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Morning Briefing for pub, restaurant and food wervice operators

Fri 28th Jan 2022 - Friday Opinion
Subjects: Let’s have Instagrammable kids’ meals, industry can take streamlining lessons from the car sector, thinking fast and slow in hospitality, licensed premises continue to be scapegoats
Authors: Katy Moses, Glynn Davis, Karina Coen, Paul Chase 

Let’s have Instagrammable kids’ meals by Katy Moses

“Beige” is how many parents describe the current options for kid’s food in hospitality venues. “Boring” comes a close second. Two words I don’t often hear associated with an outstanding customer experience in our wonderful sector.

Last week, I had the pleasure of presenting some brand-spanking new KAM research at the 2022 Restaurant Marketer & Innovator European Summit (RMI). The research, part of our 2022 Family Dining Report, focused on the evolution of the family meal and what both parents and kids want from pubs and restaurants when they go out to eat.

The family eating occasion has changed. Previous research tells us that families are eating out twice as much as 30 years ago. In fact, pre-pandemic, they made up 57% of restaurants’ revenue. There are seven million households in the UK with kids between new-born and 14 years old, and they eat out (as a family) 2.1 times per week, spending, on average, just under £40 each time. This equates to almost £4,500 on family dining per household, per year. That makes them an incredibly valuable customer group.

But does the standard children’s menu need a re-think? Some 65% of parents and 88% of restaurants admit it needs a shake-up. To re-iterate, 88% of operators… so we know there’s a problem, but we’re ignoring it. Perhaps we should be putting some of the hospitality industry on the naughty step. To me, the kids’ offering doesn’t just need a re-think. It needs a drastic change in order to keep this valuable group of people in our venues – not to mention to “woo” the customers of the future – neither of which will be achieved with dry chicken nuggets and chips. Why do I rarely see kids’ food on Instagram? Simply because, generally speaking, it’s not good enough.

It may come as a surprise to many out there that, when asked why they liked eating out in pubs and restaurants, kids primarily mentioned choice and being with their family (no, really!) So why are we limiting their choice to “beige food”, and why aren’t we taking the stress out of family dining to make it a great family experience? 39% of the parents we spoke to want the adult menus to be available to kids in smaller portions. I know there are margin challenges here, but I also know it’s possible.

51% would like more nutritional food to be available. We’re not talking a plate of greens – I’m a realist, not a sadist – but if we can manage to “hide” the goodness in kids’ food (vegetables blended into sauces etc) while still making it attractive to them, wouldn’t that be a step-up from where we are currently? At RMI, the family dining topic certainly sparked some debate, and there were many questions that I didn’t get to answer, so I’ve answered a few below.

I was asked whether we have found that children prefer a more “grown-up” experience. Yes, absolutely. They don’t have a lot of autonomy in their day-to-day lives, so choice is important. And if they’re given a menu that just includes what I call “shut up food” – food that mum or dad chucks in the oven when they’re short of time – where’s the experience in that? Imagine being excited to eat out with your family and being given a tiny boring menu of XXX with chips, and only being given a glass of water (40% of parents only allow their kids to have tap water when out as they don’t think there are enough ‘healthy’ kids drink options). Doesn’t sound like much fun to me, I’d probably be the one on the floor crying and banging my fists.

There was general discussion as to whether there’s any concern about creeping prices – what I want to stress here is that value is more important than price. And value isn’t price, value is “was the experience worth what I paid for it?” Parents want to eat good food, have a drink (or two), feed their kids decent quality, nutritional food that’s tasty and have a peaceful, fun couple of hours. No parent that we spoke to put price as a primary concern, so we in the industry shouldn’t be – we should be ensuring value.

Concern as to how we strike a balance between being a good family venue and not upsetting other guests will always be a slight challenge, unless you have a venue big enough to “zone”. But the bottom line is, if you can keep the kids happy and entertained, they won’t disturb others. If you’ve got your offer right, you won’t have this issue. Or you could make them eat in the store cupboard, either option works for me.

With kids being more online savvy, we believe they’ll influence choice of venue more as time goes on. At the moment, the decision to eat out and where to go is predominantly controlled by the parent, though kids seem to have far more choice when it comes to choosing food/drinks once in venue. Staff service needs to be child-focused – make the kid feel like they matter and they may just suggest your venue next time the little darlings get to go out to eat. I truly believe improving family dining is a huge opportunity for our industry, and surely the seven million households that are spending almost £4,500 a year on eating out with their offspring deserve more than a plate of beige nuggets.
Katy Moses is the managing director of KAM

Industry can take streamlining lessons from the car sector by Glynn Davis

Beyond building a ground-breaking business in electric vehicles with Tesla and revolutionising the development of rockets and spacecraft with SpaceX, my guess is Elon Musk would also be a dab hand at running a restaurant if he had the time.

Much of the motor manufacturing industry ground to a halt because of supply chain issues when parts, including semiconductors, could not be sourced, and this caused massive disruption. In contrast, Tesla faced no such problems. The company’s line-up of models is much more streamlined than its competitors and so much easier to supply as it involves less parts. Tesla also uses standardised parts across its compact range.

This reminds me of a neighbour of my parents some years ago, who complained vociferously when he found out a replacement part he’d bought for one of the doors on his new Ferrari was actually the same as those used on much cheaper models of Fiat, which at the time had a large stake in Ferrari. This reflected the collaboration being undertaken across the two businesses. While the neighbour was justified at moaning about having to pay a significant premium for the part, I’m sure today he would recognise that this sharing of products is a very sensible way to simplify supply chains.

Clearly, other car companies have taken note, and models of Porsche now incorporate parts from the vehicles of its parent company, Volkswagen Group. Meanwhile, at Mercedes, the company recently announced it is looking to reduce its range of models as well as the powertrain options – whatever they are.

Such lessons in using less parts are also sensibly being embraced by the food industry, which is actively shrinking the options on menus. The Lumina Intelligence Menu & Food Trends Report 2021 found an average 18% reduction being seen across the sector – with chain restaurants implementing a 20% downsizing to 64 dishes compared with 80 in 2019. Even this sounds a chunky amount to me. I’ve always much preferred concise menus where the chef has effectively edited the choice for me, and the kitchen can then focus on this more manageable configuration. And with a greater throughput of the limited number of dishes, there is invariably a freshness to what comes out of the kitchen.

There are many examples where the short menu is a virtue and a selling point. In-N-Out Burger in the US is renowned for its incredibly short menu when compared with the other burger operators like McDonald’s and Burger King. They seem to be perennially battling to keep control of the number of options on their menus. Such strategies can also provide a boost to profitability.

Renowned vegetarian restaurant Dirt Candy in New York City has never been as profitable in its 13-year history as it currently is because of the streamlining it has made to its menu as a result of covid-19. Out went the multiple tasting menus and in came a single five-course option. Such a move dramatically simplified operations at the restaurant which, like every other foodservice business, has struggled with staffing.

Prepping became more manageable because of the fewer ingredients involved, and very little work is now done on raw materials that end up in the bin because the quantities required are now much easier to forecast as a result of the single menu. This has all contributed to the fact that the restaurant can serve the same number of meals as before the pandemic, but with only 70% of the employee numbers involved. The upside for the team is the new arrangement means they have enjoyed a significant increase in wages.

With supply chain issues and employee shortages looking likely to cause problems for some time, the reengineering of menus and streamlining of options looks set to be an ongoing feature of the hospitality industry, and maybe could result in some innovations that would even impress the car sector and Mr Musk.
Glynn Davis is a leading commentator on retail trends

Thinking fast and slow in hospitality by Karina Coen

I had the privilege of hosting a panel discussion at last week’s Restaurant Marketer & Innovator European Summit (RMI), called ‘Creating a culture where innovation thrives’. I started by asking the four panellists what their businesses did to foster and encourage innovation, and it was clear that for those from relatively new and young businesses (Dishoom and BrewDog, in this case), being surrounded by creativity and working in a culture where people were encouraged to try new things and not fear the consequences of failure, was the norm.

This was in stark contrast to the experience of Punch Pubs’ Russell Danks, who in his own words had built a career working at businesses with an “old school” mentality, and legacies that could be hard to shake off. He talked about encountering a lot of institutional resistance to change, with innovation sometimes stonewalled with responses like, “you can’t do that because we’ve tried that here before”.

Russell’s solution was to divide his teams along the lines of Daniel Kahneman’s System 1 & 2 theory, where System 1 focused on “keeping the lights on, keeping trading,” while System 2 focused six months to three years ahead. This famous behavioural science model, which Kahneman popularised in his book “Thinking, Fast and Slow”, identifies System 1 as “the brain’s fast, automatic, intuitive approach,” while System 2 is “the mind’s slower, analytical mode, where reason dominates”. It recalled to mind so many conversations I’ve had with operators, particularly coming out of lockdown last summer and straight into a hospitality staffing crisis.

Part of my job is going to events like RMI and press the flesh, spreading the gospel of Stint. When I tell operators that we connect hospitality venues with university students who work short shifts, performing basic but vital tasks, their System 1 response can be to think of us as an agency – providing temporary, hassle-free staff to plug a gap, taking pressure off their core team. They can see the short-term benefits, but they could be forgiven for wondering what all the fuss is about.

However, it’s when people take the System 2 approach that they really begin to understand the benefits of Stint. By planning ahead and incorporating Stint students into their weekly rotas, operators can be smarter about when their core team works and deploy them better throughout the week, improving job satisfaction and increasing engagement and retention levels.

The examples of innovation that my panel gave me last week ranged from new product development in the shape of vegan offerings and meal kits to an in-house order and payment solution and the launch of an e-commerce platform. At Stint, we’re working to innovate something a bit more well-established – the traditional hospitality operating model. We will no doubt encounter a few people with old school mentalities, but at least we can guarantee that the push-back won’t be “you can’t do that because we’ve tried that here before”.
Karina Coen is managing director of hospitality operations at Stint

Licensed premises continue to be scapegoats by Paul Chase

In my second book “Alcophobia” (published as a free download December 2018 and available on my website) I advanced the thesis that the obsessive, puritanical opposition to alcohol is a kind of mind virus. My thesis was that puritanism can be characterised as a meme – a mind virus that manifests itself in myriad ways. I expressed the view, only slightly tongue-in-cheek, that people who felt an irrational fear of alcohol consumption were suffering from what I termed “alcophobia”.

I wrote: “Alcophobes have always represented beverage alcohol as the source of all evil. Alcophobia as a manifestation of the puritanical meme has enabled puritanism to find new hosts by serving a wide variety of different causes. The existence of a cadre of cause-oriented clerics, medics and ‘troubled persons’ professionals who proselytise for the anti-alcohol cause and defend its orthodoxies against challenge, also serves the adaptability of the puritanical meme and acts as a defence mechanism for it.” Over the course of the pandemic, we have seen alcophobia manifest itself in terms of policies that singled-out licensed premises for particular restrictions that didn’t apply elsewhere. 

What these restrictions had in common is that they weren’t supported by any evidence that licensed premises, where alcohol was sold and consumed, were any more likely to be vectors of transmission than anywhere else. But the puritanical fear of people gathering and imbibing a disinhibiting drug – and what this might lead to – is deeply ingrained. It is notable that in Scotland, which is the historical home of the temperance movement, and in Wales, the home of Presbyterian opposition to the demon drink, the restrictions have been harsher and kept in place longer than in England.

The policy divergence between England, Scotland and Wales over restrictions on hospitality, and the insistence by the devolved administrations on retaining the utterly vacuous policy of covid passports, is doing huge economic damage. Nowhere is this more apparent than in the nightclub sector, which has been mercilessly clobbered and rendered almost un-investable. The question is whether this assault on licensed premises and public drinking will continue as we emerge from the pandemic.

Right on cue, a study has recently been published that seeks to explain what it calls the “Covid-19 Alcohol Paradox”. The author is a leading temperance-supporting academic named Peter Anderson. An academic study of 80,000 households’ shopping habits sought to explain why 2020 saw the biggest increase in alcohol-related deaths in the UK in the last 20 years.

Britain’s heaviest drinkers – those in the top 20% of alcohol-buying households – purchased 17 times more drink from off-licences and supermarkets than those in the bottom 20% during the first lockdown. In 2020, there were 8,974 deaths from alcohol-specific causes in the UK – an 18.6% increase on 2019.

The author of the paper writes: “British supermarket panel data suggest no increases in overall sales and purchases of alcohol following covid-19 lockdowns, yet survey and mortality data suggest otherwise. This paper attempts to unravel the paradox.” 

But simply because alcohol-related mortality rose sharply in 2020, does not imply that overall sales of alcohol rose. There is only a paradox here if you believe the discredited whole population theory of alcohol, which assumes there is a fixed link between per capita alcohol consumption and alcohol-related mortality. The pandemic has once again shown that this theory, which has never been supported by evidence, is wrong. 

Alcohol sales fell during lockdown, and per capita consumption in 2020 seems to have been similar to previous years. Orthodox public health theory suggests that we shouldn’t see a rise in alcohol-related harm without a rise in per capita consumption. Moreover, the amount of alcohol advertising fell dramatically during lockdown, and availability was greatly limited by pub closures and other restrictions on trade. Since these are supposed to be the two main drivers of consumption, we should have seen a substantial decline in per capita consumption and a commensurate decline in alcohol-related harm.

Instead, we saw a spike in alcohol consumption among some heavy drinkers, which seems to have led to an almost immediate increase in harm. All of this leads to the obvious conclusion that harmful drinking is driven by personal circumstance rather than commercial factors. In terms of the drinking behaviour of heavy drinkers during lockdown, it is not difficult to imagine this was driven by boredom, social isolation and depression. Efforts to tackle harmful drinking should therefore focus on harmful drinkers rather than the whole population. And we should acknowledge this is an example of the collateral damage done by lockdowns.

But the devolved administrations in Scotland and Wales are led by politicians who are instinctively authoritarian, and “keeping people safe” during the pandemic has led to this knee-jerk reaction that stricter control on licensed premises is the way to go.

Anderson concludes: “That the increase in purchases was much less pronounced in Scotland and Wales, compared with England, could be attributed to the minimum unit price of alcohol introduced in both jurisdictions. Such a policy shown to reduce alcohol purchases, particularly amongst the heaviest purchasing households during times of lockdown.” Oh, what a surprise – everything leads back to minimum unit pricing for these people! Regardless of whether minimum pricing reduces purchases, it didn’t prevent Scotland and Wales seeing a sharp rise in alcohol-related mortality in 2020 that was very similar to the rise seen in England. But this never got a mention – I can’t think why.

I hope for a more enlightened approach to alcohol regulation in 2022, but once again the divergence between policy in England and in Scotland and Wales has spotlighted the stupidity of making the pandemic a devolved matter – with all the virtue-signalling this has led to.
Paul Chase is director of Chase Consultancy and a leading industry commentator on alcohol and health

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