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Fri 1st Feb 2019 - Friday Opinion
Subjects: Stepping up to tackle social mobility, innovating in all the right places, end of an era, chasing unicorns, and Treasury must get SBR review right
Authors: Rooney Anand, James Hacon, Elton Mouna, Paul Chase and Ian Fozard

Stepping up to tackle social mobility by Rooney Anand

So much has changed since young, ambitious entrepreneur Benjamin Greene decided to start a Brewery in Bury St Edmunds, Suffolk, in 1799.

In those days you walked to work, there were no cars and definitely no app to hail a taxi. The only way to message loved ones was via the post and people got their news by reading their local newspaper. Now everything we need to know is online at the click of a button.

However, despite all the progress and major technological advances one thing remains sadly a “work-in-progress” – we still live in a society where it can be tough to move across social class barriers.

In December 2018, the Social Mobility Barometer reported two-fifths (40%) of its respondents believe it is getting harder for people from less advantaged backgrounds to get on in life and move up the echelons in British society. Furthermore, almost half of respondents think who your parents are determines where you end up in society.

Perhaps a key reason things aren’t changing is a failure of government and business to recognise the benefits social mobility brings to society. It’s hugely disappointing, especially when you consider there is clear and strong evidence that improved social mobility leads to lower crime rates, improved business performance and a better economy.

The hospitality industry is a shining example of giving people opportunities based on merit rather than background or what school they went to. There are numerous examples across the industry of someone working casually in a pub for a few hours a week to supplement their income who moves to a permanent role and ultimately becomes a general manager or a licensee, fundamentally changing their prospects, standard of living and destiny as a result. 

If we could create opportunities for folk to work their way up from behind the bar all the way up to the boardroom across the sector, this fabulous industry would not only become a more attractive career prospect, it would take a powerful step towards ensuring its leaders understood the businesses they were running and that they had reached the top purely on merit. This has to be good business.  

That is why I was so proud to launch The Stepping Up Report this week, which challenges the barriers of social mobility and sets out Greene King’s commitment to provide the best opportunities for people of all backgrounds.

Commitments include Greene King working with the Ministry of Justice, Novus and the Only A Pavement Away charity on a new programme to support ex-offenders who are returning to the workplace. Greene King has also committed to supporting 20,000 apprentices by 2022 and being the first hospitality business to sign Business In The Community’s Race At Work pledge to support the career progression of ethnic minorities. We’ve expanded our partnership with The Prince’s Trust, with a target to increase the number of people offered a permanent role from 61% to 75%. Finally, we have pledged to increase internal appointments to pub general manager from 64% to 80%.

At the House of Commons this week, Greene King laid out how, as a business, it will step up its efforts to tackle social mobility, which hopefully provided MPs with some much-needed relief from “other matters”.

If we are going to solve the social mobility problem, the hospitality industry must play its part in stepping up to the challenge, as must the broader business community and, of course, government. Let’s do more to support social mobility, step up to the challenge and grab the opportunity!
Rooney Anand is chief executive of Greene King 

Innovating in all the right places by James Hacon

The Restaurant Marketer & Innovator European Summit saw hundreds of leaders from 17 countries gather in London earlier this month for the five-event series. Hosted by Propel and Think Hospitality, the event shares learnings, celebrates successes and defines the future of eating and drinking out. During the three days more than 60 speakers and panellists took to the stage to join the conversation. Here are the top ten themes to emerge from the event:

The future is digital, but how digital?
A connecting theme from many of the presentations was data and the opportunity technology presents. As the old saying goes: “What can be measured can be managed.” We heard about cocktail-making technology, the benefits of automated voice reservation systems and the continued importance of takeaway as a revenue driver. 

It is likely that “voice” will become the future as a Star Trek producer’s dream turns into reality, although it feels the greatest use of technology in our sector will be one that doesn’t stand between your business and the guest, helping you to measure and manage through the use of inexpensive sensors. We saw fascinating insights into the way sight, sound and smell can change human behaviours, which in turn generate improved sales. It might seem a bit 1984 to some, but to others this presents a dream opportunity. I lean towards the latter yet have an increasing sense it’s worth covering my webcam and turning my phone off more often – if restaurants are watching, it’s likely others are too.

Are you measuring what matters?
As we’ve said we have data galore at our fingertips, much more than ever, and the question is knowing what matters. Consider what’s important to your brand, what moves the needle on sales and how you can use this to make an impact. Make key performance indicators simple and track them. Aim to have your data interconnecting and easily accessible – live – to drive changes as they’re required rather than waiting until the end of each month. It’s important to gain feedback from your customers and use it to improve the way you operate and your proposition. Make your decisions based on data, not gut.

Is loyalty dead?
The idea of swiping a card to collect points is a thing of the past but the need to retain and grow business from existing customers remains as important as ever. Use technology to make customer interactions easier, communicate with them more effectively about what they want, and understand them on a much deeper level to enhance their experience at your venue.

Do you have the right skills in your team?
Acting both locally and at brand level is a hard balance to strike that requires new thinking, with three different skill bases – the need for geeks to analyse and decipher data, marketers to interpret this, and operators on the ground empowered to think locally. Your marketing team will need to be far more digitally focused too, with the skills to deliver on-story and be brilliant content creators.

Where should good ideas come from?
Marketers and operators need to work closer than ever to drive trade, especially during tough trading periods. Ensure everyone is up to speed with your brand direction based on a clear strategy then encourage everyone to bring ideas to the table. This will drive engagement. Once you’ve created an initiative, give someone a clear remit for its delivery and keep communication lines open. It’s important to have marketing and innovation plans mapped out well in advance so everyone is on the same page and knows what is happening. However, don’t let this restrict those last-minute revenue-driving initiatives.

Are you adapting your business to a mobile-first world?
Customers are deciding where to dine much closer to the experience, within 90 minutes we’re told. The vast majority of searches are now carried out on a mobile and people expect to be able to do everything they would on a desktop on their phone. Consider making your site mobile first, think about usability and make it fast. Consumers are increasingly micro-researching before making every little decision. This is going on when they’re standing outside your restaurant deciding whether to enter or go elsewhere and at the table when deciding what to eat from the menu. Consider content that has a quick visual impact and actively manage review sites to gain this last-minute trade.

Are your social team sharing more than pretty pictures?
Instagram is still the stand-out social channel for driving engagement for your restaurant or bar brand, but make sure you give people a reason to come. Don’t just think about what you are sharing, consider “gramability” in your interior design and product development. That said, don’t share user-generated content only and tell more of a story – that means posting more than pretty pictures of food. Consider in-house content producers for maximum impact but make sure they are clearly briefed and well managed so they drive the required impact.

To influencer or not to influencer – that is the question!
YouTube star, Instagrammer or Facebook legend, online influencers can help capture certain audiences and build queues around the block. There was some debate as to whether this tactic suits everyone, with some feeling it feels overly orchestrated and lacks authenticity while others see it as a magic potion to success. Trying to strike a balance, I feel the best advice is to consider your brand and what you stand for and then consider who, if anyone, would help you tell your story or enhance your exposure to the right audience. One strong message that came through is to be careful when you activate large-scale influencer and social campaigns – make sure operating teams are ready to deliver.

Is marketing the glue in your business?
While many other departments in our business look after aspects of a guest experience and the way we look and feel, the marketing team is the glue that bonds it all together. The role of marketing is to keep and satisfy the customer, putting them at the centre of decisions, thinking of brand and every touchpoint with it beyond the time they spend in your outlet. Customers will increasingly expect customisation, they get it in every aspect of their lives. Not doing so will mean your customers will go elsewhere. Only a specific group of upper-end restaurants can truly use the excuse of “chef knows best”, otherwise this feels like an arrogant excuse or a way to ease operations. To deliver the best for customers the team has to be behind the brand. Remember that to achieve the best result it requires teamwork and engaging and inspiring the broader team in the process, working closely with your operators and people teams to make this happen.

Simple steps count
Alongside big brand campaigns and innovations, it’s also important to focus on the detail. From ensuring your teams answer the phones to getting to know your neighbours through local business development and marketing efforts, the simple steps can count the most.
James Hacon is co-founder of Restaurant Marketer & Innovator and 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

End of an era by Elton Mouna

Back in the day when I worked at Fuller’s a mere mention of selling the brewery would have seen you marched off to HR on charges of high treason. So I must admit it came as a bolt from the blue when I heard Fuller’s had draped the tea towel over the hand-pumps and called time on brewing. 

I have fond memories of my years at Fuller’s. As well as a talented team of marketing and PR professionals reporting in to me, by a twist of fate, and Fuller’s quirkiness, so did dray horses Griffin and Pride. I wonder how they’ve taken the news? 

Many people seem to have taken news the end of Fuller’s brewing is nigh less than well. Twitter is awash with shock, horror and outrage. Dominic Walsh, of The Times, went as far as likening the £250m sale to ravens leaving the Tower of London. However, hold your horses, it’s only beer and the kingdom will not fall. In fact in my opinion the deal is genius – genius with a level of sadness, but genius nonetheless. 

The headlines? Fuller’s gets £250m and rids itself of a complex brewing and distribution headache that only accounts for 13% of annual profits. Asahi gets everything lock stock and barrel except the Lock, Stock & Barrel and the other circa 300 retail businesses. The shareholders get an early Christmas. Bingo – happy days.

The master stroke from Fuller’s perspective is its timing on exiting brewing. The fact of the matter is in the UK today we have the largest number of breweries operating since the brewing heydays of the 1930s. In London alone, there are more than 100 independent breweries. This makes selling beer in the UK extremely competitive, extremely expensive, extremely labour-intensive and extremely challenging. 

The other factor regarding Fuller’s timing is its astute understanding of the changing demands of new consumers. Generation Y, millennials and Generation Z are no longer lifetime loyalists to one beer as Generation X has been. In fact, truth be known, younger generations frequenting pubs barely remain loyal to a beer brand for a day, let alone a lifetime. A visit to the pub from a Generation Y or Z is likely to include a repertoire not too dissimilar to this – a very hoppy, fruity, crafty, quirkily-named pale ale served in a can adorned with a fancy picture on the side to start, followed by a good old reliable pint of Pride, followed by a Nanny State, followed by a New England APA and then an Uber home – job done. 

Yes, newer generations are looking for stalwart regular beers but they are also looking for a selection of ever-changing and intriguing beers with a variety of styles and flavours. Fuller’s was good at producing stalwart regular beers and I really admired its Fuller’s & Friends collaborations, but we all know deep down it was a bit “dad dancing”, “Prince Philip driving” when trying to do the crafty stuff all by itself. The consequence was with much greater competition and consumers’ shifting drinking habits, Fuller’s became a stalwart beer brand brewer and, as such, saw market share go to the true craft brewers. 

As a consequence, profit contribution from its beer business has ebbed away to an all-time low. But fear not, it has converted an awful lot of the cash generated from the brewing glory years into bricks and mortar businesses it will now focus on 100%. The slightly sad part is Fuller’s has severed links with its brewing past but business is business, stiff upper lip, keep calm, carry on. 

The master stroke from the perspective of Asahi in my opinion is this. It has easy access to a worldwide distribution network and now owns the most recognisable, most iconic, most genuine British beer brand of all time – London Pride. It is a true gem and fits brilliantly as a jewel in the crown of its portfolio of Asahi, Meantime, Peroni and Pilsner Urquell. The other master stroke is it now has the Griffin Brewery in Chiswick, which in a few years, when things have calmed down a bit and the spotlight is shining elsewhere, would make a lovely Fuller’s hotel and luxury flats combo – wouldn’t it? 

In summary, it’s a very good deal for Fuller’s and Asahi – and their respective shareholders. As for the dray horses that used to report in to me, I have scoured all press releases from Fuller’s PR guru Georgina Wald but no news yet. I do hope Griffin and Pride haven’t been forgotten now Fuller’s has decided it will no longer ride two horses at once.
Elton Mouna is managing director of London Pub collection Remarkable Pubs and is currently recruiting for top-notch management couples and general managers – elton@remarkablepubs.co.uk

Chasing unicorns by Paul Chase

While training as a young economist, I had to grapple with such concepts as Gross Domestic Product (GDP), which I understood as a broad measure of the monetary value of the goods and services the country produces each year. Then there was the somewhat more difficult concept of “marginal utility”, which I just about know how to distinguish from butter! And then, being a grammar school boy lacking a classical education, my economics tutor taught me a Latin phrase: “Ceteris Paribus”, which means “if all else remains unchanged/equal” – or something like that. Ceteris Paribus provides a get-out-of-jail card for the failed predictions and forecasts of economists because things rarely remain unchanged, although sometimes it seems God put economists on this planet to make weather forecasters look good!

I understand social science is soft science – it’s not quantum physics – but at least economists are trying to measure something that can be objectively quantified or monetised. However, “public health” campaigners feel no such inhibitions. Recently published research funded by the Medical Research Council sought to quantify how even moderate drinking might reduce “quality of life” and put a monetary value on it – apparently drinking a bottle of wine a week costs £2,400 a year in lost quality of life, while one pint of beer a week equates to £610 a year in lost quality of life.

The research analysed the health, wealth and happiness of 141,000 British drinkers aged 37 to 73 and compared alcohol’s benefits, such as making people feel happy or sociable, with the higher risk of depression, insomnia and cognitive decline. 

But this is a curious comparison. In real life people make all kinds of trade-offs between short-term pleasures and long-term risks, usually on the basis the short-term pleasure is very real and very “now”, whereas the increase in risk is often very small and may or may not occur some time in the future. Or, to put it another way: “It won’t happen to me.” Usually, statistically, they are right. How can you compare the actuality of a benefit to the increased risk of a cost?

When scientists ignore the vast amount of scientific evidence that links moderate alcohol consumption to greater longevity – and less risk of heart disease and dementia compared with life-long abstainers – and abandon what can be sensibly quantified and try to monetise a concept as subjective as “quality of life”, you know they’ve abandoned science and are chasing unicorns.

They are not alone in this pseudo-scientific endeavour. The annual Halifax Quality Of Life survey has just been published and tells us Orkney is the best place to live in the UK. I like sheep, but not that much. The survey used to say various places in southern England were the most desirable places to live so Orkney’s rise to prominence is recent. About 22,000 people live in Orkney and its population is in long-term decline. Millions of people live in southern England and its population is growing. 

Pause for thought. GDP may be a rough and ready way of measuring how well the economy is performing but at least it’s measuring something objective. “Quality of life” is an entirely subjective concept and reflects the values of campaigners who use the cloak of science to mask their lifestyle activist intentions.

There are a lot of them doing it. There is the Genuine Progress Indicator, which measures income inequality and suggests if it is growing, a place is getting poorer. Some people will agree with this conclusion and some will disagree but it’s an implicit value judgement that tilts the science. Then there’s the Gross National Happiness Index, which was pioneered by the royal family of Bhutan – clearly experts in equitable development and cultural diversity. 

And isn’t it comforting to know The Lancet is getting in on the act? This formerly reputable medical journal has become a loony-left publication and a mouthpiece for some of the country’s worst lifestyle zealots. The Lancet Commission On Obesity recently published a 56-page report on how to solve the obesity crisis and save the planet – so no lack of ambition! The report is a diatribe against Big Food and declares we should all become vegans but, if we must eat meat or eggs, it should be in tiny amounts.

Their enemy is Big Food, which is a surrogate term for capitalism, and their remedy is more state control, higher taxes and more bans. Not only that, they’d like a hand-out from the taxpayer to fund their lobbying of the World Health Organisation to enshrine their puritanical intentions into a Global Treaty On Food.

Driving to work this morning I listened to the Queen song “Flash”, which featured in the film Flash Gordon. In the song the heroine breathlessly says: “Flash, I love you, but we’ve only got 14 hours to save the earth!” Isn’t this essentially the unifying theme of all these unicorn-chasers – moral salvation lies in abstaining from pleasure – and in the process you’ll improve your quality of life and save the planet. Isn’t that nice?
Paul Chase is director of CPL Training and a leading commentator on alcohol and health policy

Treasury must get SBR review right by Ian Fozard

The sale of Fuller’s beer business to Asahi for £250m was met with a mixture of apathy, sadness and, in some cases, outright anger by the beer community. It’s the latest in a series of high-profile global buyouts.
 
Fuller’s said: “Recent structural changes to the beer industry, which have resulted in material economies of scale benefiting global brewers and a progressive beer duty spawning small brewers (resulting in more than 2,000 breweries in the UK), have been challenging for the mid-sized beer business to navigate.”
 
This small, seemingly innocuous statement in the middle of a press release is, from the Society of Independent Brewers’ (SIBA’s) perspective, significant and misleading. It is particularly relevant as the Treasury is about to conduct a review of the Small Breweries’ Relief (SBR) fund. Having campaigned for the introduction of SBR and defended it resolutely for the past 15 years, SIBA is fully engaged in this review. We know getting the review right is incredibly important for the UK’s independent brewers and for consumer beer choice 
 
Is it true to say SBR alone has been responsible for squeezing the likes of Fuller’s, thereby prompting a sale? I don’t think so for one minute. The truth is Fuller’s received a generous offer it couldn’t refuse as a publicly quoted company. It’s undoubtedly true the huge economies of scale enjoyed by global brewers, who together make 88% of the UK’s beer, will give them some advantage over the likes of Fuller’s. Beer can be brewed more cheaply by the globals than a brewer the size of Fuller’s (about 200,000 barrels or roughly 1% of the UK’s beer market) and much more cheaply than a brewery of our size (Rooster’s, producing about 8,000HL). More than 50% of SIBA members brew less than 1,000HL so it’s highly unlikely they would make a dent on a business such as Fuller’s, which is more than 400 times larger. 
 
This is important because the SBR debate is about fairness across different sizes of brewery. It’s about how the relief is structured to meet its original three objectives set by government in 2002, whereby SBR compensates for diseconomies of scale and restricted market access, and maintains diversity in the sector. In the current review, the Treasury also wants to ensure SBR doesn’t create undue distortions in the market place and it continues to support the sector’s growth.
 
While it’s right the debate focuses on economies of scale, we shouldn’t lose sight of the other objectives and realities of the market place. Small brewers don’t have large pub estates like Fuller’s to rely on – their access to the pub market is heavily restricted by the beer tie, inaccessible managed houses and soft loan ties from bigger brewers. The SBR review must take into account these market realities that all small independent brewers face day in, day out.

SIBA recently conducted probably the most extensive and accurate costs benchmarking survey of small brewers ever carried out. Our research shows few, if any, of our members make anything like the level of profit margin enjoyed by Fuller’s. As well as enjoying a large pub estate, Fuller’s can also buy raw ingredients in bulk much cheaper and use people, equipment and energy far more efficiently. Small brewers can’t do these things, despite an increasing number of SIBA members investing in pubs and taprooms to try to close the gap by having a direct route to market. The economies of scale a 200,000-barrel brewer such as Fuller’s enjoys blows small craft brewers out of the water!

The craft beer movement has been the most exciting thing to happen to beer in decades. Just as the small brewery sector seemed to have a winning formula, the globals are muscling in demanding a piece of the action. A big piece! This makes life more difficult for the majority of small craft brewers, who will soldier on and struggle to make ends meet. 

Beer Duty is the biggest direct cost paid by a brewer. Once a brewer reaches 5,000HL of production, the 50% duty relief is withdrawn on every extra barrel produced at a rapid rate. So at 10,000HL of production (3% the size of Fuller’s) a brewer pays 75% duty – a huge increase and way in excess of any possible economies of scale that might mitigate this tax increase. SIBA is therefore asking the government for this punitive “cliff edge” to be smoothed. At the same time, SIBA is resolutely defending the 50% relief enjoyed by the smallest brewer, which is essential to their survival. 

More than four-fifths (83%) of SIBA members say SBR is “extremely important” to their business – without it they would struggle to survive. Ensuring the Treasury gets the review of SBR right will help ensure a brighter future for more small brewers.
Ian Fozard is national chairman of the Society of Independent Brewers

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