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Morning Briefing Strap Line
Fri 11th May 2018 - Friday Opinion
Subjects: Beer lists the weak link in high-end venues, the hammers are out and asking the right questions 
Authors: Glynn Davis, Paul Chase and John Upton

Beer lists the weak link in high-end venues by Glynn Davis

Visiting Bordeaux for the first time two years ago was a real treat in numerous ways – all of them wine related – from the beauty of the terrain, with every bit of land filled with vines, to the wine bars where every glass seemed of good quality, and the super food that is a complement to the vino.
 
One of the highlights of the trip was dinner at Le Pressoir d’Argent Gordon Ramsay in the InterContinental hotel, where the wines went down extremely well with the two Michelin-starred cuisine. But there was one jarring element – the beers on its drinks list.
 
When you have been sampling wine for much of the day it is a necessity (for me anyway) to take a break and have a beer. Even in Bordeaux, beer has its place. Scanning through the extensive wine list revealed the beer options consisted of no more than half a dozen brews. This would not have been a problem if they were something different to the typical global brands that could have been purchased absolutely anywhere.
 
There is no way such an establishment would put such little thought into the sourcing of its ingredients, its wine list, its décor, and the quality of its front-of-house team. For far too long beer has been the weak link in the offer of restaurants and hotels.
 
The beer lists in high-end venues are still mostly determined by the gross profit that can be accrued on each bottle rather than offering the customer something interesting and different and maybe working on a cash margin. It surely is in the top-end restaurants and smarter hotel bars that customers are willing to listen to the story behind specific beers and then pay a premium price for them. The people in these places are surely a receptive (and possibly captive) audience for such products.
 
I’m not advocating usurping wine with beer. That’s never going to work – certainly not in my lifetime – but there is an opportunity to put forward some better beer options that much better complement wine lists and food menus. As I’ve stated in the past – beer should be seen as an “and”, not an “or” on drinks lists.
 
Proof of how little distance has been travelled with beer in such establishments was highlighted on a recent evening visit to two of London’s best hotel bars in the smart area of St James’s. The Stafford Hotel houses the American Bar, which has long been a favourite of mine and was for many years owned by brewer Thwaites. It has its cocktails and decent selection of wine by the glass but the beers let the side down. Predictable is the best description I can give it. 
 
It was a similar situation at the renowned bar in Duke’s Hotel (famous as the venue where Ian Fleming had the inspiration for Bond’s preferred tipple – the shaken and not stirred martini). Admittedly, many people visit for that particular drink and the high-quality wine, which is just as well because the beer list in uninviting.
 
The obvious defence restaurants and hotel bars put forward when questioned about putting greater thought into their beer list is very few people ask for it. I’d suggest the reason for this is twofold. Firstly, customers don’t want it because the choice is insufficiently tempting. The second reason is the driver of the first reason, which is nobody on the team typically has the required knowledge or inclination to commit to taking responsibility for the beer list. The focus of drinks teams is wholly on the wine and spirits offering. Poor old beer does not get a look in.
 
Although my overriding memories of the dinner in Bordeaux and the visit to the two London hotel bars is overwhelmingly positive, and I would return to each of them without a glimmer of doubt, I can’t help but feel a half decent beer list would have fully rounded out the offer.
 
I surely cannot be the only person that feels it is about time restaurants, and hotel bars in particular, get their head around upgrading their beer lists. It’s pretty safe to say the mainstream public has built a thirst for decent beer.
Glynn Davis is a leading commentator on retail trends
 

The hammers are out by Paul Chase

1 May 2018 was a historic day, we’re told. This was the date minimum unit pricing (MUP) of alcohol came into force in Scotland. The SNP government spent the day congratulating itself for ensuring Scotland was the first country in the world to introduce MUP, despite having spent years telling us Canada had already introduced it and its success there was part of the “evidence base” used to justify its introduction in Scotland. The other part of the “evidence” was the speculative numerology provided by the now-infamous Sheffield University alcohol-pricing model.
 
That numerology produced some specific predictions about what MUP at 50p per unit would achieve in Scotland. In the first year alone, it is supposed to achieve the following results:
 
60 fewer alcohol-related deaths
1,300 fewer alcohol-related hospital admissions
3,500 fewer alcohol-related crimes
A reduction of 3.5% in alcohol consumption per head
A reduction of 7% per head for “harmful drinkers”
 
So, 354 days to go and counting…
 
How will the achievement of these outcomes be measured? NHS Scotland is charged with overseeing this evaluation, but the anti-alcohol zealots from Sheffield and Stirling universities will conduct much of the research. The academic reputation of the Sheffield University group depends on the real-world outcomes of MUP in Scotland vindicating the years of research and lobbying effort it has put into this. The alcohol research departments at these universities have been lobbying for MUP since 2009, so I expect this to be little more than an exercise in the kids marking their own homework.
 
And hard on the heels of MUP in Scotland comes the announcement the UK government will produce a new alcohol strategy, and it has commissioned Public Health England (PHE) to evaluate minimum pricing. PHE is little more than a £4bn-a-year lobbying group that, since its inception in 2013, has been campaigning for MUP. If Big Alcohol produced research casting doubt on MUP it would immediately be called out as a conflict of interest. But Big Temperance? It just gets away with it.
 
What is heart-warming to see are the beginnings of the Scottish consumers’ revolt over MUP. Twitter is awash with images of Scottish consumers visiting supermarkets in Carlisle and Berwick-upon-Tweed to buy slabs of beer not subject to minimum pricing. And online sales dispatched from England are booming too – Amazon is reportedly doing a roaring trade! These sales appear to be for personal consumption, but how long will it be before White Van Man realises there’s a tidy profit to be made from giving Scottish consumers what their own government denies them?
 
There are elements of the on-trade in Scotland that think the health lobby must be thrown some red meat, and if MUP appeases it then that’s a price worth paying. But bullies always come back for more. Already health campaigners are calling for a ban on off-licence sales after 8pm, separate aisles for alcohol sales in supermarkets, banning new pubs and bars from opening in “stress areas” and the introduction of a Social Responsibility Levy to fund alcohol services. This levy is a tax that would be paid by all sections of the trade, not just supermarkets. Please remember the end game here, which is to de-normalise alcohol use, reduce sales and availability from all sections of the trade, and achieve prohibition by stealth. It is not about tipping people out of the living room and into the taproom – it is most emphatically not about “helping pubs”.
 
When you look at the escalation of demands from the health lobby in Scotland just in the past week since the introduction of MUP, it’s clear whether it works or not is almost beside the point. Minimum pricing is the thin end of the wedge, and now the hammers are out.
Paul Chase is a director of CPL Training and a leading commentator on alcohol and health policy 
 

Asking the right questions by John Upton

Let’s be clear from the start, we like metrics and KPIs and how they drive business performance. Many KPIs are very good and play a positive role in helping companies do a better job for their customers and their shareholders. 

One of the most popular and impactful metrics is Net Promoter Score (NPS). NPS is popular because it’s so easy to understand and measure. That’s also led to it being used across multiple businesses as the key customer success metric, both in daily operations and business planning.

Many companies tend to naturally rely on the NPS score alone because they don’t have enough time (or resources) to digest all the accompanying customer comments they get. As a result, very few, if any, of the words actually shared by customers (the verbatims) get to see the light of day. I know from my own experience in fast-growing restaurant businesses just how hard it is to find the time to look behind the headline metrics. 

However, by not taking the time to read what customers say can significantly increase the risk to your future success. By way of example, one of my colleagues recently told me about a well-known company he’d done some work with. Headline KPIs were all trending positively, NPS all good, sales were growing etc. However, when he reviewed the actual customer verbatims, 12.5% of customers said that they wouldn’t come back, or were thinking of not coming back. 

Just take a moment to digest that. What if 12.5% of your customers told you they weren’t coming back? When did you last look at your customer verbatims to check what they’re saying? Stats like this certainly sharpen the mind about making time to look behind the headline score.

There’s a further challenge with the increasing over-reliance on the NPS score. The score alone won’t tell you if you are meeting your customers’ needs, and more importantly which ones you are not meeting. A need can be defined as “something that must be there as without it the whole experience, service and proposition fails”. You therefore either meet a need or you don’t – it’s a binary equation to address; it’s not a percentage or score to incrementally improve.

As a result, meeting customers’ needs has to be the fundamental deliverable and focus for your business. If you don’t consistently meet needs, due their binary nature, you place your business (and its growth) at risk. Relying on improving your NPS score alone is not enough. 

But don’t just take our word for it as to the importance of meeting needs. Take a look at Harvard Business Review’s famous article about the Service-Profit Chain (SPC), which has been brought to life in many successful companies around the world. 

The SPC tells us that revenue and profit growth is built on customer satisfaction. And customer satisfaction is based, in turn, on delivering a service/product that is designed and delivered to “meet targeted customers’ needs”. One of my colleague’s former employers, John Lewis, is a great example of a business that’s been getting this right for decades. 

It’s not that we don’t like NPS – we do! NPS has made, and continues to make, a real and positive difference to customer service all over the world. However, it should be used as a kind of snapshot as to how you’re doing in relation to your customers rather than anything deeper. And we must force ourselves to reduce our reliance on the NPS score alone and to read more of our customers’ words. Just as Fred Reichheld, the creator of NPS, told us to.

To get the best results for your business, NPS has to be complemented by a ‘needs centric’ approach that provides a comprehensive answer to this question: How well are we meeting our customers’ needs on a day-by-day, week-by-week and month-by-month basis?

If you’re not 100% clear on whether or not you’re meeting your customers’ needs (or even what they are), how can you make the best strategic decisions for your business? Getting more of these decisions right, and by satisfying more customers’ needs, you will grow your revenue faster and outperform your competition. 

After all, think about what NPS actually asks. How can a customer give you a good recommendation, or keep buying from you, if their basic needs are not being met?
John Upton is former managing director of Leon and chairs a number of restaurant brands and works with iCustomer, using Artificial Intelligence to help businesses identify and meet their customers’ needs (www.icustomer.co.uk)

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