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Morning Briefing for pub, restaurant and food wervice operators

Fri 10th Jun 2016 - Friday Opinion
Subjects: The solution to the tip distribution dilemma, let’s stay in Europe, the brilliance of New Orleans, and the profit opportunity of Euro 2016
Authors: Chris Gerard, Peter Linacre, Ann Elliott, and Liam Newton

The solution to the tip distribution dilemma by Chris Gerard

Tips are a payment made by a restaurant guest to reward perceived quality of service. Service is a function of server relationships, product quality and timeliness. Ultimately it is a measure of perceived value and, to this extent, price charged can have an effect. The present debate about who should keep the tip is occasionally naive – it assumes that service delivered is exclusively about the relationship between the person serving and the guest. Deliver poor quality food or delay food from the kitchen and this connection is instantly and practically debunked. I write to remind that restaurant variable success, as measured by sales, profit and the tip, is primarily a function of food quality. It determines appeal and it also influences and/or determines the quality of service delivered by the server. My point – the kitchen matters.
To tip or service charge? Tip and the kitchen gets little. A service charge, with the right rules, means all the team are rewarded. At my hotel in Hertfordshire we introduced a service charge two months ago and the pastry chefs’ share of the tip went from £6 a month to £69 a week. Good for the pastry chef but, more importantly, good for the pastries! At the same time we allowed the team to decide who got what from the service charge. The consequence – the more skilled, the more experienced, were paid more with the service charge adding to their rate of pay, allowing a level playing field for a weekly performance-related allocation of the balance of the service charge. For the first time in my 33 years in the industry I saw professionalism substantially rewarded by peer group. This has the potential to be industry transforming – causing career team members to appear, adding huge value to the country’s hospitality appeal.
My suggestion for the service charge would be a discretionary service charge, rather than the tip, is the way to go. All of the service charge would be kept by the team in the business. This needs to be clearly communicated to every guest. The team employs or determines a Tronc master to manage the allocation and taxation of the service charge. The team elects a service charge committee to advise the Tronc master who should receive what on a weekly basis. The decisions and outcomes from the service charge committee should be transparent to the team.
The service charge committee should not have its hands tied by legislation. If it wants to contribute to a charity, a Christmas party for the team, or pay an individual more because they are excellent or otherwise deserving it should be able to do so. Take the naive view that the tip is for the server and you rob the kitchen. The combination of the living wage and a service charge creates a large pool of remuneration. Use this to broadly reward back and front-of-house to provide an engine to build our industry.
Don’t allow front-of-house servers to keep all the cash, unmeasured, robbing the back-of-house team, and HMRC and therefore, our country. Please use this review to put in place industry-improving strategies. This is a wonderful opportunity to improve food quality and service across the country.
Chris Gerard is founder and owner of gastro-pub operator Innventure

Let’s stay in Europe by Peter Linacre

The much-reviled Donald Rumsfeld gave us the following priceless piece of logic: "There are known knowns, there are known unknowns, and there are unknown unknowns." Voting to leave the EU in my view fits into the latter case. But the reasons to “remain” are for me all about the positives of the European Union. The UK has become a more prosperous, more liberal, more civilised country because of our membership of the EU. Our country is stronger because of our membership of the largest organisation in the world. Like all organisations, the EU needs constant updating and reform. The EU needs the leadership the UK can provide to bring about a better Union. There is nothing fixed about the Union’s faults and we can improve the Union through diplomacy and politics.
I am old enough to remember the pre EEC and EU world that was the UK before 1975. We were a failed economy and tired people trying to find a place in the modern world. We are now a hugely successful country – we are confident and have a clear and respected voice in the world. In 1975 it was not clear how we could turn around our failed country – remaining in the EU was part of our dramatic turnaround. Our economy is stronger for its openness and our ability to attract workers from all around the world, as well as the EU. Half of our immigration is from the EU – the balance is not. Who wants to work in our NHS, our pubs, restaurants, building sites? At a time of full employment, why would we want to stop those who want to come here?
Our lives have been enriched by our more regular contact with the various peoples across the EU. Our children have acquired a broader world view because of our membership of the EU. Our science and education is strengthened by our links throughout the EU. We are better together. Leaving the EU will almost certainly imperil the UK itself and might even imperil the EU. We have thrived within the EU – we should now work with our partners not leave them to it at a time of real danger.
We should now stand up for unity, for working together and improving the EU. We can achieve these things from within. The EU is not perfect – but it offers more for us than the “unknown unknowns” that Brexiteers offer. I have already cast my postal vote to “remain” and urge anyone reading this to peel away the arguments of Brexit and vote for the UK to “remain”.
Peter Linacre is chief executive of New Pub Company

The brilliance of New Orleans by Ann Elliott

New Orleans is one of those cities where everyone who hasn’t been seems to want to go to and where everyone who has been thinks it is tremendous. The recent amazing Propel trip to Chicago presented Sally Whelan from HospitalityGEM and I with the perfect opportunity to tag on a visit to the city and see what the fuss is all about – in particular to eat as much food as we could in as many places as we could. We seem to have done that quite well.
I’m ashamed to say we started off going to Oceania, recommended by our hotel (that was situated in the French Quarter). Usually hotel recommendations are quite good but not this one. It did give us though, our first taste of gumbo, alligator sticks, crab cakes and the local beer. The evening was much better when we visited Revolution and had outstanding food including espresso-crusted venison carpaccio and Hogs Head cheese followed by pastrami-cured tuna with Brussels sprout sauerkraut, smoked butternut and cauliflower chow chow. The service here was exemplary and we were taken on a tour of the kitchen and wine cellars. A really wonderful experience all round.
Brennan’s is a New Orleans institution and it’s said brunch was invented here. The place is famous for its Bananas Foster with banana (obviously) cooked at the table with butter, sugar, cinnamon, rum and ice cream. I had it after grapefruit brulee (caramelised grapefruit, luxardo cherries, rosemary crème anglaise) and baked eggs creole (creole sauce, chaurice sausage, parmesan, and grilled country bread). Again the service was chatty, friendly and efficient.
Having thought I would never ever eat again, we then went to Domenica for lunch – probably our highlight of the trip in terms of culinary brilliance. We shared roasted cauliflower with sea salt and whipped feta; fried Tuscan kale with pine nuts, tomato and Parmigiano Reggiano; Burrata mozzarella with mint pea pesto, ciabatta and aged balsamic; and lasagne bolognaise with pasta verde, béchamel, mozzarella and pork ragu. It was simply amazing.
The chef here also owns Shaya, which has just won the James Beard foundation award for excellence (highly coveted in the city) and serves outstanding modern Israeli food (which I love) so we took a taxi out to Magazine Street for dinner. Here we indulged in Baba ganoush, Israeli salad, tabbouleh and Moroccan carrots with chermoula and mint. The size of the portions, normal in the UK, came as a bit of a shock in comparison with some of the gigantic portions we had been served during the day so we managed to eat most of them. Israeli food is a novelty in the city and was divine.
The next day we visited a disgusting restaurant called Johnny’s Po-Boys for breakfast – po-boy being one of the staple parts of the New Orleans diet. It did set us up for a culinary tour of New Orleans, which I can’t recommend highly enough, although it was a food tour where we didn’t get to eat any food:
Our outstanding guide talked animatedly about the culinary history of New Orleans and how seafood gumbo, red beans and rice, muffulettas, jambalaya, hot sauces, Gulf Coast seafood, po-boys, crawfish/seafood boil, pralines and beignets had all became part of the city’s food heritage. So off we went to eat beignets at Café du Monde, gumbo and fried green tomatoes at Pere Antoine, pralines at Loretta’s, muffulettas at Central Grocery and Deli, and red beans and rice plus jambalaya at Napoleon House.
New Orleans was everything we could have wished for and more. A city that is rightly proud of its food heritage but not frightened to try new and exciting flavours and foods. We were told that there were less than 900 restaurants there prior to Katrina in 2005 – now there are closer to 1,200. It’s worth going for its food alone but the city is exciting, thrilling, vibrant, friendly and welcoming in every other aspect too. I have a list of restaurants to visit if you ever want to go – just let me know.
Ann Elliott is chief executive of leading sector public relations and marketing agency Elliotts –

The profit opportunity of Euro 2016 by Liam Newton

Suddenly, the UEFA Euro 2016 tournament is here – which is excellent news for our industry. The UK on-trade is more dynamic and multi-faceted than ever, yet football and live sport remains one of the biggest occasions of all, with 75% of all pub-goers watching football. The gathering of 24 international teams in France to determine the kings of European football marks a massive profit opportunity for pubs, especially given the perennially optimistic hopes of the nation and the strongest line-up of home nation teams to qualify for many, many years. Millions of people will be tuning in to watch England, Wales and Northern Ireland in the coming weeks – and many will choose to do so in the pub.

Figures from the latest edition of the Greene King Leisure Tracker show 35% of British football fans intend to watch at least one Euro 2016 match in a pub or bar – more than will do so at a friend or family’s home (25%). Among those aged 18 to 24, the figure rises to three in five (60%). The findings chime with our own research, with 80% of those surveyed saying atmosphere was a key factor in deciding where to watch the game.

Occasions are becoming a bigger driver of pub visits, whether it’s Christmas, Easter, Mother’s Day or international sporting tournaments. Separate research from CGA Peach, the sector specialist research and insight house, reveals nearly one in five people (19%) went out to watch one of last autumn’s Rugby World Cup matches in a pub or bar, and like-for-like sales were up 9% in the first week of October 2015. We also know through data from Cask Marque and Vianet that pub sales in October accounted for a disproportionate level of annual sales in the on-trade – thanks to the tournament.

We think the Euro 2016 tournament will prove to be the biggest sporting event yet for UK pubs and bars. For our part, we have produced an insights document, setting out the key facts and considerations for pub operators hosting fans during live match broadcasts this summer ( Aside from the clear and present opportunity for pubs to drive revenues for the duration of the four-week tournament, there is a much bigger consideration – those individuals that perhaps don’t visit the pub very often but who may come in to watch a game this June. It represents a massive opportunity for pubs to make it special for them, and win new fans that will return.

Carlsberg’s involvement with Euro 2016 is one of our longest-standing sponsorships. It’s a relationship that dates back to 1988, when as some of us – of a certain age – will recall Holland’s Ruud Gullit and Marco van Basten setting the European stage alight. Eight tournaments later, the world (and our industry) has changed a lot. Euro 2016 will be the most social to date, which is reflected in the way we have harnessed social media and sharable content in the activation of our sponsorship. Our new online film that encourages fans to get behind the England team in the pub has already attracted 120,000 views on YouTube:

The tournament will also of course be the most responsible – we’re mindful of our responsibility to frame our sponsorship with the right messages, and to take the necessary care in this partnership between an iconic beer brand and the beautiful game, especially given the popularity of football among younger audiences. Of course, the physical experience is what will bring this tournament to life. There will be the few that are lucky enough to be going to the games in person, but for most of us the very closest we can get to touching the tournament, and the big game experience, is with our friends and family, in our chosen pub. 

And what we want most of all is the home nation teams – and particularly England – firing on all cylinders and playing a brand of football that makes the whole country feel good – propelling the team deep into the latter stages of the tournament, and sending an army of football followers to the pub.
Liam Newton is vice-president, marketing, for Carlsberg UK

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