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Morning Briefing Strap Line
Fri 4th Jul 2014 - Friday Opinion
Subjects: The parent trap, why pubs are a special case, time well-spent outside the business and the challenge of inspiring
Authors: David Martin, Roger Protz, Ann Elliott and Tony O’Shaughnessy

 

The parent trap by David Martin

Generation X, Generation Y, and now, with alphabetic predictability, along comes Generation Z. Marketers do love to categorise, so in due course we will see what comes after Z, but as a basic principle, few would deny the tendency for offspring to behave differently to their parents.

Research by Ipsos Mori and Demos suggests that today’s 18 to 30-year-olds are generally to the political right of their parents and grandparents when they were young, but much more to the left on social issues. That may not readily translate into food and drink behaviour, but there we can refer to Darren Tristano at Technomic, plain-speaking in a recent New York Times piece: “The millennials today in the 21 to 35 age range are not looking for a place that their parents went.”
 
As a slightly colourful example, that NYT piece cited TGI Friday’s in the United States (not in the UK), saying it “struggled in recent years to draw younger revellers, who may dismiss the chain as a place where their parents ordered potato skins and nachos from suspender-wearing servers in the 1980s.” Moving swiftly on, this "parent trap" is topical, because of a number of notable foodservice brand birthdays. McDonald’s UK and Beefeater both turn 40 this year, Toby Carvery will be 30 in 2015, Chef and Brewer is in its 50s and, to discomfort fellow older readers even more, Berni Inns, perhaps the granddaddy of them all, would have been 60 next year, had it not been subsumed by Beefeater.
 
And in a brief geography lesson, note that Beefeater and McDonalds started in the UK in unfashionable Enfield and Woolwich respectively – just to remind us that we shouldn’t limit our trendspotting today to Shoreditch and Dalston.

Back to 1974, and the birth of Beefeater: this was the year that Harold Wilson resumed power (twice), Richard Nixon resigned, and Birmingham suffered the pub bombings. Less shockingly, Germany won the World Cup. Mud’s Tiger Feet was the UK’s biggest selling single, but on the plus side, the biggest grossing film globally, according to some sources, was Blazing Saddles.
 
However, if you were eating out in your mid-twenties in 1974, you are now in your mid-sixties. Doubtless you still try to be cool, but as someone once said, “Once you're over the hill you begin to pick up speed” – and that’s a constant challenge to all brands, not just the old guard, and not just those with hundreds of sites.

No one denies the need to recruit new customers to replace those who inevitably defect from even the best-loved brands. But there is a generation angle here too. If your brand (or your category) image grows old with your customer base, it sows the seeds of long-term decline, even if the demographic forecasts show a growing older population.

CGA Peach’s Brand Track research identifies the age profile of the leading brands in the UK market, and it is clear from their data just how reliant on older customers some brands already are. Looking across over 50 of the biggest pub, bar, and casual dining brands covered in their research earlier this year, on average, 27% of these brands’ dining customers are over 45. However, for ten of them, the figure is over 35% – and nine of those are pub-restaurant brands. Meanwhile for several of the newer-generation casual dining brands, the over-45s account for less than 20% of the user base, according to CGA Peach.

Pub dining has always traded strongly to a mature market, but tomorrow’s older customers have been schooled in casual dining out. There is an obvious future risk that in their minds, pub dining becomes seen to be what your parents did.

The clearest case-study of failing to age well comes from a drink category, one said by the Wine Society to be “perhaps the most undervalued, unappreciated alcoholic drink in existence … It is versatile, food-friendly, and offers exceptional value for money.” So, I recently tried ordering a glass, in an on-trend gastropub, one with its own mixologist, serving “wines of distinction” – a pub in the heart of George Osborne’s affluent Cheshire constituency, where the blue rinse runs deep and true. Yet the pub struggled to find the bottle, and was unsure what measure to pour. To quote The Wine Society again, “How did this happen to sherry?”

The answer is simple. Its customers have been dying off for years, despite a series of well-intentioned efforts to rejuvenate its appeal (like serving it with tonic and ice – with the short-lived Harvey’s Tico). Today’s specialist London bars may offer some aspirational appeal for the category, but surely the London Evening Standard had sipped a few sherries too many when suggesting that “the capital goes mad for the fortified stuff.” A more recent piece in Harpers kept the theme going, asserting “sherry is now trendy” - although when the Telegraph said in December that sherry had become “the hipster's tipple of choice” we should have known the game was up.
 
Numbers tell the true story here. For around 40 years, Kantar Worldpanel’s Alcovision research has measured the percentage of adults who claim to drink various product categories in the previous seven days before interview. The sherry story is graphic: among people in their forties, the proportion drinking sherry has steadily fallen from over one in five in the 1970s, to 14% in the 1980s, 8% in the 1990s, 2% in 2000, and 1% in 2013. Sadly, this is now not a drink just for your parents, more likely your grandparents.
 
I attach no blame to the aforementioned gastropub, because never mind putting ice in it, sherry sales in managed pubs and bars have now slowed to a glacial pace. According to CGA Peach’s Trading Index data, it takes stockists 48 days to sell a bottle of sherry, contributing a meagre £5.55 into the till each week. So, whether you manage foodservice or alcohol brands, put these on your list of things to do before they get old: evolve and rejuvenate, avoid the "parent trap". Otherwise I would refer to another big box-office film from 1974 – Death Wish.
David Martin is a director of Red Circle Insight
 

Why Martyn Cornell is wrong about pub closures by Roger Protz

In Propel Friday Opinion last week, managing editor Martyn Cornell reported that he has never been more alienated from Camra as a result of its attitude to pub closures – an attitude he wilfully distorts by claiming the campaign says “all pubs must stay open for ever”. Camra has never said anything of the sort – it would be a ludicrous stance to adopt, flying in the face of the obvious fact that Britain’s stock of pubs has halved over the past 100 years.

Martyn has had a Damascene conversion that has turned him into the Milton Friedman of the beer writing fraternity: the free market is God, it’s untouchable, inviolable. If a business fails or shuts, then that’s the way of the capitalist world. That’s the “Anglo-Saxon model”, one that is roundly challenged in such countries as France and Germany. There, intervention is deemed necessary to keep checks and balances on the behaviour of the market to maintain some balance between the interests of all sectors of society.
 
He crudely lumps pubs with taxi firms, launderettes and fast-food takeaways. Pubs are different: the very name “public house” makes it clear it has a community role different to other retail outlets. How often do you hear people saying “I had a great night in the launderette,” or “It was really buzzing in the KFC as we watched the World Cup last night.”. And, golly, the craic, the buffet and the beer were out of this world in my dry cleaner’s yesterday.

The core of Martyn’s case is that a failing pub deserves to close. But in too many case pubs have closed not because they are unsuccessful but because they have fallen victim to Enterprise and Punch, who have a desperate, frenzied need to tackle their debt mountain. Two examples will have to suffice:
 
Enterprise declared that the Dove in Ipswich was “unviable”. The sitting tenants were able to raise the money to buy the pub – a rare experience. The Dove is now, without argument, the most successful pub in Ipswich. It stages regular beer festivals and the owners have added their own microbrewery to add to the appeal of the place. It draws its customers not just from the town or even Suffolk but from all over the country.
 
The Ivy House in South East London was also owned by Enterprise, which closed the pub and planned to sell it to a property developer in an area of fast-rising house prices. It would have made a small but welcome dent in Enterprise’s debts. But the local community got together and saved the pub. It’ is now a vibrant centre of local life, holding regular music, beer and food events. It was saved due to Martyn’s much hated Localism Act which gives local people and their councils the ability to declare pubs – and other amenities – to be Assets of Community Value (ACVs). An ACV doesn’t mean, as Martyn suggests, that a pub can never close, change hands or change use. If local people cannot raise the necessary money or find another potential owner, then a pub will close.
 
Proof that the “free market” is a myth where pubs are concerned comes from fellow beer writer Nick Love, writing in the July edition of What’s Brewing. Nick says he met Paul Crossman, who leases the Swan in Clementhorpe, York, from Punch Taverns but also owns, with a business partner, three York free houses, the Slip Inn, Volunteer Arms and Woolpack. “Based on our rents at the Swan, we could pay off our mortgage on the Slip in 10 years,” Paul Crossman says. “It’s enormously more expensive to rent the pub up there than to buy the pub down here. The profit Punch takes is about a quarter of our turnover, which doesn’t leave us an awful lot to run a business.” He adds that pubcos such as Punch force licensees to buy beer at premiums of up to 80%t above free market prices available to competing pubs nearby. “Regulating the pubco industry is desperately needed,” Crossman says.
 
Patently and potently, the “free market” isn’t working but is distorted by the giant pub companies. Martyn will be appalled by the notion of regulation but Camra, MPs, and a number of publicans’ organisations believe it is necessary and urgent. Unlike a taxi firm or a Tesco Express, the closure of a pub can rip the heart out of a community. We have lost too many pubs and seen too many communities wither as a result to stand aside and genuflect at the shrine of the founder of the Chicago school of economics.
Roger Protz is editor of Camra’s Good Beer Guide and is a leading beer journalist
 

The time best spent outside the business by Ann Elliott

I would find it very easy in this sector to spend all my time eating, drinking, networking and socialising which, of course, would be bliss if I did not have a business to run. Like everyone else in it, I could be out every night of the week with work, regardless of the impact on my liver, figure and bank account. That’s probably one of the (many) reasons why I love it so much. But there are only so many seminars, conferences, dinners, private events and talks that I can go to without the whole thing going to pot. Here are my favourites of the past year (apart from the dinners and lunches we organise, of course!)
 
1.  The Propel/ALMR trip to the National restaurant Association show in Chicago, May 2014: This was a brilliant trip from beginning to end, made fabulous by the people on it. I also learnt a lot from every concept we visited (even the less-than-brilliant ones) from pretty upmarket restaurants to very downmarket bars. Paul and Jo Charity organised it all so well, which meant you could go with the flow with the rest of the team or do your own thing – and their attention to detail was awesome. I do say to people that I went to the NRA but, actually, I just went on the trip and didn’t set foot inside the hall this time. The trip was worth every penny (or, rather, cent).
 
2.  The London Bridges Walk with Keith Knowles in June 2014: This is organised every two years by Keith Knowles for a nominated charity. Everyone who walks has to donate £1,000, which means the whole day raises tens of thousands for charity. This year funds were raised for Delete Blood Cancer, which is a fantastic cause. The walk kicks off at 10am (or actually 10.30am by the time Keith arrived, but no one cared!) and takes in all the London bridges from Albert Bridge to somewhere around Tower Bridge though I am not sure exactly how many I walked, as Steve Richards and I cannot read maps and got lost. The people who walked this year were just fantastic and it was great to be able to spend some quality time with them as I walked from one bridge to another. It’s just the best of days.
 
3.  The European Food Service Summit on 23 and 24 September 2014 in Zurich: This will be the 15th summit organised by Gretel Weiss, and this is one worth travelling for. The guest list is strictly limited to 250 participants (mainly operators), who fly in from all around the world, many of whom have been year after year. I last attended two years ago and felt very privileged to hear Alan Yau speak. What a legend! We write for the magazine and so will be covering some of the conference this year, listening to speakers talk about such subjects as "changing dynamics in the restaurant world" and "capturing the diner on the move". It really is a must-attend conference and the boat cruise on Lake Zurich at the end of the first day is a truly memorable occasion.
 
4.  5020 boat trip in July 2014: I have no idea what this will be like but by the time you read this I will have gone and (hopefully) returned. It does sound like it will be good fun, with a load of boats being chartered by those with some association with the 5020 group. I love the 5020 networking groups too, but these are strictly invite only so I always feel very lucky if Chris Cowls, Robin Rowland or James Horler send me an invite. I have heard some fantastic speakers here.
 
5.  The Arena events: Talking about great speakers, they are often found at the Arena events. Alex Reilly was brilliant at the last lunch, following in the footsteps of Simon Emeny last year. Debbie White is speaking at the next one. Arena events are great for meeting suppliers, distributors, operators and contract caterers. Each event is really well organised but still manages to feel informal and friendly.
 
So if you don’t go to any other events, these are the ones I would really make an effort to attend – oh and the consistently brilliant Propel Multi Club conferences, too, of course.
Ann Elliott is chief executive of the leading sector marketing and PR agency Elliotts – www.elliottsagency.com
 
 

Why leaders must inspire to grow by Tony O’Shaughnessy

Who do we think about when we think of great inspirational leaders in the hospitality industry? Is it Jamie Oliver, Tim Bacon and Jillian McClean? These leaders have great fellowship skills, they easily communicate their new bright ideas to their team almost effortlessly and they inspire as soon as they walk into a room.
 
Yet, the minute we think of people like this we do not include ourselves in the list. If to inspire to grow means you have to be as big a personality as these people, then you are probably not going to count yourself in.
 
I perceive that part of the confusion is separating the difference between inspiration and charisma. Charismatic people appear to possess special powers that enable them to influence other people and attract their admiration and attention. I am not talking about charisma, I am talking about inspiration, and I believe that not only does every owner possess the ability to inspire, it is essential they understand this and use it to grow the business. The definition of inspire is "to encourage by filling with confidence and enthusiasm", and you do not need special powers to do that. Every leader has it in them to inspire and I believe that inspiration is at the root of long-term sustainable growth. While most of us do not necessarily possess the larger-than-life personas of the people I have mentioned, I do not believe you can build a great business without being able to inspire everybody you touch.
 
Furthermore, let us stop and remember for a moment; when you first thought of your business idea, the concept, the vision, the dream. That would have been inspirational. Look at what you had to do to get that first restaurant launched. How much enthusiasm did you generate around you and how much confidence did you instil in people – family, friends, employees, investors, bankers, suppliers and many more, all inspired by you.
 
The only secret that great leaders possess is one that we can all possess, and that is they know that you must keep the original passion and enthusiasm you had for the business and instil and perpetuate it throughout the entire business for ever, no matter how big it gets. The challenge is to make sure that every person you ever touch is motivated, as you are yourself ,by what you are trying to create and build.
 
Imagine what that would mean for your business if everybody in your business believed in and acted in the way that you do? What would it do for the customer experience, what would it do for performance and what would it mean for growth? Inspiration is like a contagion. Once you have inspired people you have given them the enthusiasm and confidence to inspire others and it become viral.
 
Standout businesses know how to bottle what makes them special and then know how to enthuse and then infuse this specialness into everybody they touch. The outcome is a unique business that reflects you, what you believe in, what you stand for.
 
Who are the people who have inspired you that nobody has ever heard of, the unsung heroes; the charity workers and the volunteers, for example? Try it for yourself – just let people know what you believe in and what you stand for and see the effect it has.
 
I believe that inspired organisations, by default, create an environment, a culture in which people are free to deliver and perform to the best of their ability. Most organisations’ growth is stunted by introducing limiting factors without actually knowing it.
 
Have you ever worked in or observed a culture that you were uncomfortable with? Did you ask yourself where it came from? Do we honestly believe that the leaders set out to create that culture? Do we not see that this culture will not attract the best people, will not keep the best people and will not allow people to perform to their potential? That is what we mean by limiting factors.
 
Alex Reilley, founder of Loungers, recently said: “Loungers is well-placed to become a national brand, and it is this we see as our biggest challenge. This challenge is not mechanical or even operational, although clearly this is not going to be easy. We see our biggest challenge as cultural, and we actually see this as the greatest threat to the business’s chances of becoming a really, really successful national brand.”
 
There is no other factor limiting growth here; market conditions, global recessions, stock market crashes ands so onl. It is about making the choice to inspire and enthuse.
Tony O’Shaughnessy is founder of The Watering Can Works


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