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Morning Briefing Strap Line
Fri 4th May 2018 - Friday Opinion
Subjects: Looking to the future, the big transport hub push and developing distinctive brands
Authors: James Hacon, Glynn Davis and Ann Elliott

Looking to the future by James Hacon 

The future can be such a dividing subject. In business we have to be looking forward to consider where consumer and market place trends may change to adapt our approach and future-proof our business, yet we have to avoid the pitfalls of not concentrating on the now or fall into the realm of navel-gazing. The question I find myself answering a lot is how far should we be looking into the future? That’s a hard topic to answer. 

You’d think it would be the largest names in our sector spending the most time and resources looking into the future, planning for the big societal shifts that are hypothesised. There at certainly some cutting-edge players out there doing just that, but for the most part it seems our biggest operators are just trying to cope with bringing their business practices, brands and approach up to date. Not yet really looking beyond the immediate challenge and trends coming down the track. 

I met two recently appointed chief marketing officers this week who are the first in that role at their respective companies. Both talked heavily about taking a more strategic approach that would help the business thrive into the future, rather than the tactics-based approach they’d been welcomed to. This takes foresight and some bravery on the part of the chief executive. It is ultimately not a position they are going to see immediate return from, the strategies we discussed would likely take years to show much in terms of return.

I wondered, and asked, what sparked this move, seeing a change in thinking and internal positioning of marketing as a strategic lead. On both occasions the need to have more foresight and be better prepared for market changes was the answer. Both were casual dining groups, both will definitely have seen challenging trading. It’s great to see strategic marketing being invested in at this time – it’s all too easy for businesses to concentrate on short-term cost-cutting during tough times, ultimately at the expense of the future success of the business.

I don’t think it’s a coincidence Wagamama has been market leading of late. I think it is one standout example of a business that looks to the future, conducts extensive research, invests in technology and engages with businesses it knows are innovating around future trends.

Meeting with Emma Woods, its customer director, and Andre Johnstone, UK marketing director, ahead of launching its seamless payment app, it struck me how their thinking was so far ahead of the market. The solution they developed took heavy investment and testing. It was also clear it wasn’t expected to be an overnight success. It’s part of a roadmap of innovation that will continue to evolve the business and keep it ahead of the market, with continued relevance to its customers.

Compare that meeting with another just a few days later with the board of a large casual dining group and it couldn’t be more different. The focus of the meeting was about getting up to speed with social media. I saw the challenge far deeper-reaching than something that could be patched with a tactical promotional campaign. The job at hand was really about needing to enact a revolutionary reposition project for one brand. The problem, however, is the short-term focus of the investors driving a culture of immediate return in the executive team, which knew it would be the right approach but felt it was unattainable.

Back to those big societal shifts and macro-trends, beyond even this internal brand-focused approach. Who in our sector is driving or involved in these conversations?

Yesterday (Thursday, 3 May), I met with Lara Ladyman, a farmer and farming journalist from Australia who recently won a Nuffield Farming Scholarship, an organisation that aims to broaden horizons through study and travel overseas with a view to developing farming and agricultural industries. 

We toured London and talked extensively about the current trends and challenges our sector faces. It was fascinating. She is visiting the US, China, Canada and the EU looking at what lies ahead in the whole supply chain from farm to plate, specifically looking at evolving technologies. She was asking questions such as: “Will we be eating cell-cultured meat and 3D-printed food?” 

For the most part it seems major suppliers and retailers are leading the way in this type of discussion about the future of food. But with changing consumer buying habits seeing growing proportions of food spend being out of home rather than in-store, I wonder if there is a broader conversation to be had in our sector? Adversely it seems most of the representation of the out-of-home market seems to come from high-end chefs. 

In truth, it may be a much broader challenge our sector has. That is the importance we put on food within our businesses. It often seems to be relegated to a subject for purchasing and senior chefs alone, but given the relevance to our business it should be at leadership level. Think of any industry conference you’ve attended recently, how much of the content was on food? In the most part it is missing. I feel inspired to do my part by including a section about food trends and the future of food into the Restaurant Marketer & Innovator European Summit next January, but perhaps it’s time for us to lift food up our agenda and work to engage in these conversations. 

If you’ve read this and at this point are screaming at your screen that you are already, I’d love to hear from you and get you involved in January.
James Hacon is managing director of Think Hospitality, which advises multi-site brands on growth, brand and development strategy, as well as investing in early-stage concepts with a bright future

The big transport hub push by Glynn Davis

Some years ago I was involved with the production of a magazine for employees of the-then British Airports Authority (BAA), which ran the major airport hubs in the UK. I made a joke about a particularly speedy turnaround of one specific edition and suggested it was a shame BAA could not turn the planes around as quickly at its airports.

This went down exceedingly badly with senior BAA management because little did I know at the time, it was being accused by the airlines of tardy turnaround times. Apparently the airlines suspected BAA liked the idea of passengers spending a little longer in the terminals dishing out their money within the shops and leisure and hospitality units.

This was at a time when BAA was making groundbreaking moves into overhauling the offer at airports from what was pretty dire to what today is seen as cutting-edge shopping and dining experiences. The UK arguably set the pace in this department and now the world’s airports are universally much more pleasurable places in which to kill time. 

It has been a similar story of reinvention at other major transport hubs around the UK, with many train stations having undergone nothing short of a revolution. When you compare St Pancras and King’s Cross stations today with their former incarnations, they are a world apart.

This has been reflected in their revenues. Consider Network Rail reported sales growth of 9% over the Christmas period. Among the winners in the capital was Paddington station with a gain of 42% and Euston station, which was up 12%. Outside London the main risers were Manchester Piccadilly, with a gain of 9%, and Bristol Parkway, up by a healthy 7.4%. These sorts of numbers are unheard of on the high street and in shopping centres.

Over the festive period a hefty 31% of the 105 million people visiting a Network Rail station entered a retail unit. That’s a pretty impressive conversion rate. The transport hub outlets of retailers are invariably their most successful and always feature in their lists of top-performing units.

Food outlets have been the star performers of late in the UK’s transport hubs and, needless to say, foodservice operators are focusing intently on these travel venues. A flurry of names including Crussh, Caravan and BrewDog have announced tie-ups with food travel specialist SSP to make a move into travel locations. They are joining the established players who, not surprisingly, want more of the action.

Among them is Costa Coffee, which was in the news recently because of the announcement by parent company Whitbread that it is to spin-off its coffee business. Had this been done a couple of years ago, it would have been greeted with a much greater fanfare but today some of the sheen has been taken off the Costa business because it has lots of exposure to outlets where footfall is growing slowly or even falling. 

As much as 60% of its 2,000-plus coffee shops are in shopping centres and out-of-town retail parks where we all know trading is proving tough in all but the most premium developments. The managing director of Costa countered this unfavourable scenario with a strategy to focus the company’s future growth on travel locations.

It is far from unusual in having such an objective as these locations are undisputedly the major bright spot on the food and drink landscape right now. But there are some important questions that need to be asked. 

If everybody is looking to move into transport hubs then the big question becomes how many operators can possibly be housed in these locations? It is also important to ask how much more business will they suck from the high street and shopping centres? Everybody should consider just how much runway is left with airports and other transport hubs for foodservice operators.
Glynn Davis is a leading commentator on retail trends

Developing distinctive brands by Ann Elliott

On the New York Propel study tour a fortnight ago, we spent some time with the senior management team from Aurify brands ( They talked about their business philosophy and it was truly fascinating. The copy on its website captures this brilliantly: “We build, own and operate networks of category-leading fast casual restaurants. While our home base is New York City, we are taking our premium brands to new markets and simultaneously developing exciting new concepts. Our operating model is designed for rapid, sustainable expansion and fosters and promotes constant innovation. Our collaborative and entrepreneurial culture enables us to attract and retain great talent.”

Aurify reminds me of Living Ventures in many ways – and Arc Inspirations. These companies are ambitious, proactive, daring, fast, bold, forward-thinking, creative and unafraid to just try things. 

I remember asking the late Tim Bacon, founder of Living Ventures, how he managed all his brands? He said he didn’t have loads of brands – they were all fundamentally the same. He had one operating model. All the functions (such as HR, purchasing, finance, food development, marketing, property, legal, operations) had consistent processes and procedures centrally that were then applied across every brand. It was highly disciplined and organised. Only the front of house was different – proposition, design, menu and drink offer. This also had the advantage of meaning his team members could easily move between one brand and another.

Aurify also says: “We conceive, build and grow original concepts that are distinctive, consistently extraordinary in quality, and bred for expansion and the long term.” 

This, to me, is key. Now is the time for distinctive (as opposed to “me too”) brands like never before. Sometimes, when I ask business owners what their brand is about they will say: “Great food, great service and great value for money.” Well, yes, but those are givens – they are not differentiators.

Today, every concept/brand has to deliver great tasting and well presented food, an appropriate drinks range, friendly and efficient service, good value for money, a clean environment, consistency, a well signed and well planned car park, attractive exteriors etc. Being good or even great in any of these areas does not lead to differentiation. These are the minimum entry levels for operators to play the game and survive. 

So how, like Aurify, Arc and Living Ventures, can businesses develop brands that really are distinctive? Patently a good starting point would be to look at how they have done it. Having common back-of-house processes must have allowed these businesses more time to focus on developing and doing new stuff. They haven’t had to keep reinventing the back-of-house/office support wheel every time they have developed a new brand – they’ve just had to focus on their consumer-facing proposition (that sounds very simple when it isn’t of course). They have had the confidence to know, whatever they try, their support functions can do just that – support them.

They have had ideas and hunches and then made them happen. They’ve had a go. They have really understood the customers they have wanted to attract and have known what would attract them. They have played and tried and tested and enjoyed themselves along the way. They haven’t beaten themselves up when ideas haven’t worked but have analysed, understood and moved on. 

Business must be fun when you have ten brands each with 20 sites you can play with – and not so much fun when you have a 200-site brand that might have been distinctive when it first launched but now struggles to adapt to new market conditions. Differentiation is inbuilt in the first scenario and so much more challenging in the second.
Ann Elliott is chief executive of Elliotts, the leading integrated marketing agency in the hospitality and leisure sector – Follow her on Twitter: @elliottsagency

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