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Fri 15th May 2015 - Friday Opinion
Subjects: The rise of small plates, news from the beer world and you couldn’t make it up
Authors: Marc Brandon, Martyn Cornell and Paul Chase

Small plates, big opportunities: How chains can take a bigger bite of market share says Marc Brandon

People are sharing, people are experimenting, people are looking to save, people are looking to watch their consumption – all trends that fit right in with the move to more small-plate offers on menus.

Small plates are getting big on menus all over the UK, and the bite-sized trend indicates that restaurant chains have not downsized their ambitions but are pursuing a bigger share of a slow-growing foodservice market.

Small plates’ potential popularity is one of several reasons why Technomic predicts quick-service restaurants, food-led pubs, and the travel and leisure segment will lead much of the growth in the commercial sector of foodservice in the UK this year. Starters and shareable main dishes are more at home on these establishments’ menus, and far more rare in parts of the cost sector, such as healthcare or workplace foodservice, where much lower nominal growth is expected in 2015.

Technomic’s MenuMonitor, which tracks the menus of more than 300 British chain and independent restaurants, hotels, retail outlets, and colleges and universities, found that small-plate offerings have increased 25% year-on-year as of the first quarter of 2015. The strategy makes sense for foodservice brands across the UK, as it gives consumers affordable and approachable ways to try new foods or to inject more flavour and variety into their normal rotation of restaurant favourites, all at a time when they are cautious about their spending. For example, ethnic small plates are showing up more on restaurant menus because they allow customers to sample and share items that are unfamiliar to them without having to commit to ordering a full-size, full-price dish.

Small plates also ensure restaurant owners’ flexibility to offer several types of food categories at different price points, which increases their ability to coax consumers back to their stores. Many customers do still need convincing: in a Technomic UK consumer survey conducted last autumn, almost six out of ten people described their spending habits as either “I am on a careful budget” (29%), or “I am still mindful of my spending but starting to treat myself to small indulgences again” (28%). More than a third of consumers are either “more focused on saving and have cut out more non-essential purchases” or “buying only necessities”.

Consumers’ prospects are not terribly optimistic for the rest of the year. When surveyed about their outlook for the next 12 months, roughly one in five respondents agreed with the statement, “The United Kingdom’s economy will improve”. Only one in seven agreed that “The EU’s economy will improve”. They regard their own situations similarly, with one in five consumers responding, “My personal finances will improve”, and a slightly smaller number (18%), “Our household will be able to spend more when we dine out.”

As such, most of the sales growth in the UK foodservice industry will come from segments that happen to be more suited to smaller portion sizes and smaller price points. Quick-service restaurants are projected to increase sales by 3.7% in 2015, against a 3% increase for full-service restaurants. A wider gap will occur between food-led pubs, expected to grow sales 3.5%, and drinks-led pubs, which are forecast to record a 0.9% decline in sales this year.

Supermarkets and convenience stores, which continue to improve their offerings of fresh prepared foods, are also expected to be a bright spot, increasing sales 3.6%. That is higher than the predicted rise at full-service restaurants, which increasingly face the threat of supermarket prepared foods as replacements for their meals.

Do not be surprised if the fastest-growing restaurant brands in the UK continue to be coffeehouses or patisserie concepts that specialise in affordable indulgences such as a premium cup of coffee and baked goods. 

Of the handful of hot culinary trends that Technomic predicted for UK restaurants in 2015, four are suited for small plates and shareable starters and mains.

The first is a strengthening focus on alternative diets. The forthcoming allergen labelling requirements have begun to spur operational changes as well as menu innovation at restaurants. While restaurant and pub owners should become more transparent about ingredients to comply with the regulations, they could also leverage the focus on healthfulness by rolling out new small-plate items that satisfy people seeking gluten-free, peanut-free or dairy-free options.

Many people do not want to commit to an entire meal of vegetarian or vegan food, but perhaps they could be enticed to try a starter or dessert built around some health descriptor. Moreover, smaller portion sizes legitimately offer customers the chance to limit their calorie intake by picking and choosing from several parts of the menu.

Small plates also let customers in on the trends for regional British cuisine or bolder ethnic flavours from all over the world. Operators have rediscovered rustic preparations and classic dishes native to their parts of Britain, giving them another chance to highlight local flavours and ingredients on their menu. Regional favourites are also showing the ability to cross over and appeal to diners in other parts of the country, and this again is an opportunity for small plates to provide a low-cost, low-risk way to try unfamiliar foods. 

Technomic has noticed culinary inspiration from across the globe as well on British menus, especially smoky and spicy flavours, the kinds of taste profiles perfectly suited for small plates and bite-size starters. Cuisines inspired by global street foods, ranging from barbecue in the US south to Latin American tacos to dumplings in Asia, have gained in popularity and will show formidable staying power.

A fourth culinary trend Technomic projected for the UK in 2015 was the rise of “unexpected” foods, which, unsurprisingly, favour continued innovation around small plates and micro-menu items. Chain restaurants, as well as independents, have been experimenting with hybrid foods and new applications of traditional dishes to appeal more to adventurous Millennial diners, as well as expand into new dayparts such as late-night dining.

Some of the most interesting findings of the MenuMonitor tracking service are small plates that cross over several of these trends, such as:

• The traditional Peruvian foods made with British-sourced produce at Pachamama, including saddleback spare ribs, Cornish lobster, lamb belly and sweet plantains

• All Bar One’s recent small-plate additions, such as ginger teriyaki chicken skewers, salmon bruschetta and sea bass ceviche

• Crispy crumbled halloumi, Bill’s giant green Gordal olives and Bill’s cheese plate, all recently introduced at Bill’s

• The cicchetti bar recently added to Piccolino Ristorante e Bar, which includes Venetian-style tapas, crudo and ceviche

Overall, the rise in small plates comes at an advantageous time for restaurants in the UK. The economies of both Britain and the eurozone appear to have weathered the worst of the most recent recession and stabilised, but growth in many consumer segments, including foodservice, is not expected to be very robust. Some parts of the foodservice industry, especially the cost sector, will be flat at best this year. But operators can broaden their appeal to budget-conscious consumers by shrinking their portion sizes, while simultaneously setting off renewed creativity in the kitchen that lets brands get in on emerging culinary trends.
Mark Brandau is content manager at Technomic

News from the beer world by Martyn Cornell

Consider two pieces of recent news in the world of beer. One was that BrewDog, the iconoclastic Scottish guerrilla marker, brewer and retailer, was coming together with three other brewers, Beavertown, Camden Town and Magic Rock – two in London, one in Yorkshire – and the distributor James Clay to form a new organisation called the United Craft Brewers Association. The other was that Carlsberg is reviving its still fondly remembered “Probably” advertising campaign.

Which one of these is going to have the most impact on the bar trade? With respect to the United Craft Brewers, while their news certainly excited the beer geeks, the answer is, obviously, the Carlsberg initiative. The Copenhagen-cum-Northampton brewer has some 15% of the total UK beer market, or more than 8 million hectolitres – that is to say, more than twice as much as the entire “craft” sector, defined as broadly as possible, put together. As James Lousada, chief executive of Carlsberg UK, underlined when Propel met him, the company is going to spend £12m on Carlsberg this year just on media – television advertising, mostly. That’s three times BrewDog’s operating profits, used just to promote one brand. 

Nor is Carlsberg some lumbering giant when it comes to advertising impact. The “guerrilla marketing” event of the year, so far, wasn’t any stunt by BrewDog, famous for being able to garner masses of media attention for very little spend, but the Carlsberg “Probably the best poster in the world” day in April in Brick Lane, East London – the heart, incidentally, of craft beer hipsterdom – when a Carlsberg poster was pouring free beer for passers-by. The stunt had 60 million YouTube views around the world, newspapers up and around the UK covered the story, Time magazine wrote about it, and sent a tweet to eight million people – all for the price of a 48-sheet poster site for a day, several kegs of lager and a security guard on hand to make sure the event did not run away with itself.

Operators, those at the rockface, know how hugely important big brands still are to the pub market, despite all the noise made by the BrewDogs and their like, and that is a fact we in the media are sometimes guilty of forgetting. The average punter will never hear of the United Craft Brewers Association, and while he or she might possibly have heard of one or two of its members, it is much more likely they will be ordering a pint of Carlsberg the next time they are in a bar than that they will be ordering anything by BrewDog. The standard lager market may be falling overall, but again, as James Lousada emphasised to us, the standard Carlsberg brand is seeing growth in the on-trade, and the company is very far from any sort of “management of decline” strategy. “Carlsberg is our bread and butter, and remains our bread and butter,” Lousada told us. “We’re investing this year in Carlsberg in a way that we haven’t in the past five years. We fundamentally believe that Carlsberg has a major role with consumers and in our business.”

The return of the “Probably” campaign, five years after the company dropped it, is a vote of confidence in the brand’s strength, rather than a desperate attempt to return to something that worked once in the hope that it can work again. Carlsberg was perhaps surprised, and certainly delighted, to discover through research that consumers still remembered their favourite ads from a campaign that first started more than 40 years ago. Advertising agencies do not normally like working with something that they never thought up themselves, but marketers are entirely happy to use the tools that do the job, and if drinkers still associate “Carlsberg” with the word “probably”, and remembrance of witty, clever ads from times past still puts a warm halo around the brand when they think of it, it would be positively wrong not to try to capitalise on that legacy.

Not that Carlsberg intends to push its mainstream brands at the expense of the rest of the market. Its powerful position in logistics and porterage to the pub trade is an area that, again, Lousada told us the company is determined to take advantage of. Thus we have initiatives such as its “Crafted” range, the promotion for which includes a 96-page book written by the former Beer Writer of the Year, Pete Brown, and which includes nearly 40 craft beers, most of which the snootiest hipster bar would be happy to take. At the same time, Carlsberg’s market knowledge enables it to see that, in fact, craft is not necessarily the area with the greatest potential for growth. It is lucky to be in a position to take advantage of the fact that “world beer” continues to boom – the San Miguel brand “has been an absolute train for us in the last three or four years”, Lousada told us. It is also trying to ensure, perhaps belatedly, that it does not miss out on the flavoured cider boom, via the Somersby range, launched 18 months ago.

All in all, then, the reaction has to be: “United Craft Brewers Association? Meh. But Carlsberg – now that IS interesting.”
Martyn Cornell is managing director of Propel Info 

You couldn’t make it up – except if you’re the health lobby by Paul Chase

You’ve got to hand it to the health lobby – when it comes to consistent messaging, they could teach the politicians and the election strategists a thing or two. We have just had “oral hearings” before the European Court of Justice concerning the legality of minimum unit pricing (MUP). These hearings arose because of the legal challenge mounted by the Scotch Whisky Association and others to the Scottish government’s proposal to introduce MUP in Scotland. This is a test case that will decide whether Scotland and other temperance-minded countries in Europe are free to introduce this measure.

As if by magic we have the publication on Wednesday of an OECD report into alcohol harms which made a number of claims about UK consumption that are demonstrably false. These claims were faithfully and uncritically repeated in a number of media outlets, including the BBC. And of course our own domestic healthists couldn’t resist the temptation to parrot the nonsense. Below is the press release from the Royal Society for Public Health (my bolding):

“New research which shows alcohol consumption in the UK is on the rise is a stark reminder of the pressing need for tougher action.

“RSPH have long been advocating for the implementation of a range of measures to combat alcohol-related harm, including minimum unit pricing, calorie labelling and compulsory PSHE education, and urge the new government to take action.

“The report by the Organisation for Economic Co-operation and Development ranked the UK above average in the study, which compared the 34 wealthiest countries. It drew particular attention to increased consumption among women and 11 to 15 year olds.

“Shirley Cramer CBE, Chief Executive, Royal Society for Public Health, commented: “This report clearly demonstrated that softer methods to discourage excessive drinking have not been successful and adds further weight to the need for stricter controls. It is particularly worrying to see increases in drinking among young people and the new government urgently needs to implement a tougher strategy to stop this upward trend.

“Our research has already shown demonstrated an appetite exists for improved labelling for alcohol, so what are we waiting for? There is no one-size-fits-all approach and we urgently need a range of policies and tactics which can influence behaviour across the population and protect the health of generations to come.”

Note the pious tone of the above and the call for tougher action necessitated by these alleged “new facts”. The factual inaccuracies of this were then challenged by the beer writer Pete Brown, who wrote to RSPH as follows:

“I was surprised to read your press release on rising alcohol consumption, given that every official data source shows a decline in both claimed behaviour as monitored by ONS and actual market data. I’m particularly surprised to read that drinking is rising among 11 to 15-year-olds, as numerous studies indicate that it’s plummeting. When I followed the link the study wasn’t available. Could you please explain why you think alcohol consumption is rising, and send me the data that seems to show this, including methodology? I look forward to your reply. Kind regards, Pete Brown.”

Pete’s email absolutely nailed it, and elicited this response from RSPH:

“Hi Pete, Thank you for your email. We were referring to the findings of the recent OECD report however have since been alerted to several inaccuracies in the report and took our comment down immediately. We are currently reviewing the claims in depth and will be issuing a statement later in the week. Many thanks.

Kate Sanger
Communications manager, Royal Society for Public Health”

Oops, red faces all round at the RSPH! 

A couple of things occur to me about this climb-down: first, why didn’t the RSPH check the facts before publishing this nonsense with all the authority of its status behind it, and why didn’t the media? Second, will its retraction be given the same prominence as its original statement? Various other self-appointed, socially-accredited experts also pronounced including, inevitably, Professor Sir Ian Gilmore, chairman of the Alcohol Health Alliance. They are all so desperate to influence the decision of the ECJ in relation to minimum pricing that they don’t care if the “facts” they publish are true or not. This is another example of the technique of the “noble lie” – it’s OK to tell ’em as long as you do so in a noble cause.

The OECD report goes on to advocate the usual stuff about rising levels of consumption being down to increases in availability, cheap prices and cunningly designed adverts – all of which need laws passing so as to reduce availability (close pubs), raise prices (increase alcohol duty and introduce MUP) and ban alcohol advertising and sport sponsorship. One interesting trend highlighted by the report was the high rates of problem drinking among educated women. Apparently nearly one in five women from the highest educated groups drinks to hazardous levels, against to one in ten among the least educated group. And then they advocate minimum pricing as the solution!

You couldn’t make it up. Unfortunately, they already have.
Paul Chase is a director of CPL Training and a leading commentator on on-trade health and alcohol policy

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