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Morning Briefing Strap Line
Fri 7th Aug 2015 - Friday Opinion
Subjects: The rising importance of convenience, the sleepless nanny state and Budapest’s foodservice scene
Authors: Glynn Davis, Paul Chase and James Hacon

The rising importance of convenience by Glynn Davis

Tesco and the other major supermarket groups have one by one assessed their hypermarket store opening programmes and recognised that people no longer want to drive to large soulless out-of-town sheds. Instead they have been opening lots of small local stores to satisfy the increased demands of shoppers for buying their food more frequently through convenience stores that they can simply walk to and from. And they have added the most convenient food shopping format of all – internet shopping with home delivery. The operative word here is convenience and it seems consumers want ever more of this luxury. Just like their retail counterparts the restaurant operators are increasingly looking to satisfy this desire through offering home delivery options.

There has been a veritable explosion in delivery activity in food and beverage of late, with ever more players adding delivery options, and start-ups creating businesses to handle the new fulfilment demands of a growing number of food and beverage businesses. McDonald’s must have thought it had convenience sorted with its Drive Thru’s but even it has been trialling home delivery – although the cost of doing so is questionable for anything other than particularly large orders since the business is not operationally rigged-up for such an activity. Neither is PizzaExpress but such is the growing demand for home delivery of this ubiquitous Italian foodstuff that it is breaking with its long-standing dine-in model to open delivery-only sites. The first is due to open in Cambridge in the autumn and Exeter could follow it if planning permission is approved on a site it has selected.

PizzaExpress cannot fail to have noticed the ongoing growth of delivery-only player Domino’s whose sales continue to grow as pizza fans increasingly use its app to order via their phones. It has been downloaded ten million times and has helped push sales via mobile to 52% of internet orders. The internet is clearly playing a big part here and has continued to fuel this delivery and convenience mentality. Consider that online transactions now account for 40% of all food delivery orders in the UK, up from 8% in 2008, according to the market research firm NPD Group. It has provided the platform for even the smallest food companies to offer online ordering and home delivery through dedicated firms such as Take Eat Easy, Just Eat, HungryHouse, and even Uber has been playing around with adding takeaway deliveries to its taxi app service via UberEats.

These start-ups have predominantly focused on the less expensive end of the takeaway market but don’t think that is the only place where the action is because there is growing demand for top end restaurant food to be delivered to the home’s of hungry consumers. Satisfying this appetite is Deliveroo that is focused on the more high-end food providers and highlighting how it has the potential for success is the fact it has just raised $70m (to follow the $25m it secured in January). This will fund its expansion not only in the UK but also overseas because the rest of the world also wants convenience. Further proof that home delivery is going up-market is the proposed launch in September of the first Michelin-starred delivery service, Supper, in London that has signed up a batch of high-end restaurants including Tamarind, Benares and Randall & Aubin. It will use cutting edge bikes from Japan that have thermally-lined boxes to keep the food and drink at the relevant temperatures for up to 20 people. These pimped-up vehicles should certainly cut a bit of a dash when compared with the spluttering low-end mopeds we presently see darting around our streets delivering takeaways.

If such deliveries prove to be incremental business then this will be great for those restaurants signed-up but if it sucks people out of the dining rooms then its validity will be brought into question. But even then such home delivery activity eats into the margins of the food providers. This is exactly the situation the major grocers have found themselves in since they began offering home delivery. Not only is it costly to fulfil orders for delivery to people’s homes (it is questionable whether any of them makes a profit) but it is also cannibalising sales at their massive hypermarkets. This is doubly bad and highlights how important it is that any food and beverage companies looking to offer home delivery options investigate in detail the economics – regardless of how appealing it might be to their customers. The big supermarkets have certainly found it tough to swallow this profit-less activity and cannibalisation of their store businesses. It is just the same with the restaurant industry, which certainly does not like making losses, and as for cannibalisation, now that’s a word that will strike fear into any restaurateur.
Glynn Davis is a leading commentator on retail trends

The nanny state never sleeps by Paul Chase

What divides “public health” from those of us who would rather like to make our own lifestyle choices is essentially the question of what it is we want to maximise. Do we want to maximise “longevity” or “utility”? It seems to be the unquestioned assumption of “healthists” (those for whom the “health of the nation” has become an ideological obsession) that longevity – length of life – is the main thing we have to consider; that all our lifestyle choices should be based on maximising the length of time we spend knocking about the planet. This explains why we have an endless stream of research papers that seek to uncover our epidemiological risk factor of premature mortality from a variety of illnesses linked to lifestyle.

A visit to the GP involves feeding all your numbers – blood pressure, cholesterol ratio, height, weight and even your postcode into a computerised, mathematical model that calculates what is termed your “QRisk Factor” – your risk of heart attack or stroke in the next 20 years. You can Google a QRisk factor calculator and play around with this model if you know your “numbers”. I did so and discovered that my risk of a heart attack or stroke was only marginally reduced even if I significantly reduced my blood pressure or my “bad cholesterol”. But when I altered my age from 66 years to 35, but made no other alteration to my numbers, then my risk of getting a heart attack or stroke in the next 20 years reduced dramatically – from 19.4% to 1%. In a man of my age managing epidemiological risk factors seems like an exercise in trying to hold back the tide. And we all know what happened to King Canute!

Of course, if you combine a reduction in both blood pressure and bad cholesterol then that does deliver a significant reduction in your risk of premature mortality, which is why the mission of many GPs is to get anyone over 40 medicated with drugs that reduce both these measures. And they’d also like you to stop drinking and smoking and to eat a nationally approved diet. But there is no obvious reason why longevity should be the ultimate goal of public health. What most people seek to do is maximise utility. This means they seek to live their lives in a way that maximises enjoyment, pleasure and sensory experience so as to enhance sociability and enable them to, er, enjoy life!

Longevity and utility are not mutually exclusive alternatives; this is not a zero-sum game in which you have to choose. This is about balance. Drinking yourself to death is not my idea of maximising utility, nor is chain smoking. But to live a life of abstemious self-denial elevates longevity to the status of a life principle that trumps everything else – and probably ensures that when you die, it will be of boredom. I think it is up to each individual to decide where to establish this balance, but epidemiology has been elevated almost to the status of a new religion; it is puritanism dressed in a white coat. We are bombarded with healthist scare stories that capitalise on our fear of death, and which seek to persuade us to surrender our freedom and our right to make our own moral choices to a new priesthood: the ayatollahs of public health.

But every so often something happens that warms the cockles of my libertarian heart. One of the unintended and positive consequences of the squeeze on public spending is that cash-strapped local councils can’t waste money funding sock-puppet fake charities that peddle the healthist ideological agenda. And so it is that Drink Wise North West has had its state funding withdrawn. Most of its money came from local authorities not public donations and it used this money to campaign and lobby for changes to government policy on alcohol. This was a classic case of using public funds to campaign against public policy. Its website was full of imprecations to “join the movement”, “act now” or “write to your MP”. It campaigned, anonymously at first, via an arms-length website, for alcohol advertising bans and minimum unit pricing. In relation to minimum pricing it made the ludicrous claim that it would reduce the price of some drinks.

Its campaigning falls foul of a Department for Communities and Local Government “anti-sock puppet clause” that reads as follows: “The following costs are not eligible expenditure: payments that support activity intended to influence or attempt to influence Parliament, government or political parties, or attempting to influence the awarding or renewal of contracts and grants, or attempting to influence legislative or regulatory action.” Drink Wise North West has a counterpart called Balance North East and I can only hope it will suffer a similar fate along with Alcohol Concern, which is another fake charity which, when it isn’t pickpocketing the taxpayer, gets money from the pharmaceutical industry for endorsing products used to treat “mild alcoholism”. The nanny state never sleeps, but we may be able to starve it to death.
Paul Chase is a director of CPL Training and a leading commentator on on-trade health and alcohol policy

The foodservice scene in Budapest by James Hacon

To make sure we stay ahead of the game, we at Elliotts regularly take time away from our desks and go “on tour” twice each year. It’s an opportunity to experience new concepts and innovations, as well as bounce ideas around the team. There was no place better to get those creative juices flowing than this year’s study destination – the stunning and surprising city of Budapest. We found Hungarian cuisine to have an unmistakable character; slow cooked meats, rich with sour cream, onions, eggs, butter, fresh produce and wine. But there’s more to it than goulash and spicy paprika meals.

Our adventure began in Liszt Ferenc tér, a great place to start any culinary tour of Budapest. This trendy square, attracting both tourists and locals, is packed with indoor and outdoor cafes and restaurants, creating the perfect atmosphere for lunch, cocktails or dinner. Other areas worth exploring are the Castle District and the tourist areas of Váci Street. A plethora of stylish, new venues have sprung up in Budapest in recent years. Opening in derelict city centre tenement houses and factory buildings, these retro-hip bars are furnished with old furniture rescued from community centres, cinemas and even from grandma’s flat. Known as “Ruined Pubs”, they are famous today all over the world. Kolor in downtown Budapest is a great example. The interior feels like a warehouse, with exposed aluminium pipes and clever lighting that makes the colourful seating stand out against its white background to give a unique, yet cosy feel.

This theme continued in many of the restaurants we visited. Bordo Bisztro, located in the Theatre District of the city is a good example. Previously an old printworks, it has used its heritage and the hobbies of its current owner to tell its story. The menu is displayed on an architect’s drawing easel and on your right is a vintage bike adorned in brightly coloured lights against a huge window. On the last day of our concept tour, we headed to Spiler, situated in the Gozsdu district, a venue that boasts a “laid back scene” with “quality street food”. We were welcomed into the hangout-style venue by warm and friendly staff that couldn’t have been more pleasant and accommodating, especially considering the size of our group.

In terms of international influence, all the usual suspects were present, Burger King, KFC, McDonald’s. No surprises there. What really struck us though, was the complete absence of any international casual dining brands. Instead, the people of Budapest are treated to an array of restaurants mimicking the westernised casual dining experience. By night the city comes to life. Night time drinking culture in Budapest is focused on the shared experience and far less on the binge drinking that has been long associated with the UK. All the bars have their own quirky personality and style, making them stand out from the competition, creating a bit of theatre on arrival. Pálinka, the national drink of Hungary, is not for the faint-hearted. It’s a “moonshine” style spirit with ABVs ranging from 37% to an eye-watering 86%, making even the most hardened drinkers from our team wince. The brandy-based spirit is flavoured with fruit, normally apricot, cherries or plum. Served everywhere and drunk as a shot, it’s immensely popular with Hungarians who drink it both pre and post dinner.

Some of the most popular beers include Soproni, which is a Hungarian Heineken, Edelweiss Wheat Beer, and fruit-flavoured varieties such as the sour-cherried Belle-Vue Kriek or lemon flavoured Gosser Natur Zitrone. Wine is also of excellent quality, white or rose wine is often served with a splash of carbonated water or lemonade. Signature soft drinks include homemade lemonade and sparkling elderflower drinks. Our team returned to the UK having discovered the perfect destination to seek out new innovations and concepts in the bars and dining establishments.

As you’ll see, we had a fantastic time and felt it was a destination really worth a visit, so much so we are running a Study Tour with Propel Info next March. If you are interested in joining us, email Jo Charity (jo.charity@propelinfo.com).
James Hacon is director of strategy at leading sector public relations and marketing business Elliotts – www.elliottsagency.com

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