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Morning Briefing for pub, restaurant and food wervice operators

Fri 13th May 2016 - Friday Opinion
Subjects: The eternal appeal of fish and chips, how to waste £4m a year, engaging with Generation Z to bridge the skills gap, and why millennials queue – and restaurants love it
Authors: Glynn Davis, Paul Chase, Jill Whittaker, and Dan Einzig

The eternal appeal of fish and chips by Glynn Davis

While enjoying a trip to visit my family in Yorkshire recently we had what is a pretty rare meal for me – takeaway fish and chips. When I was younger growing up in the county this was a weekly treat but then when I moved south I was perennially disappointed whenever presented with this iconic dish so I gave up on it. I was later informed this was likely because I’d been brought up on my fish fried in beef dripping. Lusciously flavoursome but the delicate southerners apparently found this did not deliver the crispness of batter they required. They preferred a more tempura-style batter than the hardcore northern variety.
 
Apparently there are many regional taste variations with different oils, different fish, and different batter colours being preferred in various parts of the country. This is undoubtedly one of the reasons why there has never been a national fish and chip chain of any substance. Instead there are more than 10,000 largely independently owned fish and chip shops around the UK, with each having a tremendous amount of loyalty from their customers. NPD Group found the average shop has a relatively small but extremely loyal customer base of only 578 people. With such a small number these businesses thankfully see a lot more regular purchases from their customer base than the chains typically achieve.
 
This frequency of purchasing is not just a provincial thing because even in London – with a cornucopia of takeaway food options – a third of respondents to a recent survey by seafood company Young’s admitted to enjoying fish and chips once a week. A quarter of people named the dish as their favourite takeaway meal, with this rising to a hefty 45% for the over-60s. Despite the long-standing perception the dish was a cheap takeaway option, the reality is this has not been the case for many years. 58% of people stated a preference for cod and this is certainly not a cheap fish to buy for restaurateurs. Cod in any format is never the cheapest option on any restaurant menu I’ve cared to peruse.
 
Thankfully for the country’s fryers the regular fans of the dish have no problem with the pricing scenario and on average they spend £18.03 each month, with this rising to £23.97 in London. Whether this means the margins stack-up is another matter, and again it is possibly detrimental to a national chain being created. Harry Ramsden’s is the exception in having reached any sort of scale but various owners almost killed it through cutting too many corners – like the triangular shaped pre-battered frozen fish they took to using.
 
When I investigated the unusual situation of the extremely fragmented fish and chip shop industry in 2012, I found a number of players were confident of making the breakthrough. Serial entrepreneur Luke Johnson among others recognised the potential for building a brand in this category once you’d overcome the high cost of the raw materials and the misconception the dish is unhealthy – it has less calories than Indian food, a Big Mac and pizzas so I’m reliably informed.
 
Among those brimming with confidence to grow into a national chain were the owners of the Whitby’s restaurant in Yorkshire. With the backing of the DFS sofa chain founder Sir Graham Kirkham, the plan was to grow to 100 fish and chip restaurants, but with only two currently operating it seems national domination didn’t quite happen. Another business that was confident of being rolled-out was the London-based fish and chip shop Golden Union, with its owner harbouring grandiose aspirations of being the Byron Burger of fish and chip shops. It remains a business with a single outlet.
 
This brings us back to Harry Ramsden’s – now owned by Boparan Ventures – that looks to be the main contender for gaining a true national presence. After scaling back to 20 sites in the turnaround phase, the group’s chief executive Joe Teixeira has slowly built the business up to 25 company-owned units and 22 UK franchised restaurants. 300 fish and chip shops are planned but this will clearly take some time and so we can at this stage continue to accept the fact that this is a cuisine that defies becoming ensnared by overt branding. It continues to be the independently owned – largely single unit operators – that are winning and represent the vast bulk of the 10,000 fish and chip shops that dot the UK.
 
But then again maybe this should not be that great a surprise. The general public’s taste can be rather difficult to predict and to wholly comprehend. For instance, who can possibly give a rational explanation as to why as many as 45% of people in the Young’s surveys admitted to buying those odd battered sausages you find in fish and chip shops and even more surprising is the finding as many as 8% of people regularly take their life into their own hands and buy a pickled egg from their local chippie!
Glynn Davis is a leading commentator on retail trends
 

How to waste £4m a year by Paul Chase

How do you waste £4m a year? First, invent a disease and persuade lots of people to believe it’s real. Second, blame the disease on a chemical that millions of people who don’t have and won’t develop this alleged disease regularly imbibe. Third, fail to explain why the chemical causes the disease in some people, but not in others. Fourth, fail to identify the chemical mechanism that accounts for the symptoms of the disease (which are real enough). Fifth, having made up a disease and succeeded in convincing lots of people (including doctors) that it is real, find some pharmaceutical companies willing to invest in creating “treatments” that the taxpayer will buy, via the NHS, and you’re really on to a winner!
 
What am I talking about? Alcoholism of course. Anti-alcohol health campaigners believe that alcohol causes alcoholism; that addiction comes in bottles, not in a combination of people and life’s travails. Although the disease theory of alcoholism in its original form has been superseded by modern concepts of dependence, the term “alcoholic” has survived as a descriptor for the most chronic abusers of alcohol. These are very heavy drinkers who exhibit a level of dependence that is characterised by tolerance, cravings that lead to daily or even continual use, and by withdrawal symptoms if use is abruptly stopped. These symptoms are real enough, and have all been observed, but the inadequacy of this conventional understanding lies not in the observations, but in the processes that are imagined to account for them.
 
The notion alcoholism was a disease first gained currency in the aftermath of the repeal of prohibition in the United States in 1932. Previously people saw alcoholism largely as a personal moral failing, and one that led to moral degradation and the destruction of family life. The notion that something intrinsic to the chemical ethyl alcohol (the intoxicating ingredient in your pint) caused an addictive illness – a “disease” – and that doctors would affect a cure, or at least a treatment, enabled some of the political heat attached to the alcohol issue to subside.
 
The man most responsible for popularising the notion of alcoholism as a disease was an American researcher called E M Jellinek. And he was extraordinarily successful. A collation of public surveys conducted in the period between 1946 and 1950 indicated about 20% of the general population of the US thought alcoholism was a disease. Between 1951 and 1960 this had increased to 60%. By the 1960s 65% thought so. So, by the mid-1960s mainstream alcohol science had succeeded in effecting a hugely significant transformation of public and medical attitudes.
 
People understand that life’s circumstances influence choices around alcohol abuse, but overwhelmingly the temperance notion that alcohol causes a disease called alcoholism is now the consensus view amongst the public as well as the medical profession. One of Jellinek’s basic ideas around alcoholism is the notion of loss of control, and that left untreated, alcoholism could only amplify into ever greater use, and eventually to disease and early death. However, virtually every independent attempt to test Jellinek’s typology of alcoholism found that it doesn’t follow any particular path of development and that there is no internal mechanism that accounts for the alcoholic’s loss of control. On the contrary, researchers have shown that alcoholics with every degree of severity of the problem can recover without treatment and return to non-problematic drinking.
 
But pharmaceutical companies have a huge vested interest in keeping the folklore of alcoholism-as-a-disease going. In 2014, just in England, the NHS dispensed 201,789 prescriptions for drug treatments for alcoholism at a cost to the NHS of £4,184,656. There are four main drugs available. According to a Freedom of Information Act request to the Health and Social Care Information Centre in April, there were 139,208 prescriptions of campral costing the NHS £2,500,949; 22,070 of naltrexone at a cost of £862,828; 36,151 of antabuse at a cost of £547,343; and 4,360 prescriptions of selincro at a cost of £273,536. 

Space does not permit me to analyse the effectiveness of all of these drugs, but here’s just a taster. Antabuse is a purge and puke “treatment” that is deliberately intended to cause the patient to suffer quite severe symptoms if he or she drinks alcohol whilst using the drug. These include flushing of face, headache, dizziness, nausea and vomiting. It works by interfering with the chemical absorption of alcohol by the body and by producing severe hangover-like symptoms; it is used to promote abstinence. One in 30,000 patients worldwide develop liver damage as a result of this treatment. A famous study by Fuller in 1986 found no difference in abstinence rates for patients using antabuse as compared with patients receiving counselling alone. One of the main reasons for this was compliance. Only about 20% of users stuck with the treatment – and no wonder!
 
The other three drugs work by suppressing the reward pathways in our brains that are stimulated by pleasure – suppressing our opioid receptors and/or the production of dopamine. One of these drugs, selincro, is for “mild alcoholics” – nothing like segmenting the market by creating a sub-set for a made-up disease if you’ve created a niche product. There is precious little longitudinal evidence that these drugs work – even where we can agree what “work” means. But they work for the public health racket, of that there can be no doubt.
Paul Chase is a director of CPL Training and a leading commentator on alcohol and health policy 
 

Engaging with Generation Z to bridge the skills gap by Jill Whittaker

The skills gap isn’t a new concept. It has been so well documented in the industry and in the media that it’s hard to believe there is anyone in the hospitality sector, and in the wider public, who isn’t aware that there is a shortage of staff in restaurants, pubs and catering businesses across the country. Current research shows 47% of chef positions are hard to fill, a figure that rises to 66% in London. It is business owners that are feeling the true extent of the impact this is having, and many are faced with the challenge of continuing to run their operations to the same high standard with smaller support teams. 58% of hospitality outlets are less productive compared with other sectors as a direct result of the skills gap, and this is something that can very quickly filter down to the customer and impact service quality.

It is predicted between now and 2020 an additional 11,000 chefs will be needed, but with so many operators struggling to find candidates now and with the market continuing to show signs of growth, where are these additional employees going to come from? This is where Generation Z comes in. Whilst most companies have made changes to address the skills shortage, more needs to be done to bring new talent into the sector on a more permanent basis. Collectively we need to work together to raise awareness of the benefits of a lifelong career in hospitality, rather than it mostly being considered for part-time or summer work by the younger generation. 

We are moving into a new era and the age-old industry image of long working hours, low pay and angry head chefs needs to change if we are to bridge the skills gap. Generation Z, or post-millennials, have different values and ways of working compared with those who started their profession 30 years ago, and place high importance on a work-life balance when it comes to choosing their future career path. Although we are starting to see changes that reflect this, such as restaurants opening for only four days a week and operators offering more opportunities for training and development, more still needs to be done to connect with school leavers. Whether that’s head chefs going into their local schools to talk about careers in hospitality, holding open days where pupils can have a behind-the-scenes experience, or individual businesses celebrating the achievements of their apprentices, operators need to invest time and resources in reaching this age group.

One of the most effective ways to offer career opportunities to the younger generation is through apprenticeships. Apprenticeships set out a clear training path of learning, development and qualifications, and give learners fixed goals to work towards, helping to keep them engaged. With the new government Apprenticeship Levy, which comes into play in April 2017, businesses will now have access to funds that have to be spent on training and development. The levy applies to all UK businesses in the public and private sectors and is payable for companies with an annual pay bill of £3m or above. Employers with an annual pay bill less than this won’t have to pay the levy charges, but they will continue to have access to government funding to support apprenticeships. 

These compulsory payments provide the opportunity for operators to re-evaluate their apprenticeship programmes, training structures and engagement strategies, something that many would otherwise not have done, to ensure that their businesses are seen as aspirational places to work for Generation Z. In addition to this, the government has recently abolished National Insurance contributions for apprentices under the age of 25 on a government-funded apprenticeship programme. This will help to support employers by making additional savings, which can be reinvested in further training and development.

With big changes on the horizon as a result of the Apprenticeship Levy, operators need to put plans in place now in order to make the most of the funding available from the levy and ensure the profession stands out form the crowd and attracts a new generation of hospitality stars.
Jill Whittaker is managing director of HIT Training – www.hittraining.co.uk
 

Why millennials queue – and restaurants love it by Dan Einzig

Have you noticed how queuing has become “a thing”? Queuing is now brag-worthy. It’s cool to #queueforfood. The queuing trend is driven by the millennials and restaurants and bars are actively encouraging it. Waiting in line for a table used to be a negative experience. Something that we would actually be quite peeved about. Now, however, the length of time we queue for a table at a restaurant cafe is something to brag about – by both customer and business.

Instagram, the millennials’ social media of choice, is full of selfies or foodie photos with things like “Just queued for one/one-and-a-half hours for breakfast #queue #queueforfood #queuing #lovefood #lovelife.” Twitter is the same. So why do millennials love to queue?
This has to do with a generation of people who have grown up with constant positive reinforcement. They’re the first to have parents and teachers who endlessly tell them how well they’re doing, how amazing they are, where every layer in pass the parcel has a prize and everyone’s a winner – they are the “good job” generation.

Millennials need affirmation their choices are right. They thrive on approval. Their day’s success is often measured by the number of likes they got on an Instagram post or the number of followers they have on Twitter. And what better reassurance they’re doing the right thing than an entire line of people making the same choice as them! If there’s a line, it has to be worth going to. The queue is therefore a self-fulfilling prophecy. It’s also about feeling part of an exclusive club. Being in on a trend while it’s still new. Attention spans are short. Trends come and go at lightening speed. The millennials are constantly looking for something new. And even if they don’t even really like the food when they get there, the millennials will never say, because they’ve invested their time and energy. They’ve been seen to queue. You don’t want to be seen to queue for something that’s rubbish. What a loser. So they’ll keep going back just to prove a point.

So restaurants and cafes, instead of being worried about the negative impact a queue might have on business, are positively encouraging queuing. Tender Greens in Santa Monica always has a line. Its counter is right by the door instead of at the back of the shop, so only two people can actually queue inside before there’s a queue out the door! #queuegenius. Eateries like Grey Dog in New York City will meet you in the line, give you a menu and reserve your table with a colourful bandana. You can relax in the knowledge you have got your spot and waiting doesn’t seem an issue. The Hopdoddy Burger Bar in Austin, Texas, always has a line around the building, but orders are taken and drinks served while you wait your turn.

Venues are managing their queues by creating an actual positive experience in the queue itself. They are also positively loving their queues and publicising them on their own social media accounts. Queues are good for business. Want to be part of our exclusive club? Join the queue.
Dan Einzig is the founder of leading restaurant and brand design agency Mystery – www.mystery.co.uk

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