Sometimes it is worth watching your language. People in general, market researchers in particular, love to classify and compartmentalise, to construct a sense of order. We build our boxes and fix our definitions. Eating out or eating in. Foodservice and food retail. On-premise or off-premise. Draught or packaged. They are explicitly opposite, and implicitly exclusive: you are in one or the other, not both.

But the important stuff often happens in between the lines of classification – specifically, on the fuzzy boundary between retail and hospitality, which is becoming increasingly interesting.

Start with beer. Historically there have been relatively limited examples of bulk beer being sold into the home drinking market – a few polypins for parties, and sporadic attempts by off-licences to sell “real” beer in four-pint plastic flagons. I tried it at a long-gone chain in the north west of England, before many Propel readers were old enough to drink, and it is still to be found in some of the more imaginative drinks specialists (the imaginative being most of those that survived).

Now there is a growing presence, in the specialist online and offline retailers in particular, for the five-litre minikeg. A wide range of brewers has adopted the format: the crafty micros such as Thornbridge or Windsor & Eton, the Zerodegrees brewhouses, the regionals such as Sharp’s (now part of Molson Coors) and Adnams, and the major brand owners such as Heineken.

Readers of a certain age may, of course, contend that the minikeg is merely a modern metric descendant of the old Party Seven as made famous by Watney’s (although minikegs have to be easier to get into than Party Seven cans ever were …).

But there is more: “fresh beer”, for example. In Australia, the now Japanese-owned brewer Lion is rolling out its “Tap King” system for six of its brands, including Toohey’s: a three-litre keg for the fridge, offering drinkers the concept of draught beer at home, with each PET refill bottle lasting for three weeks. Closer to home, Heineken is said to be considering its own “iconic high-end home appliance” for beer dispense.

At store level, the Australian drinks retailer Dan Murphy’s is piloting “growler stations” in two of its 160 stores, selling one to two-litre glass or plastic bottles for draught beer. In Murphy’s case it will be draught craft beers, for brewers that do not have bottling facilities, with the retailer doing the bottling in-store.

In the United States, Whole Foods Market has been serving beer for growlers since 2006 and now has 40 “growler stations” with, according to the Wall Street Journal, plans for more, as states legalise the sale of growlers outside of breweries and bars, including in some cases, by restaurants. And as Martyn Cornell has already pointed out in a recent Propel Friday opinion piece, Whole Foods in the UK is also playing this game.

Away from the retailers, the Marlow-based Rebellion Brewery, featured in Tom Kerridge’s Proper Pub Food television series, has been selling impressive volumes of “fresh beer” from its brewery for 20 years, in bottles, in mini-kegs and in mini-barrels, to its membership and direct to the general public.

Outside beer, consider the emerging breed of wine stores, such as Decanter magazine’s regional merchant of the year, Loki, in Birmingham, with its “chill out” tasting room. Or look at last year’s International Wine Challenge UK Merchant of the Year, Cambridge Wine Merchants. It has on and off-trade co-existing under the same roof.

But that is enough about drinking. The best example of boundary-bending in food is home delivery. Nearly 30 years in the UK, and Domino’s now sells more than 60 million pizzas a year to a nation of sofa-dwellers blissfully unconcerned whether their meals are defined as out-of-home or in-home. They just enjoy the convenience.

But then we discovered food on the go, the most dynamic part of the market, and another category crasher. In the early days, you knew it was potentially interesting when the market researchers were unsure how to categorise a sandwich from Sainsbury’s. Now, according to some estimates, food to go is a £6bn market.

We should have known this retail retaliation was coming. Here’s a line from the chief executive of Marks & Spencer: “We see substantial growth opportunities for our food business. It will not come by taking share from other retailers but by taking business away from restaurants and takeaways.” All very topical: this quote must be from Marc Bolland.

Wrong. It dates from 2001, from the then chief exec, Luc Vandervelde, signalling 12 years ago that UK food retailers would not stand idly by and let the foodservice sector annexe half the food business. That US-based vision was always a convenient but simplistic benchmark.

However, it has taken until now, and the emerging pressure on large food retailers to redeploy their big-box floorspace, to trigger more “disruptive” change along the fuzzy lines that separate food retail and foodservice.

In-store restaurants have long been an under-exploited facility in foodstores. They have failed to offer the kind of ambience, service and comfort that many of their customers would aspire to. But change is afoot. Tesco’s Decks restaurant format seeks to break those norms, not least in terms of service levels, although it remains to be seen how it plays out in relation to the group’s recently acquired Giraffe brand. These have rather overshadowed Tesco’s perhaps equally significant tests of its City Kitchen “build your own” grab-and-go prepared meal stations, another example of category overlap.

Elsewhere, John Lewis has signalled its ambitions to ratchet up its restaurant proposition, and B&Q has also hinted at café and restaurant partnerships in-store – perhaps a build your own sandwich proposition …

Blurring market lines has a brand dimension, too. Look into the Gondola annual report, and do some back-of-the-pizza-box calculations, and it is clear that PizzaExpress is selling more pizzas through retail than it does through its restaurants.

So, to borrow an overused cliché, it’s always worth thinking outside the boxes, or in between the lines, of established market definitions. Classifications falsely imply that we have captured everything in our neat boxes, that our understanding is complete. But if you find that researchers can’t put your concept idea into one of their pigeonholes, you might just be onto a winner.

Balcombe, in West Sussex, is the sort of sleepy little village – one pub, several small shops, a few hundred houses – that could normally expect never to trouble the front pages of the national newspapers. But all summer it was making headlines as locals, and others, protested against the possibility of “fracking”, the controversial method of pumping water, sand and chemicals under pressure deep into the ground to extract oil and gas, taking place in the vicinity. It was not, however, the worry that potentially carcinogenic chemicals may escape and contaminate groundwater around the fracking site, or the possibility that fracking might cause earthquakes, that apparently most worried Balcombe locals, and brought them out on the streets with banners and loudhailers. Instead it was the fact that house prices in the village had fallen 20% since the possibility that fracking might take place locally had been announced.

There are few things that will get a Briton rushing to the barricades faster than a threat to the price of his (or her) home. So the survey by the estate agent Wetherell looking into the effect of different types of restaurants on home prices close by looks like bad news for certain sections of the hospitality industry. Because the Wetherell survey suggested that having a fast-food restaurant nearby is going to depress the value of your home, relative to other fast-food-free areas. If true, that is a guaranteed motivation for protesters anxious to stop any new fast-food operation opening up near them: fear that the price of their nestegg is going to be contaminated by sudden proximity to hamburgers and chips.

The survey, carried out by Wetherell and Dataloft, using data from LonRes, Michelin and Square Meal, analysed home values in five of the six districts in the West End of London – Mayfair, Marylebone, Fitzrovia, Soho and St James’s. It found Fitzrovia and Soho, the West End districts with the highest number of fast food outlets, at 14 in Fitzrovia and 18 in Soho, making up 75% of the West End’s total, had the lowest property values in the West End, at £1,130 per sq ft and £1,283 per sq ft respectively. The survey also found that prices of West End homes on the doorstep of fast food outlets “underperformed” the average price growth for the region by up to 15%. 

But correlation, of course, is not causation: anyone who knows the West End will also know that the streets of Fitzrovia and Soho are probably the liveliest, noisiest, most crowded in the district, in part because these are not just residential areas but also the homes of hundreds of businesses. It is the existence of all those businesses, of course, that encouraged the opening of all those fast-food eateries, feeding advertising agency workers, film company staffers and the like. At the same time, the sheer bustle of the “West End’s East End” is going to mean that fewer people will find it a desirable place to actually live, rather than work, which will itself depress home prices. So the large number of fast-food joints, and the lower property values, are products of the same phenomenon – the busy environment – but the second is not itself being caused by the first.

Conversely, the survey found that having a high-end, prestigious restaurant nearby seemed to boost house prices. Mayfair, home to 20 of the 29 Michelin star restaurants in the West End, also has the highest property values in the West End, with prices for flats currently averaging £1,953 a square foot. The W1K postcode, which includes the Scott’s and Le Gavroche restaurants, has seen residential values rocket by 61% over the past six years, 20% above the average growth rate for the W1 district. In South Audley Street, when Richard Caring opened the restaurant 34 in a previously neglected office block, according to Peter Wetherell, the agency’s head, “this has helped to make the flats in No 33, an adjacent apartment building, extremely desirable and property values jumped up 15% after the restaurant opened.”

But again, correlation is not necessarily causation. Generally, Michelin star restaurants are going to open close to where people live who can afford to eat in Michelin star restaurants, and people who can afford to eat in Michelin star restaurants generally live in expensive homes. It seems more likely that Michelin star restaurants are attracted to areas with the highest property prices, rather than the Michelin star restaurants are actually causing those higher property prices.

Still, fast-food operators need to look out for the Wetherell survey being used against them by people opposed to a new burger outlet opening nearby. “House prices threatened” is a potent rallying cry. On the other hand, more high-end operators ought to be including a copy of the survey in the evidence they submit to planning committees when seeking permission to convert somewhere to one of their venues: “Let us open a restaurant near you, and see the value of your home soar!”

We held our 12th birthday party last week at the Parcel Yard in Kings Cross which went really well and seemed to be enjoyed by everyone. It made me reflect on why I have spent over 30 years in the industry (18 years in operations and marketing with Whitbread and 12 years running Elliotts) and why I love it so much:

 

Very few restaurants or pub companies (or indeed individual sites) can survive without putting the customer at the heart of their operation. Outstanding companies are besotted with exceeding customer expectations. They really understand every element of the customer journey, ensure their brand is consistent every time they “touch” the customer on this journey and look to impress them every step of the way. The best operators I know talk about the customer all the time. Their managers talk about customers all the time. Their teams delight in having happy customers. They know who their customers are, why they visit, what they want, and customers are the reason they get out of bed in the morning.

TripAdvisor is the most potent and critical insight for operators. It just cannot be ignored (and I believe should always be responded to). It provides such brilliant and instant feedback, which the best operators take to heart and action. Other sectors are still struggling with cumbersome mystery visitor programmes, while our sector has this amazing tool right there every minute of the day on their phone/iPad. Systems exist to combine TripAdvisor feedback with other customer insight providing on going and instant digital scorecard feedback. I think that is just fantastic.

 

I know so many ops directors, MDs and CEOs who have started on pot wash and made it to the top. They have had outstanding mentors, on the job training, real empowerment, the opportunity to work directly with customers and meaningful development plans. Through a career in our industry they learn how to take responsibility, make decisions and lead teams of people. It is a brilliant career for anyone who wants to learn, work hard and succeed.

I love the people I meet (with some, but luckily very few, exceptions). It has some wonderful characters who you want to spend time with – it’s a very sociable industry where people are genuinely pleased to meet others. Just witness all the dinners, awards, conferences, lunches and events which exist where you can network, pick up recognition or learn. I genuinely feel I have made some outstanding friends in the sector whom I can turn to for help and advice, which they give willingly and freely. We would not be as successful as an agency without input from the these friends. It is a real testament to the brilliance of the sector that those who have been successful are so keen to pass on their learning and experience to others without needing payment or acknowledgement.