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Morning Briefing for pub, restaurant and food wervice operators

Fri 28th Jun 2019 - Friday Opinion
Subjects: Consistency is king; visits down, spend up; and hospitality has X-factor for Generation Z
Authors: Glynn Davis, Dominic Allport and Joe Walker

Consistency is king by Glynn Davis

When I used to judge the pub chef of the year category for a trade magazine’s awards, the one question I’d have to ask shortlisted candidates was what had been their major achievement during the past 12 months?
Even before asking the question I’d know the answer as every chef gave the same response – “consistency” – they had all “finally nailed” the consistency of dishes coming out of the kitchen.
As a judge and journalist this was the most boring answer possible but, in reality, the most important part of their job and one of the toughest things to achieve in a kitchen that delivered hundreds of dishes a day. 
This important factor was highlighted on two visits I made in the past week. Firstly, I spent a day in the Hampshire countryside at 55-acre Exton Park Vineyard, which planted it first vines in 2003 but had to wait until 2015 to release its first wine.
Head wine-maker Corinne Seely told me the key reason for the lengthy wait had been to ensure the vineyard produced consistent, non-vintage sparkling wine. It took a number of years for Exton Park to build a library of wine that could be combined to produce a house blend that could be repeated year after year. Rushing the procedure wouldn’t have enabled the vineyard to achieve the level of consistency desired.
My second visit of the week was to the slightly less picturesque town of Ashford in Kent, where the new Chapel Down brewery will start brewing its first beer batches next week nestled against the high-speed train line’s tracks. The plan is to have an annual output of 87,000 hectolitres by the end of the year. When brewing those sort of high volumes, you live or die by consistency of the product.
Chapel Down chief executive Frazer Thompson told me he recruited head brewer Matt Anderson because of his experience at Anheuser-Busch InBev (AB InBev), where he trained on Budweiser’s production line. Any beer writer will tell you even if you don’t like Budweiser, you have to give its brewers massive respect for consistency of product. 
Anderson recalled his early days at Budweiser, when he wasn’t allowed to join the official tasting panel until he could pick five bottles of beer from five preceding weeks of production in the correct order. Today, brewing methods have moved on with no noticeable difference between the beers on any given week.
What Chapel Down wasn’t particularly bothered about was looking among the myriad craft brewers to find its head brewer. The idea is the vast bulk of its output will be split between its Curious Brew Lager and IPA, which is at odds with the production methods of many more recent brewers that are more interested in producing a different beer every week. Whereas consistency is the primary objective of Chapel Down’s brewing operation, it doesn’t seem to be particularly high on the agenda of many other smaller brewers.
These brewers haven’t had to deal with this factor and it’s questionable whether some of them could even handle it. When the fashion for craft beer fans to chase the next new beer runs out of steam, those brewers satisfying the demand might find themselves having to focus more on producing a core range of beers and the issue of consistency will rear its head. While it’s undoubtedly boring, consistency is ultimately of great importance and can determine whether you win the plaudits or not. Just ask the chef down your local pub.  
Glynn Davis is a leading commentator on retail trends

Visits down, spend up by Dominic Allport

Those of a certain age might recall Monty Python’s All-England Summarize Proust Competition held at the Arthur Ludlow Memorial Baths, Newport. Participants were required to give a summary of Marcel Proust’s novel À La Recherche Du Temps Perdu (In Search Of Lost Time). The catch wasn’t that contestants had to perform their summary once in a swimsuit and once in evening dress, the problem was the summary had to be completed in only 15 seconds. Proust’s novel runs to seven volumes and more than 1.25 million words so any attempt at a neat summary encounters a certain degree of difficulty.

But anybody pressed to provide a pithy summary of how the British foodservice industry will fare between now and the end of 2020 would probably be right if they said: “Visits down, spend up.” Of course there’s plenty of detail and some major structural trends behind those four key words. The pressures affecting on-premise eating and drinking is a big theme in British foodservice. Trends such as the continued expansion of delivery and the growth of drive-thru from its current small base reflect a big change in how we live our lives. Then there’s the growth of app-based orders, but our data tells us the big picture is “visits down, spend up”.

We definitely see visits in the British out-of-home (OOH) foodservice market sliding in 2019 and 2020. The market peaked at 11.35 billion visits in 2017 but dropped 0.5% to 11.29 billion in 2018. Despite population growth of 0.6% per annum, there will be a further drop of 0.5% in 2019 and another 0.1% in 2020 to reach 11.23 billion visits. In total, this represents a decline of 65 million visits by 2020. By contrast, we predict a 5.0% increase in spend to £59.47bn by the end of 2020 versus £56.62bn for 2018. This will be largely driven by operators increasing menu prices as they respond to cost pressures – not only inflation but also as a result of consumers buying more items per order. The average individual cheque reached £5.00 in 2018 and will rise 5.6% by 2020 to £5.30.

On-premise under pressure
A key trend in British foodservice is the decline of the on-premise sector (food and drink consumed where purchased) versus off-premise (delivery, takeaway/grab and go, and drive-thru). This is the result of the long-term decline in retail footfall as more shoppers make purchases online. One-fifth of all retail purchases now occur online. In the eating out market this figure is lower, at 5.3% of all visits, but is growing rapidly. The on-premise market peaked at 4.58 billion visits in 2016 but dropped in the following two years. It’s predicted to lose a further 8% by the end of 2020 versus 2018 to reach 4.02 billion visits. On-premise spend is likely to increase marginally but mainly as a result of operators increasing menu prices. 
Modest growth for takeaway/grab and go 
We predict a better performance in the off-premise sector, with visits reaching 7.21 billion by the end of 2020 (4% higher than 2018) and spend jumping 10% to £27.87bn. Because takeaway and grab and go currently contribute such a high percentage (83%) of off-premise visits, even low growth makes a difference. Our forecast is for takeaway and grab-and-go visits to increase 1.6% and spend 6% by the end of 2020. 

A generation ago, grab and go might have stretched little further than a sausage roll, bag of chips, cheeseburger, sandwich or cream bun. Today’s offerings inject innovation, portability and ease of consumption across a huge range of international hot and cold cuisines to create exciting meals, snacks and beverages for any daypart. There’s no doubt foodservice operators are grasping the grab-and-go opportunity by offering increasingly appetising and healthy options. 
Fast growth for delivery 
The foodservice industry will ramp up delivery and invest in drive-thru as an additional way to respond to the high street’s decline. Foodservice operators have been adopting a multi-channel approach to become as convenient and accessible as possible. We forecast consumers will spend 22% more on delivery by the end of 2020 to create a market worth £5.8bn a year. The number of delivery visits will jump 17% or 127 million by the end of 2020 to reach 882 million. The delivery market currently accounts for 11% of all off-premise foodservice visits but, by the end of 2020, delivery’s share will have increased to 12% and it accounts for almost half of all projected growth in off-premise visits. By 2020, delivery could make up almost 10% of spend in the total British OOH market, piling additional pressure on operators that rely heavily on on-premise visits. 
Drive-thru: small but growing
A recent trend in the off-premise sector is the growth of drive-thru. By the end of 2018 it only represented 6% of Britain’s off-premise market in visit terms but is forecast to grow by 60 million visits or 14% by 2020. We estimate there are now more than 1,000 drive-thrus in Britain as operators continue to diversify their estates away from the high street and find other locations consumers frequent.  

The next two years will see a continuation of that core story – the pressures affecting on-premise eating and drinking. The old habit of going shopping and finding a place to sit down and eat is still important for many but is at risk as more people shop online. That’s why we predict all the meaningful growth in foodservice will be off-premise as smartphones continue to dominate and the high street reduces in importance. The eating-out industry is fast adapting to these bigger trends by focusing more of its investment into attracting off-premise visits. 

Modest growth in the large takeaway and grab-and-go channel, supported by the continuing delivery revolution, is enough to provide 88% of spending growth for the entire British foodservice industry in the next two years. The growth of drive-thru is part of a trend towards more convenience and a result of consumers spending less time on the high street – but operators must address the large price gap between on-premise and off-premise. The average on-premise cheque of £7.17 is almost twice the £3.66 for off-premise purchases. Is that good for the industry?

QSR as big as ever 
We also see a continuation of the established trend of consumers trading down to cheaper eats when dining out. The quick service restaurant (QSR) channel that includes well-known burger, bakery and coffee chains is likely to attract 41 million more visits annually by the end of 2020 to reach almost 6 billion visits a year. This will represent more than 53% of the entire British foodservice industry in visit terms. We forecast QSR will attract £1.53bn more spend by the end of 2020 to reach £24.6bn. 

Casual dining to grow visits and spend 
Casual dining will also see strong growth in visits and spend. By the end of 2020 it will be attracting an additional 43 million visits to represent 5.5% of all OOH visits, while spend will jump 15.5% (£960m). By contrast, full-service restaurants will continue to decline, with a loss of 63 million visits or 9.3%. Similar to their QSR cousins, casual dining operators have been quick to expand into delivery. All leading casual dining chains are benefiting from this move alongside an emphasis on product and service quality. 

App-based orders to almost double 
Visits originating digitally – customers using digital kiosks or order screens in a foodservice outlet or ordering online or via apps for delivery or takeaway/grab and go – will exceed one billion per year for the first time by the end of 2020. The use of apps should see a particularly rapid increase, with visits that originate from an app (click-and-collect and delivery apps) forecast to leap 88% between now and the end of 2020. This means if app-based orders perform as predicted, they will have almost doubled in visit terms.

Technology is a key theme and our forecasts indicate any growth in foodservice visits will be overwhelmingly tech-driven. Operators know the full-scale implementation of digital order channels – offering convenience, engagement and a new experience – is key to survival and growth in a sluggish, oversupplied market. Operators are important in any foodservice forecasts because their creativity and vision ensure the health of this extraordinarily dynamic industry.

What happened in the Monty Python sketch? The first two contestants – portrayed by Graham Chapman and Michael Palin – failed to capture Proust’s seven-book novel in a few succinct sentences and, sadly, the next contestants – the Bolton Choral Society – fared no better. That led to a more creative approach to identify the evening’s winner – but you’ll need to find the sketch online to remind yourself of the outcome. However, “visits down, spend up” will probably be the right summary for the British foodservice industry to the end of 2020 – and that can be completed in a couple of seconds. 
Dominic Allport is insight director foodservice UK at The NPD Group            

Hospitality has X-factor for Generation Z by Joe Walker

It was ironic that in the same week I received an Acorn Award at age 23 for being one of hospitality’s brightest stars under 30, new research revealed more than 50% of 16 to 20-year-olds wouldn’t consider a career in hospitality. 

The research, by apprenticeship provider HIT Training and website Get My First Job, also revealed teenagers view jobs in our industry as simply a stepping stone to another career as they believe hospitality offers limited prospects. I found this sad and frustrating as my experience of an industry I started out in at 16 is one that’s bursting with opportunities for unskilled young people who are prepared to work hard and learn. 

I entered this industry with no skills but a great attitude, strong work ethic and determination to succeed. Through these and the great opportunities made available to me by my employer, Anglian Country Inns (ACI), I rapidly progressed through the ranks to become executive head chef of Hermitage Rd Bar And Restaurant in Hitchin at age 21, where I’m responsible for about 2,000 covers and £60,000 in sales a week.

I feared I would be perceived as too young for management roles but the opportunities have presented themselves at ACI and I’ve grabbed them. I’m not the only one who has benefited from the great career prospects this industry offers, with our head of food joining ACI as a chef de partie and our former operations director as a commis chef. Three-quarters of ACI’s head chefs and general managers are home-grown and I could name numerous similar examples from other companies in the industry.

I was lucky my older brother loved food technology as this inspired me to pursue a career as a chef. However, I feel there isn’t enough exposure to cookery at a young age as it isn’t compulsory to teach it in schools. Something needs to be done to address the situation as I’m sure this is one reason why members of Generation Z aren’t considering it as a career.

I also think there’s a perception the industry doesn’t offer a good work-life balance for young people but in my experience there’s lots of flexibility. Our team has regular weekends off, rotas are published two weeks in advance and a month ahead for Christmas, and some of our chefs work a four-day week, which has made a big difference to their lives. I have a three-year-old daughter and my career enables me to spend quality time with her and be there for the important moments.

I love being a chef and find it rewarding and creative as you can express yourself and your palate through your food. It’s a career that can take you around the world, showing you new cultures and cuisines, while every day is different and brings new knowledge and challenges. 

It’s a career that has given me some exciting opportunities I would never dreamed of when I was 16, such as hosting collaboration dinners with MasterChef 2018 semi-finalist Greg Emmerson and featuring regularly on local radio and London Kitchen Social.

I oversee a team of eight chefs and it’s rewarding to train and mentor them and support the company’s nine apprentices, who are offered a great career pathway with lots of learning on the job.

Being part of a kitchen team also provides great camaraderie, which creates a good bond with people and can be great fun. Kitchens are also a melting pot of cultures, which helps create a great atmosphere and allows you to learn different cuisines.

Sometimes it’s a stressful job but there are many times when that stress is good and you get a great adrenalin buzz from a busy, successful service. 

The benefits of this job are great too. I never imagined I would be earning the level of salary and enjoying the benefits I do at my age, including chef inspiration trips, free gym membership and trips to Europe.

If you have the willingness, drive and passion this is a fulfilling pathway and we should shout it loud that our industry offers careers with an X-factor for Generation Z.
Joe Walker is an Acorn Awards 2019 winner

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