What's it all about Alpha?

After the devastating terrorist attacks on New York's twin towers on 11 September 2001, the world seemed to stay at home. As if that wasn't enough, confidence in air travel was further battered by the Afghan war, followed by the Iraq war and, to top it all, a killer virus, Sars. Surely the knock-on effect of all that didn't leave airport caterers with much of a future?

"You might not think so," says Alpha Retail Catering's new managing director, Jerry Robinson. "But actually it didn't stop people from flying for long. Over the long term - and our business is based on the long term - we expect very strong growth."

So it seems. Parent company Alpha Airports Group - an airport-only business that has a worldwide presence in in-flight catering and airport shopping - has identified catering in airports as an area that's crying out to be developed.

It's easy to see why. Interim results for the group this year show that the effect of world events on long-haul flights and the fact that low-cost airlines are reducing on-board meals have pushed UK in-flight catering sales down 13.6% to £67.7m to 31 July. On the bright side, however, a 9% increase in passengers at UK airports, driven by the growth of those same low-cost airlines, pushed airport shopping sales up by 19%. Alpha has seized on this trend and has already started to overhaul its airport catering division.

So sure is Robinson of its potential that four months ago he left his position as operations director at Punch Taverns. He factors in today's lengthy security checks and delays and the fact that budget flights seldom provide food, and says the result is huge numbers of potential customers who need to eat. As he explains - in one of several pub analogies - it's time airports evolved their catering to match the high street, just as pubs did in the late 1980s.

"That's why I came to this business. I thought it was a good time to join, at the start of a journey," says Robinson. "When I joined Bass in '89, most pubs didn't do food. Similarly, at the moment airports lag behind the high street. There's indifferent service, standard products and not much that's exciting. Our unique selling point is to try to make airport catering more innovative."

We are meeting in the main terminal at Dublin airport, because Robinson reckons the recently revamped operation there best illustrates Alpha's plans. He's waiting with catering director Paul Murray in the Room, Alpha's new business lounge. Here, any passenger can pay €15 (£10.50) to sit in the chic cream chairs and plug in their laptops, or else book one of three meeting rooms. Next door there is the Brasserie Bar, a sleek, upmarket restaurant with one of the few wood-fired ovens in an airport this side of the Atlantic. And round the corner there's the foodcourt, with everything from hot sandwiches and organic salads to while-you-watch stir-fries and steak and stout pie (see below).

Alpha has invested €3.5m (£2.4m) since taking on the contract earlier this year, and work finished in September. As with all airport contracts, it had to spend its own capital on the infrastructure and design, but airport operator Aer Rianta will take a percentage of revenue.

Robinson observes that Aer Rianta, like other airport operators, is starting to take a much greater interest in the standard of catering. He argues further that airports are beginning to compete with each other. He points out, for instance, that as he lives in Leicester, he has a choice of several airports, including East Midlands and Birmingham. What might sway his decision to use one or the other in future is the quality of facilities such as parking, check-in and, of course, catering.

"We can add value to the airport through our food, particularly for business travellers," says Robinson. "Airports are recognising that they can attract people through their facilities rather than just being functional."

While keen to modernise airport catering, Robinson is determined not to make the same mistake as pubs, which, he says, rolled out rigid "cookie-cutter" brands 10 years ago and now face huge capital expenditure to modernise them.

With this in mind, Alpha has developed six concepts, including a brasserie and deli-bar, that can be tweaked and evolved during the five to 15 years of a contract's life (see panel left). Similarly, they can be adapted, rather than replicated, in each airport. So, for instance, at Birmingham airport, where the deli bar is airside, it offers take-away food for budget airline travellers.

"The beauty of the options is that we can change the range and evolve as the world moves on," says Robinson.

He also reckons that the public is tiring of predictable brands. While respecting existing partnerships with Sbarro and KFC, he is also looking to form partnerships with emerging companies. At Dublin, for instance, he has introduced Nude - a local company owned by the brother of U2 singer Bono - which offers Fairtrade, organic and healthy options.

"In the USA the airports have more unbranded stuff, which has encouraged me. It's giving the customer a more interesting experience," says Robinson.

Alpha is also going after a higher average spend, although Robinson won't divulge what this figure is. However, it's plain from the price of a hot pastrami sandwich at €8 (£5.50) or a steak at €22 (£15.30) that volume of sales is important to balance the slim margins.

According to Robinson, this isn't a problem. His figures show that food and beverage sales have increased by 25% at Dublin, while there is a 50% profit increase at Luton and 60% growth in like-for-like sales at Manchester.

But while it's all well and good to have a spanking new catering portfolio, how easy is it to get new business? Competitors in airport catering include RestAir, City Centre Restaurants and the biggest player, Compass subsidiary Select Service Partner. Robinson agrees that there is a finite number of airports, but he takes heart from the current spate of expansion plans. Birmingham and East Midlands airports are looking to expand their terminals, as is Heathrow.

"All the airports are getting to capacity and need to make their buildings bigger," says Robinson. "As soon as there is more space, there are more catering opportunities."

So what about broadening out, perhaps into facilities management in airports? Robinson says it isn't beyond the realms of possibility but it would be a long way off, not least because of the stringent fire, hygiene and security issues.

"It takes six weeks to get security clearance just for a part-time bar worker," says Robinson. "There are a lot of regulations to follow, a myriad of procedures, so it is very specialist."

The benefit of this, of course, is that it keeps the competition keen but contained. "There isn't much likelihood of a standard caterer dabbling successfully in airport catering," says Robinson.

Alpha Retail Catering

• Is part of Alpha Airports Group (www.alpha-group.com), an airport-only business started 40 years ago and until recently focusing mainly on in-flight catering and shopping.
• Has annual turnover of £450m.
• Employs 6,000 staff.
• Provides 60 million meals a year and has more than 90 shops and 20 catering outlets in 26 locations.
• Has catering outlets across the UK and Ireland, including Luton, Jersey, Inverness, Dublin, Manchester, London City and Birmingham airports.

Results of Alpha's research in May 2003
Passengers were asked to list catering options on a five-point scale of interest…

• 27% wanted self-service deli sandwiches.
• 24% wanted self-service from different counters.
• 19% wanted to eat at a bar.
• 18% wanted self-service hot snacks.
• 11% wanted a Continental-style café with waiter service.
• 8% wanted a restaurant with waiter service.

In-flight catering

Alpha division Alpha Flight Services saw a 13.6% decline in sales to £67.7m in the first six months of this year, but it is still a major business, providing roughly 50 million in-flight meals for 100 airlines in 62 countries across the world.

It is, however, having to adapt to the needs of budget airlines, which seldom provide food. From November, therefore, passengers will be able to order in-flight food on Virgin Express through an internet preorder site called AlphaD'Lish.

On the ground, Jerry Robinson, managing director of Alpha Retail Catering, says he isn't particularly looking to push take-away food for flights, although passengers can obviously buy a sandwich and a smoothie from one of its airport outlets.

But he does point out that several of his concepts meet the grab-and-fly needs of budget passengers. Not least is the World News Café, a kind of one-stop shop where people can get a newspaper, a drink and a sandwich before boarding.

The foodcourt

At Dublin airport, Alpha's foodcourt (pictured above) is competing with a number of caterers. Along the concourse, local operator Thomas Reed runs the Skyview bar and hot food counter, and Compass subsidiary Select Service Partner operates Upper Crust, O'Brien's, Sbarro and the Village Grill foodcourt. There's also a McDonald's.

Some 15.1 million passengers go through Dublin each year (there are 46 charter and 76 scheduled destinations), and if a flight is delayed, the number of customers can double in an hour, so the catering needs to be flexible. To differentiate itself and reduce long queues, Alpha has divided the foodcourt into six or seven areas.

First, there's a grab-and-go sandwich section with soft drinks. Next door is a Wok counter, where pasta or stir-fries are cooked in about four minutes, priced at €10 (£7). Then there's a hot counter which serves dishes such as steak and stout pie at g10 and a hot sandwich bar, selling, for instance, salt beef sandwiches at €7 (£5), or pastrami on rye at €8 (£5.50). Slap bang in the centre, there's a deli offering made-to-order sandwiches, salads and desserts.

Alpha also operates two concessions. To meet the needs of people who want healthy food, Robinson has introduced the Nude bar, which serves Fairtrade, organic and healthy food, such as salads, spring vegetable wraps and smoothies. There's also a Bewley's Oriental Café, which serves coffees and snacks 24 hours a day.

Separate from the foodcourt and more upmarket is the Brasserie Bar, which opened in July with a wood-fired oven. According to catering director Paul Murray, Alpha is the first airport caterer in Europe to have one.

Rather than predictable pizzas, it's used to cook west coast sea bass fillets with grilled seasonal vegetables and lemon butter (€19/£13), which is cooked on imported US cedar planks, and prime rib-eye steak with baked field mushrooms, blue cheese and port sauce (€22/£15), cooked on a skillet pan. Alternatively, there are fish casseroles cooked in Portuguese copper pots, or cataplanas, such as Molly Malone seafood coddle (€19/£13).

Robinson acknowledges the prices are more expensive than those further down the concourse at, say, McDonald's, but he says with 15.1 million passengers a year passing through, there are enough who are willing to pay a premium for freshly cooked food. "It's not cheap, but it's a reflection of what we want to do," he says.

Murray adds. "If you're not eating on the plane, where do you eat? It's an opportunity for us to create a nice environment - part of their holiday experience."

Brand partners

• Bewley's Oriental Café
• Nude (pictured above)
• KFC
• Sbarro

In a nutshell

• Airport catering is ripe for development.
• Alpha's strategy is to lead innovation.
• It has developed six new product concepts.
• These concepts are not rigid, and can be adapted to new sites rather than replicated.
• Alpha partners with emerging companies.