Propel Morning Briefing Mast Head CPL Training Link Paul's Twitter Link Subscribe Unsubscribe Web Version Propel Info website Propel Info website Forward Email Star Pubs and Bars Banner Morning Briefing Strap Line
Fri 25th Jan 2019 - Friday Opinion
Subjects: A year of transformation, it’s about more than just the beer and opportunity knocks in challenging times
Authors: Ian Dunstall, Glynn Davis and Charlie McVeigh

A year of transformation by Ian Dunstall 

This year is a transformational one for the restaurant industry. In 2018 we witnessed household brands negotiating company voluntary arrangements, rapid expansion of deliveries and KFC infamously running out of chicken – so which key themes are set to emerge in 2019?

This is difficult to call because of the impact of Brexit and the disruption it could cause. Beyond the economics, two likely scenarios are a boost to patriotic product provenance – buy British – and a greater focus on team retention.

Whatever the Brexit outcome, the cost and availability of staff will continue to be a major issue. Consumers are becoming more intolerant of mediocrity and reliance by businesses on a relatively low-tenure, low-paid, low-skilled workforce is an unsustainable response. 

The solution is a dual approach of winning the talent war by attracting, developing and retaining the best teams while developing the technological solutions to support appropriate elements of the guest journey and back-of-house production. In the more convenience sectors, digital solutions to order and payment processes are already being developed to remove service pinch points, but how does this translate into the more experiential segments?

In retail, trends are clearly the growth of online purchases due to convenience and a cut in store visits as consumers increasingly look for more experiential and entertainment occasions. The same trends are relevant to hospitality. Quick service and fast casual concepts remain relevant for convenience-based occasions but casual dining concepts have a high dependence on social and special-visit occasions and, like retail stores, need to invest to create an enhanced guest experience.

The Propel Experiential Leisure Conference in November highlighted the new wave of experiential concepts entering the market. While still relatively niche, these venues are excellent examples of how to satisfy social-occasion requirements by offering guests a more interactive experience and, most importantly, creating conversation and memories for guests to share.

A recent visit to Flight Club in Bloomsbury, London, demonstrated how appealing these concepts can be. A game of darts was transformed into interactive fun by clever use of technology supported by a superbly presented food and drinks offer. A memorable evening was enhanced by a follow-up email from the venue the next day with a video attached showing highlights from our event. This is a stunning example of how new competition in the sector is raising the bar on how to host memorable social occasions.

The food delivery revolution shows no signs of stopping as it accelerates beyond an £8bn market with ongoing double-digit growth. Heavy investment by the aggregators continues to evolve the sector with the growth of virtual restaurant “dark kitchens” and technology innovation to automate delivery transportation.

The delivery industry claims this is an opportunity for the restaurant market to more effectively compete with in-home meal preparation. Generally, restaurant brands are now realising they need to be in this market and accepting additional operational complexity and lower profit margins. The challenge for many remains how to distinguish their brand in a value-added way compared with the intensity of commodity competitors.

A key trend is the shift from heavy meat-based meals. This has been subtly developing for years, evidenced by the popularity of “lighter” chicken, the success of brands such as Nando’s, KFC and Chick-fil-A, and the growth of Asian and salad concepts that depend less on meat. Now the trend is accelerating further, fuelled by a growing sensitivity to meat production and concerns surrounding health, diet, animal welfare and the environment, with vegetarian and vegan food moving towards mainstream acceptance.

Healthier eating also continues to be an important trend, especially for younger generations. Whatever the outcome of government desires to force foodservice to cap calories in meals, the general heightening of awareness and health concerns around obesity will in some way encourage a shift in consumer behaviour away from more extreme menu options.  

The drinks mix is also shifting as consumer trends change. For younger generations the habit of alcohol with a meal has become less relevant. Demand is growing for more premium “craft” drinks at the expense of mainstream ones.

There are many other trends to respond to – the development of digital strategy as social media platforms become the primary source of consumer information; food supply and cost inflation challenges; how millennials adapt their restaurant requirements as they become the next generation of families; developing consumer interest in product sourcing and sustainability; the ongoing consumer appeal of freshness; and the seasonal evolution of new craft flavours and product trends.

What is assured is the restaurant industry is in a period of rapid evolution. At a time when the daily business challenges can be easily dominated by surviving the short-term economic and political uncertainty, there is a need for businesses to additionally remain responsive and tuned to the evolving consumer needs and trends that will determine the longer-term relevance and appeal of their business in the market.
Ian Dunstall is a consultant in brand strategy, insight and development. He has supported more than 40 brands with their positioning and development in the UK and internationally

It’s about more than just the beer by Glynn Davis

My annual January pilgrimage to New York City for a business conference has typically involved visits to renowned craft beer bars to seek out the latest brews from the city’s quality craft brewers and discover beer from new brewers that weren’t around the previous year.

This year I tried to retreat from the never-ending chase of the new and take things a little easier. This decision was substantiated after I began reading Drink Beer, Think Beer, which I took on the trip as I had been asked to review it and I thought down time in New York would be a great opportunity to read it.

One of the arguments author John Holl presents is people have become far too wrapped up in seeking the latest beers, eccentric styles and cutting-edge breweries to the point it’s taking away some of the enjoyment beer should bring. Beer drinking is not all about scooping double dry-hopped beer from the latest cool brewery to emerge in Brooklyn and then bragging about it on Twitter and Instagram. There is more to it than that. The fact is, the beer you are drinking is only one aspect of the overall experience.

With this thought in mind, I ventured into McSorley’s Old Ale House in the East Village, which has been there since about 1850. I hadn’t been through its doors since my first visit to New York about 20 years ago and from what I can remember, nothing has changed. There was definitely one member of the bar team who was around then and he was extremely entertaining – a true character of the type who gives you myriad reasons to go to a bar rather than buying beer at the supermarket and drinking it at home.

He contributed massively to my experience and took it beyond being simply about the beer. Talking of the beer, they only had two options – light and dark. Naturally, I had one of each. They weren’t potential winners of a global beer award but although not particularly memorable by taste, they were served with great theatre. Every ordered beer was dispensed into two separate half-pint glasses at great speed and with an attractive foaming head.

The character barman assured me this was because the place gets so rammed at times they have to dispense it at great speed – apparently two glasses is faster than one. While it sounds plausible, I think it’s more about it looking cool and a point of differentiation from the thousands of other bars in town. The venue also has history to further its appeal and give it some stand-out from the industrial chic of many craft beer bars.

McSorley’s reminds me of U Fleku in Prague, which is the city’s original brewpub and has incredible history dating to 1499. However, this Czech gem has a paucity of options compared with its US counterpart. It has half the amount of choice because it only serves one beer – its dark lager. These are served in great volumes around U Fleku’s multiple dining halls by its team of bartenders, who hold trays of many small glasses of this renowned brew aloft.

I say it’s renowned because that’s the feeling you get when a bar only gives you one beer option. I guess it’s the same with house wine – what foolish operator would offer poor wine? In reality, the beer might actually be rather ordinary but it’s about the overall experience you get from spending time in U Fleku. It provides you with something much richer than simply downing a beer in any old bar.

Clearly what such bars have is the attraction of history. In these craft beer days they have the luxury of not having to draw people in through the offer of a great beer selection. But what all other bars and pubs need to understand is they must give a better overall proposition than simply creating a great beer menu. I’m coming to the conclusion – and my New York trip proved the point – that it’s the combination of service and experience combined with decent beer that will determine success. One without the other is simply not going to cut it in these increasingly tough markets. Easy!
Glynn Davis is a leading commentator on retail trends

Opportunity knocks in challenging times by Charlie McVeigh

As many Propel readers are no doubt aware, I’ve been appearing as an investor/judge in the new series of BBC programme My Million Pound Menu.

I’m now looking to help companies with fund-raising, expansion planning and preparing for exit and, as part of the programme, I recently invested £350,000 in restaurant concept BBQ Dreamz. Having built and exited five hospitality businesses in the past 20 years, several during economic downturns, I passionately believe challenging times are a good time to launch and grow hospitality operations.

This is a topic I’ve been thinking deeply about ahead of speaking at next month’s Pub19 show. Building something out of adversity can future-proof it but a harsher environment can also really test a business and provide opportunities for growth that aren’t around during a boom period – for example, the chance to secure better sites and high-quality staff. Having the right people in a business to protect your brand is a pre-requisite.

In terms of investment, first and foremost I look for a brand that stands out such as my last business Draft House, which I exited last year. In the increasingly cluttered hospitality world we are experiencing, offering a point of difference is a pre-requisite for any business looking to be successful and secure funding.

The current crisis in the sector represents an opportunity for resilient brands but also ones that are comfortable and confident in their own skin.

Know your business concept inside and out. You look at a business that has been successful, for example cafe bar group Loungers, and the founders are comfortable with their offer and where it sits in the grand scheme of things. They are not chasing a part of the market that doesn’t reflect their concept, over-diversifying their offer or just innovating for innovation’s sake. They do the basics exceptionally well. Keeping things simple is a very underrated skill.

With the established, mid-market brands coming under increasing pressure, the situation is providing opportunities for independent businesses and startups to secure sites that would have previously been out of their reach and means.

Learning to adapt is also a key ability, especially for startups. The days of the cookie-cutter brand are coming to an end so you need to be able to tailor your offer to where you are and want to be – location underpins everything.

Finally, it goes without saying that being an entrepreneur will almost certainly break your heart at some point so you have to be resilient and versatile to keep moving forward.
Charlie McVeigh is a sector entrepreneur and investor and will appear as part of a business growth panel at Pub19 on 5 February. Pub19 is the only dedicated show for the pub industry. To register your attendance, visit www.thepubshow.co.uk

Return to Archive Click Here to Return to the Archive Listing
 
Punch Taverns Link
Return to Archive Click Here to Return to the Archive Listing
Propel Quarterly Spring 2018view online
 
Propel Premium
 
Lowlander Beer Co Banner
 
Funkin Banner
 
Franklin and Sons Banner
 
Lyre's Banner
 
Ei Group Banner
 
Black Sheep Banner
 
Freeths Banner
 
Venners Banner
 
Best Bar None Banner
 
HGEM Banner
 
Zonal Banner
 
Hastee Pay Banner
 
COREcruitment Banner
 
Sky Banner
 
Access Banner
 
Freeths Banner
 
Venners Banner
 
liveRES Banner
 
Pipers Crisps Banner
 
Tahola Banner Tahola web link
 
Lincoln & York Banner
 
Pipers Crisps Banner
 
Punch Taverns Link Punch Taverns Link
Star Pubs and Bars Banner
ALMR Web Link Web Version Unsubscribe Subscribe Propel Info website