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Morning Briefing Strap Line
Fri 21st Jan 2022 - Friday Opinion

Subjects: We need your support for vital industry survey, vegan food isn’t just for vegans, getting your values right helps retain staff, we’re becoming a moderation nation

Authors: Kate Nicholls, Louise Palmer-Masterson, Ann Elliott, Jean-David Thumelair

We need your support for vital industry survey by Kate Nicholls

Pinch yourself – this time next week we will be free of restrictions in England. We have been working closely with the government for some time to press home the importance to our sector of no more work from home guidance, no more covid passes and no more masks. And, when the prime minister announced on Wednesday that such restrictions under Plan B would be dropped, 2022 looks suddenly much more promising for the sector.

Even more positively, it’s a year of celebration that our industry can use to leverage its recovery, including HM The Queen’s Platinum Jubilee four-day bank holiday weekend as well as the Commonwealth Games in Birmingham, the World Cup in Qatar and the UNBOXED: Creativity in the UK festival.

It won’t all be plain sailing, of course, and we are calling on the industry to contribute to a comprehensive, state-of-the-sector survey to be used to help convince government that ours is the industry to lead post-covid economic recovery in the UK. However, to achieve that, we need targeted support, because there is no doubt that huge challenges remain for our sector.

Businesses are low on cash reserves, deep in debt and under immense pressure. Costs are rising across the board, and with the increase in labour costs and a hike in business rates this spring, are set to continue to do so. That’s not to mention what we believe poses the biggest threat to our industry’s full recovery – the proposed return in April to 20% VAT for hospitality and tourism. Add to that veritable minefield the squeeze placed on consumers’ disposable income by the rising cost of living, and operators have a dangerous path to tread.

UKHospitality will be doing its best, though, to help navigate businesses to recovery and prosperity. Launched last year, our #VATsEnough campaign is being ramped-up as we urge the government to maintain VAT for the sector at 12.5% and not raise it to 20% at Easter, just as many businesses enter their critical spring and summer trading periods. By keeping VAT at 12.5%, the government will be helping our industry keep costs down and not pass huge price rises on to consumers, thus helping us remain competitive versus our international market rivals. Just as latest figures reveal that consumer confidence is returning, it would be no less than a sharp kick in the teeth if it were undermined by price rises that delay the return of more people to hospitality venues.

Many, no doubt, will remain nervous about going back to their favourite pubs, bars and restaurants for a long time to come. So, we’ll be doing all we can to make sure they come back sooner rather than later, by continuing to demonstrate how operators have invested and innovated throughout the pandemic to make their venues safe places for people to visit. Whether it’s heated and lit outdoor spaces, improved ventilation, hand sanitisation stations, fewer tables, table service or contactless order-and-pay technology, our industry has done more – and probably spent more – than most to keep customers safe.

Operators have also worked incredibly hard to keep staff safe, but we all know that thousands have left the sector since coronavirus struck. As a result, this year and beyond, UKHospitality will endeavour to help encourage those who’ve left the industry to come back, while at the same time making this sector an attractive one to join – not just a stopgap on the way to something else, but one offering long-term career prospects. After all, availability of staff is going to be vital if operators are to fully implement their recovery plans. 

UKHospitality is forging ahead with these initiatives and more, but we need your help. To ensure our messaging is effective and that we have the most comprehensive picture of the industry to present to the government we need data – hence the aforementioned comprehensive industry survey we are undertaking. This is a major piece of work, undertaken in conjunction with Christie & Co and supported by CGA Strategy, which we hope will provide significant insights into exactly how our industry works – what type of trade businesses generate, information about business models, and the sort of cost pressures operators faces. A detailed peek, if you like, into business health in the sector.

We’re urging pub, bar, restaurant, nightclub and hotel operators to contribute to the survey, linked below. All respondents will receive a summary of this ground-breaking and valuable survey when it’s published in April. This will help us collate evidence vital not only to hospitality businesses, but also in our efforts to prove to the government that ours is a sector that can be the driver for the UK’s wider economic recovery, post-covid. And if the government listens to us on the likes of VAT, business rates and rent, hospitality’s prospects for 2022 will indeed be bright. To fill in the survey, please click here.
Kate Nicholls is the chief executive of UKHospitality

Vegan food isn’t just for vegans by Louise Palmer-Masterson

Reading the piece by Glynn Davis in last Friday’s Propel Opinion, I was surprised at the main thread – that vegan food is, to use his words, a minority sport. The piece also implied that vegan restaurants only appeal to a committed vegan group and that vegan options are off the radar as a cuisine of choice when dining out. It suggested that people only cut their meat consumption at home and not when eating out, ergo there is not a big enough slice of the eating-out pie for vegan-only restaurants, who are going to find it hard to survive.

This has definitely not been our experience at Stem & Glory. Many of our guests are, in fact, not vegan. They mostly define as flexitarian. We do a lot of corporate dining for large companies who know that they should be making sustainable choices when it comes to their entertaining. That’s not notional, we see this 100% at both our locations, and it is on the rise.

Ultimately, I am pro-choice. I believe we are all on the spectrum regarding how justified we feel it is to continue eating animal products. For me, it was an instantaneous moment, but for others, it is a slower burn. Whatever you may feel about animals and animal welfare, the arguments for eating more plant-based from a sustainable perspective are increasingly compelling. I am surprised this message seems to pass hospitality operators by, and the penny just doesn’t seem to drop. Maybe they literally fear what will happen if they introduce changes. The Claridges example referenced in the opinion piece is an example of this.

If you look farther afield though, other old school retailers are, in fact, embracing a plant-based future. Matthew Kenney, one of the earliest plant-based pioneers, has just opened a new plant-based concept at Selfridges, and Alex Gauthier, mentioned in the opinion piece, has just opened a plant-based concept in Fenwicks. I do get how nerve wracking it must be to embrace a more plant-based future if you are a steak house or meat burger concept, but it has to be done.

I was hugely inspired to hear James Brown, from BrewDog, at the Propel marketing conference on how they grew their sales of vegan food from 1% to 39% of their total food sales through a series of inspired partnerships and innovation – including investing in some of their plant-based partners to ensure they also had the capacity to grow. In my opinion, that’s the way to do it, instead of letting fear and old patterns like ‘our customers don’t want vegan food’ dictate. Give way instead to some inspired and creative thinking. Make a series of small rather than radical sudden changes, and before you know it, you have created the demand without pissing anyone off – and become trendy and sustainable all in one fail swoop.

Every single presentation at the Propel conference had a sustainability focus in one way or another. This is not new either, it was the case in every hospitality event I attended pre-pandemic. It’s the elephant in the room for hospitality right now. Everyone knows we need to be more sustainable, but it’s not put into practice, and somehow the old narratives still exist. It’s a fact that meat and dairy foods are a huge burden in terms of emissions, and it’s the responsibility of all of us to reduce consumption. As Carolyn Ball, the sustainability officer from Compass Group, put very well at the conference, hospitality has a fantastic opportunity to be a big part of the solution, which will be a huge win for all. Hospitality is a great innovator, so take a leaf out of Brown and BrewDog’s book and get creative.

On the subject of the market and pure vegan restaurants, as a brand, Stem & Glory has seen more than 100% year-on-year increase in net sales pre/post pandemic and growing all the time. I eat out a lot in vegan restaurants, especially in London, which has some excellent fledgling vegan chains, and they are all very busy. And not a celebrity chef in sight!

At Stem & Glory, what we have is an excellent and talented executive chef who is a team player, backed up by a team of chefs with years and years of experience creating plant-based foods. And it’s the same for the many hard-working plant-based teams all over the UK. Hospitality should look to these purely plant-based brands for inspiration, skill and experience to help create better plant-based dishes which will appeal to vegans and non-vegans alike. And, while they do so, grow their businesses into more sustainable and attractive propositions for all people, and for our planet.
Louise Palmer-Masterson is the founder of Stem & Glory

Getting your values right helps retain staff by Ann Elliott

“By summer, there won’t be a chef available in the country. It’s going to be a disaster for the sector, and we are just sleep walking into it.” That’s what one HR director told me recently during a series of interviews I am conducting for Harri. The lifting of all restrictions which will bring our city centres back to life and, in turn, drive footfall into hospitality venues will once again raise the issue of recruitment and retention of talent in our sector. Particularly back of house.

I don’t necessarily agree with this doomsday scenario. The sector absolutely does know there is a current and future problem with recruitment of kitchen teams, and HR directors are on the case and have been for the last 18 months or so since Brexit. I feel strongly that Brexit has singlehandedly destroyed the employment market for the sector. The pandemic hasn’t been great for it in many ways, but only Brexit is to blame for the situation.

HR directors are using a myriad of tactics to recruit and retain their teams, many of which I have highlighted in previous columns. The apprenticeship programme has been an enormous success for many, and ‘refer a friend’ schemes have worked well too. Most of the businesses I spoke to have reviewed and renewed their career pathways, making it quicker and smoother for teams to move up the ladder while making it easier for them to switch between back and front of house. Digital has become the only way to advertise, and ads themselves have been tailored to a new generation of employees. Pay, conditions and benefits have often improved too.

Operators have had to act tactically over the last few years, and no doubt will have to do so again in the next few weeks to keep their heads above water. Moving teams between sites to keep them trading, for instance, is not particularly strategic but has been vital. Keeping sites open without adequate trade to hit profit since Plan B restrictions were enforced has been a pragmatic but not necessarily strategic decision for many businesses.

HR directors can implement these tactical plans quickly because they have been built from a bedrock of sound and considered HR strategy. They have taken the opportunity over the last 24 months to go back to basics. In particular, they have reviewed what is really critical to their business and what they want it to stand for in the eyes of the guest, and most importantly, the team.

This thinking, for most HR directors I spoke to, has been embodied in their employee value proposition. Having the right values that are perfectly aligned with your culture can be game changing. When done right, they guide you in your recruitment, in the behaviours you hold yourself and your teams accountable for and in your decision making when times get tough.

Helen Melvin, people director at Brasserie Bar Co, really brought this home for me. She talked about the approach they had taken when reviewing their company core values. They started by understanding the behaviours in the business when it was operating at its very best, appreciating what was special and unique about the company and then articulating those behaviours. Brasserie Bar Co wanted the values to originate from the team, to come from the heart. Only with this approach could they feel natural, encapsulate what it means to be part of the organisation and, in turn, be easy to remember, real and honest.

Their values became “seek excellence”, “genuinely care” and “lead by example”.  They developed more detail behind each, but fundamentally, these simple statements became their north star. They really helped firm up their recruitment criteria, ensured they brought the right people on board, helped develop their team skills and inspired the right behaviour in everyone. Every team member could ask themselves very honestly if they were demonstrating these values in everything they did.

Most importantly, when the business had to make decisions going through lockdown like how to handle temporary closures, re-openings, furlough and all the communication required to manage these unique situations while doing the very best for their people, it became vital to hold themselves accountable to those values.

This employer value proposition has ensured that retention rates at Brasserie Bar Co are among the highest in the sector, and that new team members stay with the business. This has to be the right way forward, to help ensure that the business does not have a recruitment crisis back of house this summer, and that they have the chefs, managers and servers they need to successfully deliver excellence to their guests. It did make me think though. If Boris Johnson had a similar set of values, would he be in the situation he is in right now?
Ann Elliott is a hospitality strategist, connector and adviser

We’re becoming a moderation nation by Jean-David Thumelaire 

January has long been a time to cut down on alcohol consumption and adopt a healthier lifestyle after over-indulging in the holidays. And this year, given the growth trajectory of the no-alcohol and low-alcohol category – now worth £195.9m and outperforming the overall beer category by 12.7 percentage points – many anticipate Dry January will be bigger than ever. However, whilst many consumers are increasingly choosing no-and-low options to enjoy at home, are consumers actually buying them in pubs and bars? Can the on-trade afford to dedicate valuable fridge space to these products?

I believe the on-trade can’t afford NOT to stock these alternatives. While still a relatively small driver of revenue, stocking and promoting a strong no-and-low offering all year round can punch above its weight in terms of driving customer loyalty. And this year, as the on-trade continues to suffer the consequences of covid-19 and decreased sales throughout December, boasting a wide portfolio of no-and-low options is a great way to attract consumers back into venues this January and beyond. 

Key to pub-goers opting for no-and-low options is the desire to live a healthier lifestyle. According to Public Health England, 70% of Brits are looking to be healthier in their everyday lives, prompting them to moderate their alcohol consumption. A third of consumers said limiting alcohol was an important part of their healthier lifestyle. Often containing fewer calories and less sugar, no-and-low alternatives are seen as healthier options for pub-goers who still want to enjoy the taste of their favourite drink. 

And it’s vital that pub and bar owners understand these alternatives are not just for teetotallers. We are seeing many consumers moderate their alcohol consumption rather than eliminate it entirely. One in ten beer drinkers now regularly opt for an alcohol-free alternative, a figure which has grown by 16% year-on-year. Stocking no-and-low options will therefore not only cater to new customers, but also those regulars looking to moderate while enjoying the social aspects of the pub. 

The way we’re drinking no-and-low alternatives in the on-trade is also evolving. Traditionally, being the designated driver was a key reason pub-goers might opt for them. Nowadays, changing consumption habits mean we will likely see some consumers opt for these products around different occasions. Given that three out of five beers are now consumed with food, for example, pubs should consider offering alcohol-free alternatives as part of lunchtime meal deals.

As the no-and-low category goes from strength to strength, we are seeing a plethora of new product development across beer, wine and spirits. With limited space available, how can pubs and bars know what products to prioritise? Beer is a standout winner in the no-and-low category, worth more than £100m, with a value share of 1.8% of the total beer category. While no-and-low wine and spirit options are starting to grow traction, beer continues to dominate the overall alcohol category, so prioritising no-and-low beer alternatives will be key. 

Covid-19 has accelerated consumer desire for well-known brands due to perceptions around higher taste credentials and quality. The no-and-low category is no exception – brand is the most important factor when deciding which product to buy – ahead of calories, ingredients, taste claim and ABV. Spotlighting no-and-low variants of well-known brands therefore allows the on-trade to draw on the familiarity of the parent brand and encourage trial. 

We have also seen a shift in consumer preference towards premium and super-premium options. For the first time ever, the premium and super-premium category is the biggest in absolute volume, making up 40% of total beer consumption in the on-trade. This is replicated in the no and low category, which grew 23% year-on-year. So, when considering what options to stock, no and low alternatives of premium brands are a must.  

Moments such as Dry January are a great opportunity to bring new consumers through the door by offering an exciting range of no-and-low drinks. But it’s important to understand that demand for these alternatives does not end in as we enter February. A robust selection will not only appeal to a new demographic, but mean current customers are more likely to stay longer, spend more and, crucially, return.
Jean-David Thumelaire is on-trade sales director at Budweiser Brewing Group 

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