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Morning Briefing for pub, restaurant and food wervice operators

Fri 12th May 2017 - Friday Opinion
Subjects: The dangers of food customisation, Brexit presents positive opportunities for the UK, the pressure is on for marketers and foreign investment in Mayfair property
Authors: Glynn Davis, Eldon Robson, Ann Elliott and David Rawlinson

The dangers of food customisation by Glynn Davis

Customisation is deemed to be one of the most prominent trends in food today because of the increasing desire by younger consumers to do their own thing and not stick to the tried and trusted methods of the past. This appetite for pursuing an independent path, which deviates from that of the past, has long been evident in fashion and music. Food is now being thrown into the same milieu whereby younger generations want to eat a food specific to them. The only real way of showing this in a mainstream sense is to customise cuisine. 
Rather than following the rigid options on the menu there is a move by foodservice providers to enable customers to tailor their dishes to their individual tastes. This is manifesting itself most prominently at this stage in areas such as burgers and burritos where a core base product is enhanced with myriad options – often for an additional cost of course. Clearly, while the customer likes this independence the food operator is hopefully driving some extra revenue. This trend is also emerging with some of the healthy food chains where customers will have their own dietary requirements. Tossed is a great example of the latter where dishes can be tailored to meet the prescribed diets of customers.
The more unfamiliar and complex the cuisine the tougher it arguably is for customers to ultimately concoct something that actually tastes better than any of the dishes that are featured on the restaurants’ menus. This has certainly been evident in the US where Piada Italian Street Food found seven ingredients – where the protein and the sauce are two – is the sensible maximum but inevitably some customers will feel inclined to put every ingredient possible into their chosen dishes. Many are then left disappointed with the clashing taste combinations. It’s the same story at Teriyaki Madness where diners’ lack of understanding of flavours too often leads to some poor dishes being created and diner dissatisfaction.
Such was the confusion at Piada that it developed “chef-inspired” versions to give diners more direction. But hold on a minute, doesn’t this mean dishes that are created and recommended by the chef who then puts them on the menu? This sounds rather like a normal restaurant set-up to me. I’d always gone to restaurants because I wanted to pay for the chefs’ experience in putting ingredients together. If I’m the one deciding on the ingredient mix then I don’t think I’m getting the maximum value out of the dining experience.
I’m clearly not alone in this thinking because at the Mooyah restaurant chain in Texas it has experienced what it describes as “choice anxiety”. This is the affliction caused by offering too many ingredients to customers. The problem is that people can’t quite imagine from what ingredients their best tasting noodle or pasta dish will comprise.
It’s a similar scenario to the one experienced by shoe retailer Shoes of Prey. Its unique selling point is its ability to produce customised shoes. Customers can create any design of shoe they can imagine. As good as this sounds the company found most people simply cannot imagine what their dream pair of shoes would look like. When given unlimited options they freeze like rabbits in car headlights. They need guidance.
To this end Shoes of Prey has created some designs in-house and has placed them on the websites of department stores like Nordstrom. These items do not actually exist but will be made if somebody buys them. They also help to provide inspiration to shoppers. UK-based customised jumpers and scarves retailer/manufacturer Unmade has also found it has had to offer some products on its site to help people hone-in on their desired customised products.
Regardless of whether it is clothing or food, the reality is that offering customers the ability to customise things only works when you allow them to contribute only a minimum of input. Far better to leave it to the professionals in my opinion because I remain wholly convinced that to gain the most from dining out the clear sensible option is to put yourself securely in the hands of the people who hopefully know best – the chefs and the front-of-house teams.
Glynn Davis is a leading commentator on retail trends 

Brexit presents positive opportunities for the UK – it’s time to get on with the business of doing business by Eldon Robson 

The relationship between the UK and Europe has long been a tempestuous one. It took 14 years for the country to be accepted as part of the European Economic Community, as it was known when we joined in 1973, and the arguments and debates between pro and anti-Europeans during that time were at best animated, at worst acrimonious. In 1975, the country went to the polls on the matter and voted to become a fully-fledged member of the European Union (EU). And, although the arguments rumbled on, we knew where we stood and we got on with the business of doing business in this new trading landscape. 

Fast-forward to 2016 and after another period of tumultuous debate the UK again went to the polls and voted to leave. And, by however small a margin, the decision was made, as it was in 1975 to remain. This week Parliament was dissolved as the government seeks to secure a mandate to “make Brexit mean Brexit”, but whatever the outcome of the election, the people of this country voted to leave the EU on 23 June last year and it’s time to get on with it.

Like most businesses, we don’t truly know exactly what Brexit will mean for Fentimans, but we will embrace it and do our utmost to seek out the opportunities. We certainly do not plan to halt growth plans and I think it is important that, although we are operating in uncertain times, business leaders don’t put things on hold to see how it all unfolds. Although Article 50 is now invoked and there’s something of a timeline, European negotiations can be notoriously prolonged – it took seven years for The Comprehensive Economic and Trade Agreement between Canada and the EU to be signed, and let’s not forget, it took the UK 14 years to gain entry into the EU in the first place.

If you ask me if I am pro-Brexit, I will answer yes, while recognising we are still in uncharted waters and there will, of course, be risks. But in business you always have risks and challenges so you might as well tackle them with a positive frame of mind. The stock markets recovered quickly after a brief plunge in June, the euro is clawing its way back and the prediction for GDP growth in 2017 is healthy. And Brexit will present new possibilities.

Our export business is strong, and we’re keeping our eyes open all the time for new territories. Of course, we trade in Europe and so far we have not seen an impact. I would like to think talk of trade tariffs are exaggerated and the UK can negotiate good deals with remaining member states. But beyond the EU, there’s a big world out there with UK goods and services already in demand in some growing markets – Japan, South Korea, Thailand and the source of our potent ginger root, China – and plenty of opportunity to tap into other emerging economies. We currently trade in 68 countries and we aim to increase that number by an additional 20 in the next five years.

When my great-grandfather founded Fentimans in 1905, Britain was still an empire, trading across the world in very different political and economic circumstances. In fact, the world has changed beyond recognition since then. But some constants remain. We are a fiercely proud British heritage brand with a craft legacy going back more than 100 years. And it’s a legacy and heritage that is hugely appealing to domestic and overseas markets. We have always emphasised the quintessential Britishness and artisanal nature of our products and I think people should not underestimate the cachet of the “made in the UK” label. It’s something we must positively and proudly promote – in or out of the EU, the UK has always stood for John Bull spirit and a will to survive and succeed. I believe that stands as true today as it did in 1905.

As we embark on this new chapter in our country’s history, my outlook remains optimistic and my point of view is straightforward. We should get behind the government and the prime minister and make this process as pain free as we can. We will have obstacles to overcome in the months and years ahead, but we just need to park the negativity and get on with it. Brexit has the potential to bring the nation together, and if senior business leaders pull together with a united determination to make it work, it could be very positive for the UK.
Eldon Robson is the owner of the UK’s only botanical brewers, Fentimans 

The pressure is on for marketers by Ann Elliott 

The pressure on marketing professionals in our sector to deliver results is likely to increase exponentially in the next 12 months and beyond, particularly with many operators needing to deliver 4% like-for-like growth in a flat market with costs spiralling. It means it’s a question of gaining market share at the expense of other operators, or convincing diners to come out rather than stay in, or encourage them to order Deliveroo from their brand rather than another. It could all become rather cut-throat especially among those brands that have been inherently more dependent on discounts than others. So, what do marketing teams need to do to help their businesses drive share?
One of the key things to do is to establish the objectives and KPIs the board and chief executive want to be achieved. The senior management needs to know its marketing teams are being driven by the same metrics it is – that everyone is singing off the same hymn sheet and marketers are speaking exactly the same language as the operators. It does seem rather obvious but not every marketer I have met has always been totally clear on what they and their teams need to achieve or has been totally aligned with the rest of the business in terms of their objectives. Sales, profit and/or like-for-like covers growth have to be top of the objectives list.
The marketing teams then have to be very clear on their brand proposition and USP, especially in this crowded market place. How is their brand going to stand out? How is it going to differentiate itself versus its competitors? How will it withstand competitive onslaught? Brand bibles and brand standards will all be in place but it’s easy to be reactive, to waver and to concede when the pressure is on. Marketers have to protect their brand and to ensure it isn’t compromised in the short term to only suffer in the long term when the market returns to some sort of normality.
With customer spending showing signs of weakening, marketers have to be the ones in the business who “put the customer hat on” and who ensure understanding and meeting customer needs, wants and expectations remains paramount. Ongoing research is so easy and cost effective to implement nowadays that marketers can always have their finger on the customer pulse on a regular and consistent basis. This understanding should drive marketing strategy and planning – helping them put in place campaigns and initiatives to drive sustainable and repeatable covers growth.
Marketing planning, campaigns and content are crucial to customer engagement. It’s very easy to become obsessed with route to markets but it’s the messages and content that count. Great marketers start with messaging and then think through the best means to communicate this message to their customers. Facebook, Twitter, Instagram, CRM, Snapchat and LinkedIn are all brilliant but they are the means not the end. Marketing success cannot be validated by opening rates, followers or retweets. They have to absolutely deliver results. They are not results themselves. They are inputs not outputs.
Marketers are going to have to sing for their supper and deliver tangible and measurable results in the coming months. They have to ensure their brand is robust, they have to understand the changing needs of their customers, they need to make sure their messaging is spot on and their marketing communications are effective and cost efficient. They can take nothing for granted. They have to deliver. Exciting times ahead I think.
Ann Elliott is chief executive of Elliotts, the leading integrated marketing agency in the hospitality and leisure sector – 

Foreign investment in Mayfair property by David Rawlinson

I have often been impressed by Mayfair’s ability to attract foreign investors, and I have spent much of my professional life working to facilitate such deals. At Restaurant Property we have handled 70% of all Mayfair restaurant deals in the past five years, with recent examples such as Hibiscus, Sexy Fish, Roka and more. What makes Mayfair such an attractive proposition? Perhaps it is the average spend per head in Mayfair and the reputation it has earned. Perhaps it is the area’s resilience to the presently unpredictable British economy that attracts international operators from across the globe.
To operators from overseas, Mayfair’s prime commercial real estate is extremely attractive. Close to 70% of the total number of recent property buyers hail from countries outside western Europe. It certainly appears a large part of the appeal of London property to overseas investors is its financial stability. Reports in April saw record activity in the London commercial property market, with £4.9bn of transactions in the first quarter. There were 13 commercial deals of £100m or more in this quarter compared with 11 in the previous three months. A total of 80% of these transactions were made by foreign investors, an increase from 74% in the previous quarter. London as a whole is doing okay, but Mayfair is Mayfair, and going from strength to strength. 
With statistics like these, it’s clear Brexit has not deterred the most forward-thinking non-UK investors. Another vital contributing factor has to be the current exchange rate against the pound, effectively giving some international buyers a 20% discount. Instead of a decline in leaseholds taken by overseas investors, there has been a clear increase. At Restaurant Property, part of our role is to ensure we give international operators and investors the best selection of properties and advice to find the most suitable leaseholds or freeholds available. To do this effectively, we ask that those from overseas help us by providing the following information – some of which is often overlooked, and could mean the difference between a successful acquisition or not.
Firstly, a landlord pack is essential to explaining your concept, brand, cuisine, personal background, financing, and customer profile to potential landlords. Aesthetic choices are equally as important here as brand choices, and all of this must revolve around your patrons. Who are they? What do they do? What is their lifestyle? Uncovering the answers to these essential questions will give your property agent and prospective landlords a full idea of what their property will look like and how it will trade if they choose to lease the property to you. 
Furthermore, well advised landlords and vendors will request potential tenants and buyers have a clear summary of their funding. This is not a legal requirement, but it demonstrates a clear level of foresight and business preparedness that is likely to give them confidence in your ability to perform. Finally, having the right agent not only helps with finding your ideal property but it makes for a much smoother transaction. Your agent should have access to the best leisure and hospitality properties in Mayfair, London and the wider UK market. They should also have an extensive experience of dealing with foreign operators, a firm understanding of the Mayfair market, and knowledge of how investors from across the globe can best position themselves to increase their chances of being chosen in such a competitive environment. 
The bottom line is any international operator that wants to secure a Mayfair property for their concept needs to be fully prepared. That means bringing the right knowledge and planning to the table, as well as choosing the right agent. By getting these things correct, you will have the best selection of sites and dramatically increase your chances of being successful at finding suitable space in Mayfair. The right agent will also fully understand your company and help you bring your concept to fruition at the correct market price. 
David Rawlinson is founding director at Restaurant Property

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