Propel Morning Briefing Mast Head CPL Training Link Paul's Twitter Link Subscribe Unsubscribe Web Version Propel Info website Propel Info website Forward Email Star Pubs and Bars Banner Morning Briefing Strap Line
Fri 23rd May 2014 - Chicago and US foodservice Friday Opinion special
Subjects: US chutzpah, infinite possibilities, Rich Melman and Chicago, employing gifted people, spending time with colleagues and social media Stateside 
Authors: Charlie McVeigh, Paul Charity, Chris Gerard, Philip Lay, Ann Elliott and James Hacon
   
To express a preliminary interest in attending next year’s Chicago Study Tour e-mail paul.charity@propelinfo.com
   

The balance of power may have shifted despite US chutzpah by Charlie McVeigh

I was born and lived happily in a prosperous, sunny suburb of New York City until the age of eight when we were exiled by my father to a dank, grey mid-70s Britain. A land of plenty and excess was swapped for a country that still seemed to be recovering from the Second World War. Industrial action dominated the news, it rained every day and the food was bland. 
    
My parents sought out flavour, indulgence and quick service and we found them at The Good Earth Chinese restaurant, newly-opened McDonald’s and the simply sensational Kebab Kid – all in West London.
   
Nevertheless, it seemed a poor outcome for a spoiled American family and we lived for our annual summer vacation back in technicolour Long Island with its Fortune cookies, Hawaiian Punch and McDonald’s – not to mention hitting the beach on a daily basis. Like emigrees from Soviet Russia, we gorged ourselves.
   
Well, it’s 2014 and I’m just back from an exhaustive – ahem – ‘study tour’ of Chicago where it rained every day (while London basked), McDonald’s head office is closed due to striking fast food workers and – whisper it – it looks like the balance of power in the food arms race has shifted decisively to the UK. 
   
Yes, the Americans still win on service. The enthusiasm, belief, energy and confidence of American wait-staff cannot be matched anywhere. But quick-service wages to one side, this is under-pinned by what we calculated to be eye-popping rates of pay. Illinois workers are seeking an increase in minimum wage to $10/hour and front-of-house staff keep all of tips, which vary from 15 – 25%. And they don’t tip out the kitchen. 
   
And the Americans still win on sheer ambition and chutzpah. We visited Lyfe Kitchen, an Ottolenghi-style healthy casual dining concept run by a former McDonald’s COO. An executive freely admitted to us that, after six openings, they still “had not got the store economics right” but nevertheless was planning to open a further 20 restaurants this year and 250 within the next five. It’s property team has apparently identified 1,000 locations for what to me seemed a concept with far too many moving parts to ever be truly scaleable. But the food was delicious and who would bet against the School of Big Mac.
   
Likewise Blaze Pizza, with 21 locations, is more than doubling in size by the end of the year and is also looking for a quick dash to 250 sites. The idea here is a pizza concept where – burrito style – the team build a pizza to your design and it is cooked in an ultra-hot oven within three minutes. The claim is that this changes the economics of pizza in the USA where traditionally 90% of sales are in the evening because of the usual wait-time of 10-12 minutes. But I found the branding a little flat and unexciting – nothing like as inspiring as Franco Manca, Union Pizza or Homeslice.
   
Hash House A-Go-Go takes the Yankee reputation for excessive portion size and turns the dial up to eleven. It’s ‘twisted farm food’ translates to obscene, psychedelic piles of stodge covered in molten cheese – each plate arriving stuck with a carving knife and an incongruous rosemary branch. I was reminded of Richard Dreyfuss building an alien mountain in the front room, to the bemusement of his family, in Close Encounters of the Third Kind. 
   
And America’s unabashed love of success is very much alive and well. Restaurant execs greeting their British counterparts loudly extolled weekly revenues, margins and profits in front of apparently un-fazed customers. One boss even felt it appropriate to have a microphone set up in the dining area so no-one missed a word of the unit metrics. It was impossible to imagine this happening in Europe. 
   
In spite of all this I could not help feeling that our equivalent brands are cooler, slicker and more on trend. But then, I am not their target market.
   
Even so, with a Le Pain Quotidien seemingly opening on every Chi-town corner I wondered if the time may at last have come for our Byrons, Wagamamas and the rest to beat the Americans at their own game. 
Charlie McVeigh is founder of the five-strong Draft House business
   

The infinite possibilities of foodservice by Paul Charity

Four days spent with 40 colleagues in a city like Chicago reminds you of the infinite possibilities of foodservice. The French may have invented the restaurant but it was the US that invented systems, layered over category killing, scaleable offers. Five decades on from the creation of the first category killing concepts, its brands – and, indeed, what has become known as American food – dominate the league table of global unit numbers.
   
The city of Chicago provides its own moveable feast of US foodservice ingenuity. Last weekend was my fourth annual trip to the city and the food scene has shifted shape each time. Chicago, is, though, the home of Lettuce Entertain You and the city has benefited from the company’s inexhaustible ability to re-invent itself and imagine fresh concepts. This company can lay claim to the title of the globe’s most stylistically diverse operator with more than 50 unique branded offers. Sure, some of the concepts grow to mini-chains, but Lettuce Entertain You (LEY) and its boss Rich Melman revel in the one-off. Mitchells & Butlers may think it has enough brands with 16 in its portfolio, but Melman might argue that it’s missing out on the better burger market (LEY has M Burger), the tiki bar market (Three Dots and a Dash), the hot Asian steamed buns market (Wow Bao), the tapas and paella market (Café Ba-Ba-Reeba) and should be able to fill a whole food court (Foodlife at Water Tower Place). Oh and why is M&B so shy of the Japanese urban bar market (Tokio Pub)? We had dinner at the company’s Joe’s Seafood, Prime Steak and Stone Crab venue, which proves it’s also no slouch in the high-end dining market.
   
Our party of 42 industry executives spent 16 hours touring the city’s restaurants and bars. Notable, as always in our industry, is the willingness of founders and general managers to meet us and tell us anything we wanted to know about every aspect of their business. And there was no lack of interest. At Lyfe Kitchen, for example, our party must have fired off 50 or more questions, taking a forensic approach to every aspect of the offer before touring the cooking lines. This is an offer where component parts are still being tinkered with, but the food is delicious – and a California branch is taking $80,000-a-week in a 3,500 square foot site. Founded by former McDonald’s executives, this is a conversion of Damascene proportions.
   
At Blaze, the operator’s openness extended to allowing our party behind the line to make and cook their own pizzas. A big part of the Blaze fast-cook pizza offer is the energy of the staff who are encouraged to call-and-respond like an Army unit on the march. Both concepts are forging a new way of doing good-sized market segments – healthy food and pizza, of course, respectively – and stand a chance of achieving real scale. But one area where the UK excels is design – and both would look better if UK expertise was applied.
   
It was a visit to Honey Butter Fried Chicken, voted last week as Chicago’s best new restaurant concept, that provided the most complete articulation of a host of key trends. Located in a suburb, the brand was founded by chefs who ran a dining club and created a following. A particular dish, fried chicken served with honey butter, proved to be an enormous hit with their customers. The offer, then, is mainstream – fried chicken. But their first site weaves in an emphasis on ersatz design, provenance and fresh ingredients. It employs two staff who work seven hours each day to butcher 200 chickens – machine-cut chicken doesn’t taste the same, you know. It regulars believe it and form queues outside every Saturday evening. Labour costs, though, come in at 38% – just as well sales are north of $40,000 a week. To reinforce its credentials, the upstairs living area at the restaurant is where the dining club, with its 6,000 members, still meets. It’s a volume lifestyle business! It’s also a business that wouldn’t work in the UK – honey butter makes fried chicken taste very sweet indeed. Not to UK tastes.
   
Over and over, one is reminded of the towering and universal importance of food across the US out-of-home gamut. Even at Lettuce Entertain You’s Bub City (what is M&B doing in the BBQ, beer, bourbon and best of country music segment?) at 6pm on a Friday, when you might have thought liquor would dominate, 90% of patrons were eating.
   
A final word goes to best thought-through bar offer I’ve come across in years. At Howl at The Moon, a group of a dozen or so musicians rotate between 8pm and 2am to play crowd-pleasing tunes suggested by customers themselves via notes passed to two piano players (with low denomination dollar bills attached) facing each other. Our group could not tear itself away, for two consecutive nights. I’ve already briefed Luminar’s chief executive Peter Marks – here’s a way to fill a large capacity venue for the entire night. The very cool Duncan Fisher, from the Apartment Group, part of our group, might just get there first, though.
Paul Charity is managing director of Propel Info
   

Rich Melman casts a giant shadow in awesome Chicago says Chris Gerard 

The centre of Chicago is one of the most astonishing and architecturally stimulating city street and skyscapes in the world.
   
The river Michigan winds past huge mirrored skyscrapers, each one built with more than a nod of homage to its predecessors crazy aspirations. Some buildings literally reflect each other, whilst some echo each others architecture, but each add their own twists to past experimentation and continue to move and shape the city further. 
   
Downtown Chicago is a powerful testament to human creativity and ambition and it is much-loved and admired by its inheritors.
    
The city today is vibrant, clean, energetic and a joy to walk in. The city’s approach to its architecture has been applied to its food and drink businesses with enormous pride, success and, for nearly as long.
   
This experimentation, creativity and energy has consistently delivered world class and innovative restaurants and bars, and at least for thirty years.
   
The Chicago restaurant business has been much helped by the fact that its people live in their city properly – they live and work in the same place!
   
The 2008 recession may have stalled the construction of the tallest building yet approved in Chicago, but the need to keep your job has driven an even greater work ethic, (for those remaining in work). This has meant that you work 8am to 8pm, there is no time to shop or cook – you eat out.
   
In most European city’s you find, where people live in large numbers, supermarkets; in the centre of Chicago you find restaurants!
   
Rich Melman has been creating extraordinary restaurants for Lettuce Entertain You in Chicago, virtually all his life, and the thing is, at 72, he still is.
   
Chicago was created as a transport hub in the 19th Century, it delivered all of Americas dreams in the 20th Century, with some of the largest and most successful catalogue companies in the world, requiring the building of one million square feet of post office!
   
Today in the 21st Century it hosts the huge National Restaurant Association exhibition and over four days attracts restaurateurs from all over the world to think, eat and play.
   
Hosted by Propel and the ALMR, I had the privilege of joining 42 other operators to visit Chicago. I am, as you may gather, pretty wowed by the city – awesome is genuinely an appropriate word.
   
So what was my take out from the exhibition and more importantly Chicago? We should not take reservations when demand exceeds supply. We should find new technology to allow our guests to put themselves on our wait lists before they arrive and know when they should arrive.
   
Too much focus can be a bad thing. Eataly offers one of the most amazing food offers I have ever seen under one owner’s roof . But the development of a raft of specialised focused offers can reduce choice, not increase it for groups of guests with varying tastes.
   
BBQ and slow cooking is old-hat but my goodness it’s a good old hat, and it remains very popular. The Weber Grill, now looking a bit tired, created in 2002, is showing the Eataly business just how to make money!
   
“Good for you foods” can be delicious and are an emerging trend, see Beatrix or Lyfe Kitchen, but importantly they don’t rub the guest’s nose in the “it’s good for you” bit!
   
Passion for your product is a critical element to deliver success, but passion can’t beat the reality of a -30 degree centigrade winter or a poor location/plan. Last winter was tough in Chicago.
   
Hot dogs, food vans, and food innovation all can now be brought to market through social media.
   
For those that presently deliver their food with an in-house resource – get together with your competitors and build a shared city-wide delivery solution.
   
Craft beer is everywhere in Chicago with very few brewers fonts to be seen. At the exhibition, a brew-it-yourself retail solution is available at circa $60,000 and it is deskilled, making the brew house a mainstream possibility. $1.00 a litre brewed out, with a 500 litre brew.
   
For build-your-own quick service pizza with loads of energy and style, see Blaze Pizza.
   
But finally back to the big lesson, Rich Melman. He is 72 and still building sites and has been in his new business, Beatrix, nearly every day since it opened a year ago. He rings the Beatrix in the morning for sales numbers and to understand how his new key dishes are selling.
   
He is still showing all of us the virtue of passion and that retail is still detail.
Chris Gerard is the founder of award-wining pub and restaurant business Innventure, is undertaking partnership work with Charles Wells at d’Pary’s in Bedford and formerly ran Vintage Inns at Mitchells & Butlers
   

The Yanks still have a gift for employing gifted, passionate people says Philip Lay 

The first time I visited Chicago was some eight years ago and it was a truly memorable few days. This time, with the Propel and ALMR team, was just as memorable in a city that never fails to impress and inspire. One of the main memories from my first trip was proposing to my wife on the 97th floor of the Hancock tower. Thankfully, however, that remains a one-off and this visit the memories are focused much more on the variety of businesses that we visited. Sure, the Restaurant Show is big and impressive, but my memories of Chicago will always be around the people you meet there.
   
I always used to feel that the gap between the hospitality sector in the UK and in America was more than just the Atlantic. Why are they so much better at it than we are? How do they get their staff to deliver great service every time? Where do they get all of their innovative ideas? Why are they so successful? Well as our tour guide said many time, ‘fyi guys’ in my opinion the gap is not as wide as it used to be. Sure, where they get it right, they really do get it right. Watch out for ‘Lyfe Kitchen’ and ‘Blaze Pizza’. In these two, very different concepts we saw the Americans doing it as only they can, with science, style, focus and 110% determination.
   
Lyfe Kitchen delivered healthy eating in a market that usually considers those two words a contradiction in terms. But they didn’t just deliver healthy food. They delivered a total business plan dedicated to their principles. The team at Lyfe has been working on every aspect of their concept for about four years before they then started driving the roll out. A serious investment in the kitchen equipment ensures that they deliver every meal, with never more than 600 calories, within ten minutes. They have put the focus on product quality, ethical sourcing and speed of delivery so that they can serve all day parts successfully, not just becoming a dinner experience. And the food is really tasty. The chocolate dessert we ate was not only vegan, but as full of flavour as anything I have eaten.
   
Blaze Pizza has similarly created a full-blown concept that delivers great pizza, quickly. Whilst we have all had great pizza before and sometimes pretty quickly, generally we judge that either by a take away expectation or a dinner experience. Blaze sets out to deliver a price point and speed of delivery that opens the day-parts up to include lunchtime and claims average sales levels are therefore almost double that of the pizza sector in the USA. The senior team has developed the concept to be a fully franchise business, now ready to start the roll out across the US. With 17 stores trading, 11 on site currently and another 19 agreed, they expect to achieve 250 stores within about three years. 
   
Both of these businesses have been established through proper research and development; a major investment upfront, with the eye firmly on the goal of becoming the next big thing. No half measures, no compromise. Get it right and roll it out. This is where we expect to see the Yanks playing. What was a surprise to me this time, though, was the other end of the scale – ‘lifestyle’ rather than ‘life-changing’ business models. We were told that the new trend in the US fast casual market is for doing one thing and doing it really well. This is manifesting itself in smaller outlets focusing on the operators’ passion for their idea. Haute (pronounced Hot) Sausage, The Big Cheese, Wow Bao, Glazed and Infused Donuts, Honey Butter Fried Chicken were all doing exactly what it says on the tin. Almost all were credible and almost all were not scalable. All had the same passion and drive of the bigger boys, but without applying the science and clearly, in at least one case, the passion was never going to be enough.
   
So I started by saying that I think the gap is narrowing. The US is not automatically the source of great innovation. The most comprehensively impressive business we visited was ‘Eataly’ and it looked very familiar. An authentic Italian concept, that is finding a warm welcome in the States. But what the Yanks still do so much more consistently well, everywhere you go, is employ passionate, talented people that put a smile on your face.
Philip Lay was formerly retail director for SA Brain where he oversaw its expansion into the coffee sector. He currently runs the PHL Ventures consultancy
   

The benefit of spending time with your colleagues by Ann Elliott

The Propel trip to the NRA in Chicago this year was really enjoyable, useful and beneficial for a number of reasons:
   
1. A fantastic group of people: A great range of operators were on the trip including Marston’s, Young’s, Admiral Taverns, Geronimo, Spirit, Burning Night Group, Best Place Inns, Beds and Bars, Draft House, Apartment Group, Anglian Country Inns, Frog Pubs, Bulldog Hotel Group and Innventure. It meant that there was no shortage of lively debate around the concepts we visited from service through to food through to ops standards and kitchen cleanliness. It also meant some of the US restaurant chief executives who presented their brands to us probably experienced a deeper level of questioning than they might have reasonably expected. 
   
There were also a great group of suppliers who were really interesting and good fun to be with including Orderella, Reynolds and trip sponsor CPL Training amongst others. What’s nice is none of them spent time talking about their own businesses, hassling or selling their products. It wasn’t the right time or place. It meant the trip was relaxed and everyone seemed to mix well and get on with one another.
   
2. Some fantastic restaurant concepts: Propel organised for the group to see some fantastic restaurant concepts including Eataly (www.eataly.com), Publican (www.thepublicanrestaurant.com), Lyfe Kitchen (www.lyfekitchen.com) and Blaze Pizza (www.blazepizza.com). Eataly, in particular, is so different and so amazing that it’s almost worth a trip on its own. It’s an awesome mix of retail and restaurants (23 in total) including a Nutella bar (loved that), Il Gelato, a focaccia bar and a rotisserie. Customers wander around drinking wine and eating food in a very relaxed environment. The branding is just brilliant, too.
   
Eataly opened December 2013 in 63,000 square foot of retail space and is the largest site in the US, costing an estimated $20 million. It co-owned by Mario Batali and Joe Bastianich and I saw the latter speak at the European Foodservice Summit in 2012 – well worth seeing if you can get to him. Eataly, I hear, is looking for a site in London.
   
Publican is part of One Off Hospitality, which has a number of individual restaurants in the city (www.oneoffhospitality.com) some of which would definitely work here. Lyfe Kitchen will expand across the USA and could work here (though it is a very complex operation) and the Blaze Company is actively looking for a UK operation to roll it out in the UK.
   
3. Some poor restaurant concepts: Not everything in Chicago was brilliant. Personally, I didn’t rate Hash House A Go Go, Haute Sausage, The Tilted Kilt, Wow Bao or The French Market, but they all helped put the great operators into context. You can’t help but admire the passion and entrepreneurial ‘get up and go’ of some of these operators but too much menu complexity, poor property choice and/or a lack of understanding on how to deliver consistently commercial margins could all limit their ability to significantly expand. 
   
4. Some great bars: Find a great bar and inevitably you could stay there all night – Vertigo being one of them. Fantastic cocktails, wonderful skyline, pit fire and a great space overall. Special mention has to be given to Howl at the Moon (www.howlatthemoon.com) with its high energy dueling pianos which the team went back to, two nights running. This concept could definitely work in the UK and I know some operators have actively been exploring this concept for London. It was one of the best nights even though some of the bar bills were a bit steep (or maybe the evenings were great because the bar bills were so steep).
   
5. The show: Having spent time at Hotelympia earlier this year, I really didn’t want to spend more time at the National Restaurant Association show – thought I would see many of the same sort of things. Chris Gerard has produced good notes on his trip, which also include his findings from his visit to the exhibition and he patently found some gems. Yes, the show is the hook to visit Chicago but it’s not the main event by any stretch.
   
6. Summary: Propel put together a great trip with some awesome people. I learnt a lot, renewed some old friendships and made some new ones. My advice would be to book early but when you are there avoid the Sambuca shots – deadly!
Ann Elliott is chief executive of leading sector public relations and marketing consultancy Elliotts – www.elliottsagency.com
   

Social sovereignty stateside by James Hacon

Setting off from Heathrow last Thursday, our enthusiastic group of industry leaders and suppliers were full of buzz, looking forward to checking out the hottest new concepts Stateside. Whilst the diversity in the group meant that everyone had slightly different aims for what they wanted to get out of the trip, everyone was looking forward to a few days away, having fun with awesome company. I am delighted to tell you, no one was disappointed.
   
During the trip the Propel team had organised a superb tour of both dry and wet-led concepts, some by day and others by night. On top of this we would all venture off in different directions in search of something a little different or to check out the outlets we’d already researched online.
   
Having recently joined Elliotts to lead marketing and strategy projects, I was particularly interested in how the companies had launched, planned to grow and perhaps more specifically, how they market themselves. I was pleasantly surprised that at nearly all of our stops we were treated to presentations by senior executives, rather than local general managers. The opportunity to ask direct, and at times, hard-hitting questions was not passed-by, with everyone getting their fair share of corkers in.
   
Having spent many of the past years leading digital marketing and operational efficiency projects, one of the trends that most interested me was how nearly all of the companies have put social at the forefront of their marketing and had truly embraced digital in their customer journey design.
   
The four that particularly stood out to me were:
   
Wow Bao: Chinese bun concept Wow Bao sees 60% of its customers ordering via an app or through a self-service check-out. It was brilliant to learn that this didn’t just decrease the staff costs but also actively increased the average spend per head compared to a traditional transaction. The brand has also rolled out at key festivals, events and has pop-ups in large corporate offices in the city, all of which attracted heavy usage of the mobile app.
   
Lyfe Kitchen: This concept successfully delivers tasty wholesome food and was developed by former McDonald’s executives. The fit-out and launch cost per site was high at around $2m and the brand looks only to social and digital in its launch marketing, heavily utilising the recommendation and endorsement of local social influencers. In an aim to grow to 250 sites in five years, the corporate messaging and brand has been heavily invested in and is reliant on their celebrity executive chef, who came to fame as Oprah’s chef. As you would expect from former McDonald’s marketers, content marketing is central to what they are doing and they have some interesting plans around getting the message out digitally and in store. One to start following socially, I’d say.
   
Blaze Pizza: A little less investment heavy when it comes to its marketing, Blaze Pizza spends $20,000 per new site launch. A small element of this is used with traditional PR, whilst a third goes on social advertising. The rest is invested in a two-day giveaway of pizza with just one condition: a social like. The executive showing us the restaurant talked of the massive effect this had on creating viral buzz about the launch. It seemed that the followers continued to regularly share stories of their future experiences at the restaurant and engage with the brand. The company embraces a mantra of giving customers what they want by saying ‘we don’t say no,’ – this seems to be keeping the sentiment super-positive across all social sites. As if not impressive enough, the company also invests a lot in teaching the team about how important social media is to the business and gaining their involvement by promoting engagement in-store with photos.
    
Haute Sausage: Whilst a little smaller in size, this digital-savvy operator has used Twitter to drive sales from the very beginning of its operation. When giving his talk on a very wet afternoon in Chicago, the founder and current owner told the story of his third day in a food truck, when he pulled up to a street corner to find more than 50 people waiting for him. The only way they found out? Twitter. Even after growing to a physical location and multiple food trucks, his own form of marketing is social media and maintaining a broad web presence. Showing that social is truly at the centre of what he does, all of his new products and concept are trialed by his followers, helping to keep them loyal and, of course, promote them through social snaps and stories.
   
Of course, each of these examples have an equivalent here in the UK, probably doing equally as well with digital and social. To me however, what the ALMR/Propel Study Tour provided was an opportunity to take the time to really experience them without distraction and most importantly, share the experience with industry colleagues.
   
Cheers to the Propel team and my fellow travellers for an amazing weekend!
James Hacon is an account director at Elliotts Agency, specialising in integrated marketing, strategy, digital, social and content marketing – www.elliottsagency.com

Return to Archive Click Here to Return to the Archive Listing
 
Punch Taverns Link
Return to Archive Click Here to Return to the Archive Listing
Propel Quarterly Spring 2018view online
 
Propel Premium
 
Lowlander Beer Co Banner
 
Funkin Banner
 
Franklin and Sons Banner
 
Jagermeister Banner
 
Ei Group Banner
 
Greene King
 
Catapult Banner
 
Freeths Banner
 
Venners Banner
 
Star Pubs Banner
 
HGEM Banner
 
Zonal Banner
 
Hastee Pay Banner
 
COREcruitment Banner
 
Diageo Sky
 
Access Banner
 
Freeths Banner
 
Venners Banner
 
liveRES Banner
 
Pipers Crisps Banner
 
Tahola Banner Tahola web link
 
Lincoln & York Banner
 
Punch Taverns Link Punch Taverns Link
Greene King Banner
ALMR Web Link Web Version Unsubscribe Subscribe Propel Info website