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Morning Briefing for pub, restaurant and food wervice operators

Fri 25th Apr 2014 - Friday Opinion
Subjects: Picking your battleground, vital ingredients for food production, the lifespan of new-build pubs and drinking by numbers
Authors: Martyn Cornell, Chris Edger, Colin Wellstead and Paul Chase

Don’t let your enemy pick your battleground by Martyn Cornell

Every good general knows – or ought to know – that it’s a huge mistake to let your enemy pick the battleground. So I was horrified to see the statement from the Association of Licensed Multiple Retailers (ALMR) last week banging on about “unsupervised drinking in the home”, and how much of a Bad Thing this was compared to nice safe supervised drinking in pubs, clubs and restaurants.
It cannot be stated firmly enough – what I, you and anybody drinks at home, and whether or not it’s “unsupervised”, is no concern of the ALMR, the government, or anybody else. For the ALMR to even start talking about something called “unsupervised drinking in the home” is to concede far too much ground to the neoprohibitionists masquerading as the health lobby, who would absolutely adore the idea of supervising everybody’s drinking, all the time, at home or out of the home, with a view to halting it entirely, if they could.
I understand completely why the ALMR is angry at continued attempts to restrict out-of-home drinking, through Early Morning Restriction Orders and the like, and the constant striving to load extra costs on the licensed trade through Late Night Levies and so on, supposedly to reduce “alcohol harms”, when there has to be a strong argument that much of the alcohol consumed by people involved in “harms” has been bought cheaply through the off-trade, at supermarkets and the like and drunk at home first, via “pre-loading”, rather than consumed in pubs and clubs.
Indeed, the figures the ALMR quoted show nearly 70% of alcohol in the UK is now consumed away from licensed premises: and it certainly seems to be the case that supermarkets and other purveyors of alcohol to be drunk at home are paying little or nothing towards any perceived costs to society from violence and disorder on the streets caused by the consumption of the alcohol they have sold, while pubs and clubs, effectively, get all the blame and suffer all the consequences for drinking that has taken place away from their control.
And yes, I do believe that there ought to be a policy to encourage more drinking out of the home, in pubs and bars, restaurants and cafes, rather than at home, because even the staunchest libertarian has to concede that it’s far better to encourage drinking as part of a social environment rather than a solitary or isolated one. To that extent, the enormous tax and cost disadvantages the on-sales trade suffers compared to those selling alcohol for consumption away from licensed premises, with the result that it is so much cheaper to drink at home than down the pub or in a restaurant, are indeed something the ALMR should be campaigning against, as should the entire industry: there really ought to be a solid and united front to try to equalise the total tax burden between on-sales and off-sales, in terms of VAT, business rates and all the rest.
But to suggest, as the ALMR now seems to, that drinking at home is actively bad, because it’s unsupervised, is totally the wrong tactic. There are many excellent reasons for encouraging people to go down the pub, but “so that we can keep an eye on what you’re drinking” certainly isn’t one, and nor should it ever be. It implies strongly that “only supervised drinking can be good”, a position only a short step from making people apply for licences to drink, and allowing them to purchase only a set amount each month.
I lived in the UAE for two years, where exactly that system was imposed on expats wishing to drink at home: you had to get a letter from your employer saying they had no objection to you purchasing alcohol, you then had to take that letter with a passport-sized photograph to a police station a deliberately awkward distance away to be issued with your one-year drink licence, upon payment of a sum equal to £65 or so, and that licence had to be produced and stamped every time you went to the (hidden and totally unadvertised) bottle shop, to ensure you did not exceed your monthly allowance. What happened, of course, is that anyone who did not have a licence, which meant most of the extremely large Indian community in Abu Dhabi and Dubai, simply paid in cash. So much for supervision.
I don’t normally like to pull out the “slippery slope” argument, but I certainly do not think the ALMR has quite thought through all the implications of promoting pubs as a “safe, supervised and secure environment” for consuming alcohol and declaring that tax and other policies that encourage people to drink at home rather than on licensed premises “will only serve to exacerbate health harms”. It’s not the ALMR’s job to compare the health harms of drinking in pubs with the health harms of drinking at home. Even raising the comparison is yielding too much to those who want to concentrate solely on the “health harms” of alcohol. Promote the pub as a great place to drink by almost every means – but not on the grounds that it’s “healthier” than a pint or a glass of wine in the living room.
Martyn Cornell is managing editor of Propel Info

The seven vital ingredients for effective food production by Chris Edger

Too many leaders in the UK hospitality industry fail to understand kitchen processes, practices and people. At present there is a veritable explosion of food-based concepts in the UK, heralding a golden age of out-of-home eating. But what do these concepts need to do to ensure that their food production processes in dispersed multi-site locations build and sustain a reputation for quality and consistency? After all, it was the father of modern cuisine and kitchen “brigade” organisation, Auguste Escoffier, who observed over 100 years ago that “inattention never pays off in the kitchen,” and “success is the sum of a lot of small things done correctly.”
Over the past 50 years, particularly in fast-food concepts, the standardisation and systemisation of food production methods have striven to take the human dimension out of the cooking process, to achieve Escoffier’s vision of seamless consistency. These methods have been partially replicated in the UK pub-restaurant and urban casual dining sectors, but factors relating to seasonality and variety mean the human factor in “getting it right” still looms large.
So how is the sector geared up to handle the challenges posed by exponential growth and the need for quality? Not very well, according to the 2013 “State of the Nation” report on hospitality and tourism by the recruitment consultancy People First. It estimated that there were 207,000 “chefs and cooks” and 427,000 “kitchen and catering assistants” in the UK, but that these roles were by far the hardest-to-fill occupations. The report said that “chefs (in particular) remain difficult to recruit, as there has been an increase in demand for these skills as the pub industry has started to focus on food and the restaurant industry has continued to grow.” These job roles also had the following characteristics; high migrant labour (32% of kitchen workers come from outside the UK, against 24% within the hospitality/tourism sector generally and 13% in the whole UK workforce), low relative pay (£19,000 a year average earnings for chefs, £16,000 for cooks and £13,000 for kitchen assistants, against a UK average of £32,000 a year in other professions) and poor training (People First found only 15% of “skilled” trades such as chefs received training).
These statistics reinforce the caricature of these “engine room” jobs as being poorly paid, undertrained, transitional roles with low status and recognition, in spite of noble efforts by national skills agencies to “professionalise” them over the past 15 years.
But such an analysis, while reflecting the mean, does not highlight what the best do. For instance, according to a recent (confidential) cross-sector employment survey, the pub-restaurant company rated by the Peach Survey as having the highest perceived quality also had the lowest kitchen manager turnover (13%, against an industry standard of 33%). Indeed, one of the by-products from teaching executives in this sector and the research that I conduct to underpin my books (the third Professional Area Management includes case studies from ten food service brands) is that I have some close insight into what the “best” (and “worst”!) do. I suggest there are seven inter-linked ingredients for effective food production:
Expert leaders – great, sustainable food-led brands are populated/overseen by leaders (policy makers and operators) who, in addition to understanding the service concept, “get” the food production start-point and create a culture that is excited about food. To quote Escoffier again, “as far as cuisine is concerned, one must read everything, see everything, hear everything, try everything, observe everything, in order to retain in the end, just a little bit.” Because of the legacy wet-led paradigm within the UK industry, many leaders, both strategic (executives and technocrats) and operational (retail directors, area managers and GMs) simply lack (or avoid) understanding of kitchen processes, practices and people. Their lack of food production capability/insight leads to missteps, particularly in relation to some of the factors below. 
Coherent design – in tandem with the first point, effective back-of-house food production (which binds to front-of-house service) requires end-to-end coherence, taking into account brand positioning, menu development, supply chain effectiveness, purposeful machinery, ergonomic flow and technology deployment. The design should aim to meet the main principles of process efficiency, namely, safety, quality, speed, lowest cost, dependability and (where required) flexibility. 
Simple controls – to increase system resilience (for legal/EHO purposes), limit perishable waste (for P&L purposes) and ensure high standards of speed/quality (for customer purposes), food production requires rigorous scheduling, measurement and monitoring. The best kitchen planning/management information systems are timely, accurate and simple (given turnover and language issues). 
Aligned support – not only should roles/responsibilities be clearly denominated for kitchens, a supporting infrastructure (area chefs, kitchen recruiters and trainers) must also be aligned to serve food production needs. As the importance of food has grown in the pub-restaurant sector, some of these “kitchen specific” support roles are beginning to achieve the same status and importance as “generic” field-based support in exemplar organisations. Companies that assign high levels of revenue investment to the provision of “aligned” field-based kitchen support achieve disproportionate paybacks. 
Career development – intensive technical/behavioural training mechanisms (both face-to-face and e-learning) to underpin the food production operation should be taken as a given at all levels within the kitchen. When internally and/or externally accredited, they are lent further weight; research demonstrates that kitchen workers on apprenticeships/NVQs are five times more likely to stay. The most important thing, however, is that organisations have clearly defined career progression structures and they (that is, their HR teams and field-based managers) actively progress talent through these pathways. “Home-grown” is generally more productive and stable than expensive “bought in” talent. 
Incentives and benefits – obviously, companies should pay on or above local market rates to their kitchen teams. If they fail to do so, they will experience high levels of “promiscuous” turnover, given the arduous and strenuous nature of the profession. Monetary incentives are also important: they generally work when they are tied to a few key performance indicators with realistic targets, have limited caveats/“gates” and are paid out quickly/regularly. Ensuring that FOH staff “tip into” the kitchen is essential for unit harmony. Benefits are also important (uniforms, meals on shift, coffees, decent rest room facilities and so on), as is recognition – local/national awards, tokens and prizes which boost morale, efficiency and stability. 
Improvement and investment – doubtless there will be regular menu, pricing and specification changes; these will impact volumes, capacity and throughputs. Are companies making appropriate investments in machinery, facilities, technology, training and personnel to keep up? If not, frustrated and overworked kitchen personnel will migrate to more benign local businesses. 
In addition to the above, the encouragement of good relations/communications between (knowledgeable) unit GMs and their kitchen leaders (whether chef, cook or kitchen manager) is vital. It is notable that at a company award ceremony of one of the industry’s leading pub restaurant companies recently, a significant number of managers who were decorated for excellence, were from units where their kitchen managers/head chefs had been recognised for exceptional and consistent performance. 
So, leading, designing, organising, motivating and improving are essential ingredients that lie behind effective food production because as (once again) Escoffier observed: “The cuisinier loses his reputation when he becomes indifferent to his work.”
Professor Chris Edger is the author of two books on multi-unit leadership and teaches multi-site managers at Birmingham City University

Is this really the lifespan of a pub built in the 1990s? by Colin Wellstead

I read with considerable interest the recent article in Propel Info (3/4/2014) about the sale of a closed pub, the Master Locksmith in Derby, its potential demolition and the plan to rebuild a brand new, purpose-built KFC. This really got me thinking as it is probably the first case where I have been around for the whole life of a pub, albeit a very short life, which, in so many ways, I really struggle to comprehend. Remember, I am from an era before pop-ups!
I suppose my story starts in late 1992, only just over 20 years ago, when, in my time at Christie + Co, I was acting for a brand new pub company, Tom Cobleigh, headed by its charismatic but very “northern” managing director, Derek Mapp. This, for those with short memories, was just after the Beer Orders had turned the pub industry upside down, with some 11,000 pubs being sold or freed from the tie, all between 1989 and 1992. What set Mapp apart from most of the other emerging pubcos at the time was that he was predominantly operating managed houses. He was intending to grow an estate in the East Midlands and Yorkshire, mainly through the acquisition of going-concern public houses.
Enterprise Inns was only formed in 1991, with the acquisition of 368 tenanted pubs from Bass and JD Wetherspoon did not open its 50th pub until 1993, with the majority in London and the South East, often conversions from retail outlets. So it was a very different landscape then from the pub industry as we know it nowadays.
Earlier in that year, we had sold Derek his first pub, the Half Moon at Worksop, a former Scottish and Newcastle managed house, for £325,000. We then acquired one or two individual sites as well as a package of three managed houses from Trust House Forte, which had acquired a group of pubs, including the Harvester chain, from Courage in the late 1980s. Derek was particularly pleased with this acquisition and we continued our dialogue with THF and agreed a deal to acquire two more managed houses from them. This deal was progressing well and was close to an exchange of contracts. Right at the eleventh hour, Forte threw a spanner in the works. The company was in default on its lease obligations on a site at the Meteor Centre in Derby. It was long past the deadline to have developed a Little Chef on the site. It now insisted that if Tom Cobleigh wanted these two other sites, then the company had to buy the long-leasehold interest of the greenfield site, subject to the problem of not having built a Little Chef.
To say Derek was annoyed was a gross understatement. I met him at the site and the air was extremely blue. After half an hour of him screaming at me: “How can they do this to me?”, he suddenly said: “Wait there,” jumped in his car and drove off. Another half an hour later he returned a little bit calmer, only a tiny bit, and said: “F… them, we’ll do the deal, and I am going to build a brand new pub on the site.” The Master Locksmith was born, although if Mapp had had his way, it would have been called the Senile Chairman, though I can’t say after whom!
Again, this was a totally different landscape then to now with very, very few brand new purpose-built pubs being developed in the early 1990s after the large numbers of estate managed houses of the 1960s and 1970s and, to some extent, the 1980s. So it was built, and the Master Locksmith opened with great success in 1993: I recall it doing well over £8,000 a week back then, more or less from day one of opening. It was also the inspiration for many new-build managed houses that were, I believe, the rock of success for Tom Cobleigh as it grew.
The Master Locksmith was closely followed by the Widecombe Fair on a site that also housed the Tom Cobleigh head office in Mansfield, and the Bill Brewer, right next door to the then new Bass HQ at Burton on Trent, and a bit (maybe a lot) of an embarrassment to Bass. That first new-build pub really was the forerunner for a lot of the success of Tom Cobleigh, even if built almost as an accident.
Mapp and his team were also very inspirational with their trading ideas. I believe they were the first to promote two meals for a reduced price – then the extortionate 2 for £5 main meals. His philosophy was that the northern man would take the wife out early doors for a treat, she might have a pudding as an extra treat, he would have four or five pints of bitter and she would drive home!
Tom Cobleigh’s success continued, cumulating in the sale to Rank in 1996 for £123m. At the time, it had 44 managed houses and 17 tenancies. This followed the successful flotation of the company in 1995, which made millionaires of the four founding directors. The venture capital firm EAC, as it then was, stayed invested in Tom Cobleigh until the Rank sale, making a 4.6 times return on its capital invested. Not a bad success story all round, and I believe the Master Locksmith saga may have played a small part in the eventual outcome!
The Master Locksmith then passed through several owners, always as part of a package. I think I am right in saying Rank sold to Electra Partners, which sold to Spirit, then Punch and finally on to Orchid, which appears to have disposed of the site to KFC. I again looked at the pub as part of the due diligence acting for Punch when it acquired Spirit in 2005 in a £2.68bn deal. Even then the Master Locksmith was trading well – I recall turnover around £12,000 per week – and was considered as a potential transfer to lease, but it was decided to keep as a managed house.
Admittedly, I haven’t seen the pub or any trading figures since then, but it does seem really strange to me that a relatively newly built public house, a mere 21 or 22 years old, has reached the end of its useful economic life. It is also a bit ironic that what was originally planned as the site of a fast-food diner might end up 25 years later close to its original purpose. 
Finally, I hope the current wave of operators developing new-build pubs, currently driven by Marston’s, enjoy a much longer and successful trading operation than the Master Locksmith. A sad and too-early demise, from my perspective.
Colin Wellstead is retired but was most recently chairman of the property agent AG&G and before that headed the pub and restaurant division at Christie + Co

Alcohol consumption and drinking by numbers by Paul Chase

It is a curious thing indeed when an industry hails as a success the news that consumption per head of the product it makes and sells is falling, or at least that the intoxicating ingredient of it is. And yet there seems to be almost unanimous acclaim from the sector for the recent news that in the UK the average level of alcohol consumption has fallen to its lowest level this century; indeed to its lowest level since 1980. One cannot imagine the motor industry saying: “Great news for deaths on the road – sales of new cars have fallen to their lowest level since 1980. Hurrah!” It is testament to the success of medical temperance in putting our sector on the back foot that we feel the need to conduct the debate on their terms. And there are dangers in doing this.
But let us just take a look at some of these numbers and figure out what is going on: First, there is more than one way of calculating alcohol consumption per head of population. What is being measured, in all cases, is the amount of undiluted ethyl alcohol in hectolitres consumed by the population of the UK in a given year; not the volume of drinks containing alcohol, but the amount of undiluted, or “pure alcohol” those drinks contained. You then divide the amount of alcohol consumed by the size of the UK population in order to arrive at a figure for average number of litres of alcohol consumed per head. Simple, right? Well not quite. It all depends on how you define “population”.
The British Beer and Pub Association (BBPA) and the National Health Service define population in different ways. The BBPA divides the amount of undiluted alcohol by the total number of people living in the UK; the NHS defines population as the number of people aged 15 years and older. If the numerator (amount consumed) is the same, but the denominator (population size) is reduced, then the result is a bigger number for average consumption per head. Here is the comparison:
BBPA: in 2004 UK alcohol consumption per head was 9.5 litres. In 2013 that had fallen to 7.7 litres. (-18.9%).
NHS: in 2004 UK alcohol consumption per head was 11.5 litres. In 2013 that had fallen to 9.6 litres. (-16.6%).
Whatever may be the reasons why different methods of calculation are used, the salient fact is that on both measures consumption has fallen consistently since its peak in 2004. Is this good news? Well, for our sector what is important is not the volume of pure alcohol sold, but the volume and value of drinks containing alcohol that are sold. For the health lobby what is important is the volume of alcohol as such that is consumed in a year, because they believe, wrongly in my view, that the population level of alcohol consumption is the principal driver of alcohol health harms.
The danger of conducting the debate on the terms of our critics is what do we say if alcohol consumption per head rises, as it might very well do as a result of the government’s abolition of the alcohol duty escalator and cuts to beer duty for two years running? I think the answer is to point out that it is incorrect to say there is a direct causal relationship between population levels of consumption and alcohol health harms. What the budget cuts seek to do is to target what we drink and where we drink it. What we drink – high-strength or low-strength drinks; where we drink – in the pub or at home; how we drink – with food or on an empty stomach; the time-frames for our weekly consumption – over a week or on a Friday-night binge; all of these things impact on whether our consumption is harmful or not. What sociologists call “cultures of intoxication” are largely driven by the social norms of your demographic group, peer group or local sub-culture. When I was at university, engineering students drank much more than those studying the classics; a young binge drinker may drink the same amount of alcohol each week as a middle-class businessman, but in a much shorter timeframe and in more risky circumstances.
The health lobby is fond of quoting the 1950 alcohol consumption level as its starting point. Using the BBPA’s calculation method, average alcohol consumption per head in 1950 was just less than four litres. But this was the era of post-war austerity and rationing. Far more typical are the levels of consumption over the 33 years from 1980 to 2013. Using either method of calculation outlined above, these have fluctuated up and down by around two litres per head. The BBPA consumption figures show it fluctuating from 7.4 litres in 1980 to a peak of 9.5 litres in 2004, and then falling to 7.7 litres in 2013; the NHS method of calculation show a consumption level of 9.4 litres in 1980, rising to 11.5 litres in 2004 before falling back to 9.6 litres in 2013.
The evidence simply does not support the alarmist health lobby view of alcohol consumption levels. The lesson for our sector is not to obsess over drinking by numbers. Our health messages need to be based on a detailed and sophisticated understanding of drinking cultures. To reduce harmful drinking means targeting harmful drinkers, not worrying the well into believing that if they drink more than a pint a night they will end up dying from a cancer.
Paul Chase is a director of CPL Training and a leading on-trade health an alcohol policy commentator

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