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Morning Briefing Strap Line
Fri 10th Jan 2020 - Friday Opinion
Subjects: Downsizing, predictions for 2020, new-style resolutions, and year of the circular economy
Authors: Glynn Davis, Think Hospitality, Ann Elliott and Karen Lynch

Downsizing by Glynn Davis

Visiting New York for the first time in the mid-1990s involved many memorable experiences, one of them being dining out with a US friend and his mates and work colleagues. The food would hit the tables in the most gargantuan portions I’d ever seen and I’d feel full even before I picked up my fork.

Everyone else took it in their stride but what was most surprising was they would down their knives and forks and call it a day when only a modest way through their main course. This seemed a huge waste of food but was clearly a way to avoid joining the growing ranks of the obese. 

Needless to say, the growth in portion sizes and super-sized meals has well and truly crossed the Atlantic, with all you can eat buffets and bottomless brunches becoming a feature of the UK’s food and beverage landscape. It’s the same when it comes to food in retail. According to a 1993 publication issued by the government of the day, the typical portion size of a shepherd’s pie ready-meal was 210g. This has more than doubled to a hefty 450g today. Many other items have grown significantly during the past 20 years, with bagels increasing 23% and biscuits 17%, according to the British Heart Foundation.

However, the promised government crackdown on calories has led companies to consider reformulating their products or shrinking sizes to adhere to potential rules that could involve pizzas containing no more than 928 calories, for instance.

Judging by the experience of PizzaExpress that won’t be an easy thing to do as the high-street brand suffered persistent rumours its pizzas had shrunk or its plates had become larger! PizzaExpress vehemently denied the gossip and actually made its pizzas larger to put the rumours to bed – but has the climate changed? As health issues rise up the agenda – Cancer Research UK has predicted 70% of millennials will be obese by the time they reach middle age – portion downsizing might not be met with such negativity.

That might be wishful thinking as one of the major contributors to unhealthy eating is the growth of takeaway meals fuelled by the ubiquitous delivery services. The phenomenon looks set fair for further growth – heralding the demise of home cooking, which is arguably the healthiest way to eat.

Initiatives such as Veganuary promote healthier eating but are short-term activities that resemble fad diets – they don’t address the underlying issues. They raise awareness on issues such as cutting the amount of red meat consumed but all too often they are fronts for retailers flogging processed goods under plant-based branding.

We also see many operators introduce menu items to support Veganuary, which I hope aren’t cynical money-making initiatives but rather genuine moves to educate diners. The foodservice industry is in a much better position to bring about healthier eating than retail due to the fact its customers are a captive audience.

There’s an undoubted opportunity to intelligently inform consumers about the food they choose and portion sizes. We all know we eat with our eyes so an attractively plated, sensibly sized course, as opposed to one that’s simply an enormous pile of food slopped on a plate, can convey the right message to both brain and stomach. This will ultimately contribute to the nation’s health and help us avoid having to rely on our (largely non-existent) willpower to down tools when we think we’re full.
Glynn Davis is a leading commentator on retail trends

Predictions for 2020 by Think Hospitality

We have spent the void between Christmas and New Year wisely at Think Hospitality Group headquarters, with our partners formulating predictions for 2020 ranging from increased competition from the retail sector, mass adoption of customer technology, and brands upping their game when it comes to their environmental impact.

Here are our six predictions for the restaurant and bar sector for 2020.

Environmental concerns to affect consumer choice
We saw the plant-free movement become mainstream in 2019, not only an increase in veganism but also a greater proportion of the population deciding to eat less meat. The “Greta effect” will help to make 2020 the year consumers act with their feet and wallets and aim to make a real difference.

Plant-free is only part of the conversation, however, as publishers have a raft of new-wave “sustainable” cookery books in the pipeline for 2020 on topics such as using leftovers, cutting food waste, and creating planet-friendly menus for the family. This will lead to the rise of “sustainable gastronomy”, where consumers will ask: “How can we change and adapt what we’re doing in the kitchen to help tackle the climate change emergency?”

There will be further discussions on the environmental impact of fad ingredients such as avocados, nut butter and soya and the long term, non-reversible devastation of rainforests and other natural ecosystems.

Angela Malik predicts that with even more awareness and education, consumers will increasingly question the environmental practices of the places they dine at or order from in 2020 – and ultimately expect more.

Competition in the most unlikely of places
The face of retail is changing – and quickly. In the UK we saw a plethora of major retail brands enter CVAs in 2019, while the property market remains tough. Boxing Day reinforced the changing dynamic of the British high street, with footfall down 10.6% year-on-year – the biggest decline on any Boxing Day since 2010.

The same can be seen in many places around the world as e-commerce and changing consumer behaviour have an impact on physical stores. In New York it was reported 11 of Manhattan’s 17 major retail corridors experienced year-on-year falls in asking rents in 2019, while India’s sluggish economy saw a 35% drop in retail leasing during the year.

The pressure is on to attract consumers to spaces by giving them multiple reasons to visit. Coupled with the need to fill underused space, this has resulted in retailers seeing food and beverage and experiential leisure as the answer.

In the past few years we’ve seen major supermarkets up their game regarding food to go, department stores give over more footage to food halls, bookshops add coffee shops, and fashion brands bring bars into their stores.

Michael Ingemann predicts we’ll see even more of these type of developments in 2020, with increased competition from retailers that diversify their proposition.

Going head to head with the gig economy
Living in the Brexit bubble, it has been easy for UK employers to blame a lack of job candidates on the departure of EU workers. Through our work around the world we see a global crisis emerging to find and retain great employees. In 2019 we saw restaurants in Amsterdam close due to staff shortages while Ireland eased its rules around work permits for chefs in December to solve a national shortage.

It’s fair to say the gig economy is scooping up many of the part-time and casual workers who would traditionally consider hospitality. This is big business – and growing too. In Britain the gig economy has more than doubled in the past three years, accounting for 4.7 million workers, while in the US more than 7% of all workers are expected to work in the gig economy by 2021.

This pressure on the workforce is forcing change in our sector, from de-skilling kitchens to offering better pay and improved working conditions.

James Hacon predicts companies will work even harder at becoming great employers in 2020 and increasingly turn to marginalised groups to fill the recruitment gaps such as training youngsters from disadvantaged backgrounds and people who are homeless. We’ll also see the first major brands trial gig economy-style employment options offering greater flexibility, which will be fascinating to watch.

Pay to dwell
There has been a 159% rise in remote working in the US since 2007 and it’s estimated almost half the UK workforce will work remotely by 2030. It’s the way of the world and likely to increase as remote working aligns closely with what people want. In a report published recently by the Great Place To Work Institute, out of the top-ranked companies three-fifths (60%) actively promote remote working.

This change in the way people work is resulting in a changing dynamic for the hospitality sector, not least a challenging time for contract caterers and less after-work drinking. A negative for some sub-sectors is creating a boom in others. For hotels and members’ clubs, remote working has brought new customers but not necessarily more revenue amid long dwell times and low spend. During the past few years we’ve seen many attempts by hotels to maximise revenue from this source such as implementing co-working spaces and memberships but lobbies remain full of laptop-tapping workers who aren’t necessarily paying their way.

Hotel chain Citizen M paved the way for “paying to dwell” last year by charging a fee to use space and Wi-Fi in their properties. Heleri Rande predicts we’ll see more of these pay-to-use solutions developed for busy lobby spaces in 2020. This will be accompanied by even more co-working spaces in hotels. We also predict this will be the year rural pubs and bars investigate the remote-worker opportunity.

Mass adoption of customer technology
We saw McDonald’s start to roll out kiosks in 2015. Last year the business spent big on two technology acquisitions – Dynamic Yield and voice assistant system Apprente. Some reports suggest the company is seeing increases of up to 30% in order value alongside a reduction in labour costs.

Coupled with the sector-wide increase in online ordering and delivery, it’s clear consumers are increasingly becoming used to using technology to transact.

With recruitment tough and minimum wage on the rise, James Hacon predicts 2020 will be the year in which smaller brands see the benefit of investing in customer technology that’s focused on pre-ordering or in-store digital ordering to reduce labour, collect more customer data and drive up average spend.

Food delivery comes of age
Food delivery has been the top trend of the past five years, with some figures suggesting the market has grown up to 20% in the US. It’s hard to argue when you see companies such as Deliveroo report its sales surged 72% last year, albeit with growing losses.

We certainly saw movement in this aggregator market in 2019, with continued consolidation. Going into 2020, we’ve seen the battle between two competing interests to acquire or merge with Just Eat. Deliveroo, meanwhile, has been tied up in challenges with the Competition and Markets Authority surrounding Amazon’s sizeable investment – but what about the restaurants? In the past few years almost every brand has jumped on this runaway train, seeing it as an add-on to bolster business with few really committing to it long-term.

Michael Ingemann predicts more brands will take a strategic approach to the delivery opportunity in 2020, with an increase in the appointment of dedicated senior leaders to head up this revenue stream, improved proposition dedicated to delivery, and a more active approach to operationally delivering the service efficiently and profitably. This may lead to more companies taking delivery in-house, splitting their business between providers and in turn seeing cuts to commission levels.

It will be interesting to see how many of our predictions become reality. We’ll keep a close eye out, that’s for sure! 
Angela Malik, Heleri Range, James Hacon and Michael Ingemann are partners at Think Hospitality

New-style resolutions by Ann Elliott

I always sit down at this time of year, dig out the goals I set myself 12 months ago for the year ahead, and review how well I’ve done against them with a large glass of Gavi in hand. As my first resolution is usually not to drink in January, the Gavi doesn’t symbolise a particularly optimistic approach to goal achievement or set a good example for the next 11 months.

I’ve been doing this for the past 20 years and have yet to achieve 50% of my goals, never mind all of them. You’d think I would know by now what to do, how to do it and how to stick to resolutions but it appears that isn’t the case. In fact, the same goals seem to reappear year after year – like Groundhog Day. It can be depressing but my second glass of Gavi usually sorts out the negative nonsense.

Occasionally – twice in fact – to ensure I’ve set the right goals and have the processes in place to achieve them, I have adopted a “never fail” system – the “SELF Journal by BestSelf. Undated Daily, Weekly and Monthly Life Planner Organiser with Proven Productivity and Positivity System for Maximum Achievement and Goal Success”. I bought it from Amazon, which knows a thing or two about setting and achieving goals so you would think that’s a good place to start.

Not for me, it seems. So boring. Such tiny handwriting required. Such repetition. So time-consuming. So obsessive. I wanted to rebel at the strictures, to scrawl across its pristine neat lines and tell lies about what I had achieved minute by minute, hour by hour and week by week. I raged at its constraints and mentally screamed: “This is not why I gave up corporate life!” I failed two years running in the first two weeks of the year with this fail-safe system and felt that sense of failure keenly for the next 50 weeks. 

This year I ditched that nihilistic and ultimately unsuccessful approach and, with cup of tea in hand, sought a friendlier and calmer process for goal-setting, which I pinched off my son (thank you James). I can’t say whether this will succeed or not, but it feels more me and therefore has half a chance. This is it.

What were your five key achievements in 2019?
This was a positive way to start the exercise and the year. Interestingly, few of my key achievements seemed to relate closely to the goals I set myself at the start of 2019. This meant it was time for a bit of self-reflection on why on earth I wasn’t more realistic in the first place and how I could be more sensible for the year ahead. Did I really want to write a second book? It turns out no, I didn’t really.

Who were your five biggest supporters in 2019?
My dog isn’t my biggest supporter and, while my dad loves me, he doesn’t really know what I do. I resisted the urge to write down everyone I didn’t think supported me, which would have driven me back to the Gavi. Paul Charity is very high on the supporters list (thank you Paul for all you have done for me in the year).

What are five of your best memories from 2019?
It turned out there were loads – all involving friends and family and/or eating and drinking. Funny that.

Name five people you want to connect or reconnect with in 2020
This was a long list. If you receive an email some time soon, you were on this list.

What are your five goals for 2020?
These included a happy team who feel fulfilled and have the opportunity to develop their potential; to only work with clients we like that we can help become more successful (and prove it); to give back to the sector and continue to build on the success of Plan B with Emma, Holly and Kate; to have a successful Airbnb venture (first guests arrive next Friday); and to create memories through the year so the first question is easier to answer in 12 months’ time.

This was a much better and more fulfilling process than previous years. Time will tell but I feel more focused, optimistic and realistic about the year ahead – for myself and the sector.
Ann Elliott is chief executive of Elliotts, the leading integrated marketing agency in the hospitality and leisure sector –

Year of the circular economy by Karen Lynch

For a second year running, 2019 saw our sector living in an “anti-plastics” environment. In hospitality we celebrated the fact consumers were finally beginning to think beyond convenience, questioning “single use” and understanding the negative impact this can have on the future of our planet. We heard pledges of #plasticfree but, however well meaning, we often failed to take the time to understand the bigger picture. For example, where do carbon emissions fit in?

This year our sector needs to be smarter. We need to move beyond just bashing plastics and see past brands jumping on the environmental bandwagon to gain media coverage. We need to ensure we’re not switching plastic items to a new material only to find there’s no recycling infrastructure to support that choice.

This is the year we have to:

– Realise carbon emissions are the most important measure of our impact. We should count them like we do our money

– Make positive and sustainable improvements to our emissions by getting to grips with the concept of “circular economy”

– Address the issue of “single-use” materials more holistically to make better-informed choices for the environment

There’s a real opportunity for our sector to make a difference – we have a huge role to play in positively influencing our customers through our actions. Get this right and it’s not only better for the planet, it’s better for business too.

There’s a clear forward path – the circular economy – but what does that mean? I’m a huge fan of the Ellen MacArthur Foundation, which states: “A circular economy is based on the principles of designing OUT waste and pollution, keeping products and materials IN use, and regenerating natural systems.”

As your understanding builds, you’ll see how our sector is already embracing the three underpinning principles of circular economy – but where else could you make a simple change?

Rethink your approach to waste and pollution via reductions, removal or change
The Sustainable Restaurant Association’s principle of using less, but better-quality, meat is a great example. It’s the single biggest way our sector can reduce carbon emissions. Or perhaps you are already working with technology such as Winnow? I have loved following its story of reducing food waste to increase profit margins and cut carbon emissions. With WRAP stating the restaurant sector is accountable for 1.5 million tonnes of waste per year (40% of it organic) if you aren’t focused on these areas already, 2020 is the year to do so.

Keep materials in use
Are you doing this by adopting reuseable formats or using products or packaging made from their former selves? Have you bought lids for containers rather than reaching for cling film? Inspired by the “be more sustainable to be more profitable” sweet spot, at Belu we love working with our customers to identify where water bottles aren’t generating revenue and either removing them or replacing them with our filtered water and reusable bottle alternatives. While much of our sector remains dependent on the sale of bottled mineral water to keep their business financially sustainable, newcomers are seeing things differently. 

Regenerate natural systems by enhancing natural capital
Make well thought-out sustainable decisions rather than knee-jerk reactions on whatever is topical or most visible. In Finland, for example, operators are growing food on-site using hydroponic and aerobic systems, with some businesses cutting waste by 80%, creating their own circular model.

We can help regenerate the Earth’s natural systems by keeping materials in use and out of landfill. Only use packaging that’s made from recycled content, ideally 100%, so no fossil fuels are required to manufacture new raw materials. This will usually result in a big cut in carbon emissions. Many of you will be surprised, and disappointed, to learn neither glass nor cans are a better single-use alternative to recycled plastic.

If you can’t put specialist recycling in place on-site, please stick to mainstream recyclable materials, especially if your customers “take away”. There’s nothing more depressing than discovering cartons and containers you’ve paid more for are being incinerated because they can’t be easily recycled, with the material falling out of our circular economy.

We all know we need to act but it always feels like there are a million reasons to tackle it later. The simple truth is our planet has an ever-growing demand for its finite resources and time is running out. If we could only imagine and believe what finite really looks like, perhaps we’d all move a little faster?
Karen Lynch is chief executive of social enterprise and ethical water company Belu

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