla’ UK. Sacla’s insight and future trends report, Eating Out – Today and Tomorrow, explores the key emerging trends and habits shaping eating out in the UK, and ever-evolving modern attitudes towards dining out. To obtain a free copy of this 63-page report please email

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Conference Overview




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Conference Overview

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Conference Overview

Lessons being learnt: the trials and tribulations for operators Speakers at the annual summer Propel Multi Club conference in July brought delegates the inside take on a range of subjects from the UK’s better burger market to new food concept launches in the US. Sonya Hook gives an overview of the talks

CYRIL LAVENANT Client development director NPD Group How has the UK’s foodservice sector been faring in the past year? NPD Group’s Cyril Lavenant talked to delegates about its current performance, particularly within a European context. To begin with Lavenant noted there has been 0.6% growth in the number of visits made to foodservice outlets in the most recent year, which means the UK is in “much better shape” than the rest of Europe. In fact the UK is outgrowing most other countries, with Germany by comparison recording a 0.5% decline in traffic and France down by 1.2%, he explained. Similarly, Spain eroded by 0.8% and Italy’s traffic was down by 1.4%. Even the US failed to match the UK’s growth with a rise of 0.4%. “The UK is seeing growth in foodservice and also in other leisure

sectors, where it is again outgrowing other nations,” he said. “The growth is small but it’s a good sign; it means we are willing to spend money.” He noted, though, it will take a long time for the market to get back to where it was in 2008, particularly if we take into account monthly frequency of visits is now 16.4 per month compared to 17.6 in 2008, which equates to a total of 685 million fewer annual visits to foodservice outlets now in comparison to 2008. “The sector is still at the beginning of the road to full recovery, but our research does also show growth in all three major day-parts,” he explained. “Lunch is in growth by 1.7% – it was an occasion that was in decline before, so this is encouraging. Dinner is up by 3.3%, while breakfast growth is rather small at 2.6%; there needs to be

some upgrade of the breakfast offer.” The snacking occasion however is the one that is in decline, with a drop of 3.6%. Lavenant suggested perhaps this occasion could do with more indulgent items in order to push it back into growth. For the foodservice sector he advised a focus on attracting families, with growth in family dining occasions of 11% since 2009. Lavenant said: “We are spending on average 16% more on family visits; quality and variety is important here and kids need to like the environment as well as the adults.” The strength of the family dining occasion is also helping to drive growth for casual dining chains, he added. “These places offer good quality service and value for money, but they do well at attracting both families and also the 18-24 year-old group,” Lavenant said. Looking at the year ahead, he noted the sector is still recovering from very difficult times but forecast growth of 1.1% this year and 1.5% next year. “We think the market will slightly outgrow last year,” he said. “Then it will grow faster and faster, but it will take another four to six years to recover those lost consumers.” ▲ ¡ AUTUMN 2015 ¡ PROPEL QUARTERLY


Conference Overview

STEVEN PIKE Managing director HospitalityGEM Operators can learn a lot from listening to their customers – it can even have a strong impact on sales, according to Stephen Pike, managing director of HospitalityGEM, a company that helps hospitality businesses to manage the experience of their guests through insights, engagement and learning. “Really GEM, which stands for ‘guest experience management’, is the practice of measuring and closing the gap between the intended and actual guest experience in order to increase satisfaction, loyalty and advocacy,” he explained. “This will help to grow sales, repeat visits and a higher average transaction.” It can be hard to manage feedback from guests, he told delegates, but doing so will help to gain insights and make improvements to their business. “Word-of-mouth is important: it is either positive, negative or neutral, but beware that neutral feedback could be dangerous as it means that nothing is memorable about your business,” he said. Engaging with guests online is one way of dealing with word-of-mouth feedback, because it can promote brand awareness and interaction after the visit. Working out how to gather feedback is also important and can vary for each business. Using a mystery dining company can work for some, he said, but he stressed the importance of how questions are posed on feedback questionnaires. “There are ways of getting answers that are actually useful for your


business,” he explained. “You can use questions such as ‘What one thing could we have done today to make your experience better’?” Finding out where a company’s weaknesses are can help identify which areas need strengthening, such as the best occasions for upselling. “The key to selling is not whether it is done but how it is done,” he said. “Don’t be afraid to sell; just do it right.” Guests want to spend money, he pointed out, “but the team needs to be able to read the opportunities, and you need to measure the results”. To conclude, Pike explained the guest feedback systems should alert companies so they can deal with it, “and even recover upset customers”, he noted. “You need to be engaging with guests and get them to interact with your brands – all of this is closing the gap,” he said.

“Word-of-mouth is important: it is either positive, negative or neutral, but beware that neutral feedback could be dangerous as it means that nothing is memorable about your business”


BERRY CASEY Founder Hache Opening a burger restaurant in the middle of a “better burger boom”, with very little foodservice experience could – on paper – look like a disaster, but Hache’s founder Berry Casey managed to carve out a path to success. Casey told delegates how the company, which recently celebrated its tenth anniversary, expanded from its original site in Camden to six sites across London. “I began my working life in a creative department of a large advertising agency, where I met my wife and business partner, Susie,” he explained. “My move into foodservice began when one of my twin daughters asked us to buy a pop-up crêperie stand but then she left two weeks later leaving me to run it.” Having been thrown in at the deep end, Casey decided to change the core product, moving it away from the original powdered crepe mix, and soon the business attracted queues of customers all day. “But then a large Pret opened nearby and smashed our sales,” said Casey. In response, he rebranded the whole thing “and out of a few quality products our sales tripled”. Following this experience, Hache was born in Camden Town. “We started from scratch in the middle of a burger rush and recession; there was an explosion of competition, as well as a big drug problem in the area,” he explained. ▲

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Conference Overview One of the things Casey claimed to be particularly proud of is Hache’s relatively low staff turnover for the industry. “We have never advertised for a general manager – we have always promoted from within,” he said.

“We need to continue to innovate. It will be all about brands. It can be very dangerous to focus solely on the bottom line and a breakneck speed of expansion”

But we had a vision – we wanted to design a restaurant around what our kids would like.” It meant the interior had a very different feel from competitors, with elegant ceiling lights and chandeliers instead of the usual American diner-feel. “We wanted to be different, but it was only after (a number of glowing media reviews) and a host of celebrity visitors that we went from being quiet to being fully booked for the weekend,” he said.

“Then we had the very different problem of being absolutely jammed.” He explained the business still turns away enough people every Friday and Saturday night to fill the Camden site again. Out of the six sites across London the Camden venue is still one of its most successful, he said, despite being off the main high street. “I’m not sure I understand it completely, but I’m not complaining,” he added.

CORRADO ACCARDI Founder Pizza Rossa Selling pizzas by the slice works in many European cities but Britons are more wary. Corrado Accardi, the founder of Pizza Rossa, spoke to delegates about how he had to implement a complete U-turn in his strategy for the UK in order to find success. Accardi introduced his pizza-by-the-slice concept a few years ago in London, having raised funds via a hugely successful crowdfunding campaign. But the company has now unveiled a new strategy involving seven-day-a-week venues such as transport locations, shopping malls, universities and street food markets after closing its London Wall site in the City of London. Pizza Rossa specialises in individual slices of pizza that are designed to offer a healthier alternative to standard pizza, as the dough is lighter. “We have managed to create a product that tastes good when reheated and therefore not all of our units need to have pizza ovens, and it also offers extreme flexibility and scalability, as well as being a healthy ▲



Another USP for the business is the quality of the product and the menu itself, he noted. “Our chef produces a new special every month,” he said. While business is good, he pointed out the market is still challenging. “I predict there will be some casualties from the crowded premium burger market over the next few years,” Casey said. “We need to continue to innovate. It will be all about brands. It can be very dangerous to focus solely on the bottom line and a breakneck speed of expansion. It is going to be interesting.”

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Conference Overview indulgent product at just 200 calories a slice,” he explained. Pizza Rossa’s post-money valuation after its second round of fund-raising was £1,490,000 – it was only the third food and beverage company to complete a successful second round of fund-raising. In 2013, the company launched an equity crowdfunding campaign that broke the European record for a start-up by achieving its target within 17 days. Earlier this year the company’s second crowdfunding campaign to aid its expansion over-funded its target of £150,000 a week before it was due to finish. But he explained: “It has been difficult to attract the British customer to the original proposition.” Consequently the company made the decision to close its London Wall site, which opened in November 2014. The site was purely a takeaway site in an area that was quiet at weekends. “The market needs to be developed first,” said Accardi. “I plan to move away from the City of London now and will move back in the future.” Pizza

Rossa has also opened its first kiosk site at Pump market in Shoreditch – and is in negotiations with a shopping mall operator in Eastern Europe. Accardi explained the company is close to signing a deal that would see two openings in transport locations this

ANDY LAURILLARD Founder Giggling Squid Getting the formula right for restaurant expansion is a challenge and a concept that works in some places may not have the same appeal in all parts of the country. Andy Laurillard, co-founder of Thai food chain Giggling Squid, discussed the impact on the business as a result of opening in a town that didn’t have

the same demographics or footfall patterns as its other sites. Giggling Squid, which started in Brighton six years ago, now has nearly 15 sites but Laurillard admitted the company could have 30 units by now if it hadn’t opened a restaurant in Crawley. “There are four legs to our business but it had wobbly legs in Crawley as three were missing,”

year, potentially leading to 12 over the next year or so. “A leading operator of shopping malls also wants pizza-by-theslice, so we are in talks with them, and we are really targeting universities, too,” he said. “Our Shoreditch market site is seeing sales going up by 10% week-on-week.”

he said. “The venue was packed between Monday and Thursday but it was quiet on Fridays and Saturdays.” The other areas of the business – the lunchtime trade and its takeaway arm – were also non-existent in Crawley. “In some of our sites takeaway represents 15% of the business but in Crawley we missed that revenue stream entirely,” said Laurillard. Despite a sales turnaround when the team opened a bar above the venue, the company took the decision to dispose of the site.

“There are four legs to our business but it had wobbly legs in Crawley as three were missing” But lessons have been learnt from each of the existing venues, he noted, and the whole expansion process is a learning process. “The lesson learned from opening in Tunbridge Wells is the effect of national press, which boosted our business by 25% overnight,” he said. Meanwhile, at Henley-on-Thames it was able to put the prices up. “We learned that variable pricing works and we now have three price points across the business,” said Laurillard. “We also introduced a wine list with bottles priced at £40 to £50 each for Henley, which we have since rolled out to our Tunbridge Wells site.” For the future the company has made a list of 50 target towns. “We are taking time to get to know exactly what we are looking for in these towns so that we can make decisions quickly if we need to,” he explained.



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Why brands perish Why do brands falter and die? One aspect involves ‘common typologies’. There are four leadership types who ‘blow up’ foodservice brands, all with distinctive characteristics, says Chris Edger

The clueless: This type of leader is completely unsuited to either running a foodservice brand or lacks the skills to manage a brand during its transitional phase of development. With regards to lack of tacit expertise of the industry, it is not uncommon for brand owners – in order to seek “new perspectives” – to go outside the sector to hire new leaders; in spite of all the evidence (both practitioner and academic) that promoting talent from within or across the sector from similar concepts is the most fool proof way of safeguarding a brand’s future. Sometimes hires have been made from food retail, for instance, but these new recruits – steeped in knowledge of “functional retail” – lack a recognition of the centrality of “service performance”, “on-site production” and “emotional connectivity” within a hospitality context. Tangible factors such as range, availability, quality and price are the main drivers of customer satisfaction in food retail. Intangible attributes such as service, sociability and environment are just as important within foodservice. Also, often leaders from a food retailing background – where brands are highly systemised brands and “homogenised” – cannot cope with the heterogeneous nature of foodservice; they are insufficiently attuned to the fact that “one size cannot fit all” within this context. Lacking these insights, the clueless leader wrecks the emotional dynamic of the brand by searching for solutions based more upon efficiency than effectiveness. With regards to the wrong leader being in place at the wrong stage of the brand’s life cycle, each role during the various transitions must be matched by appropriate leadership skills. Whilst it is possible in some instances for some leaders to fulfil multiple roles, the likelihood is that owners of decaying brands “negligently persevere” with the wrong leaders with the wrong skills at wrong time in the brand’s development, resulting in dire consequences for all concerned (ie employees, customers, shareholders, suppliers, communities etc). The reckless: This category of leader jeopardises the future of the enterprise by making high-risk decisions in an effort to achieve preposterous stellar growth and/or generate dubious shareholder “value creation”. Unsuitable assets are acquired for the sake of the appearance of scale (the notion of expansion being conflated with growth) or complicated exercises in “value engineering” are conducted. The reputation of the brand is diminished rapidly by vainglorious “financial” rather than “industrial” strategies that end in unmitigated disaster. It is not that the leader in this instance is “clueless”; rather they possess a dangerous combination of a lack of self-control and a low boredom threshold. They seek immortality by “putting all their chips on red”, and – in some instances – they get away with it on the first or second occasion. Inevitably, however they get found out. To the reckless, taking risks is a form of aphrodisiac – it is a stimulant that they crave in order to feel energised, excited and alive! But why are these chancers in a position of authority in the first place? Likely explanations include brand owner greed (the fact that they buy into “wrecker’s” vision for their own self-serving financial purposes), executives dangerously morph into this category through boredom (they have been in position too long) and/or they are subject to a complete lack of corporate governance (checks and balances that thoroughly review key strategic decisions). Whatever the reasons this type of leader comes with a strong health warning; they should not be appointed in the first place or stopped in their tracks before they do irreparable damage.


The egoist: The egoist is probably one of the most common leader typologies connected to failing foodservice brands. This individual has an almost improbable and delusional sense of infallibility. Their lack of self-awareness coupled with a misguided belief in “divine superiority” drives them to make decisions without consulting others whose views and opinions they regard as derisory or “unworthy”. Soon the egoist has created an organisation that relies upon them for all the answers; decisions are deferred or delayed for fear of retribution or being cast out of the “circle of patronage”! The all-powerful monarch with a sense of unbridled self-destiny has surrounded him/herself with compliant followers who have learnt to flatter and preen the leader’s sensitive ego rather than draw their attention to unpalatable truths. But because the “egoist” is in it for themselves rather for the long-term prosperity of the brand (the “project” is about them rather than the common good) the brand is usually doomed to failure. Following conception no successful brand can be the entire preserve of one man or woman. Engagement and innovation can only be sustained through a feeling of common purpose and public recognition of the contribution of others. The egoist cannot see or recognise this, eventually – even though they are surrounded by sycophants – they are left isolated and become detached from the truth. At some point a “regime change” will occur and all those that the egoist believed were close colleagues and confidents will spurn and ignore them! The toxics: Our final category of failing brand leaders (although not totally mutually exclusive to the types previously outlined) incorporates the consciously venal! These sociopaths have managed their careers successfully because they have been outstanding at “managing upwards”. They are nasty usurers who – unlike unself-conscious egoists – plot, scheme and dissemble deliberately to get their own way; whatever the human consequences. Lacking any empathy for the feelings of others they actively seek to “divide and rule” – deliberately setting brand members up against one another through gossip and misinformation. They do this because they believe that it augments and strengthens their position; they become indispensable puppet masters – the only people who can lay claim to being able to control the unruly rabble (which they’ve created!). Toxics are hard to catch and dispatch because they are sly and mendacious. As they are used to preying on the insecurities and fears of others to control them they are artful in “seeing off” any challengers by deploying equally ruthless tactics (ie whispering campaigns challenging their moral probity and good character). But in the end, their game play hangs them “by their own petard”. Toxics run out of people, the brand runs out of energy and they run out of track! At some point their tactic of blaming everybody else for poor performance loses credibility and they become the victim, along with the brand which is probably “too far gone” for redemption.

Professor Chris Edger teaches multi-site management at Birmingham City University. This article is extracted from a forthcoming book on brands life cycles he is co-authoring with Tony Hughes, the former managing director of restaurants at Mitchells & Butlers and currently a non-executive director at The Restaurant Group


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Giving an insight into insight Elliotts director of strategy and development James Hacon discusses the potential of insight programmes, what they can bring to operators and why the key to getting the most out of them is to ‘read between the lines’


hen meeting with clients, Elliotts’ insight programmes are by far the service that evokes the most questions. While PR and marketing are perhaps more defined, and better understood, across our sector insight remains somewhat a mystery. “So you mean research?” is a frequent comment. “Insight” actually has two dictionary definitions, and both are very valid. The first is “apprehending the true nature of a thing, especially through intuitive understanding”. Practically speaking this is accurate. A good insight programme digs deep into a problem, based on desk, qualitative and quantitative research. The second definition is an even better representation: “penetrating vision or discernment; seeing into inner character or underlying truth”. To put it into more realistic terms, it’s a case of moving past pre-determined, anecdotal instinct and establishing the true situation. A plethora of operators work on instinct alone, some to great success, but there’ll always be a need to discover the cold, hard facts and inform decision-making. How does this look for the hospitality industry? To many operators, insight is as simple as purchasing a regular report and tracking a number of core analytics. There’s no problem with this in principle, but it’s a massive missed opportunity to dig deeper. Anyone can look at the reports out there that give an overview of the market, but the true value in this data is through “reading between the lines” and identifying gaps: either between their own brand and the competition, or identifying noticeable opportunities. In a fragmented, busy market such as ours though, there’s a greater need for brands to mine further to develop the ideal approach.

Digging deeper There are several metrics that an insight programme such as ours uses to pin down an operator’s true positioning in the market. Price-points are always a pivotal indicator, with brands generally bunched up together in the premium and valueled categories, but it’s when we crossreference this with other factors that the data comes to life.

“The key is to read between the lines. There’s only so much that can be gleaned from a basic, numberbased report. It has to be linked with practical advice and reading, interpreted from an operator’s viewpoint to present a real picture that can be used in a forward-thinking strategy”

The amount of sites a brand has, dwelltime, average amount of covers, spend per head, target demographic, customer sentiment, size of menu: there are plenty of aspects of an operation that it’s well worth digging into to establish where a brand is falling behind the competition and wider market. The key is to read between the lines. There’s only so much that can be gleaned from a basic, number-based report. It has to be linked with practical advice and reading, interpreted from an operator’s viewpoint

to present a real picture that can be used in a forward-thinking strategy. Away from a desk-based approach, one valid tactic is site visits, possibly taking the learnings from aforementioned market work and comparing them to the real thing – visiting competitors and marrying the insight to the real thing, tweaking the findings to match the reality. Qualitative and quantitative means are equally viable means to reach insight. Again, this comes in many forms. Qualitatively speaking it’s a case of speaking to people. This could be those behind an operation, such as managers or their teams, or it could be the consumers using a venue. It could even be consumers who aren’t using a venue, to understand why. Quite often, insight goes one of two ways. The results of a programme can either reaffirm thinking or an approach, or on the contrary it can quash pre-existing opinion and inform a re-shape accordingly. The end result of an insights programme is a series of recommendations, based on unequivocal findings and robust market data – taking the lessons learned and turning them into specific and realistic action points, with priorities identified and a clear plan of attack at the ready. I’m not of a footballing persuasion, but Johan Cruyff’s quote is apt: “My insight is often confused with speed. When I start running earlier than the others, I appear faster.” A commitment to insight, and reading between the lines, can put any operator ahead of the game.

James Hacon is the director of strategy and development at Elliotts, the sector’s leading specialist marketing, insight and PR agency ¡ AUTUMN 2015 ¡ PROPEL QUARTERLY



Making it personal Keep it simple Of course, this can feel very difficult to do on a busy Saturday night, which is why it’s important to keep the process simple when staff have slipped into service mode and are trying to get tasks done as quickly as possible. To aid this, train your team to have one or two set questions that they can express naturally, but they don’t need to think about. It could be asking the guest about their journey to the venue, or what they’re doing afterwards; this is an important question as it identifies the guest’s dwell time length. The interaction doesn’t even have to be verbal – it could be a visual cue, such as what the guest has with them – are they carrying lots of shopping bags or have they got children with them? Both of these situations will require different handling; perhaps offering the shopper somewhere to store their bags, or giving the children an activity book to play with. Consider the age of your guest; people like to be addressed in different ways and those of a certain age group tend to prefer a formal communication style. At the same time however, there’s always a caveat – your team have to be careful not to generalise or stereotype, but train themselves to pick up on characteristics.

“This means operators need to build a personalised approach into their brand values and ensure staff are well trained on implementing them”

HospitalityGEM managing director Steven Pike talks about the importance of reading the needs of guests as individuals


hen you think about our society as a large, it is clear that the rise of the individual is a key trend; think about how people separate themselves from others when walking, commuting or working by putting on headphones, creating their own personal space amongst the masses. Without a doubt, this has impacted on hospitality, as the customer now has a very different perception as to how they should be treated and what they want their experience to be. The group mentality has disappeared – now everyone wants to be, and should be, treated as an individual with their own unique tastes, desires and preferences. The operator needs to consider this and the implications it has for their business; all of these people are going to have their own opinions on guest experience and in today’s increasingly vocalised society they are more likely to share these opinions with their friends, particularly using social media platforms which have the potential to reach far greater numbers of people than ever before. This means operators need to build a personalised approach into their brand values and ensure staff are well trained on implementing them. It’s all about encouraging staff to do more than just go through the motions; if your team make a conscious effort to learn something about each guest, then they’ll identify it and it will become a habit. It doesn’t require a psychology degree, but could be anything as simple as how the guest is dressed, looking at their body language, or engaging them in conversation and finding out about their day. All of those simple elements can help your team to understand how it might be best to cater for that individual, even compared to someone else on the table.


Solo diners are ideal for developing this personalised approach; they are just one individual whose needs your team needs to work out and these are often far clearer than they are with a group. With the solo diner you can guess quite quickly what they’re doing; are they just coming in to relax with a book or are they coming in to do some work? This presents a great opportunity for your staff to practice the individual approach and then see if they can extend that to groups of diners. As with all aspects of staff training, it’s one thing to teach them, it’s another to ensure it happens. Identifying a way of assessing that a personalised approach is being used is important. Again, this doesn’t require a huge amount of process; it could involve the manager asking a member of the team: “What can you tell me about the guests on that table?” and then discussing how this impacts their experience. There needs to be a routine where your team bring the information out of their minds and verbalise it. Peach Pubs do this especially well: their managers are tested on how many of their regulars they know, and they have to describe certain things about them in order to prove this, such as their partner’s name, their job or their car. It’s all part of being an excellent host; the managers have to know their guests and this encourages them to engage with each one and in turn ensures the guest feels they receive a personalised experience every time.

Steven Pike is managing director of HospitalityGEM HospitalityGEM is the UK’s leading expert in guest experience management (GEM). The company provides hospitality operators with tools for intelligence gathering, guest engagement and staff learning, working closely with them with a personal approach and modern software to help generate revenue growth through effective GEM. HospitalityGEM's services include mystery guest visits, online feedback, social advocacy, performance analysis and learning management. Clients include Wagamama, Brasserie Blanc, Spirit Pub Company, Malmaison and Peach Pubs. For more information, visit:



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Chain pubs face being eaten out-of-home by new competition


s branded pubs continue to do well, they find they are not only competing with independent pubs. Their “competitive set” in the out-of-home (OOH) foodservice market now includes the successful casual dining brands and many other types of outlet. Branded pub operators have become especially adept at recognising the need for both improved premises and a better experience for consumers. The advancement of gastro-pubs and the enhanced food offerings in most branded pubs has been a major driver of the increased and sustained visit growth that we’ve seen.

Good pub food means success The growing importance of many pubs as a place to eat means for the year ending March 2015 less than one in 20 branded (chain) pub visits (4%) exclusively featured beverages. Comparing this figure to the much higher 15.5% incidence of beverage-only visits for independent pubs illustrates one of the biggest differences between brands and independents. It also underlines a key ingredient for success that those independents are largely missing. There are of course many examples of independent pubs that offer great food at a great price, alongside a great atmosphere and experience, but these are very much in the minority.

Branded pubs are doing well – but as NPD Group foodservice senior account manager Jack MacIntyre explains they now have a hungry competitor in casual dining outlets

Pub visits are down At the same time, Britons are visiting pubs less frequently than seven years ago. British consumers went to a pub on average of 3.9 times per month in 2008 but this is now down to 3.5 times per month in 2014. For the pub industry, this means 47 million fewer visits in the year ending December 2014 than during 2008. To put this in the context of the whole OOH market, overall visits remain 5.5% lower than in 2008 – this despite



the post-2010 uplifts in much of the market. Pubs in general suffered during the recession, but independent pubs rather than chains have borne most of this burden. How can they respond? Smaller operators and independents do not have the same resources as branded pubs when it comes to finding larger premises, or refurbishing their sites. In particular, they cannot mimic the super-pub strategy of some chains that have created multi-zonal pubs so that the pub experience is sufficiently diverse to meet the needs of all customers – young and old, male and female, drinkers and eaters. So in this context branded pubs have a clear advantage. Many independent pubs are ill-equipped to cope even with a few weeks or months of slow trade, let alone to think about expansion and renovation.

Branded pubs face new competition As chain pubs continue to provide a much more balanced and quality-heavy value proposition, they find they are competing with more than just pubs. Their principal group of competitors – what marketers call their “competitive set” – has widened to include casual dining brands. If you conducted a straw poll of pub customers and operators ten or so years ago, it is highly likely that the majority would view “going to the pub” as a distinct category. There would have been little or no sense of the competitive set involving any outlet outside of the pub channel. Now, pubs – especially branded pubs – are directly competing with all manner of OOH outlets. And the casual dining outlets stand out. Casual dining is the channel that has arguably shown the most innovation and flexibility, and has reaped the rewards of this, with 5.3% traffic growth between year-ending March 2014 and year-ending March 2015. Sitting in the long-neglected middle ground between quick service restaurants (QSR) and full service restaurants (FSR), casual dining offers consumers the efficiency, ▲

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Insight immediacy, and “fun” of QSR, with the full experience and food and drink quality of FSR. Alcohol – especially cocktails – is also a welcome addition to the changing scene in casual dining outlets. In other words, casual dining has created an offering and experience that is difficult to beat.

Pubs fight back: happy hour gives way to app power

Casual dining satisfies Look at casual dining in terms of customer satisfaction and it’s certainly a winner. NPD data for year-ending March 2015 shows consumers felt “strong overall satisfaction” in 77% of visits to casual dining chains. This means they rated the overall experience as either “very good” or “excellent”, with this figure representing an increase of ten percentage points since yearending March 2009. Branded pubs came in at second place (“strongly satisfied” in 73% of visits) while QSR chains scored 67%.

Winners and losers Looking at historic growth figures in terms of visits for key foodservice channels, the characteristics of the big winners and losers stand out. Casual dining (+20.1%), QSR (+4.8%) and branded pubs (+44%) are channels where there has been significant innovation and advancement in the broad offering. FSR and independent pubs have simply not evolved well enough to compete with the might of the casual dining-led revolution in OOH over the past seven or so years. The overall net effect of these visit changes on pubs is a decrease of 4.3% between year-ending March 2009 and year-ending March 2015. As a result, many of the successful chain-led pubs have taken over (both in terms of visits and premises) from independent operators who were forced to close during the economic downturn.

No room for second best All of this intense competition in the British foodservice market has spawned a newer breed of the “demanding” consumer. In geographical areas where the offering has advanced significantly – most commonly in urban areas with high concentrations of casual dining outlets and gastro pubs – consumer demands are very tough indeed. As Casual Dining Group chief executive Steve Richards said in Propel’s Friday Opinion on 17 July 2015: “The options and experiences available to today’s restaurant-goer are endless, which means their expectations are even higher. They will not tolerate second best, and venues that do not take absolute care of them do so at their peril.” NPD customer satisfaction data for year-ending March 2015 supports this claim. While at first glance the “peril” that operators face may seem a little overdramatic, when we look at the data, Richards’ point actually resonates strongly. Of those consumers who rated the overall satisfaction of their visit to a chain pub as “excellent”, 71% say they will definitely return to the pub within the next four weeks. Now, compare this to those consumers who selected “very good” rather than “excellent” when rating their overall satisfaction; just 42% of these consumers said they would definitely return within the next four weeks. Can you build a successful business on the back of customers who do not intend to visit you again anytime soon? Clearly the difference between “excellent” and “very good” is the new standard of excellence that operators need to seek out in this increasingly advanced and competitive market. That applies to branded pubs, independent pubs, casual dining – in fact all the foodservice channels. Everybody knows the competition is tough; but it’s going to get even tougher.


“Now, pubs – especially branded pubs – are directly competing with all manner of OOH outlets. And the casual dining outlets stand out. Casual dining is the channel that has arguably shown the most innovation and flexibility, and has reaped the rewards of this”


The release of high-profile platforms like Apple Pay has recently highlighted the use of technology in the out-of-home (OOH) foodservice market. Pubs are well-placed to take advantage of two types of technology: apps that drive consumers through the door, and apps that maximise the in-pub experience. A Propel Morning Briefing (Wednesday, 15 July) reported on the first of these. MatchPint has developed a 2,000 strong customer base with more than 250,000 sports fans using the website and app to discover pubs and bars around them showing selected sports events. This traffic-driving and convenient use of technology is clearly well suited to pubs and their consumers. Other apps like Orderella and Bar Pass remove unnecessary queuing and time-wasting. I had first-hand experience of Orderella in my usually full-to-bursting favourite pub in Covent Garden. Sitting down at the table my friend had somehow managed to secure among the busy Thursday night crowd, I was faced with standing in the snaking queue to the bar. Noticing the Orderella sticker on the table, I took the plunge and my experience was transformed from one fraught with the idea of having to repeatedly queue at the bar, to one where drinks were ordered from – and delivered to – the table. As the importance of the overall “experience” in foodservice outlets of all kinds becomes increasingly important, pubs must look at any way they can of boosting this experience. But there are two sides to the story when considering the use of technology in pubs and bars to reduce queuing time (or remove it altogether). Pete Brown, writer of Man Walks into a Pub: A Social History of Beer, looks favourably on the institution of queuing in pubs, saying: “It’s what makes British pubs unique – the random queue, the waiting to see whose turn it is.” This was written before the more widespread use of apps like Orderella and Bar Pass, and it’s fair to say that – from a London perspective especially – times have moved on (if indeed Brown’s view ever did reflect reality). Consumers are unlikely to tolerate the idea of waiting in a queue at the bar for their drinks, when instead they could be waiting at their table, continuing to socialise with their friends. Considering that 61% of visits to the pub are motivated by socialising, pub-goers will welcome the precious extra ten to 15 minutes of “friend time”, per round, afforded by ordering apps. In other channels, where this queue-busting technology is not as commonplace, innovations such as contactless card payments and, more recently, Apple Pay, are helping to improve the in-pub experience by streamlining the payment process. Consumer reservations about these types of payment technology are more focused around the innate privacy and security side of the offering, rather than the social objections in the case of pubs.

Jack MacIntyre – foodservice account manager at NPD Group He can be contacted by email at:

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New kitchen video technology ready to stir up a consistent guest experience Delivering consistency is a challenge for operators when it comes to serving food but as Intelligent Business Systems managing director Gareth Powell reveals, help is at hand


was reading an intriguing news article in Propel Morning Briefing the other day where it was revealed that 80% of diners view “word of mouth” as the greatest influence when deciding where to eat. Tellingly, the research, carried out and published by guest management experts HospitalityGEM, also highlighted the fact three quarters of respondents would be “very likely” to stay longer than planned if they were having a great meal experience. Commenting on the research, HospitalityGEM’s managing director Steven Pike said it was vital for operators to manage the guest experience to ensure consistent delivery of their offering. I am definitely among the three in four people who really look forward to sharing a good meal with friends and colleagues. However, I know from my own professional involvement in the hospitality industry that delivering consistency has always been a major challenge for operators wherever they serve and sell food. We all know from our own eating out experiences how quickly a meal can turn sour thanks to relatively minor hiccups. Longer than necessary gaps between placing an order and receiving the food can turn a positive experience sour. Being in a group of diners sat with plates of cooling hot food waiting patiently for the final meal to be delivered by apologetic waiting staff is never much fun. And how annoying is it to tuck into your food only to discover that the potato wedges are undercooked or what should be a well-done burger is pink in the middle? Fortunately, technology is on hand. Scenarios like the ones pictured above will become increasingly rare as next-generation kitchen video management solutions give operators unprecedented control over the preparation and distribution of food. As you would expect, at Intelligent Business Systems we’ve been at the forefront of these innovative technological developments following the recent launch of our very own new improved kitchen video management system (KVMS). This exciting new product development sits 100% in the cloud and operates in conjunction with our POSLink touchscreen technology and StockLink business management software. We’ve invested a lot of time, effort and resources developing our KVMS, rewriting and


replacing our existing system. The result is a highly sophisticated yet easy to use intuitive business tool that is going to revolutionise how kitchens operate and deliver food.

Put through its paces Critically, we’ve listened carefully to our clients throughout the development process. Remember that famous quote from Apple founder Steve Jobs where he says: “You can't just ask customers what they want and then try to give that to them. By the time you get it built, they'll want something new.” Jobs’ wise words definitely don’t apply to the hospitality sector where operators have a very clear view of exactly what they want. Two of our multi-site clients, Itsu and GBK, are currently putting our KVMS through its paces with the intention to roll-out to other sites later this year. Other multi-site clients are likely to be making their own KVMS investment to take advantage of timing savings, numerous efficiencies and many other benefits. For example, our solution is perfect for foreign workers or unskilled kitchen staff who do not have English as their first language as video screens can communicate a visual experience (via graphics and images) rather than written instructions and descriptions on how to cook hot food and prepare cold.

“The result is a highly sophisticated yet easy to use intuitive business tool that is going to revolutionise how kitchens operate and deliver food” Recipe cooking times for individual components can be built into every food item and stored on a database. Staggered information is sent to the screens depending on the menu item ordered by the customer. Every component of a meal is fed through chronologically. Shorter cooking items are held back so everything remains fresh and cooked as it should be when the recipe was originally devised. Orders can be sent directly from the POS as soon as they are input so staff don’t even need to cash-off at the till for the food order to enter the


system ready for preparation. At the same time, visible countdown buttons on the screen show what stock is left. Kitchens use combinations of different screens, including those for preparation and pass control. The former displays all the items of a recipe while the latter shows the course status from the initial order to serving the table. Statuses include new order, started cooking, cooked, prepared and at the table. Individual kitchen screens only display information relevant to the tasks currently being completed in a particular preparation area (for example grilling or fryer locations). All screens can be viewed in various formats such as individual tickets or lists for ease of use and can intuitively interact and communicate with each other, triggering activity as and when applicable. When configured for the food-togo sector additional features kick in. During busy times food is prepared in anticipation of the par levels and left in the back of a chute. The par control function automatically sets replenishment levels relevant to the time of day. For example, two soups up to 11am with a minimum of ten available during the lunch period rush hour. When the operator is quiet it can alter the mode of service to “on-demand" where the food is cooked fresh when the customer comes in rather than in advance. The KVMS is equally impressive away from the kitchen. Because it integrates with StockLink business management software, data and reports are available within seconds of an order being placed. Operators and management have immediate access to analysis and performance management information to interrogate and improve any aspect of a meal and its delivery. These are exciting times within the hospitality sector as operators embrace game-changing technology. We’re really pleased to be playing our part. It is a major achievement as we approach our 25th anniversary and it is good to know our technology is just as relevant now as it was then.

Gareth Powell, is managing director of Intelligent Business Systems –

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Analysing the success of Tahola at Caffe Nero What has the feedback been from your users? It’s essential to what we do. As the business evolves, what the Tahola Cognos system is great at doing is allowing the reporting system to evolve as well. How has the solution developed for you over the years? We have brought in more applications and the more we have brought in, the more broad the scope of what Cognos does has become. We’ve also got better at assessing what is useful for our users and the people in our business. We have a people focus and we use systems to complement that by not having whole rafts of data and reporting.

Caffe Nero head of business systems David Radburn talks about its partnership with business analytics company Tahola and the impact the system has had since being introduced some 10 years ago What service(s) do they provide to you? Essentially they provide consultative and advisory work, creation of new reporting, help with new project launches and support of the entire application. Before you installed the Tahola analytics solution how did your business operate or deal with all the data from your systems? We didn’t have anything – we probably had a few systems that had their own in-house reporting application. How did that process work for you – any positives and/or negatives? The positive is it didn’t cost us anything to report in that way because we were using tools that came with the application. But the downside was we didn’t know enough about what was going on in the business. I don’t think there were any benefits I can think of in not having Tahola Cognos as an analytics tool. Why did you need this solution – the Tahola Cognos system? We didn’t know what was going on in the business. We literally used to take printed till rolls and enter them into a spreadsheet to work out information. How did you go about selecting a solution? We looked at a couple of options. Cognos was an obvious choice for us and Tahola was recommended to us as a Cognos partner with expertise in hospitality.

What challenge(s) was the project going to solve? We wanted better control on product launches and prices, we wanted to look at what our sales mix was by product and many other KPIs. We didn’t really have any of this detail. What were you concerned most about with the solution and project? I think that we were concerned to make sure that the data was believable and to make sure that we could properly validate it. Tahola was saying don’t be too prescriptive about what sorts of things you want to know about the business, just give us a broad flavour and it was able to build in the flexibility we were looking for. Where have you noticed the most significant change(s)? The way we analyse the business centrally has changed totally. We look at KPIs around key ratios in attachment rate and in the way that our food sales are working, we look at product, people, sales, service, everything. Can you give an example of how the solution works for you on a daily/ weekly basis? We have a trading meeting every week where we look at some core strategic information about how well the business is performing, how well the stores are performing, and how well products are performing. We make decisions on a weekly basis across the business and on a more directional basis based upon information we get out of the Tahola Cognos system. We use it to monitor our payroll.

Are there examples though where you’ve used the information in the business and you’ve seen a financial performance impact? We know for example that since we launched the Balanced Scorecard we have seen an increased focus on things like staff turnover and therefore we saw a reduction in staff turnover numbers. Would you recommend this solution to others? Yes. If you want to be able to get a good perspective across your business particularly if you’re wanting to pull together different data sets into one place the only way to do that is to use something like the Tahola Cognos system. What additions/improvements would you like to see to the solutions? There are more technical things that we would like to do around mobile and giving our area managers the ability to look at their business more on the fly as they walk in to the store and know exactly what’s going on. I don’t think there’s anything that the system can’t do that we want to do. What does the future look like? We will attempt to standardise some of our information so that we can really compare what we do in different territories around the world. We will increasingly move towards a more mobile and flexible solution. This will mean we will need to get better at highlighting and alerting important information to people.

To find out more information about Tahola contact Simon: Tel: 01142 211 122 ¡ AUTUMN 2015 ¡ PROPEL QUARTERLY


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Making action plans really ‘smart’ Mastering Multi-Units founder Lee Sheldon offers his expertise on the best way of developing and executing a robust and value-added action plan “


love it when a plan comes together!” John “Hannibal” Smith’s catchphrase from the eighties TV show “The A-Team” is perhaps a fitting endorsement for the successful execution of a plan. Sometimes I see a little too much emphasis on the creation of the plan rather than on its implementation. Of course it’s essential for multi-unit managers to have a road map that will lead their team to success, but it’s the execution of that plan that should be the name of the game! Now try not to groan when I mention “smart” objectives. Yes, I know just about everyone in business can repeat the mantra of specific, measurable, achievable, realistic and time bound (or variations of the same theme). However in my experience, a manager’s ability to recite this bears little or no relation to their ability to actually write objectives that conform to this standard. From a multi-unit managers perspective I believe creating a robust and value-added action plan is achieved through the following straightforward steps:

Accountability: Who owns the goal? Is one person responsible for each step or are several people involved?

Analyse current performance and consider what needs to be achieved: Why does it matter?

As an example, we recently worked with a multi-unit manager in coffee and bakery to help reverse a negative sales trend that resulted in a gap between actual and budgeted performance. Analysis of the data showed that breakfast provided a real opportunity to grow sales. The plan involved focusing on specific products to up-sell, for example, a fresh orange juice, which was deemed to be a “perfect partner” to current breakfast purchases. The whole team was engaged, with their suggestions at the forefront of the plan. They also identified a successful selling technique that involved highlighting that the juice was “one of your five-a-day of fruit and veg”. A hopper of fresh oranges sitting atop the juicer also provided an appealing visual to tempt the customer! Naturally there were a number of steps involved in achieving the goal; from getting the team’s view on what products could best be up-sold, to a number of mini-training sessions to help the team with

Determine what you need to do to close the gap: (If performance is under where it needs to be) or the size of the opportunity that you want to exploit. Get specific: Move from vague or generic statements to a set of clear, detailed steps to achieve. Whenever feasible get the team involved in the identification of these steps as getting their input into the generation of ideas will lead to much greater commitment on their part. X to Y by when: Measures are critical, whether it’s a hard measure (£ or % are very common) or a softer measure (eg the number of sales training meetings taking place). Don’t forget to set a date for when it needs to be achieved as well.

Avoid ‘Ongoing’: The perennial favourite of many an action plan. Whilst the sentiment is understandable, (people want the standard to be achieved and then maintained until further notice), it is important to set a date when the relevant standard needs to be in place by. It can then be stipulated that the standard be maintained and reviewed on an agreed basis. Communicate: Make sure everyone who is involved in the plan, knows about the plan. It seems obvious but I’ve seen some wellcrafted action plans that had little impact on performance because individuals were unaware of it! Close the loop: Ensure there are regular opportunities (monthly or quarterly) where progress with the plan can be formally reviewed, recognised or corrected, as appropriate.

A juicy example

effective and genuine selling techniques. In total there were seven actions written down for this goal, each one with an owner, deadline date and a measure.

“Of course it’s essential for multi-unit managers to have a road map that will lead their team to success, but it’s the execution of that plan that should be the name of the game!” A sales goal was set to deliver an extra £150 of sales per morning shift but the real key was to break this down into specific volume goals for the team. How many orange juices the team needed to sell each shift was calculated, with individual goals agreed at the shift briefing. Tracking progress throughout the shift was important to monitor achievement for recognition or correction purposes. It was this discipline of ensuring that shift performance was reviewed every shift, without fail, that I believe ultimately led to the successful execution of the goal. The morning orange juice goal (£150 per shift) was forecasted to deliver an additional £4,500 over the six-week period. Alongside similar suggestive selling activities at other parts of the day, this would close the overall sales gap that existed, three periods into the financial year. Like Hannibal, the multi-unit manager was delighted that within three months their plan delivered the required sales boost to both close the gap and start exceeding the sales budget for the first time. Although unlike “The A-Team”, no duck tape, welding gear or limitless supplies of ammunition were involved!

Lee Sheldon is the founder of MMU – Mastering Multi-Units – ¡ AUTUMN 2015 ¡ PROPEL QUARTERLY



Making opinion matter After the opinion polls completely failed to anticipate the General Election result, David Martin gives four lessons businesses can learn from such research


or all the money and brainpower thrown at them, the often with noble intentions. But it’s fraught with risk, if not opinion polls singularly failed to anticipate the results dishonesty, especially if the possible answers to the question of the General Election. It was a statistically significant are not equally socially acceptable, or equally “cool”. And failure, and an unexpected one, not least for the consumers’ answers to those kinds of questions will not always “commentariat” – take a read of Andrew Marr’s reaction in the consider affordability – in other words they are more of a wish list. New Statesman to see how the result unnerved the experts. It In the words of Trajectory Partnership chief executive Paul caused Marr to ask: “How the hell do we know what we think Flatters: “We know that consumers are notoriously bad at we know?” The British Polling Council (BPC), which represents predicting their own future behaviours” – and he’s a seasoned the professional polling organisations, with an evident gift for sage in the business of market research. Far better to ask your understatement, declared the results of the final pre-election customers what they actually do, or did. polls “were clearly not as accurate as we would like”. It cited the 3. Handle social media with care: results from eight polls in the final three days of campaigning, I admit it, I Tweet, tentatively. But calm voices are often drowned with sample sizes as big as 10,000 in one case, using a mix of out there by what Marr described as “an echo chamber of lazy, telephone and online methods. On average, they underestimated received opinion, big on the volume, an ear-splitting background the Conservative eventual share of the vote by over four noise”. Ahead of the election, social media seemed to signal percentage points. The BPC, with the Market Research Society’s a loud and clear Labour advantage. But it wasn’t the whole (MRS) support, has set up an independent enquiry to make electorate talking. recommendations for future polling. “None of the above” Young industry leaders grew up with social networks, might be a good place to start. In stark contrast, the so it’s easy to be lulled into thinking that it represents exit poll that asked 22,000 people how they voted wider opinion. But the 2014 Ofcom report on the after the fact, in 133 constituencies around the “We know that Communications Market showed that whilst 35 country, proved to be suitably accurate. The BPC/ consumers are million people claimed to use Facebook, usage MRS learned panel will report back by next notoriously bad levels of social media are highly age-related. That’s March. But for now, here are some commercial endorsed in CGA Peach’s Brand Track data, where implications, when gathering customer sentiment. at predicting over 80% of under 35s claim to access social media their own future 1. Don’t get your insight from just daily, but only a little over a third of the over 65s behaviours” an ‘in group’ of close advisers: do so. Those so-called “shy Tories” may have been In the political world it’s easy to imagine too much quiet but too many commentators forgot to listen reliance being placed on “insider” opinion from the to them, or were listening in the wrong place. Don’t hothouse of the “Westminster Bubble”. But it’s also a risk overlook your silent customers; they too have opinions, and in the business world, if too much emphasis is placed on expert they might just be in the majority. views, close to the management group, or where customer 4. It’s no longer a two horse race: opinion is gathered too narrowly. When focus groups were the A key factor behind the failure of the opinion polls is likely go-to method for qualitative research, agencies had a homing to the emergence of a more complex multi-party political instinct for the comfy suburbs of the big cities. The good folk of “market”, leading electors to be less likely to identify with a Sutton Coldfield, Wilmslow and West Bridgford could have made single party than previously. As the BBC’s political research a decent living from market research, but for the client manager, unit pointed out, 25% of voters on 7 May did not support the giving a voice to less fashionable places was a constant concern, Conservatives, Labour or Lib Dems, compared with 12% in and it still should be. 2010, and the possible permutations of switching behaviour But you don’t have to leave it to the “experts”. Diagnosing have multiplied hugely. the superior customer experience that it measures in the USA In a commercial context, it’s natural to become fixated on your compared to the UK, KPMG Nunwood’s David Conway observed positionally closest competitor, or on your biggest one. However, recently that “If you look at the US, their executives sit with the ever-increasing diversity of available local eating-out choice customers all the time... we just don’t do that in the UK – it’s means consumers’ decision processes are now less simple. You kind of ‘by remote control’ and by a little bit of distance...” need a multi-dimensional insight on the competitive landscape. This followed a piece on JD Wetherspoon in The Independent This fully paid up, life-long market researcher is certainly referring to chairman Tim Martin’s longstanding commitment to not here to shoot down the pollsters, but there are some clear spending a couple of days a week in different pubs talking and lessons to take from their recent fall from grace. At its simplest, listening to customers directly – a consistent commitment to as competition multiplies and becomes more diverse, it is critical broadly-based close-up consumer listening that will have yielded to talk to as many customers you can, and in as many places as an invaluable competitive advantage for the group down the possible. And don’t be afraid to do it yourself. years. Listen widely, and lead by example.

2. Don’t trust what people say they might do: Surveys often ask consumers to imagine what they are going to do in the future, sometimes in the search for a PR soundbite,


David Martin is managing director of Red Circle Insight, a market and customer insight resource


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Marketing to operators: Creating supply and demand Elliotts chief executive Ann Elliott offers her expertise on the best ways for suppliers to market their business to potential customers


supplier in our sector once offered me £10k to get it “into” an operator business. Unfortunately for it we just don’t work that way. If we did then we would never work with any of our operator clients again. It is still in business so perhaps another agency took it up on its offer. Business-to-business marketing is more subtle and more complex than this crude attempt to secure meetings. So how should suppliers market their business to their potential customers?

Be an outstanding supplier to your existing customers Nothing, but nothing, beats personal recommendation. This is where 75% of new business effort should go. All your current customers should recommend your company without hesitation and do so willingly and freely. They should be talking about you (positively of course) without you even knowing about it – you may only find out what they’ve been saying when someone gives you a ring out of the blue and asks to work with you. A great supplier just does the basics brilliantly well – on time, on budget. It establishes KPIs with its clients at the start of the relationship, ruthlessly measures them month after month and then put in place solutions to improve any poorer performing areas (before the client mentions them). It doesn’t let anything slip. It isn’t complacent on the functional side of the relationship and is totally and utterly reliable. It builds on the basics too – relentlessly looking for opportunities to add value, increase sales or reduce costs. Never settling for “good”, it aims for “brilliance”. An outstanding supplier puts itself in its client’s shoes constantly thinking how things can be done smarter, faster, cheaper. More than that though is the emotional intelligence piece. Some clients may work with people they don’t like but most don’t. They want a relationship based on trust, honesty and understanding and they want to enjoy working together. If they don’t look forward to meeting you then it’s not a relationship destined to last very long no matter how brilliant your product. Others might try to match the quality of your products but they should never be able to match the quality of your relationships. This relationship can be measured every month very simply and effectively (let me know if you want to know how we do it). If your clients rate you highly then they will help you build case studies, provide you with testimonials and offer to speak to others about what a great job you do.


Make sure your proposition is clear and distinctive What you do, and what you could do for potential clients, may be painfully obvious to you but totally unclear to them. If you literally can’t summarise your offer in a sentence then work on it until you can – don’t ramble on. We have actually (and physically) been up and down in lifts with clients so their “elevator” pitch is set in stone and anyone in the company can repeat it. Clarity and focus are crucial. Always think about your proposition in the context of what it means to your clients. How does your product (or offer) benefit them? Clients are rarely really interested in you or your product until they understand how it benefits them. Look at your offer very critically through their eyes.

Understand your target market and bespoke your approach The more precise you can be about the people you want to meet and talk to, the better. Paint a picture of who they are, what they read, what events they go to and what is likely to be important to them. Imagine how they work. Try and appreciate how busy they are and the pressures they are under. Your meeting with them will not be the most important thing in their diary so don’t take it personally if they cancel five times. Understanding their business is obviously an important part of this and there is simply no excuse for poor research into the market place, their performance, their competitors, their customers and their challenges and opportunities. This comprehensive understanding is essential in tailoring all communication to your audience and helping you explain why your product is invaluable.

Sort out your website and SEO The first port of call for anyone interested in working with a supplier is its website but many supplier websites are really dire. They are dull and boring. They lack engagement and interest – the website equivalent of watching black and white TV. We are in the hospitality sector but you wouldn’t guess that from many of them – they use too many stock shots, don’t have email/newsletter sign up, don’t include case studies/ testimonials and don’t feature any insight or relevant information etc. etc. There is really no excuse for not getting this right and regularly updated.


Use every means of communication at your disposal No one form of communication works any better than any other in a businessto-business marketing plan. You need to consider how you will use and coordinate direct mail, email, LinkedIn, Twitter, networking, PR, awards, sponsorship, speaking opportunities, shows and exhibitions, direct recommendations, case studies, printed collateral, cold calling (don’t even think about it), Facebook, blogging, white papers, SEO and website updates. Successful supplier marketing plans will include a real mix of marketing techniques – what works for one person and one company may not work for another so evaluation of success is key. Brand presentation must be consistent as should key messages. It is always safe to assume that someone will need to hear about you at least four times from various sources before they are aware of your existence – and you may need to make contact quite a few more times after this before they think you may be of use to them. Any inconsistency in messages will just extend this period of time.

Be innovative and creative Operators in this sector have to stay one step ahead of their increasingly brand promiscuous customers as well as two steps ahead of their active and acquisitive competitors. They need suppliers who are nimble, quickthinking, highly proactive and very responsive. They want people who bring them insight and responses to this insight – responses and solutions that can help them grow their business and gain market share. They need to be quick to market, to trial and to roll out. This should reflect your approach to marketing too. One supplier told me that its intention was to become “entangled” in its clients – for its clients to be so dependent on it and for it to add so much value (and to be so invaluable) that clients wouldn’t want to lose them as suppliers. It has never lost a client working on that basis. Be that supplier and that partner. And finally, don’t give up – ever.

Ann Elliott is chief executive of the leading sector marketing and PR agency Elliotts – Follow her on Twitter: @elliottsagency

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LT MANAGEMENT SERVICES The sector’s leading out-sourced management company

LT Management Services Limited (LT) manages around 1,000 licensed retail and foodservice properties including restaurants, hotels, nightclubs and both managed and tenanted pubs, across the UK. LT provides a range of services to cater for the needs of each client, including full financial back office services, procurement, payroll, IT, telesales, credit control, operational support and caretaking services for closed premises. The company has been able to grow to the largest of its type in the UK through its policy and practice of open book management which assures the clients, ranging from property-owning companies through to banks and insolvency practitioners, complete transparency of all costs associated with its business. With its substantial buying power, LT passes on to its clients keen pricing for all goods and services supplied into client estates. Just recently, for example, LT won the contract to manage 43 Rileys Sports Bars for the new investor. Working with administrators has meant that LT has created a complete set of systems and controls that are centred around cash management, facility maintenance and compliance. LT also supports its clients with sales and marketing support and strong operational processes and practices. LT will react quickly and take on new business at short notice when required and will manage businesses for

clients on either a short term temporary basis or for the longer term. LT has been able to grow turnover and improve margins in most of the businesses that it has been asked to manage on behalf of clients. With a dedicated recruitment resource available, LT seeks to appoint strong managers into all clients’ units with a view to maximising performance. Hands on operational management and strong head office financial controls ensure that the client’s financial performance is maximised. What we do: We run managed and tenanted pubs and bars, restaurants, hotels and nightclubs on behalf of owners, banks and insolvency practitioners. We provide everything from business development solutions, independent business reviews on sites or whole businesses to closed site management and caretaker services.


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Ethnic food variety is the spice of life As ethnic food trends grow in the UK, Technomic assistant editor Sarah Janssen looks at some of the concepts making their mark and how the market is gaining popularity


rom Indian curries to Japanese sashimi, global flavours have taken the UK by storm. Ethnic-focused concepts are cropping up across the country, and ethnic spices, sauces and street foods are influencing menu items at traditional UK restaurants. Ethnic-focused chain and independent restaurants are enjoying strong sales growth, thanks in part to adventurous millennials who seek out exciting, exotic flavours. One-fifth of all consumers – and two-fifths of consumers aged 18-24 – polled in Technomic’s most recent UK Ethnic Food & Beverage consumer trend report, say they are ordering more ethnic foods and flavours than in 2011. The most popular ethnic cuisines in the UK are Chinese and Indian, although Britons are also seeking out other cuisines such as Caribbean, Middle Eastern and regional American varieties like Tex-Mex and Creole.

“Ethnic-focused chain and independent restaurants are enjoying strong sales growth, thanks in part to adventurous millennials” Overall, the restaurant industry in the UK saw strong sales growth in 2014, increasing 6% to 18.6 billion from 2013, according to Technomic’s Top 100 UK Chain Restaurant Report. But ethnic chains fared even better – full-service Asian chains saw 10.6% growth in sales in 2014, and Asian fast-casual concepts grew 12% during that time. Mexican full-service restaurant sales also grew 14.4%.

Strong growth Last year, Itsu – a fast-casual Asian noodle concept selling sushi, soups, salads and snacks – saw sales jump 12% to £50.4m while increasing its unit count by 9.3%. Units averaged £1.12m in 2014, and the chain recently announced plans for regional expansion with an aim to open ten-15 locations in 2015. South African-based fast-casual chicken chain Nando’s enjoyed a 10% growth in sales in 2014, topping £501m in the UK. Nando’s, with its flame-grilled chicken and peri peri sauce, has been a hit with Britons, building a cult-like following that has pushed the chain’s growth to about 45% over the past five years. Casual-dining ethnic chains are also gaining popularity in the UK. Las Iguanas, serving authentic Latin fare, increased sales last year by 17.1% and upped its number of units by nearly 12%. The chain was recently acquired by Casual Dining Group (CDG) in a deal expected to be worth between £80m and £90m. CDG aims to launch seven new locations of Las Iguanas over the next ten months. Casual-dining chain Wagamama, an Asian noodle concept that is trialling breakfast, saw sales increase 12.3% last year, above the average 10.6% for fullservice Asian chains. Emerging and independent ethnic chains are also making their mark. Thai chains like Giggling Squid, Chaophraya, Thaikun and Busaba Eathai are leveraging the popularity of south east Asian flavours to fuel growth. London independents have sparked a small-plates trend featuring tastes from ▲ ¡ AUTUMN 2015 ¡ PROPEL QUARTERLY


Feature around the world, with small plates offerings up 25% on UK menus year over year. Pachamama Bar & Kitchen in London offers a menu of small plates inspired by Peruvian cuisine, and Ramusake serves up Japanese dishes in a small-plate format.

On the menu Restaurant operators lacking an ethnic-focused concept can find ways to incorporated global influences onto menus to appeal to and attract more customers, as a number of major players in the UK restaurant industry have already done. Ethnic flavour influences have proven popular with consumers – more than two-fifths of all consumers polled, and half of Londoners, reported ordering ethnic foods and flavours once a week or more often, according to the ethnic food and beverage report.

“London independents have sparked a small-plates trend featuring tastes from around the world, with small plates offerings up 25% on UK menus year over year”

Spicy sauces associated with Indian, Asian and African foods have surged on UK menus since 2013, rising 75% in that time with help from growth in Szechuan (50%), curry (26.5%) and peri peri (20.3%) sauces, according to Technomic’s MenuMonitor data. Looking at year-over-year growth, teriyaki, yuzu, tamarind, Cajun and sesame flavours have increased in mentions on main dishes. Popular flavours for starters are lemongrass (157.1%), miso (13.3%) and Mexican (3.7%). Operators are even adding ethnic flavours to desserts: cardamom has increased in mentions by 25%, green tea mentions are up about 63% and ginger has grown by nearly 9% since 2014.

Global tastes Chains and independents alike are incorporating these global tastes onto their menus, providing consumers with innovative items to keep them coming back. Pizza Kitchen & Bar recently added a peri peri chicken pizza with peppers, sweetcorn and peri peri sauce, finished with coriander and lime. London hot dog concept Top Dog uses international flavours to create a variety of combinations like its kimchi, Chicago, corn n’ guac tofu and chilli n’ cheddar hot dogs. McDonald’s UK launched in May the Great Tastes of America 2015, featuring burgers that highlight regional flavours of the States. A different burger was launched every Wednesday during the five-week promotion and was available for a week. The Miami Special featured sun-blush tomato sauce, bacon, cheese, lettuce, onions and mayonnaise. The Dallas BBQ featured bacon, lettuce, red onions, mayo and a Dallas barbecue sauce. Other burgers in the promotion were the California Melt, Arizona Nacho Grande and the New York Classic. Bar operator Yates’s also launched a spring and summer menu inspired mostly by American foods and featuring items like buttermilk chicken and waffles with maple syrup; The Cowboy, with barbecue baked beans, bacon, chorizo and a fried egg; and The BBQ Chicken Fest, buttermilk chicken goujons, chicken wings, pulled chicken and chorizo skewers served with coleslaw, garlic bread and barbecue sauce. The ethnic trend will likely continue to proliferate as consumers, especially younger diners, seek out new, innovative flavours from around the globe. Operators can experiment with these flavours as limited-time options or add craveable, ethnic options as permanent menu items to keep existing consumers engaged and attract new guests.

Sarah Janssen is assistant editor at Technomic Inc



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News Digest

News Digest Michelin-starred brothers plan first gastro-pub: Michelinstarred chefs Chris and Jeff Galvin have bought one of the oldest pubs in Essex to convert to their first gastropub. The brothers, who come from Brentwood, Essex, have exchanged contracts with landlord James Gardner to turn the 14th-century Green Man, in Howe Street, Chelmsford. Chris Galvin said they hope to open it under the same name, as a pub selling local produce and local brews, by spring 2016. “We want to have a Great British pub with a restaurant part of it,” he added. “I really want to be proud about being in Essex and showing what it can do.” He said it will cost at least £1m to get the timber-frame building “up to scratch”. In 2005 Chris and Jeff Galvin opened their first solo venture – Galvin Bistrot de Luxe in Baker Street. In May 2006, the brothers launched Galvin at Windows, on the 28th floor of the London Hilton Hotel on Park Lane, which gained its first Michelin star in 2010. In 2012 they opened their first venture outside of London – The Pompadour by Galvin and Galvin Brasserie de Luxe in Edinburgh. SSP set to expand street food concept at UK railway stations following Euston launch: SSP Group is looking to expand street food to other railway stations in the UK following the launch of a new street food

Propel Morning Briefing, our sister daily news bulletin, has broken all manner of exclusives in the past few months. Here is a selection of the many stories brought to you first

concept in Euston. Network Rail commercial director Hamish Kiernan said talks are taking place with SSP to look at bringing street food brands to other stations following the opening of Junction Urban Street Food at Euston. The venture has introduced three independent brands – Big Apple Hot Dogs, The Rib Man and Beany Australia – to travellers at Euston offering authentic street food in a convenient “grab and go” format. It has been created as a result of a partnership between SSP and British Street Food founder Richard Johnson with Network Rail, which is keen to see the concept rolled out to other concourses. Kiernan told Propel: “We are talking with SSP about how we can expand the street food brands we have on offer at our stations but we haven’t identified any definite sites as yet. The biggest challenge is finding the space. There are so many brands out there that could appeal to travellers. The success here after the first couple of days shows there is certainly potential for elsewhere.” Starbucks to close its 23 Boulange bakery cafe sites in the US: Starbucks is to close all 23 of its La Boulange retail bakery cafes locations in the US, as well as the two manufacturing facilities that serve those locations, by

O’ My Buns plans rapid rollout after launching first European site in Leicester: Europe’s first branch of O’ My Buns, which has sites in a number of countries, has opened in Leicester. O’ My Buns specialises in cob-like buns that come in a range of sweet and savoury flavours and have a coffee glaze. Business partners Fayyaz Jamal and Hanif Piranie have opened an O’ My Buns cafe in Evington Road, and have plans to open two more branches of the franchise in Leicester, including one in Highcross. Jamal, of Leicester,

said: “It is a very unique product. It comes from Asia. There are stores in America, the Far East, Taiwan, Malaysia, Kuwait, and Qatar.” He said the company had a centralised kitchen in Thurmaston where the products for the cafe were made. Jamal said the business partners hoped to have six branches open across the UK by the end of the year, and to open one every month in the UK from then onwards.

British beer sales continue to grow but support still needed: Beer sales are continuing to grow year-onyear, with sales at the end of quarter one of this year rising 1.5% over the past 12 months, according to the latest “Beer Barometer” from the British Beer & Pub Association (BBPA). This continued growth follows nine consecutive years of decline, which saw beer sales slide by a startling 24% – 6.7 million fewer pints sold, per day. The BBPA said huge tax rises were the major culprit, with a devastating beer duty hike of 42% from 2008 to 2013, under the disastrous beer tax “escalator” policy. This sent the typical duty on a pub pint (plus the VAT on the duty) from 38p to 56p.

the end of September. The company stated: “As a standard course of business, Starbucks continually evaluates all components of its business to confirm they are aligned with key priorities and strategies for growth, which includes the continued analysis of the store portfolio. Based on our ongoing evaluations, Starbucks has determined La Boulange stores are not sustainable for the company’s long-term growth. The La Boulange brand will continue to play a significant role in the future of Starbucks food in stores, and the company looks forward to serving delicious La Boulange food at its Starbucks retail locations in San Francisco and across the US and Canada. The Evolution Fresh retail location in San Francisco will also close.” LT reports profits boost as it signs more long-term management contracts: LT Management Services, the UK’s largest outsourced operator of pubs, restaurants, nightclubs and hotels, led by Billy Buchanan, has reported an almost 50% increase in pre-tax profit in the year to 28 December 2014. The company, which operates about 1,000

The period saw 7,000 pubs close, with 58,000 jobs lost. BBPA chief executive Brigid Simmonds said the figures highlighted the need for continuity from the Treasury in its tax policy for beer, which has seen a historic hat-trick of beer duty cuts.

sites on behalf of private equity companies, investment funds, banks, administrators and other owners, saw pre-tax profit climb to £601,000 compared to £407,000 in the year before. Turnover for the year was £11,251,000. LT provides a full range of outsourced services to its clients ranging from back office accounting and payroll services to full operational management of pubs and other leisure assets across a range of both large and small clients. LT also provides outsourced services to a number of wellknown high street brands. The UK’s foodservice market is in ‘much better shape’ than the rest of Europe: There has been 0.6% growth in the number of visits made to foodservice outlets in the most recent year and the UK is outgrowing other countries, said NPD Group’s Cyril Lavenant. By comparison, Germany saw a 0.5% decline in traffic, France was down 1.2%, Spain eroded by 0.8%, and Italy traffic was down by 1.4%. Even the US failed to match UK growth with a 0.4% rise. He noted, though, it would take a long time for the market to get back to where it was in 2008. ▲ ¡ AUTUMN 2015 ¡ PROPEL QUARTERLY


News Digest Beds and Bars targets £100m annual turnover after adding £9m of sales in two years: Beds and Bars chief executive Keith Knowles has reported that he aims to more than double company annual turnover from the current £39.06m a year to £100m after the company staged a remarkable performance turnaround in the past two years. The current goal comes after the company, which operates bars and hostels in the UK and Europe, added £9m to sales in the past two years, growing from turnover of £30.2m in 2012. This sales growth followed “the perfect storm” of 2012 when the

company was severely hit by reduced visitor numbers to the UK during the 2012 Olympics. The company’s problems in 2012 were compounded by a lack of banking support and the challenges of turning around the fortunes of its Paris site. Bank debt was reduced by £15m through a sale and leaseback back of its Winston Hotel in Amsterdam and other pieces of property rationalisation. Knowles attributed much of the company’s success to investing in its people. He said growth to £100m would come through

Monthly frequency of visits is 16.4 per month versus 17.6 in 2008 and there are a total of 685 million fewer annual visits to foodservice outlets compared to 2008. He said that the sector is “still at the beginning of the road to full recovery”. But NPD research also shows growth in all three major day-parts though the snacking occasion is in decline by 3.6%. For the sector, he advised a focus on attracting families, with growth in family dining occasions of 11% since 2009. Looking at the year ahead, Lavenant noted that the sector is still recovering from very difficult times but forecasted growth of 1.1% this year and 1.5% next year.

to the end of last year, 14% of our funded businesses have had female founders. Compare that to this year when 21% of businesses that have funded on Crowdcube have been led by females and it looks like a trend that is set to continue. When it comes to investors, out of our growing investor community of more than 185,000 people, 24% are female.”

Crowdcube raises more in first half of 2015 than whole of 2014, high female engagement: Crowdfunding platform Crowdcube has raised £38,889,297 for funded businesses in the first half of 2015, more than the £35m raised in the whole of 2014. A total of 74 businesses were successfully funded in the first six months of 2015 with 56,838 investors joining the company’s investment community. Of the companies funded, 19 were start-up, 36 were at “early stage” and 19 were “growth” businesses. One member of the investment community made an investment of £1m, the largest single investment to date. Nine businesses raised more than £1m. The platform also reported a high level of female engagement. It stated: “Since we launched in 2011 up


Luke Johnson – food and drink retail sector ‘still a wonderful business to be involved in’, but the ‘fight is on’ for pubs: Sector investor Luke Johnson has argued the food and drink retail sector is still a “wonderful business to be involved with” although pubs face a structural challenge from the decline in alcohol consumption. He said: “The sector remains relatively fragmented and it is still growing, albeit supply is outstripping demand currently.

consumption across the UK is rather an extraordinary shift. How long that will continue is anyone’s guess. But it means that the fight is on if you are in the pub business, which I am.”

an investment, join venture developments – franchising is also currently being explored.

At heart, it’s experiential which means that we are semiprotected from the ravages of the internet, which I see tearing apart conventional retail. It is a very large industry – worth £70bn across all food and drink retail. When you get it right, it is decent margin and it is good return and it provides cash profit.” He argued pubs are facing one of the toughest challenges in the sector because of the rapid decline in alcohol consumption. Johnson, whose pub and bar investments include Grand Union Group, Draft House, Eclectic Bar Group and Laine Pub Company, added: “There are these major shifts in behaviour which are quite a challenge to wet-led businesses. The statistics on shifts in drinking behaviour amongst young people are somewhat hair-raising; the 20% decline we’ve seen in just over ten years in alcohol

MatchPint secures £1m investment: MatchPint, the mobile technology company connecting sports fans, pubs and drinks brands, has secured a £1m Series A investment in order to drive growth and innovation over the next 18 months. Since launching in 2011, MatchPint has developed a 2,000-strong pub customer base, with partners including Stonegate Pub Company, Marston’s, Fuller’s, and Greene King, while more than 250,000 sports fans currently use the website and free mobile app to discover pubs and bars

around them showing selected sports events. The funding, which has been raised through a combination of existing shareholders and Londonbased investment syndicate 24 Haymarket, will be used to build on the existing pub product, grow the consumer base, and further develop the innovative mobile vouchering system which has already been used by Guinness, Heineken, Carlsberg, and Pimm’s to deliver rate-of-sale drivers for pubs and bars during specific events.


Punch Taverns set to launch new coffee-led concept Brewed and Baked: Punch Taverns is set to launch a new bakery cafe concept called Brewed and Baked. The company, which operates more than 4,000 pubs across the UK, is to open its first venue in East Lothian in Scotland. It described the planned refurbishment of The Burgh pub in Musselburgh, as a “complete transformation”, which would be the first in a new business concept for the company. Divisional director David Wigham told Propel: “We think this is a site that’s passed its best as a pub and lends itself to taking advantage of emerging market dynamics around coffee – it will be a licensed coffee shop. Starbucks and others are starting to sell alcohol – this will be Costa meets Greggs meets a pub. This pub has a high street location and we’ve taken our cues from what we’ve seen emerging in the market.” Punch already has a “reasonable amount” of coffee experience in the company with one area manager who previously worked for Caffe Nero, Wigham said. He added that there is likely to be one draft beer tap and the site is set to open at the end of the summer. The site will be run by an individual licensee in line with Punch’s traditional business model. ▲

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News Digest Technomic research reveals six key trends in US in first half of 2015: Research by insights firm Technomic has revealed six key trends in the US in the first half of 2015. The fast casual segment is continuing to outpace the rest of the sector growing at 11%, compared to 4% among quick-service restaurants (QSRs) and 5.6% in casual dining. Within the fast casual segment, concepts built around customisation are growing twice as fast as those that are not. QSR’s that have developed clearly defined niches like Chick-fil-A and Culver’s are building “cult-like status”. Consumers are also demanding to know the story behind ingredient sourcing and processing with operators responding by being more transparent with menus. Online ordering, mobile apps and table tablets are appealing to millennials’ high-tech and high-speed preferences and supplementing service while food blogs and media means everyone is becoming a culinary expert. The research was compiled through interviews with operators, chefs and consumers combined with data from Technomic’s Digital Resource Library, MenuMonitor database and Top 500 Chain Restaurant Report.

Glendola Leisure expands in Scotland by buying Saltire Taverns, enters hotel market: Glendola Leisure, the Rainforest Cafe and Waxy O’Connor’s operator, has bought Saltire Taverns in Edinburgh from local operator Billy Lowe for an undisclosed sum. The company will take over established bar and restaurant business Le Monde in George Street and Angels Share on Hope Street, including 48 bedrooms. Alex Salussolia, managing director at Glendola Leisure, said: “We currently operate a number of businesses in Scotland and we are delighted to add to our portfolio by taking over these successful operations. We intend to work with Billy going forward and use our expertise in the hotel and leisure sector to build on his success. We are thrilled to be entering the hotel market in the city and are looking forward to growing the business even further with the four star 98bedroom Design Hotel on Market Street, due to open towards the end of 2017 by Carlton Hotel Collection, the sister company of Glendola Leisure.” Pizza Hut UK exits 22 locations, trims staff number by 900 as estate is re-shaped though investment: Pizza Hut UK, owned by private equity firm Rutland Partners, exited 22 locations last year as part of

Burger & Lobster eyes major expansion in UK and overseas:

Burger & Lobster, the brand owned by Goodman Restaurant Group, is set for major expansion both in the UK and overseas before the end of 2015. The company is following its openings in New York and Stockholm with franchises in Kuwait in September, Dubai in October, and Saudi Arabia by the end of the year as well as a number of new sites in the UK. Director of operations Simon


King told Propel the deals in the Middle East had been signed with a local partner rather than a master franchisee while the brand also has a second site in New York under offer. Burger & Lobster is also planning more UK sites with three more restaurants due to open in London and one in Birmingham before the end of the year. It will also open a 3,500 sq ft restaurant in Liverpool in 2016.

UK’s biggest brewpub operator Brewhouse & Kitchen aiming to double estate by 2019: Brewhouse & Kitchen, the EISbacked micro-brewer and pub operator, is aiming to double its number of sites to 18 by 2019. The company, led by Simon Bunn and Kris Gumbrell, currently has nine sites – six of which are trading with three more in Gloucester Quays, Southbourne and Bournemouth due to open this year. Gumbrell told Propel it is aiming to double that figure in the next four years with the £15m raised through EIS leaving headroom for “two or three further sites” and beyond that, further

expansion can be funded through cash flow. He added: “It’ll be a blend of leaseholds and freeholds, predominantly freehold is the plan, which gives us real strength with the bank. They [the sites] don’t have to be huge, but big enough to take the brewery without compromising on cover space – we need about 120 covers.” Gumbrell added the company might consider diversifying into related areas such as craft distilling, as some craft beer operators have done, in the future “but not yet”.

plans to boost UK profitability, newly-filed Companies House documents report. The store closures meant UK turnover dropped to £225,464,000 in the year to 30 November 2014, compared to £230,106,000 the year before. However, restaurant Ebitda, including central costs was £15,730,000, 5% ahead of the year before with like-for-like sales in the remaining estate climbing by 3%. The company, which operates 285 sites now, had refurbished 55 of its sites by the year-end but will have competed re-imaging at 50% of the estate by the end of this year. The company added: “With less than 20% of the estate refurbished, a proportion of which took place in the latter half of 2014, the sales and profit impact of the programme is still in its infancy and will build throughout 2015 and 2016. The strong financial position of the company is reflected by a cash balance of £27.87m at the balance sheet date.” The company employed 8,454 staff in 2014, 907 fewer than the 9,342 staff it employed the year before. Pizza Hut UK reported exceptional costs totalling £4.14m (2013: £2.13m).

Former Peach executives launch new £5m gastro-pub company: A new gastro-pub company Epic Pubs has launched its first site – with three more lined up to open. The company, led by former Peach Pub Company partner Andrew Coath, has acquired the freehold of The Golden Ball, an independent pub, in Maidenhead, Berkshire. Epic, which has secured EISfunding of more than £5m, will follow that by opening sites in Haslemere, Surrey; Towcester, Northamptonshire; and in Essex – all freehold. Coath, who was a partner at Peach Pubs for more than ten years, is working with fellow experienced gastro-pub operators Jonathon Taylor, who also worked at Peach, Mark Austin and Wendy Twiddy. He told Propel the Halsemere site was set to open in early October. It has also acquired a Georgian residential property, which was once a Saxon inn, in the centre of Towcester and is investing £1.1m converting the building into a gastro-pub set to open in early November. Epic is also in the process of securing an independent pub in Essex that it hopes to open in February next year.








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