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Fri 1st Jun 2018 - Friday Opinion
Subjects: The delivery battle is heating up, going it alone and supporting street food
Authors: Glynn Davis, Ann Elliott and Tom Cormie 

The delivery battle is heating up by Glynn Davis

Restaurants and foodservice operators of all shapes and sizes are either grappling with how to use home delivery to their best advantage or they are at the least being caught in the cross-fire as the rival aggregators and delivery firms suck in more consumers as they battle it out for dominance.
 
From the point of view of companies such as Deliveroo, Just Eat, UberEats and the myriad of other smaller companies it is very much a fight worth having because the market for takeaway foodservice is on fire. It has grown by a massive 73% over the past decade to £4.2bn in February 2018 and the expectation is it will hit the £5bn level over the next two years, according to The NPD Group.
 
The debate has been raging for some years about the pros and cons of these companies. While they satisfy the insatiable demand for home delivery by consumers it is the economics when used by foodservice companies that have been under some question. Although restaurants have railed against the fees charged –and the rich data collected – by the aggregators it has not been plain sailing for these organisations either.
 
Be in no doubt about it, they are in the midst of their own tough battle. As they compete for customers – and restaurant clients – in a rapidly developing market where large amounts of investor money are committed, there has been a constant stream of announcements from the key players Just Eat and Deliveroo. These have introduced a raft of new services that have sought to highlight their points of difference in this hard-fought market.
 
In only the past week we have seen Deliveroo announce it is giving away £10m of share options, which extends its existing options packages beyond senior members of staff to all its 2,000 employees. It highlights just how intense the competition is to attract the required numbers of skilled personnel. Although the self-employed couriers are not included in this shares windfall, Deliveroo recently pledged to give all its 35,000 riders around the world free access to an insurance scheme. This followed similar action by UberEats in Europe.
 
There is an equally hard-fought scrap going on for restaurant partners. Just Eat last year tied-up with Funding Circle to offer its takeaway partners discounted access to loans that are potentially more attractive than traditional bank funding. It has also recently announced the offer of a 45% discount on electric scooters and access to exclusive green energy deals through a partnership with Make it Cheaper. Maybe these financially supportive initiatives from Just Eat should not be too surprising as its chief executive Peter Plumb previously spent ten years running Moneysupermarket.
 
Likewise, Deliveroo has also launched a support scheme for its restaurant partners that can help them cut their everyday expenses – including energy bills, recruitment costs, printing services and business rate reviews. There is also the opportunity for those restaurants that exclusively use the Deliveroo platform to access its staff benefits portal – that includes discounted cinema tickets and meals out as well as 25% off relevant training courses.
 
Two other recent initiatives at Deliveroo seek to further create an exclusive (and differentiated) restaurant base. The company has set up a rotating pop-ups proposition, which involves giving street food traders access to its Editions “dark kitchens” for 12-week stretches. The increasingly important Editions division is also integral to Deliveroo’s most recent announcement it is launching a £5m fund for investing in UK restaurants. The aim is to fund restaurants and celebrity chefs that want to expand into new areas of the country or develop new bespoke menus that can be delivered by its couriers.
 
At the heart of all these various initiatives is the objective of creating much greater loyalty around the aggregators – whether it is with their employees, restaurant partners, or customers. The leading players in the food home delivery market recognise they need to keep all these stakeholders happy in order to deliver on the expectations of their other key stakeholder – the investors that are fuelling the ongoing home delivery battle. Expect the constant stream of announcements and initiatives to continue.
Glynn Davis is a leading commentator on retail trends 

Going it alone by Ann Elliott

Jason Green and David Salmon were both successful operators at The Restaurant Group (Jason became the managing director at Chiquito and David was brand director at Frankie and Benny’s). But rather than join another large corporate when they left The Restaurant Group, they decided to set up on their own, buying a pub – the Cock n Bull – in Stourbridge. That’s a pretty brave move and way out of most people’s comfort zones. It’s not surprising with their knowledge, experience and enthusiasm the pub is flying and they are now almost inundated with other offers of pubs for them to run.
 
Leaving corporate life is not easy, whether you leave voluntarily or with a bit of a push – and I speak with experience of both. For those now considering that move for whatever reason, and thinking about Jason and David’s experience, I have some advice to offer.
 
Having freedom from the ties of corporate life can be totally intoxicating particularly when you find you have the time to exercise, walk the dog (whether they want to or not), go to every school event, see friends, go shopping (without worrying what you are going to say if your boss calls and asks you where you are) and even, sometimes, just stop the car and go for a walk. I loved that sense of freedom and still do.
 
You now don’t have to work with anyone you don’t like or who doesn’t share your values, whether they’re a client, an employee or a supplier. It’s another sort of freedom to be able to say: “I really don’t have to be here” and to walk away. So, I don’t work with rude, ignorant, dishonest or simply miserable clients because I just don’t have to. I like working with kind, funny, thoughtful and considerate people who treat my team well. The same principles will apply to you whatever you choose to do on your own.
 
It is very likely you will work harder and longer than you did in corporate life – working late, working earlier, working at weekends and working on holiday. I always work on holiday unless I’m trekking in which case its only because I can’t get a signal. Working like this isn’t a problem when you have created the working life you want to have rather than having a life someone else has created for you. You are in control. Taxi drivers sometimes ask if I enjoy my job and I always say: “Yes I do because it’s the job I have created for me and me alone. If I don’t, there is no one else to blame but me.” They don’t talk to me much after that!
 
Potentially you may miss having a team around you if you are going it alone. I found it was great working with teams from other businesses but not so great when I had to leave them. Setting up a business with others will mitigate against this. It’s unlikely a support infrastructure will exist – meaning you have to do everything yourself but, quite honestly, that’s not the end of the world. I missed having personal development on tap as I did in corporate life so found a mentor for the first five years to help me stay on track and after that I had some brilliant chairmen to help.
 
Cash flow isn’t really on the agenda for most in corporate life but it can become a big issue when setting up on your own in anything but a cash business. Getting clients to pay within 90 days is a real nuisance so it helps to have a really good bookkeeper to chase debtors. It’s all part of the much higher highs (and much lower lows) that you have working in your own business versus someone else’s. You may also find skills and interests you were never able to develop when progressing up a career ladder – personally I found I loved being able to connect people, something I never did at Whitbread.
 
So I wish Jason and David all the luck in the world going out on their own. You have to be brave and wise but it’s fun and very rewarding. I wish I could do it all again!
Ann Elliott is chief executive of Elliotts, the leading integrated marketing agency in the hospitality and leisure sector – www.elliottsagency.com. Follow her on Twitter: @elliottsagency
 

Supporting street food by Tom Cormie

A burgeoning craft and street food scene has resulted in a dynamic and exciting environment in the university city of Cambridge. Gone are the days when your options for lunch were restricted to national casual dining operators or Michelin-starred fine dining. While both of these are important aspects of the restaurant landscape, they do not fully represent the breadth of choice expected by the consumer.
 
The decreased brand loyalty (particularly among millennials) and increased interest in provenance and artisanal products has left diners constantly chasing the next new thing. This may seem fickle initially, but what it actually does is to put the onus back on the operator to stay fresh and innovative, therefore maintaining a consumer’s engagement with their brand. Consumers don’t expect more – they demand it. This is ultimately a very positive scenario both for the consumer and the operator as it will result in progress and prevent stagnation.
 
Cambridge is still a little behind the more established London and Bristol in the street food scene. However, I believe it punches above its weight in this regard. It can’t be too long before we see something akin to the wonderful PopBrixton in London, which provided a platform for Kricket, which went on to open its first bricks and mortar site in Denman Street in January 2017 and is soon to open in White City and has just returned to Brixton with a restaurant in Atlantic Road.
 
Another recent and great example of shipping containers providing a home for emerging restaurateurs and chefs is Wapping Wharf in Bristol where former MasterChef finalist Larkin Cen opened Woky Ko to great critical acclaim. Larkin has also recently announced expansion plans.
 
Cambridge is making great progress in its street food offering. This is largely due to the excellent work done by Heidi White who has championed street food in the city with events such as Eat Cambridge and the creation of foodPark, providing weekly lunch markets with a fantastic range of world cuisine on offer.
 
One of the real success stories of recent times in Cambridge has been Steak & Honour, which burst on to the scene a few years ago with its fantastic burgers. In early 2017 it progressed into its first bricks and mortar site just off the Market Square, funnily enough almost opposite Honest Burger. With a “no-reservations” policy and competition from a successful “almost-national” brand it will have to continually improve and adapt to stay competitive. The vans are still popping up around Cambridge to feed hungry revellers and they seem to be popular as ever.
 
Another excellent addition to the Cambridge craft scene is Calverleys Brewery, located in a backstreet off Mill Road. Founded by two brothers in 2014, with the aim of creating weird and wonderful beers, and now with a taproom serving the beers fresh from source and a rotating street food presence, it has become an excellent place to spend an evening.
 
Credit should also go to other businesses that are promoting street food such as Thirsty in Chesterton Road, which regularly has a street food van outside and the old Dales Brewery where Hot Numbers Coffee regularly hosts jazz nights with a van outside catering for the evening.
 
With all these options for street food traders, a platform has been created for our talented chefs and food entrepreneurs to succeed and gain their well-deserved recognition. There is now a clearly defined and easily navigable path to opening your first restaurant from supper clubs to street food.
 
The creation of this platform has coincided, rather conveniently, with the emergence of crowdfunding, which has facilitated many expansions and provided much needed finance that is representative of the surge of interest and desire to be involved in the sector. Notably, on an international scale, BrewDog’s Equity for Punks scheme has raised millions but on a local level Stem+Glory in Cambridge has successfully crowdfunded to fuel expansion into London. Not only does crowdfunding raise finance but it buys you a loyal fan base that will act as your ambassadors and promote the business.
 
The simple way in which to ensure we all continue to eat, enjoy and revel in amazing street food is to make sure we support these traders as much and as often as we can. If we do this then we will continue to see bold, innovative and high-quality businesses grow and flourish.
Tom Cormie is a negotiator at Fleurets’ Cambridge office 

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