Propel Quarterly Spring 2015

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uarterly For pulling power, nothing beats Sky Sports

Call 08448 245 670 fo or tth he be best st pac acka cka ag ge e for your ou o ur b bu usine e ss

Number of events quoted is total shown on Sky Sports from 2014/2015 season as a whole. Calls to Sky cost up to 5.1p per minute (plus 15.97p connection fee) for BT customers. Calls from other providers may vary. Terms apply.

www.propelinfonews. com


ISSUE 10 • SPRING 2015

For pulling power, nothing beats Sky Sports

Key Highlight s

Key Highlight s

Chelsea vs. Paris St Germain

Middlesbrough vs. Ipswich Town

UEFA Champions League Wednesday 11 March

Sky Bet Championship Saturday 14 March

Huddersfield Giants vs. Castleford Tigers

Burnley vs. Man City

First Utility Super League Thursday 12 March

Barclays Premier League Saturday 14 March

Premier League Darts

Chelsea vs. Southampton

Thursday 12 March

Barclays Premier League Sunday 15 March

ATP BNP Paribas Open

Man Utd vs. Tottenham

Thursday 12 - Sunday 22 March

Barclays Premier League Sunday 15 March

Warrington Wolves vs. Leeds Rhinos

Plus so much more...

First Utility Super League Friday 13 March

59,000 hours of unrivalled sports coverage across seven action packed channels

Call 08448 245 670 for the best package for your business

With Sky Sports you have endless opportunities to help drive footfall and revenue with the sports that matter, live in your venue throughout the week. Hours quoted are based on 2014 content . Number of events quoted is total shown on Sky Sports from 2014/2015 season as a whole. Scheduling may be subject to change. Terms apply. Calls to Sky cost up to 5.1p per minute (plus 15.97p connection fee) for BT customers. Calls from other providers may vary. Correct at time of supply 03/02/2015.

uarterly The essential information resource for pub, restaurant & food service operators

The accidental restaurateur Interview with Jamie Barber

Inside: My big idea for 2015 The wisdom of crowds How to satisfy your need for speed Everybody has a stake in technology Key trends for 2015 Pulling the team together A great deal matters A view to a skill


ISSUE 10 • SPRING 2015

With over 65 years of drink making heritage, and the No.1 Mixers & Juices range in the on trade,* there is every reason to stock in your outlet. Available in 125ml, 160ml bottles and 150ml cans.

*CGA Brand Index to 12/07/2014 BRV300917_15

Editor’s Opinion

Dear Reader,

Editor’s Opinion

Crowdfunding is the democratisation of investing You hear dark mutterings about the rise of crowd-funding. Some regard investors as naive and fear there will inevitably be an almighty train crash involving a crowd-funded business that will lead to greater scrutiny of the whole process. Certainly, you come across businesses looking for investment with unrealistic valuations of the existing enterprise, which in some cases is no more than a business plan. One sector entrepreneur told me he thought the Chilango mini-bond was an “unethical” way to raise money, given how little most of its investors can really know about the Mexican food market. And it cannot be denied that the self-certifying process to join as an investor is little more than a tick-box exercise. But for me, the rise of crowd-funding amounts to the democratisation of the investment process. Given paltry interest-rate returns from major financial institutions, here is a chance for ordinary citizens to side-step the legions of sluggish and expensive institutional funds and put their money to work. There is fun to be had along the way as well, with many crowdfunding businesses offering decent perks, not to mention the generous tax breaks that come with investing in start-up businesses. As our article on page 12 of this issue shows, the crowd-funding market is exploding. The market leader, Crowdcube, with its 89,398 registered investors, saw as much investment in the first half of 2014 as in the preceding 12 months. The market is developing, too. Last summer saw the launch of the first mini-bonds, allowing investors to lend money to more established brands, as well as buy an equity stake in start-ups and early-stage businesses. River Cottage Canteen recently raised £1m by borrowing from “the crowd” and will be paying them back 7% interest per annum over a four-year term. These bonds are not without risk, however, which is why they offer higher interest rates than many other investment opportunities. By contrast, the Mexican restaurant brand Chilango offered 8% interest on its bond, reflecting, one assumes, a higher degree of risk investing in the business compared to River Cottage (ironically, the higher rate of interest itself becomes part of the larger risk profile). There is an element of the wisdom of crowds at work here in a very direct way. The speed and weight of money drawn into particular investments reflect the collective judgment of many thousands on the investment appeal of particular businesses. There is always the danger of a lemming-like rush towards a particular investment, with under-researched investors drawn by other investors. But in terms of track record, it is not as if the decision-makers at the professional lenders, the big banks, have covered themselves in glory in the past decade or so. And it is clear that crowd-funders can spot an investment they like. Crowdcube itself reached its own recent investment target of £1.2m in just 16 minutes in January, with individual investors parking their money alongside a private equity firm. Crowd-fund investors preferred River Cottage Canteen to Chilango as an investment, judging by the speed of take-up. River Cottage hit its £1m target in 36 hours. Chilango took a number of weeks to raise £2,160,000. Investors liked the cut of Chilango’s jib – it was the largest amount raised by Crowdcube so far. It is just that they liked River Cottage Canteen even more as an investment prospect, judged by the speed of the cash flowing into its bond. An analysis of the Chilango investment community shows the way crowd-funding largely draws those with a bit of money to punt: Chilango’s investors do not look to be staking their life savings. Its 748 investors made an average investment of £2,900, while 22% of the investment group were women. An estimated 20% of the businesses looking for investment on crowd-finding websites hail from the world of food and drink. Businesses from our sector are particularly suited to fundraising of this sort because prospective investors can make judgments on the quality of what those businesses do based on the investors’ perspective as consumers. There is less publicity attached to the companies that fail to attract funding through crowd-funding. Watching the major crowd-funding websites, I would estimate that three in four businesses fail to reach their investment target – and quietly fade away. The crowd has spoken, and may well have done founders a favour with their lack of enthusiasm. It is worth remembering that the grand total of businesses to have been funded so far through Crowdcube is just 143. Like your average series of Dragon’s Den, invested businesses are heavily out-numbered by those that are judged to lack investment appeal.

Best wishes,

Paul Paul Charity ¡ SPRING 2015 ¡ PROPEL QUARTERLY







My big idea for 2015 by John Porter


Smoking-hot hospitality marketing tactics


The wisdom of crowds


Key trends for 2015


Raise a glass to the return of confidence

by James Hacon

by Martyn Cornell

by John Porter

by Chris Edger


Alcohol Policy: An overview in general election year by Paul Chase


How to satisfy your need for speed


The accidental restaurateur


The art of craft beer selling


Touchscreens versus the human touch


In this boom, only the strong will prosper


Engagement, opportunity, innovation and transformation

by Steven Pike

Paul Charity interviews Jamie Barber

by Martyn Cornell

by Christine LaFave Grace

by Richard Negus

by Sonya Hook

12 74

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

Propel Multi Club Conference


A great deal matters


A view to a skill


Everybody has a stake in technology


Beer styles you really need to know about


All fall down


Pulling the team together


Crystal balls

in pictures

by Cyril Lavenant

by Martyn Cornell

by Gareth Powell

by Martyn Cornell

by David Read

by Ann Elliott

by David Martin

Director Jo Charity T: 01444 810304 E:

T: 01444 810304 E:

Commercial Director Sharon Dickinson T: 01444 810305 E:

Managing Director Paul Charity T: 01444 810306 E:

Events & Marketing Executive Adam Dickinson E:

Managing Editor Martyn Cornell E: T: 07950 291326



Design & Production Jonathan Taylor E: W:


Contributors Paul Chase, Chris Edger, Ann Elliott, Christine LaFave Grace, James Hacon, Sonya Hook, Cyril Lavenant, David Martin, Richard Negus, Steven Pike, John Porter, Gareth Powell, David Read Printing and Distribution Evonprint, Mackley Estate, Henfield Road, Small Dole, West Sussex, BN5 9XR

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Find increased profits where you’d least expect them. Adding non-alcoholic cocktails to your bar menu could boost soft drink margins by up to 40%. Order your Frobishers Mocktail Menu and Recipe Card for ideas, inspiration and tips to drive your premium soft drink sales. FOR MORE INFORMATION EMAIL MOCKTAILS@FROBISHERS.COM OR VISIT WWW.FROBISHERS.COM @FROBISHERS #UNUSUALSUSPECTS


My big idea for 2015 Two hundred years ago this June saw the big crunch match between Napoleon and Wellington. Will this year be YOUR Waterloo? John Porter asks some of the hospitality industry's leading generals where their assaults will be?

#YummyTreats will totally transform our social reach in 2015, linking the dining and drinking experience in the pub, from booking process, to experience, to feedback, to data capture. This creates an engagement opportunity for us in the consumer’s home, with an emotional link to the pubs that works with both human engagement and process-driven marketing. With some insight and a lot of luck we believe we might have created an industry-leading concept. It’s still in its infancy, but initial trials in 2014 have shown huge impact in return on reach, engagement and awareness of the sites piloted. Marketing will hopefully translate into direct sales and we will delight the customer with unique experiences or, as the name suggests, #YummyTreats. It's all data-centric, that’s where a huge amount of our time has been spent, understanding what data we need, how to keep it clean and the best way to reach our audience. We have some ambitious numbers to achieve by year-end, but if we can get our team behind the detail, by the end of 2015 we should have a fantastic reach, pulling from a loyal, existing customer base, rather than continuously looking for that illusive "new" customer.

❝ ❝ ❝

Peter Borg-Neal, chief executive, Oakman Inns: For us at Oakman Inns, it’s the launch of "Oakmanology". This is a bespoke educational project that will enable our people to build their own skill base and to take their career in the direction they choose. A key aspect will be highlighting that craft skills are even more important than management skills. If you want to be brilliant at what you do and get paid more for doing it, you can – you don't have to crawl up the management ladder to feel you are progressing in your career.

Tim Martin, chairman, JD Wetherspoon: My big idea is to continue working on our plans to become the world’s grooviest pub company. If we can open the same number of pubs per person in China as in Britain, we’ll be bigger than Microsoft! Don’t worry, I will keep taking the pills …

William Lees-Jones, managing director, JW Lees: Every business is different, and as customers’ use of social media develops, there is a need to tailor support to individual businesses. This year, we want to work on making our use of social media more relevant to our customers, and more individual to each business. There are real benefits for businesses that can build more trusting relationships with engaged fans/brand advocates.

Andrew Guy, chief executive, Ed’s Easy Diner Group: 2015 will be the year when we recognise more people’s specific dietary needs, without changing the essence of Ed’s. The recently introduced legal requirement to provide allergen information for customers has drawn greater attention to the subject, and questions relating to gluten intolerance are the number one subject in our customer e-mails. So, by March 2015 we will have a separate gluten-free menu that covers 95% of all the dishes on our regular menu. Additionally, we have a new, low-fat milkshake that is as thick as our famous regular shake, with all the flavours and just 10% of the fat. And we have vegetarian hamburgers, various halal choices and kosher hotdogs. The availability of this range of choices is a trend that’s here now and here to stay.


Tim Foster, director, Yummy Pubs:

Giles Fry, managing director, Snug Bars At the Snug, we believe that this year our guests will want to buy more packages, so we’ll match food and drink items together and promote them as a fixed package. Our food menu will reflect the "comfort finger food" trend that is getting bigger each year, and I also believe there will be a bigger appetite for guests wanting to try something different. Premium spirits will continue to evolve and reach niche areas which many more people will want to try. Our food and drink offer will continue to deliver quality at every level: that’s our one constant.

Ian Grundy, managing director, Foundation Inns It may not be revolutionary, but it is vital nonetheless: staff and team Involvement is an area we are putting a lot of time into during the coming year. One of our advantages is that we can quickly flex our offering to suit local market requirements without being shackled by “big company” procedures. Decision-making should be quick and easy. But there are always barriers, even in a small company. Most of us in this industry would recognise, there are vastly differing motivations for staff/teams. Although everyone wants to earn money, other motivations include social, career development, daily structure, et cetera. The key is to tap into these motivations, and to give staff proper, identifiable areas of responsibility, where they have the opportunity to show initiative, and not just follow a tick-list. This enables a team, and individuals, to show flair, become part of the decision-making process within the team, and be proud of the job they are doing. It also, very importantly, opens up countless opportunities for recognition, reward and development.

Corrado Accardi, founder and chief executive, Pizza Rossa This year will see our revival of the aperitivo, served the Milanese way. You buy your drinks at a set price and with them comes a vast array of canapés, including mini-portions of foods such as risotto, pasta, fish and cheeses – and not a peanut or crisp in sight! It’s the best way to enjoy a drink and a nibble while talking in a relaxed manner with friends or work colleagues. The aperitivo is a ritual in most urban towns in Italy, but Milan in particular – so why not in London?




Advertising Feature

From zero to hero A labour management system might just be your biggest hero in 2015


hen we first speak with the majority of our customers and ask what they use to manage labour scheduling, the most common response is ‘I have this spread sheet which tells me what I need to know’. Labour costs are your biggest expenditure and your team have the biggest influence on overall performance. Yet too many people think they are doing just fine. At Catton Hospitality we think that anyone can get better at labour scheduling – even the most experienced among us. But how? Our easy to use system compares your rota against your sales forecast and using a traffic light system, highlights where you might be over or under staffed. By comparing your costs against your allocated budget you can easily manage your weekly scheduling within budget. The accuracy of your sales forecasting can also be improved. S4Labour will compare your previous four-week history, by day, against your actual sales to highlight if you are being over or under optimistic.

“S4 Labour highlighted the fact that we were stressed on some weekday evenings meaning we couldn’t give our customers our full attention. We’ve now put an extra person on some evenings and customer feedback has been great. For an extra cost of £30 in labour we are also seeing an additional £500 increase on an average weekend.” Three Conies

The majority of our customers save a minimum of £10,000 per site.

Improved customer service Delivering WOW customer service is the only way to ensure repeat business!


“Prior to using S4Labour I had an idea I was over staffed during week days but seeing it on the S4 system highlighted the on going cost implications to the business. It has enabled me to put an extra person on Saturdays while still reducing my labour costs.”

At Catton Hospitality we love being your secret weapon to help tackle labour costs. To do this we have to be easy to use, cost effective to run and above all else – deliver on what we say! The majority of our customers learn how to use the system after a short 30 minute phone call but we’re always here to provide on-going support free of charge. And when it comes to pricing, no matter your size, S4Labour only costs you the equivalent of two hours per week based on the national minimum wage. As for delivering, then we think our customers speak volumes. We’re proud to work with many award-winning operators including Anglican Country Inns, Arc Inspirations, Bath Ales, Brunning & Price, Loungers and Oakman Inns. From our holiday planner to our daily weather forecast, S4Labour has a host of added functionality which our customers love.

Reduce costs

Oakman Inns

See when your team have extra capacity so you can use this time for ‘housekeeping’ chores or redeploy shifts accordingly.

Old House at Home

The benefits that S4Labour can bring to your business are many:

“In our mind we thought we knew what the rota should be but S4Labour made us challenge things. It suggested we half the number of people we had on in the mornings. We saved 40 - 50 hours in the mornings and a further 14 hours between 3pm and 5pm across one week.”

Improved productivity

Improved forecasting Compare the history of your forecasting against actual sales to improve accuracy. “Using S4Labour has now meant we have a standardised way of working throughout all of our sites. At the click of a button we can now view all of our businesses and how they’re performing. With S4Labour the managers can forecast more accurately and rota according to the labour demands.” Mackenzie Group


S4Labour from

Catton Hospitality

Telephone: 01295 267400 email: Twitter: @TheCattonGroup


Smoking-hot hospitality marketing tactics James Hacon shares half a dozen strategies you ought to be considering for your marketing campaigns this year


arketing never stands still. Today, in large part, the innovation is technologydriven, with a regular stream of new ways to engage with customers and potential customers, both broadly and in a more targeted fashion. At the same time, marketers are finding new ways to spin old ideas, and make them relevant to 21st century consumers who, thank goodness do not seem yet to have turned totally cynical about companies' attempts to engage with them. So what are the current hot strategies?

Proximity marketing With technology progressing rapidly, an ever increasing number of your customers will be walking right by your outlet with a mobile device that can be targeted by beacon devices. Proximity marketing allows you to send a direct notification to a device, be it a smartphone or a tablet.

Armed with real insight and research, brands can create adaptable content that truly talks to the individual In many ways beacon technology, currently being more heavily used by retail businesses, represents a far greater opportunity for hospitality businesses, with customers being in situ for a much longer period. This gives the opportunity for the technology to add real value to the guest experience. In real terms it could be used to encourage the up-sell of new dishes, to gain instant feedback and to deliver brand-building

messages via engaging content. Last year saw the Eat chain trial what many believe was the UK’s first ever restaurant beacon trial, sending messages to 100 customers when they entered a store. This was then developed to 10,000 users.

Influencer marketing The idea of gaining attention through the power of celebrity or influencers is nothing new, although the type of people these influencers could be is changing. Traditionally, brands might have looked at sport stars, local television celebrities or business leaders. Now, the search for influencers extends to those that are big across all the main social sites too, most often Facebook, Instagram, Twitter, Pinterest, Vine and YouTube. For an upcoming project, we at Elliotts are working with a YouTube celebrity who regularly achieves multi-millions of views, to maximise our efforts. Another example resulted in a social reach of more than 2.5 million late last year for a branded restaurant re-launch.

User-generated content Following on from influencer marketing comes user-generated content. Again, this is nothing new, but something you do not see many hospitality businesses truly leveraging. Every second of every day a photo is being taken in a restaurant or bar somewhere! In a culture where sharing experiences has become second nature, many of photos of your business will be shared socially through to the networks of that happy snapper. This is clearly great endorsement and word of mouth for your business already, but often invisible to you as an operator or marketer. You can enhance this activity by clearly

defining parts of your guest journey in a way that there is clear encouragement to take and share photos. Think of something that is worth sharing and creates talk ability. Creating a unique hashtag and displaying hashtags across your point of sale and within the venue will help to group the content and allow you to monitor its use. You can then utilise this imagery within your own brand assets: consumers love seeing "real" photography and content, not just staged, brand imagery.

Personalisation With direct marketing still a winning tactic in hospitality marketing, it is not going anywhere soon. Static messaging is, however. One of the biggest jobs for marketers this year is continuing to segment databases and highlight what different demographics really want to hear from you and when. Armed with real insight and research, brands can create adaptable content that truly talks to the individual, based on their generation, spending habits, geography, visit frequency and lifestyle. This is not about selling, it is about adding real value through creativity defined by data. One area we are seeing great wins with is in highlighting the top 25, 100 and 500 brand loyalists, then making them feel truly valued – in many cases like superstars!

Connecting with communities Over the past year we have seen a growing number of restaurant and pub groups move to more targeted local marketing. This is about a bank of tactics being highly localised as well as creating dedicated local activity. Given the already high level of interest here, I am predicting this will continue to grow this year, with a focus of building real relationships with local communities through active networking, welcoming local community events and getting the team involved with good causes nearby.

Recognise, reward and inspire great service As the old saying goes, you can’t flog a dead horse. For hospitality, so much of the experience is based on people. Of the seven Ps of experience marketing, this year we will see people continuing to reign supreme. While people management is clearly an operational area, it is important that marketers recognise they have a place here too. Many successful brands are hosting sessions that are designed to inspire the team and educate them in the important part they play in driving loyalty and ensuring people come back.

James Hacon is the managing director at Elliotts, the sector’s leading specialist marketing, insight and PR agency ¡ SPRING 2015 ¡ PROPEL QUARTERLY



The wisdom of crowds

Chilango, Fleet Street, London

Crowdfunding is the hot new way to raise money for your fledgling operation, it would seem – but taking the crowdfunding route is no guarantee that the cash will come flooding it, says Martyn Cornell


ince the Financial Services Authority in the UK made changes in regulating crowdfunding in April 2014, crowdfunding has boomed as a source of finance for small businesses. Last year, equity-based crowdfunding reached £84m, up three-fold on 2013, and 20 times the sum raised just two years earlier, according to research from the innovation promoter Nesta and the University of Cambridge. Almost £10,000 an hour was being raised via crowdfunding in the UK, with equity and rewards projects being launched at a rate of 45 a day, and successful projects were raising an average of a little over £9,500 each. Naturally, the hospitality industry has been in among those taking advantage of this newly popular form of funding, and there have been some spectacular successes. Hugh FearnleyWhittingstall's River Cottage Canteen raised £1m through Crowdcube, from 283 investors, in the space of 36 hours, funds that will enable his business to launch an outlet every year, taking it to seven units by 2018. Chilango brought in £2.16m through its "burrito bond" fundraising, at the time the largest amount ever raised on Crowdcube, with 749 people investing. The coffee shop chain Taylor Street Baristas, led by Richard Shaer, raised more than £1.5m in cash through its own mini-bond on Crowdcube. Big-name investors such as Jon Moulton, who put £25,000 into the brewer Delavals as it attempted to raise £400,000 via the crowdfunding platform, and another £50,000 into the Edinburgh-based pizza delivery firm La Favorita Delivered, again via, and Luke Johnson backed the equity crowdfunding idea. Writing in the Financial Times, Johnson said: "Part of the explanation for the sudden expansion of crowdfunding is very low interest rates. Investors are receiving poor returns on bank deposits, so they are searching around for other places to put their savings. Of course, punting money in crowdfunded projects is much more dangerous than leaving it in the bank – but also more exciting. "However, he warned: "Crowdfunding cannot offer the experience, mentorship and connections that veteran investors provide. Weak ideas will still fail to find the necessary backing.


And many crowdfunded projects will go broke. But as an alternative to the traditional forms of finance for cash-strapped ventures, it represents a real breakthrough." The publicised successes of crowdfunding mean that it is now being seriously considered by many. A survey by the law firm Irwin Mitchell found that just under a third – 32% – of entrepreneurs and business leaders believed crowd-funding would be their most likely option for raising new finance in the next 12 months, only slightly fewer than the 38% who said they would turn to more traditional sources of finance such as bank loans. Another 17% said they would look for peer-to-peer lending and 13% would seek angel investment. But more than three quarters – 77% – said that they would consider investing themselves through an equity crowd-funding site. Taking the crowdfunding route is certainly not a guarantee that shedloads of money will suddenly flood through your letterbox from eager investors, however. Of the 330 businesses launches on Crowdcube, Britain's biggest crowdfunding site, in 2014, only 105 were funded, giving a success rate of just 32%. This means that for every Chapel Down, the Kentish wine maker that raised more than £4m last year on the crowd-funding website Seedr, three and a half times more than the original target, for some 15% of the company’s equity, there are a couple like Angela Malik, who sought to raise £350,000 on Crowdcube to expand her Modern Asian Deli concept in return for 18.9% of the equity and ended up attracting less than £3,000, not even 1% of the sum she was after. Others who struggled to reach their targets include Samba Swirl, the first self-serve frozen yogurt chain in the UK, which fell well short of the £285,000 it was seeking through Crowdcube even after raising the amount of equity on offer from 7.3% to 10%, and the developer Corryard Holdings, which tried to raise £1m in return for a 20% stake in a project to develop a five-star hotel near Perth in Scotland and brought in less than 5% of that sum. One big criticism of equity crowdfunding is that it gives away equity in a company, at a time when the potential future value of that equity is very hard to calculate. Critics of equity ▲


Feature crowdfunding say entrepreneurs may be valuing themselves too cheaply, and missing out on future wealth. At First Merchant, a London-based lender that helps small hospitality operators with loans where banks and other providers of finance may be loath to tread, partner Richard Hamlin said: "There is no question that both crowdfunding and peer-to-peer lending have shaken up the banking industry within the regulated and unregulated marketplaces. It offers a serious and useful alternative to banking finance or bridging finance. It will be here to stay as a permanent part of the lending/fundraising landscape unless there is a catastrophic loss suffered by multiple individual investors or interest rates on savings accounts become really attractive again. "I do know, however, that many entrepreneurs instinctively prefer debt finance to giving away equity of any kind. This is often especially the case for fledgling businesses whose owners do not wish to give up a share of their business forever. The fascinating and inspirational characters who build multi-site leisure chains seek credit to expand, but probably not at the cost of losing control of their enterprises. There is also the question of discretion and privacy when it comes to funding, which is an individual decision, of course. "Sector expertise is an essential feature of responsible lending, and borrowers should expect their funders to be familiar with the industry they trade in. We specialise 100% in leisure and hospitality. We know the marketplace well and we work closely with our restaurateur borrowers before drawdown of funds and during the currency of the loan. Many of our borrowers return to us for funding each time they take a major step forward." However, Callum Campbell, chief executive and co-founder of the crowdfunding platform Fireflock, based in Canary Wharf, in London, says that for the hospitality sector, like other businessto-consumer industries, "crowdfunding suits them very well. The reason is, I think, that these are businesses that like the idea of their customers being shareholders too, people who, to coin a phrase, like the product so much that they buy the company. So the sector can benefit very well from accessing capital through crowdfunding – it benefits both the company and the consumer. When you've got a substantial and loyal customer base, if you appeal to those people as customers, you're likely to appeal to them as investors. You can also offer them discounts and so on as shareholders – it's a great way to interact with your client base." Seeking to raise money through crowdfunding is also a good way of testing the viability of an idea, seeing if it has public appeal, Campbell says: if your idea cannot raise cash, it is also unlikely to find customers. "What's happening in the States is that a lot of VCs are saying to people, 'Look, before you come to us for money, why don't you go down the crowdfunding route first?'," he says. "And the reason why they say that is that it's a 'proof of concept'. Is there demand out there for your product, do the public like it, are people willing to put their money where their mouth is? It's a good testing-ground. From the company's point of view, it can be an important part of their marketing strategy to go down the crowdfunding route." On the perceived risk of revealing your plans to rivals, Campbell says: "You don't have to reveal everything. And I don't think you have to be too sensitive about what you reveal – there's a massive gap between having a plan and being able to implement it. The chances are that you're not the only person with that idea anyway. But you need to be able to show that you can execute it, and execute it better than anybody else." Going to a crowdfunding platform, Campbell says, "does involve a lot of pre-preparation, to make sure your business plans are clear, that you're very clear about the detail of your overall vision, and that your financials are clear. Spend some time beforehand talking to the platform, understanding how the process works – some platforms will be different to others, some will have different criteria. It's important to spend some time with them first, to make sure you're comfortable working with them. But ultimately, it's about having good people on board." One success story is Pizza Rossa, the London-based artisanal pizza-by-the-square-slice concept, which has run two crowdfunding exercises through Crowdcube, raising a total of some £600,000 to fund its expansion. Company founder Corrado Accardi, who is now being asked to speak at conferences and to business school classes on how to run a successful crowdfunding campaign, says the benefits of exposing the company on a crowdfunding platform are more than just straightforward cash-


raising. It also gives the opportunity to meet potential suppliers and, in his case, potential franchisers. During Pizza Rossa's first crowdfunding campaign, "We had expressions of interest in franchising from 15 different countries," he says. While he was giving away equity at an early stage in his company's development, the attraction of crowdfunding was that it was a quick way of raising funds, Accardi says: "If I had gone the traditional route, I would have been looking for money for much longer, and probably at a larger discount. Bank loans are impossible as a start-up. If you want to raise large sums of money, the equity crowdfunding route is pretty much the only way." However, "The disadvantages are that you have to put your business plan in the hands of a lot of people, and in many cases that's competitors. So there are a lot of people who will simply fish for information. In one case I found the layout from my first campaign was used pretty much the same by another campaign." Another problem, Accardi says, is that you attract "unwanted interest" from people who want to show they are cleverer than you, and put up unwarranted harsh criticism of the business plan on the crowdfunding website.

“Pizza Rossa founder Corrado Accardi is now being asked to speak at conferences and to business school classes on how to run a successful crowdfunding campaign” According to Jean Miller, chief executive of the equity crowdfunding platform InvestingZone, the first step for fledgling companies looking for crowdfunding should be a donation platform, where companies solicit money in return for goodies such as discounts on products, invitations to exclusive events, special merchandise and so on, with bigger donations attracting better offers. "Donations sites can be a great way of introducing an idea to the market and, executed well, could even unleash latent demand for a product or service," Miller told the website CrowdFundBeat. "Funds raised on reward or donation platforms are typically used to develop the product further or determine market entry. In contrast, equity crowdfunding should be used when your business is ready to start looking for serious investors that can back the company and help it grow in the long term. "Once you have decided to use equity crowdfunding then the next step is to attract the support of a few good-quality investors. What’s needed is sympathetic investors that understand startups, which often require larger funding requirements but have longer time-scales to market and the potential to generate high returns. However, to attract investors you need to create a robust, well-written business plan that includes detailed financials and assumptions. This information can then be used to create a sensible valuation and share structure that takes into account how much money your company will need to raise to meet objectives and how many shares you are willing to sell. We often work with companies that are wary of adopting shareholders. However, by drafting a strong business plan, your company will be more successful in attracting the support of investors who can provide sound advice on achieving future growth and add real value to your business."





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The heat is on...

The Nestlé Professional Toque d’Or® Competition has always aimed to set the bar for student catering competitions, through an innovative programme of challenges that directly aligns to the national curriculum, and oɲers genuine value to competitors. After 27 years of success, the organisers have continued to shake up the format, with the help of a number of a starry list of ambassadors including Loch Fyne, Firmdale Hotels, The Wolseley and Michelin-starred chef Simon Hulstone. This unique line-up reÁects the growing importance of developing youth skills and training the next generation in the hospitality industry. Across the UK 108 bright young people have been getting ready for their big moment, when they will compete in the 27th Nestlé Professional Toque d’Or®


Competition Heats. Each team of three knows there are only six team places up for grabs in the Finals, where they will be in with a chance to take home the now famous Nestlé Professional Toque d’Or® trophy. If they make it they will join an elite alumni of past competitors, who include Michelin starred chefs, innovative operators, business owners and renowned names including Anton Mosimann. The stakes are high, the reward invaluable. For this year’s Heats competitors a world of unknown challenges awaits, as the Nestlé Toque d’Or® organisers have spiced proceedings up with new twists and turns. Each Heats team will be put through its paces during a series of Masterclasses, where the students will be asked to replicate what they have learnt and tested on their ability to absorb new


information and think on their feet. It will be an experience that gives them a varied taste of what their exciting hospitality career will entail. Daunting though the Heats may seem, the Nestlé Toque d’Or® organisers believe this new way of doing things will allow the students to focus on the learning and development experiences on oɈer, ensuring the competition is truly of value to each entrant. A record-breaking 36 teams - attracted by the life changing experience that Nestlé Professional Toque d’Or® oɈers Äercely competed for a place in the Grand Finals that is a beacon for top talent and youth skills in catering. According to Managing Director of Nestlé Professional® UK & Eire, Neil Stephens, 2015 has seen an

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unprecedented number of colleges wanting to engage with Nestlé Professional Toque d’Or®, with a staggering 140 teams from 75 colleges registered to enter the highly aspirational competition. Praising the quality and creativity of entries Stephens says: “Our partnership with PACE is a winning formula, the incredible number of entries seen this year pays testament to the value that colleges now place on competing within Nestlé Professional Toque d’Or®. “We’re seeing a growing movement by employers in their awareness of the advantages of recruiting a ‘Toque’ candidate and many of our past students have gone on to work with the Änest establishments in the UK, whether as a chef, or in a front of house role. Teamwork is key – hence we place so much emphasis on combining front and back of house skill sets. “Indeed, Nestle Professional Toque D’Or® enjoys a reputation for dramatically accelerating students’ career paths for those who participate, with past contestants working with the Fat Duck, Whatley Manor, Mosimanns, The Lanesborough and L’Ortolan, to name but a few. Nestlé Professional Toque d’Or®

is part of Nestlé’s broader worldwide commitment to supporting youth skills, training and development. “This year sees fresh twists and challenges that will surprise and excite competing teams. For example, we have made ‘Sustainability’ our focus for the Ärst round of the competition, a key pillar which is increasingly embedded within catering operations, and epitomises the future of the industry.”

The full list of Nestlé Professional Toque d’Or® Heats teams is as follows: Belfast Metropolitan College Blackpool and The Fylde College Bradford College Buxton and Leek College City of Bristol College City College Norwich City of Glasgow College Coleg Llandrillo (3 teams) Croydon College Doncaster College Forth Valley College Henley College Coventry (2 teams) Highbury College Hull College Kendal College Kirklees College New College Nottingham (4 teams) Northampton College North West Regional College Salford City College Shefðeld City College (2 teams) Southern Regional College Southern Regional College, Newry South Thames College (2 teams) University College Birmingham University of Derby, Buxton Westminster Kingsway College York College ¡ SPRING 2015 ¡ PROPEL QUARTERLY



Key trends for 2015 There's a general election coming – and a Rugby World Cup. What else can we look forward to this year? John Porter asks around

Nigel Wright chief operating officer TCG: The economic recovery looks to be here to stay, but consumers will still be thinking very carefully about where they spend their hard-earned cash. Increasingly, we think customers will be choosing operators who add value to their night out. The "wow" factor will be very important, which is why we are focusing on the presentation of the drinks just as much as the content. Demand for cocktails is stronger than ever and we have added a range of new serves with a strong visual element, such as Lynchburg Lemonade, presented in a jam jar; an alcoholic milkshake served in a small milk bottle; and a range of mojitos in a Havana rum tin. In everything from cask ales and craft beer to food and speciality coffees, we’re emphasising presentation in our staff training programme, to help each of our pubs and bars maintain the competitive advantage in their local market.

Jonathan Neame

Stephen Minall

chief executive Shepherd Neame:

director Moving Food: As the 2015 general election campaign steps up before the vote in May, immigration will inevitably move up the political agenda. My fear is that the food industry will sit by and say nothing, as is sadly all too common. There are almost no hotels, restaurants, pubs or contract caterers in the UK that could survive without our international workforce, and there is even less chance that these outlets could be supplied with food without these workers harvesting, processing, butchering, storing or warehousing their goods. Nigel Farage may be willing to canvass support whilst holding a British pint, but he should be aware that the pub’s menu was predominately produced and supplied with the help of an international workforce. I’ve been in this business in various roles for many years, and I for one appreciate the benefits of the liberal immigration policy we offer here in the UK. We have a range of organisations, associations, and trade bodies in the UK catering sector, representing, pub groups, restaurants, hoteliers and contract caterers. My hope is that they will be brave enough to make the industry’s case on this political hot potato.

Economic conditions for eating out should remain benign, with low interest and energy costs for consumers. This should continue to drive investment and innovation in retail and new product development, and accelerate the recent positive recovery trends in the sector: eating out, accommodation and craft and premium world beers will be growth engines. The general election will dampen spirits, however, as an unstable political platform is the most likely outcome. And then of course there's the weather – and thankfully the Rugby World Cup will cheer us all up as England win!

Peter Borg-Neal chief executive Oakman Inns: Community engagement will be an important trend. Although technology brings the entire world to an individual’s handheld device, the reality of life for most people is that their dayto-day lives revolve around a small number of relatively fixed locations – where they work, where they live and where they go to play. The importance of pubs and restaurants being part of their community will continue to grow and to extend into further areas of commercial interactivity. It will no longer be enough to make a small donation to the local church roof, buy the occasional item from a local producer, recycle 10% more than you did last year and then joyfully tick the community engagement box. Community engagement will mean leading, not just participating, in local initiatives. ▲




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Feature Tim Martin chairman JD Wetherspoon The long-term trend is for pubs to lose bar sales to supermarkets. Supermarket beer prices are lower now than a year ago, so this trend is likely to continue. As pubs struggle for bar sales, due to the supermarket tax disparity, most PLC investment will be aimed at food sales. As an industry, the big boys have mostly thrown in the towel in respect of beer.

Tim Foster director Yummy Pubs:

“Customers will increasingly reject those bland and cynical brands which are not investing in their businesses, and so failing to engage with their customers”

Premium has been on the tip of everyone’s tongue in practically every meeting I’ve had in the past three years, but what does it actually mean? Whether it’s Taste the Difference or Tesco’s Finest, it’s simply the consumer trading up. We began a life cycle in Yummy when we started to create "premium destination experiences", essentially our way of trading up the pubs for the consumer. Now it seems everyone has upped their game, investment has been huge in both our competitor set and the casual dining players. I think in 2015/16 the consumer will be searching out ‘personalisation’. The boom of 'not on the High street' retailers in the past six months gives insight into this approach – artisan producers, street food, it’s all about getting close to the source and migrating back to changes in lifestyle which a recession does. My target consumers will want to combine the value for money that was so prevalent in 2008/09 and the premium of 2013/14 into personalisation in 2015/16. Getting the insight so the visit matches their expectations is our challenge, and something we’ve been working on for over a year. Generic emails with limited data insight will be unsubscribed, and non-specific and uncustomised direct mail will go in the bin. My consumer will be looking for the enhanced emotional attachment to the sites which personalisation can achieve. If we can personalise the experience from initial contact to service to follow up, we will win out. It’s not rocket science, but it’s a very difficult thing to master with a number of sites, as opposed to just one.

William Lees-Jones managing director JW Lees: I expect to see even more pop-up experiential retail brands, offering new and interesting food and drink choices. The other side of the coin is that customers will increasingly reject those bland and cynical brands which are not investing in their businesses, and so failing to engage with their customers. Provenance is also becoming even more important.




Feature Insight

Raise a glass to the return of confidence Chris Edger, compares the results for the 'Britain's Most Admired Company' survey in the restaurant and pubs sector, and draws some hopeful conclusions


ver the past 24 years, Professor Mike Brown of Birmingham City University has run the Britain’s Most Admired Company Survey, known for short as BMAC (the last 21 in conjunction with Management Today magazine). The BMAC survey, which covers 26 business sectors in the UK, locates the top ten companies in each sector by capitalisation/scale and then distributes a survey to company leaders and analysts requesting them to rank their perceptions on a one to ten Likert scale relating to nine key attributes/ characteristics about their own business and competitors. The key attributes/characteristics that are assessed in this largely peer-based perception survey are: quality of management, financial soundness, quality of goods and services, ability to attract and retain talent, value as a long-term investment, capacity to innovate, quality of marketing, community and environmental responsibility and efficient use of corporate assets. Last year I wrote an article in Propel Quarterly analysing the 2013 results; but what do the November 2014 restaurant and


pub sector results tell us and, more pertinently, how do they compare/differ from the year before? (See the table below – November 2013 figures are in brackets.)

Sector confidence rises Comparing aggregate results over the two-year period, sector confidence has risen by 5.5%. This is significant. Other sectors within the 2014 survey fell from their 2013 highs, including food retail, utilities, oil and extractive, food producers and business support services. Overall the post-recession exuberance of the 2013 survey was curbed in 2014 as the total BMAC index score dropped slightly. Clearly, restaurants and pubs are on the bounce compared to other sectors – but what are the main drivers behind this growth? Looking more deeply into the micro-detail at attribute/ characteristic scores, "financial security" ( up 10% year-onyear), "value as a long-term Investment" (up 10%) and "quality of goods and services (up 8%) are revealed as being the main ▲

Rank 2014

Rank 2013


Rating 2014

Rating 2013

Rise/fall 2014 v 2013















JD Wetherspoon






The Restaurant Group






Greene King


















Mitchells & Butlers






Spirit Group






Enterprise Inns












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Insight factors behind the sector’s surge. Clearly, leaders and analysts within the sector believe that economic fundamentals and a concomitant improvement in the sector’s overall consumer propositions are major causes for optimism.

Single-value brands outshine McDonald's (ranked 9th overall in the entire 2014 BMAC survey), Domino’s and JD Wetherspoon showed good growth on the previous year, continuing to fill the first three spots in the table. Single-brand organisations with huge scale (relative to their segment competitors) and clear value positioning clearly continue to outshine in this sector. But key drivers in their improved performance also point to reasons for their continued momentum: McDonald's saw "quality goods and services" up 25% year-on-year, Domino’s had "value as a long-term investment" rated 13% higher and Wetherspoon was voted up 13% on quality of goods and services. Interestingly, "financial security" scores for these organisations were relatively flat yearon-year, hinting at pressures on margins arising from "better" brands and concerns around margin sustainability.

Urban casual dining climbs The urban casual dining restaurant operators Restaurant Group and Gondola showed the most dramatic rise in fortunes. Confidence has clearly returned to a market segment which depends heavily on the vicissitudes of household income and levels of leisure-related discretionary spend. Restaurant Group rose to number four in the table (up 9.5% year-on-year), the main drivers including "financial security" (up 13%) and "capacity to innovate (up 14%). Gondola’s improved ranking at number seven (up 11.8%) was assisted by a great leap forward in its "value as a long-term investment" score (up16%); unsurprising, as its extraordinarily successful PizzaExpress divestment was unfolding during “Leaders the time of the survey.

“Domino’s had ‘value as a long-term investment’ rated 13% higher”

Pubco model improves

The biggest movement in scores came from Enterprise Inns, which, though still firmly rooted to the foot of the table, improved by 15.2%. The main drivers behind this increase included "value as a long-term investment" (up 24%) and "financial security" (up 18%), suggesting that survey participants are now more confident about the company’s future prospects after its post-recession return to modest growth and improved financial gearing. A rise in its "ability to attract and retain talent" score (up 23%) might also be reflective of its recent retail appointments and widely touted decision to leverage some of its "slack" assets within by forming a managed division. So what do the comparisons between the sector believe that 2013 and 2014 tell us? First, we can still Vertically integrated retail economic fundamentals detect synchronicity within the sector consolidates and a concomitant according to business model positioning/ Greene King and Marston’s, placed improvement in the segmentation. Second, the sector at number five and number six, have – exemplified by the biggest beasts – sector’s overall consumer shown respectable rises in their scores has momentum and confidence which propositions are (up 4.8% and 2.5% respectively), their undoubtedly washes down to small and provenance-based balanced portfolio major causes for medium-sized players. Looking back over approach (upstream production married to optimism” the survey since its inception, it is clear that multiple format downstream retail) continuing the sector tends to experience five to six-year to win admiration from their peers. The survey "bull runs" before its exuberance is punctured was conducted before Greene King’s bid for Spirit, through macro-economic setbacks that punish the overbut both companies saw notable upticks on "ability to leveraged. But for the moment, the BMAC survey confirms that attract and retain talent" (Greene King up 6% and Marston’s confidence is growing, and that is a good thing for all of us who up 9%) and "capacity to innovate" (Greene King up 18% and have a strong vested interest in the sector’s success. Marston’s up 12%). These scores suggest that both company’s attempts to revitalise their estates through acquisition (Greene King) and new builds (Marston’s) are having a positive effect on attracting/retaining great people. Notably, both companies’ "quality of management" scores remain high relative to the survey.

Multi-brand pub retail flatlines Mitchells and Butlers and Spirit, coming in at number eight and number nine, flatlined in the BMAC survey ( down 1% and up 0.7% respectively). Scores that degraded Mitchells and Butlers progress included "quality of management" (down 8%) and "ability to attract and retain talent" ( down 2%). In Spirit’s case, progress was hampered by factors such as "quality of goods and services" (down 3%). In the case of Mitchells and Butlers, its recent purchase of Orchid and its return to likefor-like sales momentum might change perceptions in the future. But the scores for both suggest that their multi-brand complexity might lead observers to conclude that they both suffer from sub-optimal resource deployment/decisionmaking. Indeed, Spirit’s proposed takeover by Greene King, might have come at just the right time for the target company, judging by this survey.

“The biggest movement in scores came from Enterprise Inns, which, though still firmly rooted to the foot of the table, improved by 15.2%” Professor Chris Edger is the author of Effective Multi-Unit Leadership (2012), International Multi-Unit Leadership (2013) and Professional Area Management (2014) ¡ SPRING 2015 ¡ PROPEL QUARTERLY



Alcohol Policy:

“Persuading the working class to abstain from alcohol was thus seen as a genuine attempt at working class self-improvement”

An overview in general election year The drinks industry needs to make sure its concerns are taken into account by politicians when manifestoes are drawn up, says Paul Chase Introduction UK government policy on alcohol in England and Wales, and to a lesser extent under the devolved government in Scotland, has in recent years been something of a moving feast. In this article I want to explore what factors impact on the development of alcohol policy and what may change if the outcome of the upcoming general election results in a Labour government, or a Labour-led coalition government.

A very brief historical overview Historically the Liberal Party of Victorian England struggled to reconcile its support for individual freedom and free markets with its belief in local democracy, and its growing belief that the state should protect people from the perceived moral threat of alcohol consumption, which, as the twentieth century wore on, became medicalised as protection from perceived health threats. Meanwhile, the early union movement demonstrated some sympathy with the temperance movement; saw the brewing and distilling industries as capitalist enterprises which exploited workers and wanted to weaken their ability to organise. We also saw, between 1838 and 1858, the rise of Chartism – a mass working class movement for universal male suffrage; and “Temperance Chartism” became a distinct strand within the broader Chartist movement. Persuading the working class to abstain from alcohol was thus seen as a genuine attempt at working class self-improvement. This in turn fed the conviction that working class interests could only be advanced if the labour movement organised as a political party – the Labour Party. Historically, the Conservatives were generally much more sympathetic to the trade in beverage alcohol, and did much to defend its interests from the 1870s onwards; and it was thanks to the opposition of Conservative peers in the House of Lords that the attempt by the Liberal government of Herbert Asquith to close 30,000 of the nation’s 96,000 pubs over 14 years, and nationalise the rest was defeated. So, current party political attitudes to the “alcohol problem” reflect this difficult and changing history.

Modern alcohol policy Labour’s introduction of the Licensing Act 2003 was initially seen as a deregulation measure that reflected the growing neo-liberalism of “New Labour” under Tony Blair’s leadership. Alcohol was henceforth to be seen as part of a wider leisure culture that was good for tourism and employment. Overlaying this was the cultural proposition that we should favour a continental-style, café bar culture designed, in Tony Blair’s words, to create “a Britain more at ease with itself, and with alcohol.” The perceived liberalisation of the Licensing Act 2003 created a backlash from the forces of social conservatism and from those in the Conservative Party who saw liberalising the regulation of alcohol as a threat to law and order. It was only later that the way in which the “alcohol problem” was framed changed from “law and order” to “public health”. Nevertheless, the Labour government began to row back from the radicalism of the new Act as it reacted to the increasingly shrill opposition to its policy.


The Conservative-led coalition government, formed after the 2010 general election, promised some radical supply-side changes to the way in which the sale of alcohol was regulated: a review of alcohol policy which led to the introduction of EMAROs and the Late Night Levy; banning below-cost sales of alcohol; and tackling underage drinking. In 2012 the Conservatives were minded to go further than a ban on selling alcohol below cost, and to introduce minimum unit pricing – a policy that had long been championed by the health lobby and had been passed into law in Scotland, albeit not implemented due to legal challenge. However, attempts at introducing Early Morning Alcohol Restriction Orders (EMAROs) have been thwarted by concerted and unified opposition from the trade and the Late Night Levy has so far only been considered or introduced by a handful of local authorities. Then we saw what the health lobby regarded as a “great betrayal”: minimum pricing was abandoned by the Conservative-led coalition government, or at least kicked into the long grass for lack of evidence regarding its efficacy, and with the convenient excuse that we should in any event await the outcome of the legal challenge to minimum pricing in Scotland that will be resolved sometime this year by the European Court of Justice. Minimum pricing was also contrary to the Conservative ideological opposition to anything that compromised free markets, and faced considerable opposition within Conservative ranks for that reason, as well as the more pragmatic opposition that arose out of the need to avoid measures that raised prices and gave ammunition to Labour charges of a “cost of living crisis”. So, Conservative attempts at supply-side reform, which reflected a growing acceptance of health lobby perspectives, were abandoned in favour of adopting voluntary industry responsibility approaches to alcohol harm that were supported by the drinks industry, and which could deliver on some health lobby objectives, whilst not offending ideological opposition to government intervention emanating from Conservative libertarians. This is a classic example of how politicians as brokers of interests seek to arrive at a compromise that splits the difference between opposing groups. The problem for the Conservatives in seeking to do this has been the increasingly ideological nature of the health lobby itself, which views any partnership approach that involves the drinks industry in policy formation as tantamount to supping with the Devil – and as far as they are concerned the spoon will never be long enough! So, at present we see a Conservative approach to alcohol policy that attempts to fuse traditional one-nation paternalism by supporting voluntary approaches, whilst avoiding policies that offend against libertarian tendencies, or that run the risk of opening the party to attack


Opinion for adopting policies that penalise the moderate drinking majority.

Underage issues

Stream convergence

Victorian Temperance Movement propaganda

What all this indicates is the difficulty for the health lobby in achieving the radical supply-side, whole population approach to the regulation of alcohol that it wants to see. To do so requires an alignment of what Professor John Kingdon refers to as “three streams”: a problem stream that defines the “alcohol problem” in a particular way and that does so consistently; a policy stream that defines a solution to the perceived problem and which gains traction with government; and a politics stream that pacifies internal party politics by influencing wider public opinion, whilst sealing off the opportunity for party political opponents to opportunistically attack the policy approach adopted. The attainment of health lobby polices on alcohol required all three streams to be aligned and thus for a policy window to open. But policy windows don’t stay open for long. Industry lobbying; intellectual challenges to the “evidence“ provided by predictive mathematical models, such as the Sheffield Alcohol Pricing Model; and ideological opposition from within and without the Conservative Party have caused the policy window to blow shut – for now.

But what of the future? What does Labour’s new approach to public health have in store for our sector? Helpfully, this is set out in a paper titled “Protecting Children, Empowering All – Labour’s New Approach to Public Health in the 21st Century”. What is interesting about this policy paper is what is left out, as much as what is put in. There is no commitment to introducing minimum unit pricing – just to keep it under review; no to a “fat tax” and no to a general approach of using taxes and price mechanisms to leverage changes to peoples’ behaviour. Instead we see a commitment to act more strongly in a range of narrowly defined fields, such as changing the way that specific products, such as high-strength, low-cost ciders are taxed. The paper also deplores the proliferation of cheap deals for strong alcohol: “The rise is excessive drinking has been fuelled by the increasing availability of low-cost, high-strength alcohol. Cheap, high-strength alcohol is now a permanent feature on the supermarket shelves including an endless wave of special offers and promotions, and such marketing has been shown to be particularly attractive to harmful and dependent drinkers, binge drinkers and young drinkers.” The rise in excessive drinking? Well, actually it is falling as the figures below from a compilation provided by the Portman Group indicate:

Consumption u The UK consumed an average of 9.4 litres of alcohol per adult (15+) in 2013 down 19% from the 2004 peak and 10% lower than 2000. u 2013 consumption is twice as high as in the 1950s and 30% lower than the 1900s. u According to the most recent OECD analysis of 24 European countries (2011) the average per capita consumption is 10.4 litres – the UK was just below this in 2011 at 10 litres per capita. u The percentage of frequent drinkers fell between 2005-2012. Men dropped from 22% to 14% and women from 13% to 9%. u The percentage of those drinking over the recommended guidelines on their heaviest drinking day also fell from 2005-2012. Men dropped from 41% to 34% and the women from 34% to 26%.

u The proportion of young people in England (11-15 year olds) that have tried alcohol fell from 59% in 2000 to 39% in 2013. u The proportion of young people in England (11-15 years olds) who think it is OK to drink alcohol once a week fell from 46% in 2003 to 26% in 2013. u The proportion of young people in England (11-15 year olds) who think that everyone their age drinks has fallen from 9% to 4%. u The proportion of young people in England (11-15 year olds) that do not think alcohol is used by their peers has increased from 12% to 20%. So, in terms of the policy stream, the Labour paper on public health is describing a policy approach that links to a problem stream that defines the “alcohol issue” in terms that are demonstrably false; but which is in line with a politics stream that relies on the maintenance of a false consciousness of the impacts of alcohol on society. This is a pretty shaky foundation for any attempts by the health lobby to get its show back on the road. There are however, other indications that Labour has bought in to the general approach of the new healthiest ideology that has gained traction since its inception in the 1970s. Consider this from Labour’s policy paper: “We will adopt the internationally accepted ‘Health in All Policies’ approach – putting health concerns at the centre of our programme for government. Improving our health is not in the gift any one department, organisation or agency, it is the product of many separate policies and activities not just from government but in communities, schools, workplaces, businesses and homes across the country. Successful policy must build a systematic approach that mobilises all of the relevant government departments, local authorities and community and voluntary groups to contribute to a broadly based approach to improving the health of all of our nation.”

“We, as a sector, have demonstrated our ability to influence alcohol policy by challenging the problem stream and the policy stream” This takes us pretty close to the healthiest ideology that says public health must trump all other considerations: not good news for the drinks industry. Labour also proposes to separate its approach to the health of children, which will be quite prescriptive, from its approach to the health of adults, which sounds more advisory. Labour proposes to legislate to limit the amount of fat, salt and sugar that can be included in food and drinks “marketed substantially to children”. Whereas an increase in information on labels, including a legal obligation to put the number of calories on bottles and cans of beverage alcohol is proposed so that adults can make informed choices. Labour is very concerned to avoid the accusation of ‘nanny-statism’: “But, to avoid accusations of a ‘nanny state’ approach we need to set out clearly what we see as the proper limits to government action. If policy makers fail to address the ‘nannystate’ claim, it could in the end undermine public support for making progress on public health. A negative tone, perceived as telling people what to do, can turn people off.” So, a more cautious approach than one might have imagined, but still an approach that is more sympathetic to healthiest ideology than to industry concerns. We, as a sector, have demonstrated our ability to influence alcohol policy by challenging the problem stream and the policy stream; what is lacking is a wider approach that can influence the politics stream – influencing the public opinion upon which government policy formation rides. We have got to get better at that.

Paul Chase is a director of CPL Training and a leading commentator on alcohol and health policy ¡ SPRING 2015 ¡ PROPEL QUARTERLY



How to satisfy your need for speed There are ways of getting people in and out of your restaurant quickly, maximising covers and table turn time efficiently, without hurting the guest experience, says Steven Pike


ith any eating-out experience, it is vital that and creating a more relaxed atmosphere in your restaurant. customers enjoy themselves and feel well looked Customers will notice big parties arriving and it could make them after, not least in order to ensure they provide a concerned that they might be neglected by your front of house positive word-of-mouth service for your operation. team or will have to wait a long time for their food. You may also However, a great experience does not need to mean that people wish to have a cut-off for bookings to allow for a certain number stay in your site for a long time. Indeed, they may not want to; of walk-ins, so you can scoop up those people who make a during the lunchtime service, customers may need to be in and decision when walking past. out within the hour, while at breakfast they are often likely to be Manageable on their way to somewhere else. The number of staff on your team, and the training they undergo, Furthermore, as we all know, increased table turns means increased sales. Staff must thus be able to maximise covers is also vital to ensuring efficiency. You need to have enough without negatively impacting on the guest experience and giving people on shift to allow front of house to have sections of a your site a bad reputation. manageable size, so customers are served quickly and all The immediate consideration needs to be the upsell opportunities are maximised. You also need to expectations of the customer: do they want to be provide comprehensive training, so front of house “You do not in and out of your site quickly, or are they there staff know all the steps of service and when and want customers to relax with friends for a couple of hours? how to upsell in an appropriate way. You do not sitting with empty Gauging these expectations intuitively is a key want customers sitting with empty plates when skill your front-of-house team must have, or plates when they they could be on their next course or enjoying develop, since the customer's need for a quick a second drink. Table management software could be on their getaway or a more leisurely experience will can also help here, as it can provide a real-time next course or dictate how tightly and in what manner your status for every table in the restaurant. enjoying a second staff interact with them. When it comes to seeing how effective


Format When it comes to evening meals, it is likely that customers will wish to remain at your site for a longer period than at other times of the day. Our statistics show that the average dwell time is one to two hours (although this is extended at weekends), while 71% of those surveyed are more likely to spend longer over a meal if they are with friends. However, this will depend on the format of your operation. You need to think about your long-term strategy and how you want people to use your site. Wagamama and its imitators have done this exceptionally well, by creating a format that encourages quicker meals and more flexible seating arrangements, even at nighttime, increasing the number of table turns in any given period of time. If you want to encourage customers to stay at your site for a good proportion of the night, it does not automatically mean you can only offer one sitting. We suggest planning for two sittings, one early (beginning between 6pm and 7pm) and then one later (beginning between 8pm and 9pm). Staggering these sittings will lessen the pressure on both the kitchen and the front of house, ensuring there is no backlog with orders or bookings


your staff are at table turns, and how much your customers enjoy their experience, we strongly recommend evaluating your site, or sites, whether that is through mystery guests, customer feedback surveys or another method. These will help you to assess the difficult balance between speedy table turns and an exceptional customer experience and to decide on actions that may improve it.

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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The accidental restaurateur

Jamie Barber is the son of Martin Barber, the property entrepreneur and founder of Capital and Regional Properties. He eschewed the property world himself, working in his 20s for the law firm Harbottle & Lewis, which specialised in clients from the film, media and communications industries. Barber started his involvement in the hospitality industry almost accidentally, advising Roger Moore's son over a venture called Spy Café, which had a menu that included Live and Let Die Burgers and Goldfinger Fries. His restaurant investment company is called Sweet Potato, with stakes in Hush, Brasserie Hush and Cabana, and a commitment to acquiring emerging restaurant brands. Previous investments in Villandry, Kitchen Italia and Sake No Hana were sold in 2011. His rare failures include Shumi, loved by the critics, not so much by the customers, which opened in 2003 and closed within 18 months. Here he tells Paul Charity about his mentors, including Adam Kaye and Nigel Ray, The Code, getting Victoria Beckham to mix cocktails, salt beef double-deck sandwiches and how his biggest failure was not the concept everybody thought it was


PC: You have a background as an entertainment lawyer. What attracted you to the restaurant industry? JB: Well first of all I was a lawyer knowing that I wanted to have my own business. I used it very much as a stepping stone, I enjoyed it immensely and had great exposure to a lot of very interesting and funky people but I always knew that I wanted to have my own business. At that stage I didn’t know what form that would take at all. I described myself at the time when I was a young 20- year-old as an entrepreneur without portfolio. I ate out a lot, I was in my mid-twenties, I had disposable income, I had no family, so I used to go out a lot to bars and restaurants, but I don’t think I was ever driven with a kind of 'cheffiness” desire that I had to get into the kitchen to start my own restaurant. That was never the plan at all. I think it's been reported before that I used to act for Roger Moore, who was a great supporter and a great guy and he introduced me to his son Geoffrey, who was trying to start a chain of themed restaurants based on his father, which didn’t work out. When I had unravelled Geoffrey from all the arrangements that he had got himself into, he was then lost, and said, 'I want to start a restaurant and I don’t know what to do.' I said, 'Rather than do a burger restaurant, why don’t you start something a little bit more high-profile? I don’t know how to do it, but why don’t we do one together,' and I left the law with no track record, no funding, no real experience and we started this restaurant in 1998. I knew I wanted to have something like the Ivy on the ground floor and something a bit like the Mirabel on the first floor and a


bit like the Met Bar as a bar. Those were the kind of three iconic things around in ’97/’98. As it happens we’ve kind of surpassed most of those things in some shape or form, and we’re still here. We’ve evolved, we’ve changed to live with the times, we’ve refreshed, we’ve rebooted, and this is our strongest year after 15 years. We won Tatler Restaurant of the Year last year, which was great, and we’re still here and still moving. PC: What was it do you think that has given Hush its longevity? JB: We have always evolved. I think the restaurant has grown with me, in a sense, so in its earlier years, it was probably a little brasher and a little bit more bling. I think it has matured like a fine cheese. In the early stages we were trying to be something, and now we are not trying to be anything, we’re settled, we know who we are and we are very confident about what we do – very great, simple food in great surroundings with great service. It sounds very, very obvious, and we’ve tried to have fun with it. So we have backgammon boards because I like to play backgammon. My much younger sister, who is 27 and a Cambridge graduate, she’s been working now for us for four years and she has introduced elements that she likes – they screen classic movies in the courtyard with hot water bottles in the winter. In the winter season we do 'Ski Season', which is our way of using the outside space in the winter. We just have fun and move with the times and that’s what it is. Our like for likes are up 12% on last year which is really good.

Feature a large shareholder in both Cabana and Hush. He been incredibly supportive, he has an incredible code of ethics when it comes to doing business, which I have learnt from. He has his own saying, 'Do things right, do it well and do it with class,' and we have tried to again, on a corporate basis not play anyone around. We are very straight down the line, we deliver what we say we are going to deliver and I think he’s been very good in terms of that macro view.

Jamie Barber

“Every time we open a new site it’s a massive buzz and I am always proud that we have managed to galvanise the team and suddenly there are people eating our food and staff running around serving them”

PC: How different is the menu now from when you first opened? JB: The menu is still 'international, contemporary'. To be honest it’s a bit of a greatest hits of dishes that I like to eat. I don’t really enforce that on our chefs, but they know what I like and what I don’t like. They can't bear it when I go travelling, as I usually come back and say, 'Listen I had this really great dish, can you do something like this?' It tends to be a bit of an amalgamation of stuff that I like – good quality comfort food. It's quite similar to when we first started, but it has also moved with the times and it is certainly much better in terms of presentation and complexity. PC: Was it a hit from the start? JB: Yes, we had a big opening where we had a lot of luck, we had Victoria Beckham the week before filming a TV series based on her life and she phoned up and said she had heard that we were opening and could she come and cover it with her film crew. She turned up and made martinis behind the bar. We had Roger Moore and Joan Collins and Michael Caine and it was a very, very big and glitzy opening. It shows you how naïve I was, because our PR company at the time saying we’d upset some of the critics because they hadn’t been invited to the opening and my comment back was, 'There are critics?' I was so naïve in my twenties, I had no idea, I was so out of touch. I think now I am so totally immersed in the industry I wouldn’t make that mistake again, but it was funny. PC: Who would you say has been your key mentor as a restaurateur? JB: I think I have had two that have really

PC: How are your two Hush Brasserie offshoots? JB: They are good, they’re very different to Mayfair. We picked two Cityish locations and we find that we do extremely well for breakfast for that period and we do extremely well for lunch for that period and we do well early evening. But the dwell time is not the same as it is in Mayfair. There are less opportunities for us to do some of the fun, stretchy things that we are doing like backgammon competitions and the movie showings. So we are just learning how to maximise that, we are doing well and making some money, we have the longevity of customer experience in Mayfair. I think the next location, when we find one, will be in a more neighbourhood-type location so that we can try and make that third space that we are really after. We were very close to doing one in South Kensington, actually, but we were gazumped at the last minute, which was extremely disappointing. supported and helped me and mentored me. One is Adam Kaye [co-founder of Ask Italian and Zizzi], who is one of our shareholders. He has had such depth of experience that he is able to see things with a clarity that I don’t see when I am completely immersed with something. Funnily enough, he is not involved in Cabana but is still extremely supportive and interested in what’s going on with Cabana and has actually helped me in that sense as well. He comes out with little sound bites that seem to resonate in my head for several weeks at a time and then come back to bite me. For example, he always has the mantra that if the experience is right, the revenue takes care of itself. Very, very simple comments to make, but actually, there is a depth to that, and if you really think about the experience you are offering to people and every decision that you a make is referenced back to the experience, then I think that it can give you a different insight into your own behaviours within the sector. We have evolved it now, but for Cabana we have something which we call The Code. What we want to do with Cabana is that we want to blow people away with taste and flavour, we want to lift people's spirits and we want to make then forget that they are in the UK just for an hour or so. So all the decisions we make in terms of design, in terms of menus, in terms of staff training are referenced to The Code and it just helps us come back to what we thought of when we first started and makes sure that we are bench-marking against the same criteria. The second mentor is Nigel Ray, who owns Saracens, and is one of the largest shareholders in Domino's, and he is also

PC: What do you think overall of the UK dining scene, what are the mass market brands you admire? JB: That’s an interesting one, I still think Nando's is a fantastic operation. The food is not for me, I prefer things that have got a slightly higher quality, but it is an amazing experience and I think that does very well. I really like the Soho House Group, they manage to execute things extremely well and I think it's very impressive. I think Five Guys' speed has been very impressive' although again I am less keen on the product. I really like generally the stuff that the Hakkasan Group throws out. PC: How about the overall UK dining scene? JB: The last four years or so have been the most exciting since I started in the business, probably lit by social media. The number of small operators that have created things that have blown people away has been unbelievable. Watching those street operators mature into standalone restaurants and fully fledged brands has been really, really interesting. I keep a list of places that I want to go and it grows exponentially, and trying to push it down is very hard. I think we have a list of about 40 places that we want to go to. They include little street vans, Brazilian street food operators, there is constantly something cropping up that is interesting. There is a woman called Belle Shapiro who does this thing called Belle and the Brisket, these amazing salt beef doubledeck sandwiches. It is definitely a down-up approach today, whereas in the old days it was very much top-down, you know, 'Let’s wait for Gordon Ramsey or somebody to ▲ ¡ SPRING 2015 ¡ PROPEL QUARTERLY


Feature music is on and it’s a great buzz. What I am most proud of is taking an idea on a piece of paper and just making it into a reallife thing. That is the same from all of the brands that I have had, Kitchen Italia and even Shumi. Seeing them come to fruition is a big achievement. PC: That sense of nervousness, in no way does that lessen as you get further into your career – is it as acute now as it was right at the start? JB: Every single time you open a restaurant it is a big punt, and the same way an actor is always nervous before he goes on stage, they say that it is part of the process, for me it’s always part of the process.

invent something we can go and visit.' That’s caused a whole load of different industries in itself – I am very involved with crowd funding, I am on the advisory board of a crowd funding platform, called Crowdbnk. The reason I hooked up with them is that I get so many approaches from people asking me to fund or help with certain operations, probably one a week, that I was trying to put some kind of formality towards all of these approaches I had. The explosion of street food operators has thrown up this need for funding which is definitely pre-bank, pre-institution funding and crowdfunding platforms are a fantastic way of galvanising the fan bases to try to help people grow. At the moment it’s a bit like the Wild West, there is a lot of nonsense going up on platforms which hasn’t really been looked through properly. The reason I like Crowdbnk is because they do quite a lot of due diligence. But I think [crowdfunding] will mature over the next two or three years, it will become a mainstream way of funding early-stage businesses. PC: What are you most proud of so far in your restaurant career? JB:The truth is that every time we open a new site it’s a massive buzz and I am always proud. I have this pattern where three days before the nerves kick in and I am not the funnest person to have around. The architects always take the mickey as I am always wondering, 'Have I done the right thing,' I always worry about the location. Then we open on the night and I am always extremely proud that we have managed to galvanise the team, things that start off on a piece of paper become real and suddenly there are people eating our food and staff running around serving them and the


PC: I asked Alan Yau the same question and he is very Zen and says, 'By the time we open every single element of the restaurant has been concreted into my mind and thought through and I am completely confident.' You owned Villandry for a number of years and even opened a site in Bicester – what was your contribution to the brand in those years do you think and why did you sell Villandry? JB: We took Villandry on when it was dying, so it was on its knees, but it had a fantastic brand and a huge amount of following, People loved to love the brand, but at the time they were always disappointed. The menu had unravelled and had become so chef-driven that there wasn’t any sense of identity in the food that was being offered. There was smoked eel tortillas with horseradish dressing, great stuff, but not for a local brasserie where people want to eat on a daily basis. It started off its life with a strong French heritage, named after a French chateau and the natural thing for me was to edge it into being an all day French bistro brasserie. We did a significant amount of refurbishment, we took a business that was loss-making and made it properly profitable within 18 months and gave it a very strong identity which had been lacking. I managed to secure a site in Bicester Village which is a terrific operation, and it was phenomenally successful on a very large scale – these were 6,000, 7,000 sq ft sites. This was 2007. After that we were exploring a corporate acquisition, and during the middle of that acquisition the recession hit. We weren’t performing any differently, funnily enough, because I think Bicester and Great Portland Street were almost hedged against the recession, there was so much spend that we weren’t really hit at all. But our investors lost the appetite, at that stage, to fund a big acquisition and we ended up sitting on


our hands for almost two years. It got very boring, and I needed to do something, personally, that was faster moving. At the time I had Hush, Kitchen Italia, Villandry, Sakina Hanna, which was a Japanese restaurant that we had in St James’s, and it just lost the fun. After 15 years in the business I didn’t feel like I had anything to prove to anybody, I wanted to enjoy life a bit and have some fun and something that was quicker-paced and fast-moving and I made the decision to sell all of those slower moving businesses. We had a terrific offer for Villandry which we were very happy to accept and everybody did well out of it. There were two sites only but the valuation was hefty and we were extremely happy with it. I still think that Villandry had or has legs to properly expand, I am not necessarily sure that the big format, the 6,000 or 7,000 sq ft restaurants, is the way that I would have expanded it. I think I would have expanded it in 4,000 sq ft sites. PC: What do you think has been your biggest mistake and what do you think was the lesson? JB: Shumi was a mistake, because I had built up a very big following and a lot of brand recognition with Hush and at the time the branded restaurant scene didn’t really exist in the same way that it does now. So at the time the model that people were following were very much like D&D restaurants, which were a selection of stand alone restaurants, the Ivy, the Caprice and J Sheekey. There was a guy called Chris Podker who owned a restaurant called The Avenue, and then he did one called The Circus, so the idea of kind of brand synergy didn’t really exist at that point and so we decided to do this restaurant called Shumi. What I wanted to do was do a glamorous Italian restaurant. The original name for that restaurant was Delago, which means 'from the lake', because there was quite a lot of fish on the menu, small dishes which people could share, something that hadn’t really been done. The only frame of reference we had at the time was like going to a Japanese restaurant, and so we had one dish was a rice flour spaghetti and it was very light and because it was rice flour we decided to put a pair of chopsticks next to the dish. As soon as that happened it all became a bit wrong. Everyone assumed it was a Japanese/Italian restaurant, I had reviews saying that we had soy sauce pasta and wasabi. There was never any Asian ingredients in anything that we did, but we failed to connect with customers, which was the biggest mistake I made at the time. I was trying to appeal to critics rather than to customers, and we had some great critical reaction. Fay Masher said it was one of her favourite restaurants that had opened that year. [But] customers loathed it and it was confused, a bit pretentious and it was a mistake. PC: How long did it last for? JB: I think it lasted eighteen months and it was a very stressful period. I had not expected it not to work. I didn’t have the sense of nervousness before we opened, I had the Alan Yau confidence that everything was going to be fine, and it wasn’t, so that was a big lesson to me. ▲

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Feature PC: Cabana in a sense was another quite large step in that Brazilian cuisine is not well known in this country. How did you spot the market gap for Cabana and how confident were you that it existed? JB: I don’t think I was looking for a gap, I wasn’t aware that the Olympics were coming up, I didn’t really go, 'This is an untouched food genre.' I think I was very interested in doing a casual dining brand that had legs to expand and I wanted something that had theatre and had a USP. I had been fascinated by what USPs there were in restaurant brands, these different things. YO! Sushi's conveyor belt is its USP. Nando’s piri piri chicken is its USP. I was looking for something that I felt could be that spark, that something different. All of these casual dining brands have got to have two things, they’ve got to have the story or the genre or both. With Cabana I think we have the story and the genre. I have this friend David Ponti who I have known for 15 years, David started a very big, high-end, Gordon Ramsayesque Brazilian restaurant called Makoto, which was a very formal restaurant, white table cloths, no music and that failed. It lasted, I think, 18 months. At the time I said, 'I don’t understand why you didn’t do the thing with the skewers, because that’s how I associate with Brazil, you know with colour and music and passion and the skewers coming round the table, and activity.' I had been saying this for a number of years and then I sent him a text saying, 'Why don’t we do this thing with the skewers?' and he said, 'Are you serious?' So we went to Brazil. I had my eyes opened, because I found that Brazil wasn’t the clichéd pastiche of Carmen Miranda and Pele that I had thought it was. There was a very cool, urban scene there, especially in Sao Paulo, full of contemporary art and street food and stuff going on; smells and vibrancy. And I thought, 'We could take this back, this is alive.' I thought there was a really great experience that we could offer, and so we went for it. We decided to do two sites at the same time because I wanted to find out whether if it worked in one location, I needed to know if it was the location or the offer or consequently, if it didn’t work I needed to know whether it was the location or the offer. Both of them had very slow starts. Westfield was a complete and utter disaster when it opened, it was doing £8,000 a week because the centre was so immature. It was dreadful, it was like tumbleweed – we all complained to the centre, saying. 'This is a disaster, we want rent deals,' and then after six months it suddenly started to mature. Then the Olympics hit and it was on the map. From then the like-for-likes have been unbelievable. It is now doing £50,000 per week so I think I can breathe a sigh of relief. It’s gone from being the millstone to being the crown jewels – it shows you how you have to work for these things. PC: It's unusual opening two at the same time. Do you think in retrospect that speeded up the learnings? How did the other site start? JB: Absolutely. If you only do one thing at a time, you have nothing to benchmark, you have no comparable, you don’t know whether one thing works better in one location. If you have two sites, you have things to compare, you can compare margin, you can see whether it’s décor, you can compare sales mixes, you can


compare customer demographics So for me, doing two definitely accelerated the learning, and we felt comfortable enough after two sites to be able to go, 'OK, let’s expand.' Again, it was in a desolate location, surrounded by empty units. We have a very, very strong following there, so we’ve seen out Jamie Oliver’s Union Jacks, we are significantly out-trading our neighbour next door, Zizzi – we know that because the whole industry swaps numbers all the time – and we have a nice business there. We make money, and it's turned out to be a good site.

PC: What have been the major evolutions with Cabana over the past three years? JB: When we started, the experience was more complicated. We were trying to take elements of the churrasco from Brazil and bring them over in our own way. So we had the red and green discs that they have in churrasco where if you are on green it means that you want more food – we use that to signal waiters. But it became difficult, people were using them as coffee coasters, waiters couldn’t see, it was frustrating. We had half-skewers and whole skewers at that time and we found that the half-skewers wasn’t quite enough to fill people up and a whole skewer was too much. Then I had lunch with Ian Neill [former chief executive of Wagamama] when we first opened, and he said, 'I think you should ditch all this and go for a straightforward one-size-fits-all skewer. And again those things tend to go into my brain and stay there for about a month or so, then we thought about it and thought it was a good idea. So it evolved very quickly in the first six months and then has been very stable since then. PC: What do you think are the current prospects of the brand in the UK as a whole and how is it performing outside London? JB: Trinity [in Leeds] has been exceptionally good for us. We have only been open for a couple of months but it has way exceeded expectations. We all wrote on a piece of paper, best guess, about seven of us, and it's about 30% above the highest best guess. We’ve got more Twitter raves about Trinity than we’ve had on any opening we’ve


had – they seem to really like it. So that’s given us the confidence to know that our pricing, our offer, seems to work outside London. I spoke to somebody who shall remain nameless but he felt that Cabana had the ability to do 75 to 100 units. I think that for us over the next three years I want to do five a year and see where we get to at that stage. I am not brazen enough not to know that seven to 25 is full of growth pains but we are trading very, very well. Our like-for-likes are incredible on our existing sites, about 14 or 15%, and we are just happy to expand. Cabana, and Hush, has my full attention – I am not really looking at anything else at this stage. PC: Slightly more general question: how do you find the toughest challenge people say in the sector, recruiting and retaining good quality chefs and staff in general? JB: First of all, we want to have fun with this business and hopefully that comes trickles down and our employees do have fun. They go out collectively with and without us, and there is a very strong collaborative nature. David and I meet all of the general managers and their assistants every week, so there is a sense that they have a direct line of communication with the owners. There is a big people piece that we are working on at the moment to make sure that people understand that they are being developed; that if they start off as a waiter there is a programme that they can go through and they will end up taking a site at some point with us in the future, assuming that they are good enough for it. But we tend to pick personalities. We love personalities, they are difficult people and have their way of doing things but if you can put some boundaries on strong personalities, then you end up with a great team. The most important thing for people is not necessarily whether they are being paid 50p an hour more than they could if they went to work somewhere else: it's more about the people that they work with. They want to feel that they are working for something dynamic, fast moving, good people with a sense of purpose, that’s what helps us retain staff. PC: The marketing landscape – how much do you think that has changed in the past 15 years? JB: It’s unrecognisable. One of the beauties about having my sister involved and she is only 27 is that she is able to connect in a very current way and there is no doubt that without Twitter and without Facebook and Instagram et cetera those channels of communication enable you to have direct conversations with your customers. David and I still will give our personal emails addresses to every customer with every bill and we filter out every single comment, good and bad. We take learnings from it. If they’re bad we use them as challenges to try and make those people convert into massive supporters. PC: How many emails a week do you receive between the pair of you? JB: Between us, 20 or 30 a week – about 15 of which are really supportive emails which is great when you think people are taking the time to write a supportive email. Then we get maybe asking us if we are doing any ▲

Feature new sites and then we get a few that say that their chips were cold et cetera and we pull those ones out and try and make them good. We also do a lot of mystery dining, mystery shopping, we send friends and family in anonymously into the restaurant so we are constantly trying to work out what is going on. Even though we have seven sites, I still regard this as a start-up. PC: Do you think you are ahead of the game regarding the marketing landscape at Cabana and Hush? How do you benchmark against your competitors? JB: Again, my sister is the best person to speak to about this. I think we are very current, I think there is more for us to do on loyalty which is what we are working on at the moment but I think that we tweet massively, we respond to every tweet. We are active on Facebook, we are always trying to come up with fun and quirky activities that we can then talk about. For example, we have this thing called Beach Bum Sundays which has been very successful – as it’s 30 degrees in Rio and freezing cold here, we have a promotion that if you turn up in a bikini you get free drinks. That’s been quite fun, and people are sharing that and talking about that. And really, it’s about customer engagement, making people laugh and smile and feel like they are part of the community. PC: You’ve personally tended to work with partners – is that your preferred way of working? Is it always straightforward to split responsibilities? JB: I like collaborative approaches, I work best when I am bouncing ideas off people. When there is a lot of bouncing around of ideas, I usually find the thing that I think resonates and filter it out. Again, I felt it was very important to enjoy what I did, and I find it enjoyable working with somebody else. David and I naturally split our responsibilities. David is much more design-led, so when we pick a site, we’ll have an initial sight of

the scheme, and then David works quite closely with the designers. I tend to focus much more on corporate sign-up things, site acquisition, funding, but also on the creative stuff in terms of menu development and menu engineering. PC: How easy do you think it is to raise finance to expand generally perhaps – do you think the banks are supporting the sector? JB: I think they are becoming much more supportive of the sector. For us, we have got bank debt and we have a very supportive relationship. I think it is always difficult at our stage of expansion to raise significant debt because most of the banks look historically at ebitda conversion. When you’re growing at five to six sites a year and have pre-opening costs and head office costs, you will always be in a situation where it is loss-making until you get to ten or 15 sites, whatever it might be. So that’s always a challenge. We have a very supportive arrangement with HSBC: they come in on every site with us. PC: What do you think will be the major changes to the UK restaurant industry in the next decade or so? JB: Site acquisitions is more and more difficult. I think that London is particularly congested and is getting to the stage where it is the victim of having been landgrabbed over the last decade. Naturally, that means that brands like us are looking outside of London to make moves. You may find over the next ten years that there is a lot more proliferation of good-quality branded restaurants in the provinces, outside of London. When you see people like us, people like Wahaca, Turtle Bay, all making early stage moves outside of London, this would never have happened ten years ago. You wouldn’t have restaurant brands do their fifth, sixth site out in Leeds and Newcastle and Nottingham and Manchester .You will find a big migrations into major cities.

“I would love to see Cabana grow into a major casual dining player, I think it’s got a lot of early support and has a lot of followers and I don’t see any reason why we can’t get there”



PC: What personal ambitions in the sector do you have left? JB: I am always very ambitious. I would love to see Cabana grow into a major casual dining player, I think it’s got a lot of early support and has a lot of followers and I don’t see any reason why we can't get there. How big it will grow to, that’s a hard one to say, because at the moment I am evolving the size of the company. I personally can see the next three years mapped out very easily. I hope we will be in a situation where we’ve got 25 sites and at that stage I may find that I’ve got this totally sorted and I want to take it on to the next, 25 or I may find that I need more of a chairman-type role and have somebody that would take it to that stage. But I can't really predict that yet. PC: What single piece of advice would you give to somebody thinking of starting their own restaurant? JB: For me, I am always focused on what is the exit. If I am to invest in your business, how am I going to get my money back, because stand-alone restaurants are not easy to sell, especially if they are chefdriven. Who is going to buy it? So I would try and advise people that were starting out to try and map out in their head, over and above just getting the thing open, what is your plan? If they have sussed that out, then their motto should be like Nike’s motto, which is 'Just do it,' stop talking it and just do it. If it doesn’t work, it doesn’t matter, if people go bust you learn from it. In the States they are much more understanding. You try something, you fail, you learn , you try something, you fail, you learn, and the third time you have a success on your hands. If I had given up after Shumi failed I’d have done nothing and it took me a year to brush myself down and get back on the road. PC: Do you think we have much left to learn from the US restaurant industry? JB: I will know that answer in a week's time as I am going to Florida to an F&B conference, where 60 major US restaurant groups are all meeting, called the F&B round table in Orlando. There is a lot of activity in the States in the lower end, quick-service branded sector, and also in the very high-end branded sector. There does not seem to be a huge amount in the middle sector, and I am interested to find out why that is and what is changing. PC: A lot of large legacy brands in the middle market that aren’t moving very quickly. Who in the sector do you most admire, and why? JB: Nick Jones in the higher-end sector and Christian Jeremy are examples of how you can skilfully execute something that look boundless. Obviously there is a huge amount of thought, and planning but they execute very, very well. There is a lot to be admired in that. In the casual dining sector, I think Robin Rowland has done a fantastic job with YO! Sushi, I think he has galvanised a brand and I really enjoy that vibrant brand. I still think I have a lot to learn from people like Ian Neill, who is an altogether great guy. I like to spend time with people who have done it as I am always learning, I am hungry for knowledge, hungry for stuff, for ideas.


The art of craft beer selling

The Propel Craft Beer Study Tour at The King's Arms in Buckfast Street, Bethnal Green, sister venue to The Earl of Essex, in Islington

There were plenty of lessons to take away from Propel’s craft beer retail study tour, says Martyn Cornell, including the importance of choice, and of well-trained barstaff


onsidering it took in a comparatively tiny slice of inner London – seven venues inside not much more than a square mile of hipsterdom, from the Angel in Islington through Shoreditch to Hackney – Propel Info's Craft Beer Retail Study Tour, organised with the help of the Thinking Drinkers, Ben McFarland and Tom Sandham, left the more than 40 people from 20 or so retail operators on the tour with plenty to think about. They saw seven distinct and distinctive approaches to selling "craft beer", all clearly very successful, from the "brew it yourself" of the new Brewhouse & Kitchen outlet just off the City Road, where weasels once popped, to the tight and well-trained set-up at BrewDog's Shoreditch bar, to the fascinating hybrid that is Mother Kelly's in Paradise Row, Bethnal Green, where, underneath the arches, Nigel Owen of Moontide combines a bar boasting 23 craft keg beer taps with an off-licence that has a huge range of chilled bottled craft beers to take away.

At the Well & Bucket, just up the road from BrewDog's Shoreditch bar, at the King's Arms in Buckfast Street, Bethnal Green, at the latest Draft House, the Birdcage in Columbia Road, Bethnal Green and at the Fox in Kingsland Road, Haggerston the study tourists were shown four different ways to turn ordinary, slightly run-down East End of London boozers into attractive, inviting, 21st century bars capable – and this is important – of attracting a strong local following, as well as drawing in visitors from far-away postcodes such as NW3. What lessons did those on the tour take away? Well, choice is good, certainly:

craft beer customers seem to expect a dozen or so different draught beers to pick from as a matter of course. Price is not a problem: this may be a London thing, but nobody seemed to think that the high cost of a pint of something rare and strong was putting people off: and in any case, several of the retailers visited were very happy to sell their stronger draught beers in one-third of a pint measures, which brings the price per glass down to something a little less toe-curling.

Quality Quality is vital: keeping the beer lines cleaned regularly should go without saying anyway, but is even more important when, as many craft beer bars do, beers are changed over regularly. Staff training is also a key part of the offer. BrewDog has been rightly praised for this, but knowledgeable barstaff who can advise and guide customers who may be unsure what they want and what they might like are going to be an essential part of the set-up for anyone who wants their craft beer offer to be taken seriously. Everybody should hire enthusiastic staff – that was a clear message – but BrewDog, for example, goes out of its way to encourage its barstaff to study for the American cicerone qualification, and pays those who gain qualifications more money. Food, too, is going to be an important part of the offer, judging by the outlets the study tour visited: craft beer operators are seeing upwards of 50% of their turnover come from food, and if you add in the drink that is consumed with that food, it suggests that without a decent menu to attract and keep people, you will quickly be losing customers to places down the road that have thought about what they want to be doing with their kitchens and are getting it right. You don't, like the Well & Bucket, have to be serving oysters, but … A question the study tour perhaps failed to answer is the demographic one: who ARE the craft beer drinkers? They're not all manbun-wearing bearded hipsters in their 30s with full-sleeve tattoos, certainly, since there are not enough of those people to keep any bar going outside Hoxton.

Distinction This may be a question tied up with another, even harder to answer: what is craft beer? Is cask beer craft beer? Should we make a distinction between what Nick Miller of Meantime Brewing calls "traditional craft", as represented by Britain's surviving family brewers, and the many hundreds of small brewers who emulate them with beers that are much the same as those being brewed in the 1930s, and "modern craft", brewers like Meantime itself, BrewDog, Thornbridge, Siren and so on, drawing from a wide range of sources for inspiration for their beers, from the American West Coast to Belgium to Bohemia to their own fertile imaginations? The demographic question is certainly worth asking. If you build a craft beer bar, they will not necessarily come. You can stock it entirely with "modern craft" beers, as, for example, Mother Kelly's has, with no cask ale at all, or you can stock only cask ales, as, for example, the Sussex Arms in Twickenham, West London, near my home, which has a dozen handpumps, plenty of manbun-wearing staff behind the bar and a "vinyl only" music policy, but that apart is pretty much a "traditional" pub, with no keg taps. Both have been very successful. But Twickenham's most "modern craft" oriented bar, Ales and Tails, with craft beer bar signifiers such as keg taps protruding from tiled walls, closed after barely a year. Maybe that is the difference between East London and West London: the west may be still more traditionally oriented than the other, and not ready for masses of "craft keg" yet. Looks like the next craft beer retail study tour is going to have to be around the capital's western suburbs … ¡ SPRING 2015 ¡ PROPEL QUARTERLY



Touchscreens versus the human touch


s the future of hospitality less hospitable? New technologies and services being rolled out by restaurants are further redefining, and in some cases reducing employees’ interaction with guests. But less can be more, proponents of foodservice’s new tech-enhanced tools assert. Indeed, amenities such as ordering/ payment kiosks and tabletop tablet computers are all about delivering better service and boosting customer satisfaction, they maintain. In an effort to meet diners’ insatiable appetite for greater convenience when they are dining out or buying food to take home, a wide variety of foodservice concepts are incorporating tools meant to help customers order, pay for and pick up their foods in their own time. Here is a look at some of those concepts, and what these new technologies mean for the foodservice landscape.

Help guests by getting out of their way In November, the McDonald’s restaurant in Woolwich, South London, the chain’s first in the UK, debuted a tech-forward new look in honour of its 40th anniversary. Self-service ordering and payment kiosks, as well as table-mounted tablet computers on which customers can play games and access social-networking sites, were among the highlighted additions. Why invest in the kiosks, which let consumers enter their order using a touch screen rather than verbalising it to a cashier? Franchisee Taimoor Sheikh said at the time: “Staying ahead of customer expectations is vital, and the new technology we’ve introduced in this restaurant recognises the way people live their lives today.” Many consumers, and the coveted Millennial cohort in particular, have grown accustomed to placing food orders online from their desktop or laptop computer. Interfacing with a computer to order food is no big deal to them, and the opportunity to use technology to place an order


Some worry that new technology, such as touch screens, distance hospitality workers from customers too much, says Christine LaFave Grace, but the trick is to align technology with consumer priorities, and actually leave staff with more time for the hospitality


increasingly is an expectation, not just a “nice to have”. The kiosk option gives on-the-go consumers the confidence that they are placing their order as quickly as possible, without having to wait on line behind undecided or information-soliciting customers, and with a low chance of order input error. Plus, for McDonald’s, the kiosks are a key element of the expanding "Create Your Taste" platform, which lets people customise their orders as they never have been able to before. Using the kiosks, customers can select different toppings, sauces, buns and more for their burgers and chicken sandwiches. The platform debuted in a handful of stores in Southern California in 2013; USA Today reported in December that it would roll out to 2,000 stores in the United States in 2015. The Tesco-owned coffee chain Harris & Hoole takes the speedy-order-and-payment a step farther. The chain’s recently upgraded mobile app lets users order as soon as they enter a Harris & Hoole coffee shop by “checking in” to that location. App users who have a prepaid amount stored in their account can place their usual order automatically and then confirm it at the point of purchase. It is not exaggeration to call technology as a tool to support customisation and convenience a new mandate for restaurants, especially those in the limited-service category. Domino’s Pizza recognises this: the chain’s single biggest department is IT, as National Public Radio in the US reported last year. Domino’s drive to stay at the forefront of consumer-facing technology has had an irrefutably positive impact on the chain’s bottom line. In the third quarter of 2014 alone, for example, Domino’s like-for-like sales in the UK increased 12.9%. That growth, Propel reported in October, was driven in part by a nearly 31% surge in online sales (which now account for seven in ten of all UK orders placed for delivery). ▲

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Insight Moreover, orders placed on mobile devices now account for around half of all online sales. A website update last autumn is part of Domino’s effort to use technology to deliver a better customer experience. The updated site tracks customer purchases placed online and creates personalised promotions based on customers’ previous orders. In addition, promotion codes are applied automatically, rather than requested of consumers when they are finalising their order. Customers can even add a movie to their order: they can pay £2.49 or £3.49 to get access to a link where they can watch a latest release or an older favourite. In November, Domino’s announced a partnership with Microsoft that lets games players order pizzas through their Xbox One console while playing games or watching movies. Some may scoff at this bid to appeal to hyperconnected Millennials, a consumer block they see as having a super-short attention span and an unhealthy attachment to their mobile phones. But Domino’s chief executive, Patrick Doyle, testifies to the value of investing in innovative tech and unexpected (but logical) business partnerships. He told the Detroit Free Press in January that customer satisfaction is higher for guests who place their order online, and that orders as a result tend to be a little larger and a little more frequent.

Full speed ahead It is not just limited-service restaurants, though, that stand to realise gains by rolling out new convenience-targeted tech. A study conducted last year by Edelman Berland on behalf of the mobile payment specialist Velocity found that UK restaurant customers spend an average of 11 minutes waiting for their bill. The use of mobile payment systems that allow people to settle their bill as soon as they are ready to leave could spur as much as a 14% increase in table turnover and sales, the study suggested. Speed matters to consumers: In a Technomic

“It is not exaggeration to call technology as a tool to support customisation and convenience a new mandate for restaurants”

survey last September, nearly half of UK consumers identified “speed of service” as one of the top three factors driving their selection of a restaurant. In the US, the casual-dining chains Applebee’s and Chili’s have installed tabletop ordering and payment tablets at thousands of units. In the UK, YO! Sushi last year launched an innovative service at its new London Heathrow outlet: consumers can order a meal online to be ready when their flight lands and then pop into the restaurant to pick it up on their way out of the airport. While the chain is known for its sushi conveyor belt, from which guests can grab any bowl that catches their eye, dine-in customers can also place orders directly with servers, who carry mobile devices that track orders and can suggest additional items diners might enjoy. How do guests feel about the rising tide of technology in the restaurant space? Overwhelmingly positive, actually. A Technomic survey of US consumers last fall revealed that among diners who had used tabletop tablets or ordering kiosks, more than four in five found them both convenient and easy to use. Moreover, 78% said they were fun to use. Boomers and Matures before them have readily adopted smartphones and social media. There is no reason to believe that using a computer in a restaurant will be a bridge too far for many of them. Yes, we are moving away from the traditional models of customer-server (or customer-cashier) interaction. But when customers are better able to manage their food and beverage orders and dictate the pace of their meal, they are happier, and happier customers are more likely to return. Front-of-house staff, the industry’s early tech adopters assert, can in future focus more on their role as a restaurant guide and on providing tailored-to-each-guest/table hospitality.

Christine LaFave Grace is associate editor at Technomic Inc

“Domino’s drive to stay at the forefront of consumer-facing technology has had an irrefutably positive impact on the chain’s bottom line” ¡ SPRING 2015 ¡ PROPEL QUARTERLY



In this boom, only the strong will prosper


The eating out sector is setting records, but as activity climbs, so do rents and premiums, says Richard Negus, and that means the weak will be squeezed

ast year was a record-breaking one in the restaurant industry, with Hardens Restaurant Guide confirming some 148 new additions to London’s restaurant scene alone, a third higher than the previous record, set back in 2006. The sector also experienced unprecedented merger and acquisition activity, with the likes of PizzaExpress, Gondola, Strada, TGI Friday’s and Prezzo all changing owners. The activity is forecast to continue. But how sustainable is this restaurant property activity? Allegra Strategies confirm that there are some 326,000 outlets contributing to the UK food service and hospitality market. The number of restaurants that provide full waiter/waitress service and that fall within planning use class A3 is approximately 32,000, although the exact number is difficult to calculate, because of the blurring of boundaries between restaurants, pubs, cafes, coffee shops, delis, sandwich shops, takeaway restaurants, drive-through restaurants and quick service restaurants. All, to varying degrees, provide food which can be eaten on the premises. However the focus of this article with be on restaurants falling within Use Class A3. There are believed to be around 6,000 restaurants in Greater London – around one to every 580 households – and the capital continues to be the driving force of the sector. It is where consumer demand and competition are greatest, and the result is a city with the most diverse and exciting variety and quality of restaurant offerings, probably better than any other city in the world. It is also the location where, generally speaking, concepts and brands need to succeed before consideration can be given to national/ international expansion. By my own and very approximate calculation, some ten restaurants have opened every week during the past ten years. To put this in perspective, at the same time, approximately 30 public houses (mostly wet-led “boozers”) have been closing every week, evidence of the shift from pure pub drinking to eating out. It will come as no surprise therefore that it is the continued growth of eating out in the UK which is fuelling the increasing number of restaurants, as restaurateurs seek to capitalise on growing consumer demand. The requirement for expansion is from a mixture of new entrants, independent operators, small restaurant groups, the branded chains and overseas operators, and the demand is stronger now than it has ever been.


Location The problem is that, to a point, the restaurateurs are all looking for the same thing. They wish to be located around High Streets in populous towns, on out-of -town retail and leisure parks, in shopping centres and at travel hubs (railway stations, airports, and so on). They generally require space for a minimum of 100 covers (seats), which typically amounts to a total floor area (to include ancillary/back of house areas) of 3,500 sq ft. There will be plenty of examples of restaurants with only 60 covers and also of restaurants with 200-plus covers or more, but it is the branded operators which are driving new restaurant openings, with the likes of the Restaurant Group (owner of Frankie & Bennie's and Chiquito), Nando’s, Prezzo, PizzaExpress, Five Guys, McDonald's, Wagamama, Bella Italia, and many more, each looking to expand their stable by 20 to 50 new restaurants in 2015 and the same again in 2016. The restaurant market, for reasons of supply and demand, is dominated by leasehold property. Accordingly there are two principal ways for operators to secure restaurant premises, namely directly from a landlord on a new lease or by purchasing an existing restaurant premises. In London there is a shortage of new development leisure schemes, and hence acquisitive restaurateurs will have to persuade an existing occupier to vacate their premises by offering them some financial incentive, or “premium". Persuading owners of profitable restaurants to give up their businesses does not come cheap and to purchase prime sites in London can require significant premiums. In recent months operators such as Five Guys, Caffe Concerto and McDonald's have paid £1m-plus premiums to secure premises in the West End of London. The premium is paid to the tenant and not to the landlord, although the landlord will inevitably benefit at the next rent review (restaurant leases generally provide for the rent to be reviewed every five years, and upwards only) and use the evidence of the substantial premium as a sign of increased tenant demand and rising market rental values. The value of the premium depends on whether the restaurant is being sold as a “going concern”, that is, with the restaurant continuing to trade as is, under the same name, etc, or as a “property” with the benefit of the fixtures, fittings, A3 planning use, licensing, etc. The value of a going concern will be affected by the actual trade of the business, whereas the value of a restaurant property will be driven by potential profits and be influenced by various factors such as location, property configuration and size, state of repair, condition of fixtures and fittings, and so on. A good example of the premium value for a prime going concern is Madison, One New Change, near St Paul's Cathedral in the City of London, where the leasehold restaurant is believed to have generated annual profits of £1m. It was acquired by D&D London Dining Group for something in the region of £4m in May 2014. ▲


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Expertise you can trust

Opinion Where restaurants produce little or no profit, the calculation of premium by a multiple of profits is less appropriate and the calculation of the value has very little to do with the restaurant’s trade, but more to do with the potential trade under the style of operation proposed by the purchaser. The value or premium is therefore little more than "key money” and can vary from nothing (or even a reverse premium for the restaurateur tenant seeking to exit their liabilities under their lease) to £300,000 to £400,000. In absolute prime properties, that figure could exceed £2m for restaurant sites that will be stripped back to shell (removed of all fixtures, fittings, furniture and equipment) and then refitted at an additional cost of £1m, or more.

“Some of Pizza Hut’s High Street restaurants found themselves in secondary/tertiary locations”

Restructure During 2014 AG&G sold some 20 of Strada’s "bottom end" restaurants as part of the restructure by Tragus (owner of Bella Italia, Cafe Rouge and Belgo) and the subsequent sale of the Strada group to Hugh Osmond’s Sun Capital. The restaurants were sold individually to a variety of branded operators and some private restaurateurs. Their locations were mainly in provincial towns across the UK and in some London suburbs. The restaurants were on the whole “tired” and mostly smaller than the 3,500 sq ft/100 covers desired by the multiple restaurateurs. No trading information was disclosed to prospective purchasers and the premiums represented what the buyers were prepared to pay restaurateurs are being forced to pay rents of £35 to £40 per sq to secure the sites (key money); none of the restaurants would ft in some locations, which ultimately dilutes profits for existing continue to trade under the Strada name. The average premium businesses, not only through the increased competition, but as paid for each restaurant was around £130,000, with the highest a result of increasing rental values and therefore increasing costs premiums being achieved in the London locations. An estimated to businesses. It is all very well if restaurants continue to trade £250,000 to £450,000 was spent by each purchaser refurbishing profitably. However a very serious risk with restaurant properties their restaurant. are the length of leases, often for terms of 20 and 25 years, which What a purchaser can afford to pay for a restaurant will is considerably longer than all other commercial property (retail, depend on how successful/profitable the purchaser believes the industrial or offices) and is due to the length of time required by restaurant will be under their management/operation. It is the tenants to depreciate their substantial fit out costs compared restaurant brands, with their consistency of offer and geographical to retail and office users. If restaurants do not trade successfully knowledge of trading potential, that will be able to approach then the leases with “upward only reviews" can become a burden acquisitions with a degree of confidence and certainty. It goes rather than an asset. without saying that the more successful brands can afford Pizza Hut came to the UK some 40 years ago and to outbid less successful operators. Purchasers will grew to 700 restaurants at one point. It opened be aware that if the restaurant trades successfully sites in High Streets, shopping centres, retail “Restaurant the resulting value of the restaurant could be and leisure parks across the country. Many of worth a multiple of around four times profits. brands, with their its High Street restaurants opened more than However for the “branded” operators such 20 years ago and with new local restaurant consistency of offer as PizzaExpress, Nando’s, and so on, these developments, some of Pizza Hut's High and geographical purchasers will be aware that their company Street restaurants found themselves knowledge, will be (brand) has the potential to be sold at a in secondary/tertiary locations. Just as able to approach multiple of around ten times profits and this restaurant tenants now are signing up to long acquisitions with perhaps explains the financial justification leases, Pizza Hut had signed up to 25 and for some growing restaurant chains offering a degree of 30-year lease terms with rents pegged to retail substantial premiums and how they can outbid rents and rent reviews every five years. Over confidence” non-branded/independent restaurateurs. the years, rents increased and as better-located Of the new acquisitive restaurateurs, the competition diluted trade, many of Pizza Hut’s High American chain Five Guys probably made the biggest Street stores (as opposed to out-of-town stores) became impact on the sector in 2014, having grown to nearly 20 sites unprofitable. The Pizza Hut business suffered as a result and in 18 months and in the process securing three prime West found it difficult to exit some leases that were too long in term for End of London sites (Covent Garden, Argyll Street and Villiers retailers and in locations too weak to appeal to the new wave of Street) paying premiums in the region of £1.5m to £2.5m. Each restaurateurs. Fortunately for Pizza Hut, many of these leases are site will have had another £1m-plus spent fitting the restaurant now expiring and its liabilities ending. out. It may be questionable whether each Five Guys’ restaurant The forecast for eating out is continued growth, and individually will be worth more than total of the premium paid acquisitive and expanding restaurateurs are reaping the rewards. and fit-out cost, however undoubtedly the potential of the However, with some towns reaching saturation, it will only be the “brand” will be worth considerably more than its constituent strongest that will survive, and over the coming years some of the parts. Outside London, Five Guys has managed to persuade smaller operators will fail. Judging by the multiple restaurateurs' (bearing in mind it is a new and unproven operation to the UK) acquisition plans and number of new entrants announcing landlords of leisure/shopping centres to let it key sites, often by intentions to open in the UK, 2015 will see no let-up in restaurant paying market-setting rents, which ultimately will affect all local openings. If anything, the sector could see even more merger restaurateurs as rent reviews approach and landlords use the and acquisition activity as investors try to ride the crest of the new rental evidence to increase rents. restaurant market wave.

Competition The shortage of supply in London, high premium values/rents and strong competition are driving some branded restaurateurs to look to suburban locations and out-of-town leisure schemes for expansion opportunities where competition is weaker and rents lower. However where rents were once £20 to 25 per sq ft,


Richard Negus is a director at AG&G, the chartered surveyors and leisure property specialists and has 25 years of experience of dealing with leisure property. During the past 12 years he has bought and sold nearly 500 restaurants.






The team at Sticks’n’Sushi have worked with Reynolds for over three years. Andreas Karlsson, Operations Director for Sticks’n’Sushi, speaks about why the partnership continues to grow from strength to strength. 1.

Why do you continue to use Reynolds? One of the reasons we use Reynolds is that we both have a common goal, which is to provide our respective guests with a consistently high quality product. Although we are a relatively small operator at the moment, we always feel that we are well looked after by our dedicated account management team.


What strengths does Reynolds have as a supplier to your business? Reynolds provides outstanding service every day of the year. The team works closely with our chefs and managers, handling all of our bespoke product requirements for the UK.


How well do you think Reynolds understands your business? They have 100% understanding and appreciation of our requirements, consistently helping us to source, locally where possible, fresh ingredients for our business.


Would you recommend Reynolds to other operators and why? Right from the beginning, even as a small start-up from Denmark opening our first restaurant in London, Reynolds has provided us with solid support and feedback, helping us make the right decisions for our business. Three years on, we now have three restaurants in London (soon to be four with Canary Wharf) and over 150 Sticks ‘n’ Sushi employees, and we are very confident that Reynolds is best suited to support our ongoing development.

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Conference Overview

Engagement, opportunity, innovation and transformation The latest Propel Multi-Club Conference at the Lancaster London Hotel near Hyde Park in London was crammed full of juicy gems, as usual. Sonya Hook sums up some of the best contributions from the line-up of top speakers Steve Haslam

Steve Haslam, co-founder of TLC Inns, talked to delegates about his decision to diversify out of the pub business by focusing on the rollout of the Grand Central Bar and Grill concept. Grand Central, described as a fast-casual concept, aims to provide “all-American fun with bubbly, outgoing staff,” according to its founder, Steve Haslam. Haslam, of course, is no stranger to dining concepts of the moment, having gained considerable experience over the years via Mitchells & Butlers, Toby Carvery, Browns and All Bar One, and later in setting up his own company (along with his co-founder and wife, Jo Haslam). His career within the industry has also been varied: Haslam reckons to have gained a rounded picture of the catering industry by having worked his way up from the ranks of cleaner. His company, TLC Inns, now runs five pub-restaurants, offering what Haslam likes to declare is “outstanding service”. The first three sites, all of which were Enterprise-owned, were ones in which he invested heavily, working hard to provide the right atmosphere and to offer customers good traditional pub food. “One of these sites in particular became a multi-award winning venue and it also went on to become one of Enterprise’s best sites outside of the London area,” he said. So how does Grand Central fit into this model?


The birth of Grand Central Haslam said that TLC had been struggling to find suitable pub sites to add to the portfolio. Instead the team started to think about tapping into the popularity of American fast-casual dining, but creating a more premium concept. “Really the idea was born out of the demise of Outback Steakhouses,” he said. In September 2011 he entered into negotiations with the administrators to create Grand Central Basildon. Three days and £25,000 later and a deal was drawn up. TLC Build moved in straight away and the site took six weeks to rebrand and refurb. “We are fortunate to have our own building company and we can design our own builds,” Haslam said. “It took an investment of £250,000, but it did have £100,000-worth of kitchen equipment still on site, so that was a bonus.” The venue, which was then given the name Grand Central, did represent “a complete eye-opener” in terms of a new venture for TLC. “It had been shut for two months but for a long time it had suffered,” Haslam said. “We had been successful with pubs and we thought it would be simple, but we hadn’t thought about the fact we would be inheriting the Outback customer.” These customers, he said, were used to heavy discounting, and the venue had become a second choice to all the big players on the nearby retail park. “We needed to work hard to change the way that business was operated. One problem


was that 80% of trade was walk-in, so staffing was very tough and challenging. It also had bad reviews on social media.” This realisation made it clear to Haslam that the goal for the first year needed to be to increase spend and dwell time by focusing on "premium America". “We wanted people to come for an occasion,” he said. The plan of attack was to make creative menus and to use early incentives, which were given names such as Magic Mondays, Trader Tuesdays and Wall Street Wednesdays, along with other offers. “We did manage to upsell through these and it was also fun and interactive, because we basically bigged everything up. We had themed evenings and the staff wore costumes for these – they had passion and this would draw in huge crowds,” Haslam told delegates. In year one the team also concentrated on how they handled guest complaints, until they found that serial complainers just moved on and they gradually managed to attract a more family market. “We had headphones installed for the kids, and parents loved this – it meant we developed a good early evening trade," Haslam said. "We also now have really good positive feedback on TripAdvisor and we have turned the site around on social media.” The company has now introduced breakfasts, to help growth for year two onwards, he said: “We are now full on Saturday and Sunday mornings.” ▲


Great Beer, Great Crisps... Great Pub. @Piperscrisps



Conference Overview Growing the brand The early success of this Basildon venue encouraged the team to seek out and invest in a sibling, and the Grand Central in Ely, Cambridgeshire was born, right opposite TLC’s pub The Cutter. The fairly swift growth of the Grand Central concept turned out to be a good call. “For the current 2014/15 year our projected turnover looks set to be £8m and projected ebitda is £1.2m. For the 2015/16 year, with two Grand Centrals added, the projected turnover is in excess of £10m and with ebitda in excess of £1.5m,” Haslam told delegates. In February last year the team refurbished the smaller Ely site, giving it 90 covers, against Basildon’s 250. The venue

Joe Teixeira, chief executive at Boparan Ventures, talked to delegates about the challenge of reconnecting the British public with the iconic fish & chip restaurant chain Harry Ramsden’s There is nothing more British than fish and chips. These two delicacies were first served together back in 1860, and Britons have remained in love with this perfect food pairing ever since. It makes sense, then, that Britain’s longest established restaurant chain is the one that specialises in this much loved meal. The Harry Ramsden's business, which was started by the eponymous entrepreneur in 1928, has been an iconic British brand ever since it started out. “It was plain sailing, really for the Harry Ramsden's brand until just a few years ago,” Joe Teixeira told delegates. “When our company, Boparan Ventures, purchased it four years ago it had become tired and forgotten, so we knew we had a big task ahead of us.” But within the first three years of this turnaround plan, Teixeira, said, the company has managed to breathe life into the brand, and it is now “modern and relevant to today’s consumers”. To understand where Ramsden’s had got to, Teixeira said, he pinpointed a date in September 2011, when a Channel 4 programme aired, showing the years of underinvestment in the Harry Ramsden's brand. “It showed the lack of care and attention in the business and it also showed that the best staff had already left,” he said. “One thing it did also highlight, though, was that the business not only needed a turnaround of investment, but that with a compelling proposition it still had big potential.” One of the positive outcomes from the programme was that it showed the Harry Ramsden's brand name worked with consumers. “It punched well above its weight and people had good feelings about the brand itself,” Teixeira said. Rebuilding the business needed a combination of things. “Firstly we needed to throw money at it but we also needed

opened in May 2014. “It was a fantastic success for its first six months, with sales exceeding £500,000 and a 50% return on investment," Haslam said. "It turned out to be a really good addition to the area.” In August an opportunity arose to take on a site in Colchester and work started on that one straight away, with £250,000 invested in the project. The venue, a former supermarket, opened just eight weeks later with 200 covers. In November the team took on the first freehold investment for Grand Central, with an opening in Ipswich. “This one, our third Grand Central in 12 months, was our largest investment to date at £750,000," Haslam said. "It will open in April this year, and it’s our biggest site yet, with 300

internal covers across two units, with a bridge linking the two buildings.” TLC continues to be a family run operation, and Haslam’s daughter is now very involved in the training side of the business. “We invest heavily in our teams and we ensure they have passion and pride in the business. My daughter works on training staff on standards, service, food, presentation and protocol,” Haslam said. For the future the Grand Central model will clearly play a big part in TLC’s plans, but Haslam has not given up on pubs: the company has just teamed up with the Bedford family brewer and pub owner Charles Wells to add another pub venue to its growing portfolio of successful businesses.

to get the right people in place,” he said. “Our first task was to engage with our staff and sell our vision. We needed to re-engage with past, present and future customers in optimum locations, and we also created a new look and ambience.”

In the first year sales were up by 60%, Teixeira said, and the second year was also good. “We have some exciting projects in the pipeline as we want to have 250 sites by 2019 – we have 140 sites already signed up on a franchise basis and we have a partnership now with Welcome Break, so we will be opening in lots of service stations. We are becoming even more established in our key heartland of Yorkshire as well.”

Focus The team also wanted to focus on three areas: the core business, the franchise business and also the licensing portfolio. The Bournemouth Harry Ramsden’s, the country’s largest fish and chip shop, with 400 covers, was the company’s starting point, followed by Blackpool and Eastbourne.

“Our first task was to engage with our staff and sell our vision” The company is also looking further afield with a possible plan to open in Qatar, as well as in other global venues. The licensing portfolio has also had some investment, and the company has been working with partners to put Harry Ramsden's into more supermarkets as well as extending the range, and developing its relationship with Birds Eye.


Joe Teixeira As well as store investments, the team had to look at the product itself. The menu was amended slightly, all recipes were revised and new equipment added. “Along with this, we had to reinstate the message that good food takes time,” Teixeira said. The company invested in screen technology, and it went digital, which helped to feature a more localised offering, as well as helping with upselling and cross-selling, Teixeira told delegates. “We also worked on more effective PR, marketing and social media. We also now partner up with non-complementary businesses, such as O2, which has worked well.”

Plans also include extending out of the core frozen fish market in retail, with the launch of chicken in batter, as well as mushy peas. This is due to be rolled out in Tesco. “The target is to achieve £100m in retail sales and we are aiming for 10% of market share, as well as increasing market spend,” Teixeira said. Overall, Teixeira is confident of the brands growth in all areas. He told delegates that the company was now growing at 8% year-on-year. “Previously, like-for-like sales were in serious decline and it took us 18 months to see our first shoots of recovery. We didn’t see any real growth until the last quarter of 2013,” he said. But with plenty of new openings on the cards and existing sites all faring well, the company is certain that the nation’s love of fish and chips will continue to draw in new customers of all ages, who can enjoy good quality food in a comfortable environment, Teixeira told delegates. ▲ ¡ SPRING 2015 ¡ PROPEL QUARTERLY


Conference Overview The New Inventive Bar Company has rapidly evolved its brands Revolution and Revolucion de Cuba to create a contemporary premium offer for the UK’s high streets. Its chief executive, Mark McQuater, gave delegates insights on this transformation, while also outlining some plans for the future. The New Inventive Bar Company operates 54 Revolution bars, a chain bar concept which began life in the 1990s as a vodkaled late night specialist. The company also runs five Revolucion de Cuba bars, which is the brand’s spin-off cocktail and food-led concept. With a number of factors changing the way people socialised in the on-trade, exacerbated by changes to licensing regulations, Inventive realised a few years back that the brand needed to undergo a transformation programme in order to become more relevant to today’s consumer, chief executive Mark McQuater told delegates. In order to do this the team had to think carefully about how to begin this process and also what kind of offer Revolution could provide. “We decided initially that one of the main aims was to move it away from being a late night specialist to more of a premium bar,” McQuater said. In 2013 the management changed from "owner-founder" to a more balanced team, McQuater said, and this triggered the change process for Revolution. To start with, all the nonbranded outlets were separated out, which made it easier to focus on the core offer. In addition, the company decided that the cocktail offer was working well and that good profit margins could still be achieved with cocktails, but the range needed to be expanded. “It started life as a vodka-cocktail based venue, so we needed to add a much wider cocktail menu to tap into this growth area better,” McQuater told delegates. The brand now offers a premium drinks range with a choice of 32 cocktails. Consequently, the cocktail element is now the fastest-growing sector of the company's offer, with growth up by 24%. While cocktails are now vital to the success of Revolution, other drinks are also adding to the profits. Wine sales have grown by 12%, premium draught beer by 16% and cider 11%. “Before it was more about pitchers and vodka mixers, but sales of these have dropped off more as we have re-engineered the business,” McQuater said. Food also plays a much bigger part of the business, as the company realised it was important to move the focus away from a late-night drinking venue in order to increase dwell time and to encourage people to arrive earlier in the evening.


Transformation “Once we started it was a rapid change process and we took on 32 projects in 14 months, which equated to around three a month,” McQuater said. “After a short break we started on the Revolucion de Cuba concept, while also planning more Revolution openings.” A closer look at the management and team structure has also helped improve the company. “We also implemented lots of travel incentives for general managers and there is now a lot of fun in our business,” he told the conference. The transformation has been rapid. “We now have a fast-growing food business with double-digit growth in catering,” McQuater said. “Food gross profits are up 10% and there is still a way to go in food.” Social media now also plays a big part of the company’s communications strategy, and it now has 420,000 Facebook friends, which is the fourth biggest in the sector after Nando's, Subway and Domino's, he said. “We have high engagement scores and pre-booked sales are growing more than 10%.”

Spin-off In addition to the Revolution concept, the company focused on the spin-off concept Revolucion de Cuba. The two have similarities but tap into slightly different audiences. “Revolution has 76% of its customers under the age of 34, while de Cuba customers on average are about six years older,” McQuater said. “At Revolution 59% are female and there is a high spend per head at £29.42, but this is even higher at the more premium de Cuba bars, at £32.68.” Revolution has more of a mainstream feel, according to McQuater, while de Cuba has a Latin American environment with a Cuban/Spanish feel throughout, reflected in the live music and rumled cocktail menu. This is also clear from the food and beer menu, which is predominantly Spanish and Mexican, including tacos, fajitas and burritos. In contrast, Revolution tends to focus on a wider cocktail range, and food is more general, such as gastro-burgers. To separate these two brands, the team worked hard to adapt the Revolucion de Cuba brand to the upper end of the market. “Drinks are full-price and there’s not much discounting here, which enables good service and floor service as well, rather than chasing price – we concentrated instead on chasing customers,” McQuater told the conference. Most customers are aged around 20 to 30 years old, so the company “got really big on social media”, in order to tap into this market better. The outcome, McQuater said, is that turnovers are high and profits are strong. Looking forward, new Revolution bars are lined up to open nationally while Revolucion de Cuba


Mark McQuater bars are also likely to start springing up in towns which can deliver its more premium customer base. “Revolucion de Cuba is about to grow fairly rapidly now,” McQuater predicted.

Simon Holroyd, managing director of London’s most innovative gastro-pub operator, Noble Inns, spoke at the conference about the company’s journey, its food offer, its approach to design, and its new concept, developed with the company's executive chef, Neil Rankin. The Noble Inns story dates back to 2008, Simon Holroyd told the conference, when he and his business partner, Scott Hunter, decided they wanted to own a pub. “Naturally we started out by looking for investment and also the right site,” Holroyd said. This site – the Princess of Shoreditch – materialised when then pair came across the perfect venue in London for their fledgling pub business. “We found the site but this was in the days before Shoreditch had become trendy, so it was a risky site,” he said. The site was not doing very well when the pair took it over they had to ask themselves the question: what was the best way to turn this pub around when they did not have much money to invest? “We came up with two things we needed to address and that was to improve the product and improve the service,” he said.

Conference Overview different from a gastropub, and one year on it is a successful business,” he said. The next site, called the Smokehouse Islington, was a project which involved Neil Rankin, a chef who specialises in smoked and slow-cooked food. “He basically took refined barbecue food and put it in a community local pub,” Holroyd said. “Potentially it’s our best business. It emerged perhaps at the beginning of the trend of slow-cooked food.” The Smokehouse concept is one the company wants to roll out, nationally, and potentially internationally. Holroyd said he hoped to have ten in London over the next five years, with the second site in Chiswick already under way. This one has a beer garden with a fire pit, as well as a whisky room.


To start this process, Holroyd and Hunter went out to find new suppliers and producers to build relationships with. They then worked on addressing their customer service, initially by recruiting a new team of staff that could be passionate about the business. “Basically we had a shell and we changed the product and service within this,” Holroyd told delegates. “The venue went from £7,000 to £18,000 per week, which shows you can improve your top and bottom line. We then had enough to invest in the business. We also had some good reviews, and then we started getting real traction.”

Opportunity Around 2011, and with a healthy bank account, another opportunity arose with a pub called the Islington Tap, later renamed the Pig and Butcher. “It would have been simple to take the winning formula and do it again but Scott wanted to do something a bit more interesting,” Holroyd said. After a trip to the country to do some research, he and Hunter worked on bringing the "country pub" idea to the centre of London. They pared back on the build, making the venue light, airy and fresh. They also worked hard to implement restaurant techniques but within a pub environment. “People soon realised it was

“Basically, our aim is to expand the business carefully and in a way that retains all that we hold dear” Simon Holroyd

Noble Inns is now well known for being an innovative pub company, but, Holroyd said, the team has some rules it likes to stick to, and the management's ethos is that they only deal with people they like and who share their values. Using local ingredients and products, and buying from small family-owned companies is also part of the strategy, and Holroyd and Hunter also want to try to ensure the team grows with the company and can then share in the success of the business. “Basically, our aim is to expand the business carefully and in a way that retains all that we hold dear,” Holroyd said. Using these values the pair continually put their heads together to come up with new concepts which might fit well within the portfolio, the latest being a project called Bad Egg. “We thought about places we liked to hang out and decided we would like to create a diner brand, which we then called Bad Egg,” Holroyd said. The idea was to make an environment that is chic but accessible, and timeless rather than on-trend, according to Holroyd. “It includes well thought through playlists and atmospherics. The pricing tier is lower than our pubs to encourage repeat visits.” The first of these has opened in Moorgate. It has main courses priced between £8 and £10 with an average spend of £13 to £15 on food. “The menu includes dishes which are bold and bravely flavoured, again created by chef Neil Rankin,” Holroyd said. The food includes dishes such as hashes, and bubble and squeak taken from different cuisines, like Morocco. Burgers and ribs will also feature, and baked eggs with influences from Korea and the Middle East also appear on the list. Food will be a key part of the business: “We expect 70 to 75% of sales to be driven by food,” he said. The interiors will be booths with open kitchens, while Bad Egg makes sure the ethos of Noble Inns runs throughout the business, with a good attention to detail and knowledgeable staff. The Bad Egg and Smokehouse concepts will both play a significant part in the future of the business, Holroyd said, though he hinted at something new from the Noble duo in the not too distant future. ¡ SPRING 2015 ¡ PROPEL QUARTERLY


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Conference Overview

Catering for drinkers and diners too


olmes and Peverelli told conference delegates that they came up with the plans for setting up the Pint Shop concept during their time together at Leon, when they were the chain's operations manager and executive chef respectively. “In our final year at Leon we came through with a shared desire to want to open something,” Peverelli said. “Leon is a very inspirational kind of company, with three very inspiration directors, and there was a good head office there which we got involved in. I got involved in menu development, choosing sites, PR and marketing and it was an amazing exposure.” The pair's combined experience before and during the Leon years helped them feel they had the confidence to leave Leon and set up on their own. But it was a bold move, with very little money between them and no experience in starting a business. However, Holmes and Peverelli felt frustrated about what was on offer for both drinkers and diners. “We had an idea to create a pub business and we had an idea we could make something we thought was special,” Peverelli said.

Richard Holmes and Benny Peverelli, two former senior executives of the healthy fast food restaurant chain Leon, revealed how they set about reinventing the pub for the 21st century with the innovative Pint Shop in Cambridge, the city’s first new-build site in a decade.

“We felt there was nowhere truly addressing that need where drinkers and diners were both looked after but shared the same space.”

Hard to explain The first idea, he said, was not the Pint Shop but a concept they called Walker & Lane. “When we did our first pitch, we were asked what was unique about what we were doing, and we found it hard to explain it, which was a real wakeup call. It became a catalyst to what we have become and to what Pint Shop is now,” Peverelli told the conference. The Walker & Lane idea was scrapped and instead the pair set about establishing what could be unique about their business, which eventually led to the opening of the Pint Shop in Cambridge. “We had lots of ideas and we did some research into the history of drinking and pubs,” Holmes said. “We thought that maybe we could find something from the past and be inspired by that.” During their research they came across a story from the 1830s about the measures that were introduced to stop people ▲

Richard Holmes (left) and Benny Peverelli (right) ¡ SPRING 2015 ¡ PROPEL QUARTERLY


Conference Overview keep things fresh and interesting, he said. Above the fireplace there is a beer list, which is lit up “like a piece of art”. “We wanted to do less but do it really well, so we focus on three drinks, beer, whisky and gin,” Peverelli said. “Beer has been a massive part of our business and accounts for about a third of our revenue. We sold 150,000 pints in our first year, which blew us away.”


Richard Holmes

Benny Peverelli

drinking so much gin, including the Beer House Act, which let people buy a licence for just two guineas and turn their homes into retail beerhouses. “The answer, it was thought at the time, lay in beer. There was no refrigeration then and beer was considered to be relatively safe. Consequently, beer houses were born, and then tens of thousands of them sprung up around the country.” This story struck a chord with Holmes and Peverelli, and they then set about looking for buildings in city centres which felt like they could have been domestic dwellings. “We also needed to find small batch brewers, and right now there are plenty of them,” Holmes said. The name the Pint Shop was chosen but the pair were keen not to use the words ‘restaurant’ or ‘pub’. “We simply used the words ‘meat’, ‘bread’, ‘beer’ and let people decide what they wanted it to be,” Holmes said.

“We raised our money in less than six months and managed to get just short of £1m”

Momentum Once born, the Pint Shop idea gathered momentum. “We raised our money in less than six months and managed to get just short of £1m,” Holmes told delegates. They then set about fine-tuning the concept. “We knew that food and drink had to take an equal billing,” Holmes said. “We had to create something that was desirable to lots of people but had different access points – you could spend £5 for a pint and Scotch egg, or on a weekend you could spend lots of money for a special occasion. Lots of different people from different backgrounds all use the space together and the venue is often used as a meeting point, like original pubs were.” Hot bar snacks are visible and instant: “This is a core part of our business,” Holmes said. The dining space is an extension of the bar, with meals that start at £10 to £15 a head, or a set menu with two courses for £10 and three for £13. This space has more soft furnishings and it has table service, but the overall look is simple and designed to be long-lasting. “Again we use simple ingredients which are well-sourced,” Peverelli told delegates. “We cook with three primary cooking principles: charcoal spit, charcoal grill and slow cooking. It helps define that uniqueness – people don’t have a spit roast fire in their homes, or draught ale.” The menu changes with the seasons to help



Training staff on beer has been an important part of the business. “We spend a lot of time with our guys behind the bar so they can talk to our customers and so they are confident in what they are selling,” he said. Overall, the two set out to create a relaxed space but with good standards. “We use the right plates and cutlery for the right foods, and we have waiters who are really informed about the foods they are serving,” Peverelli said. In terms of the branding the idea has been to keep things subtle, and therefore signage is small: “We are not a shouty brand but we wanted to make sure branding was done in a fun and engaging way.” “We have had an amazing first year,” Holmes said. “Our biggest mistake, perhaps, was not hiring enough people in the beginning. We started with just 20 staff and now there are 45 people.” Training and development will be a big focus for the year ahead, he said, in order to get more structure to the business. Funding and growth will also be important. “We have got our second site ready and our plans are to open another six over next four years, so we will definitely have another site in 2015, maybe two,” Holmes said. They may also increase capacity at the Cambridge site, he said. “We took on a big building but only opened a bit of it, so we have the capacity to grow the site. We have capacity to add another 30 covers which would add half a million on turnover.” Holmes stressed the importance of keeping ahead of the competition, as they have noticed some of their ideas appearing elsewhere in Cambridge: “We need to keep evolving and keep it fresh.” However, the brand got off to a phenomenal start, which means the future looks bright. “We hoped to achieve £20,000 a week by the end of month 12,” Holmes said. “But in week one we took £22,000 and now we are trading at just shy of double that figure.”


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Conference Overview




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Huge turn-out for Propel Multi Club Conference Thursday, 20 November 2014 The Lancaster London Hotel, Lancaster Gate, London, W2



Conference Overview

Our next Our next conference is on conference is on Thursday 20thMarch June 2013 12th 2015 at The Oxford at The Lancaster Belfry Hotel Gate Hotel, London

Chris Gerard ยก SPRING 2015 ยก PROPEL QUARTERLY



It’s been a good year for the sector, but among the lessons 2014 has for 2015 is that meal deals are growing increasingly important, says, Cyril Lavenant

A great deal matters


he foodservice market had a really positive year in Great Britain. In 2014. Among the "Big Five" countries in Western Europe where the NPD Group tracks the foodservice industry, Great Britain was the only one to register visit growth, with an improvement of 0.9%. Germany saw a fall of 0.1%, France a drop of 1%, in Spain visits were down 1.3% and in Italy they fell 1.9% (YTD Nov 2014). We know that two factors have a direct impact on the performance of the foodservice industry: GDP growth (and growth forecasts) and consumer confidence. For both metrics, Great Britain outperformed its European neighbours. British GDP was up 3.5% in 2014 (and is expected to remain at least above 2% growth in 2015 according to various sources). In contrast, Germany achieved GDP growth of just 1.4%. A growing economy has a direct impact on the morale of consumers. For the first time in many years, British consumers are starting to feel positive again about their purchasing power as well as their financial situation and are increasingly confident about the future. This cannot be said of consumers in France, Spain, Italy or even Germany. However, at NPD we feel that these two factors do not tell the whole story, regardless of their importance. The British foodservice market has a specific strength that other countries do not have: it is a very dynamic industry in terms of new and


diverse concepts. Many operators have realised that consumers’ needs and habits are changing quickly and are taking the necessary actions to satisfy these needs, and even anticipate future trends.

Lower than 2008 For the year ending November 2014, British foodservice market visits increased by 0.9%. This is a very encouraging indicator for the industry, as it represents

the first year of true growth since 2008. However, this growth does not mitigate the losses of these consecutive years of bad trading. Indeed, British foodservice traffic is still lower than 2008. The past 12 months saw 11.05 billion foodservice visits, against 11.7 billion in 2008, a drop of some 650m visits, or 5.6%. So while Britain’s population has grown, visits per capita have declined from 197 a year in 2008 to 173 in 2014. Fortunately, total ▲

Chart 1: 2014 foodservice visit growth for the big five year ending November 2014


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Insight Chart 2: Total foodservice traffic and spend, year ending Nov 2014 versus year ending Nov 2008 Total foodservice spend and traffic (millions)

spending is down just £74m on 2008, at £50.7bn. Food price inflation has helped maintain spending, but at the expense of consumers who are trying to save money.

Winning and losing channels Among the winners, two channels in particular are a good indicator of what consumers are looking for these days. First, the quick service channel (including fast food, pizza, ethnic, fish and chips) is up 1.5% in terms of visits for the year ending November 2014, and up by 4.7% compared to year-end November 2008. This channel now represents 51% of all foodservice market visits, up from 46% six years ago. The success of this sector is clearly linked to its affordability, but also to the constant innovations and improvements made by operators. In addition, the pub channel is growing for the second year in a row, with visits up by 0.9% over the past 12 months. However, as many in the industry know, there is a huge difference in terms of performance between branded pubs and independents. The first category grew traffic by 5.8% in the past year while independents lost 6.4% of their traffic. Branded pubs now represent 63% of total pub traffic, up from 40% for the year ending November 2008, a 57% rise. This trend is likely to continue in coming years if independent pubs do not adapt their business to satisfy the demand for good food, affordable prices and family-friendly locations, all delivered in a way that appeals to young adults aged between 18 and 34. On the downside, vending machines, workplace canteens and college/ university canteens are still losing visits. The decline regarding vending machines is associated with the snacking occasion declining by 4% this year and by 11% since 2008 (and this is true for the morning snack, the afternoon snack and the late snack moments). Snacking is an occasion that savings-oriented consumers find easy to cut out, especially if it is an opportunity to cut out an all too often unhealthy treat. What about the full service restaurants channel? If we include casual dining


restaurants in that channel, the sector is showing slight growth of 0.4%. However, when we remove the more modern and more recent outlets that belong to the casual dining sector, it is another story.

Reflecting consumers’ needs Over the past six years, consumers have visited foodservice outlets less frequently to save money. It is no surprise that consumers have cut down on the most expensive eating-out occasions. This has impacted full service restaurants because they are the most expensive outlets and most of the time fail to deliver a great experience. As a result, full service restaurants (excluding casual dining chains) are among the biggest losers, with a 19.6% decline in visits since 2008, representing 200 million fewer visits. More specifically, the traditional independent restaurants have suffered massively, with traffic declining by 18.7% in the same period. At the same time, the casual dining sector has grown strongly, growing visits by 18.1% since 2008. Obviously, this expansion has to be linked to the increase in the number of outlets. But this growth is a mark of success; the casual

dining chains can keep opening new restaurants because they are meeting consumers’ needs, while many traditional independent ones are closing because they are not. Casual dining chains offer modernity, specific identities and clear branding that reassure consumers who do not want to take chances when they eat out. For many years now, consumers have been increasingly choosing brands over independents. Independents now only represent 46% of yearly traffic, down ten percentage points since 2008 when it was 56%. The casual dining chains also provide a pleasant atmosphere and a specific décor. They are particularly appealing to families and young adults (the 18 to 34 age group) looking for good quality food at affordable prices. The casual dining sector now represents an important (and growing) 4.2% of the British foodservice market in terms of visits. The performance over the year ending November 2014 underlines the success of casual dining: full service restaurants (excluding casual dining chains) are down 1.8% while casual dining restaurants have increased their traffic by 7.8%.

Diversity London remains a booming place for the foodservice industry with a 10.1% increase in traffic, against a drop of 0.8% in the rest of Britain for the year ending November 2014. A good example of this dynamism is the growth of "pop up" concepts for on-the-go consumption. When we look specifically at lunch on the go in the quick service channel, traffic was up 2.8% in London, against a smaller increase of 1.1% for the rest of Britain. Pop-ups can be found wherever a few square meters of retail space become available. The variety of food they offer is fantastic, even overwhelming. It is no longer a simple story of Chinese or Lebanese or burgers: you can now find pulled pork (with many different tastes and options), Venezuelan food, Ecuadorian food and ▲

Chart 3: The decline of full-service restaurants since year-end November 2008 versus the rise of casual dining over the same period


Total traffic (millions)

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Insight exotic food from many other countries. And these concepts are working. During lunchtime, it is easy to find long queues of consumers willing to wait ten or even 20 minutes to get their food. These outlets offer exciting new and good quality food despite a rather high average ticket for food-on-the-go. As a result, contrary to what we see elsewhere in the industry, independents in the quick service channel in London have regained lunch on-the go traffic (up 9.2% from a year ago), even though they are still losing ground in the rest of Britain (down 4.3% from a year ago). London is clearly ahead of Paris when it comes to food diversity and health concepts. It is not surprising to see some big players in the British foodservice scene grabbing major opportunities in the French capital, which was not so long ago considered the city of food diversity but is now lagging behind London and other destinations in this respect. In another sign of the dynamism of our industry, London is not the only place where new food is appearing; Leeds is also a very good example of a city where you will encounter many new concepts.

Big trends A year ago, writing in the Spring 2014 issue of Propel Quarterly, we predicted that meal deals, breakfast and socialising would be winning themes in 2014. Now that the data is in, we can confirm that they did indeed play a major role in the growth of the foodservice industry over the past 12 months. Offering valuable and relevant meal deals remains crucial in the foodservice industry. Visits that include a meal deal increased by 9.2% in the past 12 months. This is in contrast to the 0.6% fall in visits that include neither a promotion nor a meal deal (and this is the sixth consecutive year this type of visit has declined). Few outlets can thrive without a good deal proposition. Only 3.5% of all visits to independent outlets include a meal deal, against 19.9% for all branded traffic. And these visits are only up 0.3%

Chart 4: Lunch on-the-go traffic QSR Lunch on-the-go – Independent traffic (millions)

London is up 9.2% for the year ending November 2014, against a 4.3% decline elsewhere in Britain

for independents against a 10.4% increase for branded outlets. As a result, chains have grown total traffic by 5.3% while independents have lost 4.5% of visits. At the same time, visits including a promotion (coupon, BOGOF, any price discount) have increased by a rather small 2.4%, a much slower pace than is the case with meal deals. Meal deals are catching up with promotions – meal deals are offered in 12.9% of visits and promotions are offered in 15.6% of all visits. This move away from the pure price reductions that are evident in the grocery market is a good trend for the foodservice industry. Breakfast has gained 5.6% in visit terms this year and this occasion now represents 11% of total foodservice traffic, up by one half of a percentage point over last year. However, a very good sign for the industry is that lunch (up 1.9%) and dinner (up 3.6%) have also grown significantly. Lunch is a particularly positive sign, as it can so easily be replaced by home meals. This daypart saw three consecutive years of decline, so the upturn is encouraging. The dinner occasion continues to perform well. It is growing again and has weathered the economic crisis much better than other dayparts with a decline of just 1.8% since 2008 ,against 5.8% for the total market. This is consistent with the good health of the industry during

Chart 5: 3.5% of visits to independents included a meal deal, against 19.9% for branded traffic

Share of visits inclding a meal deal – total foodservice YE Nov 2014

weekends, with four consecutive years of visit growth at weekends. What does this say about consumers’ needs? It indicates that consumers are increasingly looking for an experience and want to socialise when they eat out. People making dinner visits because they want to socialise are up 5.1% in the past 12 months. That is a significant result given that the average ticket for a “socialising” dinner is 50% higher than for a “functional” dinner.

Structural changes The foodservice industry started to grow again in 2014. However, the drop of approximately 650 million visits since 2008 represents a gap of over 6%. A strong GDP performance and improved consumer confidence will not be sufficient to deliver strong future growth. The foodservice industry will have to keep demonstrating its ability to deliver innovation. And it will probably take at least three more years to achieve the same level of visits that the market had in 2008. Having access to the latest intelligence and insight and responding to emerging trends will be the keys to good performance. Manufacturers, operators and distributors who manage to understand consumers and follow their fast-changing behaviour and needs will have a much better chance of succeeding and growing ahead of their competitors in our very fastmoving industry. In addition to changes in consumer tastes and needs, we are facing other structural changes that operators will have to take into consideration: an ageing population, increased working from home, growing online sales, people travelling more and more. There are many issues and trends that will keep us all awake and make 2015 and the following years very exciting, if a little uncertain.

Cyril Lavenant, is director foodservice UK and France for NPD Group Note: All data is for the year ending November 2014 ¡ AUTUMN 2014 ¡ PROPEL QUARTERLY



Cynics were quick to see dark motives when Enterprise Inns announced that it was building up a managed pubs division. But the reality is that it's all about learning skills that can be passed on, the company’s Paul Harbottle tells Martyn Cornell

The refurbished Duchess of Cambridge

A view to a skill


Paul Harbottle

hen Enterprise Inns revealed plans to run 50 estate into a number of retail concepts, of which we've identified managed pubs within the next 12 months, nine within our current 5,500 pubs, and the managed division as it conspiracy theorists speedily declared the move is looking to develop three of those nine concepts. Clearly there a threat to the company's better tenants and are a number of pubs out there that don't fit the bill for managed lessees. It was, they suggested, simply a ploy to allow Enterprise pubs as we intend to run them in the short to medium term. The to grab all the cherries in its 5,500-pub estate, as its business three that we're concentrating on at the moment are what we call model came under threat from planned changes in the law the community hub, so wet-led pubs within the community; family that would allow pubco tenants to opt for a market-rent-only dining, which is more a value food operation with a 50/50 wet/ agreement, rather than one that tied them to buying their beer food split; and 'premium drinking', which is 70/30 wet to food but through their landlord. with premium drinks and a premium drinks offer. However, Paul Harbottle, group commercial director Understanding the opportunities at Enterprise Inns, a former chief operating officer at JD "Our business has talked about itself based on location, Wetherspoon and ex-chief executive of Atmosphere Pubs and property type and throughput in the past: we're now Bars, who joined Enterprise in September last year, insists the starting to look at our business based on the consumer company's real motives are very different. "We are not that's in the locale, or likely to use the premises, the trying to kick good tenants out of good pubs, and we retail opportunity that exists in the location, so “We are need to be clear about that," he said. "The main what else is around there, cluster management brief I was given is to teach ourselves how to run not trying to of our own estate as well as what competitors pubs from a retailing perspective. The opportunity kick good tenants are doing, where the supply and demand sits, managed pubs brings to Enterprise is to help our out of good pubs, and we're in the process now of segmenting lessees and tenants get a greater understanding and we need to be from our expertise of how to run a better pub. The the whole estate on that basis to understand clear about objective is definitely not to convert Enterprise into what opportunities exist out there. This is in its a managed pubco. It will always be a leased and infancy at the moment – we've done two divisional that” tenanted pubco with some management skills we can districts in detail, one was the south coast and the export to the rest of the business." other the Sheffield and Grimsby area, where we've The company opened its first managed pub, the St done granular analysis of every pub, we're got some James of Bermondsey, in South East London, in May last year, customer feedback, we've got regional manager and property putting it into a new managed pubs division, the Bermondsey manager feedback, so it's quite a rich database of information. Pub Company. By the end of January this year the Bermondsey But we have 17 DBUs [divisional business units] in our business." Pub Company was due to have added another 14 sites, from While the managed pubs will be competing in a sector that is Lancashire to Swansea. However, Enterprise is "not randomly heavily branded, Enterprise has no current plans to challenge the picking pubs to convert from tenanted to managed," Harbottle likes of Mitchells & Butlers in that area. "It's probably too early says. "We've gone through a process of starting to segment the to say definitely, but the thinking is that the managed pubs will ▲



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Feature not be branded," Harbottle says. "We're very proud of the fact that we run local pubs that are part of the community they've established themselves in over a number of years, and we don't envisage inventing a brand. But the reason I'm slightly hesitant is that we have a pub in Eccles called the Blind Pig which we opened at the beginning of last year, and we've opened a second iteration of that called the Crafty Pig, and before you now it we're going to end up with a 'Pig' brand. But that's not the intention!

Strong foundations "My objective is to have beneath the building a concept which is built on some strong foundations which is very much focused on the segment and the retail concept that we've identified, such that I would absolutely be able to walk in there and understand that it is the concept that we know it is. But I would hate that the consumer would be able to walk into two of our pubs and say, 'It's the same operator, the same pub'." Despite this low-profile approach to the new managed estate, one change that looks likely to happen is a new name for the operation itself: Bermondsey Pub Company is seen as "not right" for a national managed pub company. Meanwhile the team in charge of the operation consists of a pair of regional managers, who will each eventually look after 18 sites, a retail auditor and an HR and training manager, all under a divisional director, which last role is currently being filled on an interim basis by Steve Cash, formerly brands operations director at Harvester and Miller & Carter for Mitchells & Butlers until he retired at the end of 2013. Harbottle also runs the Beacon estate of 190 or so "managed tenancies" in the Enterprise empire. Running managed pubs is not about better economies, he says: "There are economies of scale, and there are efficiencies of process. But in a managed environment there's an overhead that doesn't exist to the same extent in a leased and tenanted." The break-even point for an Enterprise managed pub is £8,000 a week, though the "sweet spot" is rather more than £12,000 a week. "The cost of running Enterprise spread across the 5,500 pubs we have today amounts to £5,000 or £6,000 a pub. Compare that to a Wetherspoon or a Greene King, which is up around £50,000 a pub, and the [managed pubs] we have currently opened are between those two – £30,000," Harbottle says. "So you've got the economies of better buying, better back-of-house processes and everything else, but there is almost a diseconomy as well, which is the overhead it carries for the marketing, the support that's needed. But we're driven it down: whereas a Wetherspoon or a Greene King is quite 'control-and-command', ours is a much more entrepreneurial-type business, where we are giving a lot of flexibility to the manager to operate within the concept that we've defined. We liken it to a framework, and they can colour in the picture. We think if the managers take ownership of the business, we will have a more successful long-term business than one that's all control and command. We give them the freedom to engage with the local community, with local businesses, but not going so far as to rip up the concept and say, 'I know better and I'm going to do it my way'."

The Duchess of Cambridge


The refurbished Sir John Balcombe

The future The Bermondsey Pub Company sites have been reaching maturity, on average, within six months, he says, and any that have been open at least that long are showing a profit, though not all have been immediate success. Lessons are already being learnt for the tenanted estate: Enterprise is looking at introducing several new products as a result of what it has learnt running managed pubs so far. To help the estate expand, Harbottle wants to set up a specific new openings team, with the aim of eventually adding one new managed site a week. "We've publicly declared that we want to do 50 managed pubs in the next 12 months.," he says. "But like all these things, it's an evolution, and at every point in time you reflect on what's working and what's not and review the process. We're not frightened to say it could grow bigger than that, but we are very keen to stress that this is about having a management capability to benefit the leased and tenanted business, not to convert Enterprise into a managed business." Actually going out and buying pubs to convert to management is unlikely: "You never say never, but when you're got 5,000-odd pubs, one reason why this is so exciting for me personally is that the one hurdle I don't have to overcome is finding properties. I will almost guarantee that the overlap between what I'm looking for and what's available is so strong, there's no problem." Enterprise now has six or seven designers on its books, who Harbottle sees as becoming experts on each of its concepts as time progresses, and able to help those concepts evolve. The pubs are refurbished when Enterprise takes them back: a normal investment is likely to be £150,000 to £200,000 per pub. The Duchess of Cambridge in Goldhawk Road, West London, however, had £250,000 spent on it to turn it into a "premium drinking" outlet, and, in particular, to make it more womenfriendly compared to what it had been like under the previous tenant, who had also been running the Bree Louise, a specialist ale bar near Euston Station in North London, and who had walked away from the Goldhawk Road pub after apparently failing to make it work. "We've invested in the toilets, we've invested in the ambience," Harbottle says. "Some of the learnings we can take back into the leased and tenanted estate for our regional managers are to sit down with tenants and simply knock off a few easy wins – like not alienating half your potential customer base, be it men or women, for example."


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It’s a new logo for Andy Murray, and for IBS as well, and both reflect their values and ambitions, says Gareth Powell


hat do Andy Murray, the tennis player and Australian Open finalist and Intelligent Business Systems have in common, apart from constantly striving to be recognised as world-class market leaders in his and our respective fields of expertise? Well, like us, Andy has kicked off 2015 with a brand new logo, which will be emblazoned on all things Murray-related for the foreseeable future, starting with his appearance in the final of the year’s first major, the Australian Open. Murray’s logo combines his initials and the number 77 (the time gap between British men’s singles wins at Wimbledon). According to its designers, the logo “captures Andy’s energy and spirit”. The blurb that accompanied the launch of the two-times major winner’s logo said it was “simple and striking, with heraldic cues that echo his dominance on the court”. Murray is following in the footsteps of other iconic global sports stars with branded identities readily associated with their names and sporting exploits, such as Tiger Woods (initials), Jack Nicklaus (golden bear), Greg Norman (great white shark), Roger Federer (initials) and Rafael Nadal (bull’s head). Our decision to effectively launch our silver anniversary (it’s our 25th birthday next year) with an early present reflects the changing nature of our business and constant evolution of technology. When we first started out as an epos provider in the early 1990s, we would usually deal with the IT department as our day-today point of contact. How times change. Today everyone within an organisation has an input, because everybody has a stake in technology. It is no longer just a means of tracking transactions and stock and safekeeping your cash. Obviously we still do that, but the data that our systems generate informs an entire operation. Now every pound spent can be reviewed and justified. Future pounds can be spent more effectively. And work harder for you, allowing you to do better business.

According to the Guardian newspaper, a poll conducted by Brand Republic revealed that 70% of participants liked Murray’s new design, and brand experts are predicting a lucrative future for a brand with a global reach. It is also a statement of intention from Team Murray as they look to improve and build upon an already impressive sporting CV, which now includes four final appearances in Australia. We have similar ambitions in our arena, the global hospitality market. Not just for the response to our new logo (even though the feedback from our hospitality peers has been overwhelmingly positive) but to ensure we are always seeking to do things better. After all, our ethos as a business is to always improve and enhance our product offerings and the benefits they bring to our clients. That is why we are excited about the launch activity for the new logo, which includes a revitalised website and online presence, external branding outside our head office in Brackley, Northamptonshire, a new livery on our vehicles and a new advertising campaign. We are also publishing a new corporate book and will be distributing this to delegates at the next Multi-Club event in March (we are the Propel Multi-Club’s technology sponsor). Just as important is the clear message pulsing across the four continents where we market our systems: ours is no longer purely an epos company but a provider of hospitality

Cleaner Like Murray, we have gone for a simpler and graphically cleaner logo, one that also readily reflects a far greater spirit of collaboration with our clients and numerous third party application providers. The graphic symbolises the links that are essential to our success as a technology business.



Seamless I think there are two primary reasons why we are generating so much interest from multi-site operators. First, hospitality operators do not want to invest in several different solutions using the same data. And who can blame them? We can all remember walking into hotels and seeing three or four different systems on the reception desk, none of which would talk to each other. Today, operators rightly demand seamless communications between solutions to avoid unnecessary duplication, expense and inefficient use of staff time. At IBS, our application programming interface integrates with other technology applications. Uniting numerous business tools into one solution is a powerful proposition. Clients can benefit from crossover functionality and the seamless sharing and interpretation of data. We currently integrate with a dozen or so hospitality applications, including LiveRes, PayPal and S4 Labour, and more are being added all the time. Second, operators do not like complexity and confusion. None of us do. They want to keep things as simple as possible, including their technology. We were talking to a potential client who said they had seen a demo where one of the country’s leading epos suppliers had two dozen versions of its POS offering. A solution for fine dining. One for quick service. Another for food on the go. Different versions depending on the number of outlets. We have just one, which can be configured to a client’s exact requirements, regardless of the different service styles. You just change the settings and configure it to your needs. These are powerful weapons to have at your fingertips if you want to take the hospitality sector by storm in 2015, just as Andy Murray is looking to add to his collection of grand slam titles this year after coming so close in Melbourne.

Gareth Powell, is managing director of Intelligent Business Systems –

Andy Murray picture: lev radin /

Everybody has a stake in technology

management solutions which constantly upgrades the capabilities and functionality of the technology at its disposal. As I have said several times before in this column, the rebrand is the culmination of a process started several years ago. We correctly recognised and predicted the game-changing importance of cloud technology and developed new online versions of our versatile POSLink POS and StockLink product offerings. At the time it could have been seen as a risk among our technology peers, but our investment has been rewarded in a highly competitive environment where third or fourth generation epos-driven technology tools are the order of the day. But even we were surprised at the incredible response from the hospitality sector. As one of the very few to operate exclusively in the cloud, we have been rushed off our feet demonstrating our solutions, as multi-site operators see the value in online technology that simplifies rather than complicates how they operate.


Beer styles you really need to know about The beer world has never seen so many new styles being invented, and old styles being resurrected, plumped up and given a new spin, as boutique brewers search for the next big beery thing, writes Martyn Cornell


f you want to be counted a beer wrangler today, to be looked up to in the most hipsterish hang-outs in the West End of Glasgow or the East End of London, it's no good simply knowing what the Three Cs are (1) or how to get hold of a case of Westvleteren, one of the world's rarest beers (2). Now you have to know how to pronounce Gose, what the difference is between Grodziskie and Grätzer and whether IPL is actually A Thing. Since the new wave of American brewers began experimenting with making hop flavours the centre of attention in the 1980s, inventing American Pale Ale as a style, turning IPA into a beer that would be unrecognisable to anyone who drank the original India Pale Ales on a veranda in 19th century up-country Bengal, and dragging Imperial Russian Stout back out of its grave to pump it even fuller of roasted, hoppy flavours than the original was when the Empress Catherine drank it in St Petersburg, the most passionate edge of the beer world has been following two trends: inventing brand new styles that owe little to tradition, and digging up

deeply obscure old beer styles – often giving them a new twist. Britain's new-wave brewers have, with some exceptions, been rather more conservative than their American counterparts, but it is now true to say that what the United States brews today, the UK will be brewing tomorrow: the latest edition of the Good Beer Guide shows 16 brewers in Britain making something they specifically call American Pale Ale, while another 30 or so have beers that reference the US West Coast, using the name of an American hop (Cascade, Citra, Simcoe) or an American hopgrowing area (Yakima).

Gose: pronounced "goe-zeh", and so little known it is probable the vast majority of beer drinkers even in its home country have never heard of it, this is probably THE trendiest beer in the US right now. It has been described as "one of the world's most obscure beer styles", and it actually disappeared several times, to be revived each time. Gose is a topfermented sour wheat beer, only lightly hopped, but flavoured with salt and coriander, originally made in the town of Goslar in Lower Saxony, Germany, about

45 miles south of Hanover, but it found its biggest market in Leipzig, 90 miles to the south-east in Saxony proper. Eventually Leipzig was the only place where it was being made, and by the end of the 19th century it was regarded as that city's local beer style. After the Second World War, however, with Leipzig now in Communist East Germany, the beer struggled. There was no Gose made between 1945 and 1949, and the one brewery making the beer closed in 1966. It was bought back again in 1986 by a Leipzig pub owner, Lothar Goldhahn, albeit contract-brewed in East Berlin, but it sputtered in and out of life for the next ten years as Goldhahn struggled to find someone willing to brew it. Then in 1999 a brewpub opened in Leipzig making Gose, and another Leipzig brewer began brewing the beer in 2002. American craft brewers look to have first picked up on the style in the mid2000s, but it only really started to take off in 2010. Today there are getting on for 200 different Gose being brewed in the US, some with wacky additions they would not recognise in Leipzig: blood oranges, hibiscus flowers. So far it looks as if only a couple of British brewers – Magic Rock in Huddersfield and Beavertown in London –have made Goses, but you can expect to see quite a few more.

Grodziskie/Grätzer: Grodziskie, is an even more obscure style than Gose, originally brewed in a town in Posen – an area that has swapped back and forth between Polish and German ownership over the centuries – known as Gratz in German and Grodzisk in Polish. Thus the beer made in the town was known to Poles as Grodziskie and to Germans as Grätzer. The local speciality was a lowgravity beer made from 100% smoked wheat malt and heavily hopped, and sometimes with willow bark added as well, at least historically. The last brewery in Grodzisk closed in 1993, but samples ▲



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Feature of its unique yeast were preserved, and in 2012 enthusiasts transported some of that yeast from Poland to the Jopen brewery in Haarlem in the Netherlands, which brewed two beers to the old recipe, one with willow bark, which they called Grodziskie, the other without, which they called Grätzer. Since then, half a dozen or so American brewers have also made a Grodziskie: no British brewer has done yet, but at least you will now be able to pontificate about its origins when you see one.

Lichtenhainer: Another obscure brew from the former East Germany, this one originally from the village of Lichtenhain, just outside Jena, in Thuringia, Lichtenhainer is made from smoked malt and soured with lactic bacteria after its primary fermentation. The last Lichtenhainer was brewed in Wöllnitz, near Jena, in 1983, but it was revived by a local brewpub in 1997. Mentions of the style by various American beer writers over the past 15 or so years have encouraged ten or a dozen US brewers to have a go at brewing a Lichtenhainer, but it remains way to the left of mainstream. Expect to see at least one British brewer have a go some time soon, however, in the never-ending search for something different to present to drinkers.

IPL: The invention of the oxymoronic "Black India Pale Ale", or Black IPA, by brewers in the United States cemented the idea of "India" in a beer's name as meaning "extremely hoppy", and there are now hundreds of US Black IPAs. Black IPA is, if not a mainstream UK style, certainly one a number of British brewers are making, with versions by, among others, Brain's, Otley, Windsor & Eton and Caledonian. (You'll find huge arguments, incidentally, over whether "Black IPA" was invented in Vermont in the 1990s or the Pacific North-West in the mid-2000s: if you ask, I suspect you'll find the

British ones were all inspired by the US West Coast.) So if Black IPA is a wellhopped black beer, what is IPL? The letters stand for "India Pale Lager", and what that is meant to mean, of course, is a lager beer with much more than the ordinary volumes of hops crammed into it, generally of the highly aromatic North American kind rather than the usual European hops found in lagers. The first "IPL" is generally held to be Sword Swallower from the slightly off-the-wall Shmaltz Brewing in New York, in 2007, since when they have proliferated. How this differs from "Imperial pilsner" or "Imperial lager", another "style" boutique brewers have come up with, is hard to say: "Imperial" has been used by brewers since the early 19th century to mean "the biggest beer we do", most notably with Imperial stout (although "Imperial mild" can be found as far back as 1830). There is even one US brewer that sells an "Imperial India Pale Lager". Very few British brewers have made an India Pale Lager so far – the Canterbury Brewery is a very rare exception – and

Imperial lager is almost as rare in the UK, with Camden Town's Rude Boy Imperial Lager and Meantime's Imperial Pilsner among the few examples. However, more than 150 US brewers have brewed IPLs, and a similar number have produced Imperial lagers/pilsners, which have been around since at least 2002. Whether we will see more examples soon in British bars remains to be seen

ISA: If IPL is India Pale Lager, ISA is – what, exactly? "India Session Ale" is the answer: an expression coined to describe beers that are heavy on the Americanstyle hops, but comparatively light in alcohol. Unfortunately the American idea of what a "session" beer is differs rather

from the British definition: while a Briton would rule out anything much above 4% alcohol from the category "session beers", many US beer drinkers, and brewers, seem happy to call anything under 5.5% "sessionable". It's another example of how the UK and the US are two countries divided by very different drinking cultures. ISAs, which first started appearing in 2006, are also supposed to have “All the IBUs, half the ABV” of "normal" IPA, according to the American beer writer Brian Yaeger, and they often have bitterness levels of 50 IBUs (International Bitterness Units) or more, which any British brewer is likely to say will be far too wearying on the palate to make a good session beer, one which allows the drinker to consumer several pints over an evening. Perhaps for this reason, while there are 40 or 50 ISAs being made in the US, only one British brewer appears to have made an ISA: Caledonian, as a one-off collaboration for one of the JD Wetherspoon international beer festivals last year.

Belgian IPA: You are probably getting the idea by now: this is going to be a well-hopped beer with some sort of nod to Belgian brewing traditions, right? Correct. Except that nobody seems sure exactly what aspect of Belgian brewing tradition they want to honour with a Belgian IPA. Many are like Belgian tripels, with 8% or 9% alcohol, made with Belgian yeasts, but American hops, and drier and sharper than mainstream US IPAs, perhaps with a touch of Brettanomyces yeast. Others are more like saisons made with loads of American hops, on the cloudy side. With its combination of masses of flavour and masses of alcohol, this is another style that is sweeping the US, but take-up in the UK has so far been slow, with Hardknott Brewery of Cumbria's Queboid one of the rare cisAtlantic examples. Unsurprisingly, Belgian brewers are starting to make Belgian IPAs in increasing numbers, but only for export to the US: the home market isn't keen on American hop flavours, apparently.

(1) Cascade, Centennial and Columbus, the three Pacific Coast hop varieties seen as typical ingredients in the beers of the American craft brewing scene (2) Ring the Westvleteren abbey in Belgium, give them your car registration number, turn up at the appointed time, hand over the cash for the one case that is all you are allowed, promise not to resell it, depart ¡ SPRING 2015 ¡ PROPEL QUARTERLY


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All fall down David Read shines a light on what is really happening to UK food inflation, what operators can expect in 2015 and why it is the right time to rebase your supply chain


here is a supposed Chinese curse which says: “May you live in interesting times”. Well, if interesting can be interpreted as complex and unstable then we certainly have them right now. For most of my many years working in the food/drink supply chain, inflation has been fairly predictable. A major movement was perhaps 1%, and on the whole commodities behaved predictably, in line with generally small variations in harvest volumes. Since the beginning of the decade however we have entered a new era, where food inflation first soared, and, more recently, has fallen sharply. The difference between the peak in early 2011, and today’s food deflation is a massive seven percentage points, though there is consensus amongst many analysts that the current retail price war accounts for more than 2% of this and is therefore not present in foodservice supply chains.

Global GDP growth Some very large economies, in particular the eurozone and China, are cooling steadily. This is cutting demand, not only for food but also for the costs associated with making food, acting as a brake on inflation.

Inflationary movement 2011 to date Weakened euro At the beginning of 2014 £1 would have bought you around €1.20. Now it is close to €1.30. This 8% change in value was a huge deflationary influence on the cost of food in the UK in 2014 and could be an even bigger influence in 2015.


CPI Annual Inflation Food CPI Annual Inflation

The good news is that food and drink inflation is now almost certain to stay low, and possibly fall further throughout 2015. Here’s a quick summary of the positive and negative influences; the trick of course will be working out which ones will have more impact.

The key word in climate change is the word “change”, which the weathermen tell us should be interpreted as two things – increase in mean temperature and increased volatility. After several years where we saw both in abundance, 2014’s weather around the globe was considerably more benign, and by recent standards we experienced bumper harvests in the majority of the key food commodities. The long-range forecasters mostly got it hopelessly wrong and as a result this year’s forecasts are all over the place. ▲

Deflationary Influences: Falling oil price In May 2014 the price of a barrel of crude was around $115. As I write, it is hovering just below the $50 mark. The causes are varied, but put simply, it has become a grim battle for market share in a slowing market. The press and politicians are focusing on the primary impacts of this, such as the price of petrol and energy (which is ironic bearing in mind the levels of taxation these attract), but we need to recognise that oil strongly pervades the food supply chain in a multitude of ways. From transport to packaging to production costs, oil is a key feature of the price we pay for food. If the sub-$50 a barrel price remains, or falls further, this will constrain the price of food, and may see it fall more. ¡ SPRING 2015 ¡ PROPEL QUARTERLY


Image © Basphoto |


“A hung parliament surrounded by political uncertainty could damage investment and growth” Inflationary influences:

Expect to see more movement among the larger players in food wholesaling and distribution in the next few years. On Wages balance, this is probably a deflator as investment in systems and In November 2014, UK average earnings overtook inflation for distribution begin to deliver economies. the first time in five years, just as the pace of GDP growth began On balance, our interpretation of the above is that food and to slow. Many economists are predicting a year when drink inflation will remain low for the caterer throughout this pattern increases, which will put a burden on 2015. For caterers this is also a great time to work on business costs and may slow some of the current your supply chain, to gain the maximum benefit of deflationary pressures. this deflationary environment. Here are the key “Expect to see opportunities:


As a business we have been talking since 2007 about the fundamentals of global food markets, and the inflationary nature of population growth, climate change, commodity market trading, and issues with water supply.

more movement among the larger players in food wholesaling and distribution in the next few years”

In an inflationary environment, price management is more straightforward – do your homework, peg the prices, then get on with life. Suppliers are generally more prepared to take risk when prices are inflating, but ask them to take a risk on a price deflating in the future, and you will experience more caution. Contractual mechanics that allow price reduction/ renegotiation are thus critical in fixed price agreements.

Oddball Influences: Retail price wars The landscape is changing fast in food retail. The now significant growth in convenience, discounters and online has been eating into the big food retailers’ revenues in their core business of large stores, which include non-food. A fierce price war has developed, which we believe has added over 2% points to food inflation in the latter part of 2014. It goes without saying that a similar price war in foodservice has not emerged.

The 2015 general election Political commentators are now suggesting that this election will be the most difficult to call in decades. It may have no influence on inflation at all, but a hung parliament surrounded by political uncertainty could damage investment and growth, and act as a deflationary pressure in the latter part of the year.

Supply market developments For much of the past few years we have seen little consolidation within supply markets. That changed in November 2014, with the announcement by Fresh Direct and Bain Capital, (the owner of Brakes) that they will bring together three of Bain’s fresh food businesses, M&J Seafood, Parleys and Wild Harvest, with Fresh Direct. The new company will create an “all-in-one” supplier for produce, fish and seafood, meat and fine-dining products.


Price management

Distribution We are still amazed at how little attention is paid to delivery value in foodservice. Delivering food has pretty much a fixed cost. That fixed cost is amortised over the value of the delivery, so if you have lots of small deliveries you pay more. The smarter caterers buy upstream when they can, and consolidate deliveries to the maximum.

Value chain The value chain is the biggest opportunity of them all. For almost every organisation the best way to improve value from the supply chain is to change what is bought. We regularly come across organisations buying more than 10,000 SKUs (ingredients). In most cases, some simple planning with chefs can reduce the volume of SKUs by 70% to 80%. This enables lower prices, simpler ordering and less waste. This really is a golden time for caterers to re-base their supply chain – before the current down changes to its more usual up next year.


David Read is chief executive of Prestige Purchasing

We aim to: Promote free, fair and Ňexible markets Reduce the cost of doing business responsibly Unlock growth and investment in our people and communiƟes

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Pulling the team together


etting the best out of a team is always a major talking point in the hospitality industry. At almost every conference we go to, there is somebody talking about a great team initiative they have run. That is not a complaint: staff engagement is both incredibly important and incredibly difficult to get right, so it is great to hear success stories. We have conducted several insights projects for clients to help them better understand, engage and inspire their teams, and those projects tend to be the most emotive pieces of work we do. Like many operators, our team here at Elliotts has doubled in the past 12 months and it is now more vital than ever that we keep our own team engaged. So we recently conducted a "warts and all" team survey and feedback programme to understand how happy the team were and what they thought was working well (and not so well). We have now put a number of changes in place and we will measure progress against this first survey benchmark. I feel really strongly that a happy team is a productive team, and that a happy team means a happy client – and that is the be-all and end-all for me. It got me thinking about how the operators we work with ensure their teams are happy and engaged so their customers feel the same way about them as our team feel about working at Elliott's. Here is some of what we have learnt:


Ann Elliott looks at the keys to unlocking successful staff engagement, from providing perks to providing leadership

Many of the operators we know have implemented simple but robust incentives schemes which have led to an immediate positive impact on staff engagement, morale and retention. For some though, the thought of any sort of team incentive fills them with dread. bringing them out in an unpleasant cold sweat. However, in reality there are plenty of options that are relatively cost-effective. One is Huddlebuy, which gives the employees of companies who sign up to its service a range of hundreds of perks to choose from, including discounts at major UK shopping chains and supermarkets, hundreds of pounds off travel, discounts on gym membership and two-for-one restaurant offers. I am also exploring Medicash, which offers low-cost health care plans, and also costeffective life insurance policies. These three initiatives, combined with early participation in the new pension legislation, all help towards maintaining engagement between employees and employer.

Spontaneity Quite a few companies we work with offer frequent, small-value and spontaneous "incentives" providing lots of recognition for team members going above and beyond what is expected of them. The key premise is that positive behaviour is rewarded there and then. Some give vouchers, some give company ▲ ¡ SPRING 2015 ¡ PROPEL QUARTERLY


Insight cheques, some give money. They tend to involve all non-site teams in these schemes to encourage and inspire them to get out into their businesses. But while the implementation tends to be spontaneous, the organisation and process behind these schemes has to be thorough and comprehensive. It cannot be left to chance. I know this may sound a bit on the obvious side, but whenever I’ve conducted staff engagement research for companies performing well, the staff have been happy and allowed to have fun. They have been allowed to bring their own personalities into work rather than leaving them at the front door. I have also conducted in-depth research with teams that have not been allowed any scope for fun at all. It made them miserable. Teams need to be able to smile and laugh with their customers and colleagues, because camaraderie, and getting on with those you work with, is absolutely vital to personal wellbeing. This is something, judging by work we have carried out, that operators such as TGI Friday’s, Las Iguanas and Turtle Bay seem to have nailed.

“Operators such as TGI Friday’s, Las Iguanas and Turtle Bay seem to have nailed workplace cameraderie”

Values Clients who have a clearly defined set of values always tend to have more focused teams. I have spoken to many employees who know their company values off by heart: they do not have to get a credit card statement out of their wallet to remind themselves of what they are. Not surprisingly those values tend to be few in number, clearly articulated and reflected every day in the working environment. There is no dissonance between words and action. Those companies I work with who have high levels of team engagement only employ people who at interview demonstrate too, that they have empathy for these values.



Whenever we embark on an internal engagement project for a Arguably most important of all, those clients who regularly seek client, we always include questions on career development. It is feedback from their teams do have higher engagement scores. more or less unanimous across the board that employees want Their teams seem to truly appreciate being asked for their to know where they are going and how they are going to get feedback in a transparent and anonymous way. there. What sets truly great clients aside is their commitment to Engagement seems stronger when these surveys are not just delivering this process from beginning to end. limited to HR/workload suggestions but also include a variety I have found that there are usual several layers to this of areas (particularly operations and marketing). Often the process. First, every team member wants to know best suggestions for change come from the people what the next role is. Second, they need to know who work in outlet all day, every day. They know the what skills, experience or expertise they must customers best because they are dealing with “Those clients have to be promoted into that role (and how them on a daily basis. they differ from where they are). Third, staff Some clients use informal meetings to who regularly need to know what the company will do to canvass thoughts, some use training sessions, seek feedback from help them get there and what they need to others use external observers, some use their teams do do personally. Fourth, they need to know Survey Monkey-style surveys. Some are better how they will be measured on their progress. or worse than others, but what matters is that have higher Finally, they have to know who will help them, employees are asked their view and their views engagement monitor them and decide about their future are acted on. progress. The most inspired employees I have spoken scores” Mentoring schemes, in particular, work well to are engaged because they have a leader they in this process, giving junior employees somebody respect and admire. Leadership is something of an to look up to and relate to, while it provides senior intangible and a book's worth of thoughts on its own. employees with the opportunity to show if they have a knack for The evidence is that it can be taught at every single level from management and development. team leaders to board directors. It is an absolute must for team engagement. Technology Our work with our clients has taught me that staff Staff notice when their employers are investing in the right engagement does not level over time: as hard as it is to technology to enable them to work quicker and smarter, and get right, it is even harder to keep it right. Working on staff are engaged in order to use it properly. Equally, they will engagement is a continuous investment of both time and definitely notice when the technology or equipment they are money to ensure that a workforce is happy and focused on using is out of date – a common complaint. delivering a great experience. This is a difficult one. No one has unlimited IT budgets, but most employees I have spoken to truly appreciate being given the latest technology with which to do their jobs. It is Ann Elliott is chief executive of the easy to understand why team members would want to take leading sector marketing and PR agency bookings on the latest software or to capture consumer data Elliotts on an iPad, rather than on an old-fashioned data capture card. It all aids engagement. Follow her on Twitter: @elliottsagency



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.


‘….. partnering for success …..’ To learn more or talk through your requirements please contact: or telephone 01953 450056


Crystal balls Everybody likes reading forecasts from experts – predictions about what the future holds, from smart watches to hoverboards to retail trends. But most forecasts are inevitably wrong, says David Martin


he turn of the year put us once again in the annual List Season: when pundits of every flavour predict the hot trends for 2015. The public seems to love them, since they come out every year, attempting to tell us what we are going to see in the coming 12 months. And yet, most forecasts are wrong. The “Undercover Economist”, Tim Harford, in an article in 2014 on the accuracy of economic forecasts, described a “quite astonishing record of utter failure” and talks of “our inability to peer into the future of a complex world”. His blunt conclusion was that “There is not a lot of point asking an economist to tell you what will happen to the economy next year – nobody knows.” Here is one prediction I can confidently make, though: most people in our industry believe that eating out will continue its steady long-term growth. Expectations may have been prudently tempered in recent years, but there has long been an air of confident certainty about future market expectations. Optimism has been the rule.

Optimism Much of the foundations for this optimism are well-grounded: rising long-term affluence, a growing population, healthy and wealthy boomers, increasing brand reach and availability, just for starters. But most of these are extrapolations, intellectual straight lines, helpfully supported by the example of the market in the United States, offering a handy template for those straight lines on the whiteboards at presentations in Britain about the trends in the home market. With around 50% of the US food dollar spent out of home, this was the imagined Promised Land for the future of UK eating-out. But as that noted business-watcher Dilbert once cautioned, “Studies have shown that accurate numbers aren’t any more useful than the ones you make up.” In recent years, reports from the US seem to suggest that in-home dining is now staging a fightback, retaking its share of consumers' wallets, a trend-reversal that certainly wasn’t part of the forecast. Here are some relevant recent observations from McKinsey’s work on consumer sentiment in the US: “With food as the secondlargest household expense after housing, many Americans say they are cutting back on the most costly eating options: dining at restaurants and ordering takeout … Multiple years of austerity have left consumers with altered views about spending. Almost 40% say they will probably never go back to their pre-recession approach to buying. Cautious spending behaviour is the new normal and is unlikely to change in the near future. American consumers continue to cut back on spending by … eating more meals at home.” I know all too well from my share-picking inability that “past performance is not a guide to future performance.” The unfortunate reality is that predictions of future consumer behaviour, as much as we need them, are probably about as accurate as economic forecasts.

Supermarkets Just consider the example of food retailing. The one-stop weekly shop was seemingly permanently embedded in consumer behaviour, and the big retailers duly spent billions of pounds developing large out-of-town stores, to meet the perceived convenience of the car-borne shopping trip. Online shopping initially seemed to pose no major threat, until consumers embraced mobile technology, and began to live their lives by it – and then, suddenly, retail norms were well and truly disrupted.


The spontaneity and immediacy enabled by mobile seems to have catalysed major changes in consumer attitudes and behaviour. For food retailing, the new normal no longer means one main weekly shop. Instead we are using several retailers online and offline, clicking and collecting, and buying top-up food day-to-day from the modern corner shop. Superstores may not be perfect, but to some eyes (like mine) this new mode of shopping often appears to be an inefficient use of consumers’ scarce time. However, the old conventions of "convenience" are suddenly outmoded, and, equally quickly, the retailers’ real estate is now being questioned. Goldman Sachs, for one, thinks as many as one in five food stores should close to restore like-for-like growth to the sector). It is a stark example of perfectly plausible extrapolated assumptions being derailed by unforeseen shifts in consumer behaviour. It also highlights how the initial visible responses to (in this case) mobile technology may not have as much long-term impact as the hidden triggered attitudinal changes. In the foodservice sector, it is arguable, we have yet to see the full consequences of such attitudinal shifts. Of course no one doubts the significance of technology in eating out. Starbucks' chief executive, Howard Schultz, talks of “a seismic change in consumer behaviour … brought about by technology and the access people have to information”. Luke Johnson has observed that “the eating experience is being reinvented by technology.” But there can be no guarantee that the long-term trends, and nor, therefore, the future expectations for the balance of eating out versus eating in, will remain unaffected, because mobile technology's ultimate impact is not yet fully known.

Break-down Conventional distinctions are already breaking down fast between eating in and eating out, between retail and foodservice, between the on and off trade: coffee in the car, snacking on the street, desk-dining, tapas in the wine shop, tasting evenings at bottle shops, and in the United States, wine in Starbucks, and dining at the supermarket (aka the “grocerant"). In our data-rich world, we may be encouraged to think we have become smarter at predicting the future. But here is Dilbert’s view of forecasting: “You can put well-researched facts into sophisticated computer models, more commonly referred to as ‘a complete waste of time’.” For more credibility, I could cite the Danish quantum physicist Niels Bohr: “Prediction is very difficult, especially about the future.” Or we could refer to the celebrated economist JK Galbraith: his view was that there were two sorts of forecasters: “Those who know they don't know and those who don't know they don't know.” In essence, nothing is certain about future consumer behaviour. Extrapolation is almost certainly wrong, especially given the disruptive effects of mobile technology. If I was a scale food and drink operator, I would be regularly consulting my customers, and looking for clues in the way it is affecting their life, their thinking and their eating behaviour, in and out of home. And I wouldn’t start in Shoreditch.

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


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