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Hospitality Business Leaders Report 2019: Focus on the fundamentals

22 August 2019 by
Hospitality Business Leaders Report 2019: Focus on the fundamentals

According to The Caterer Hospitality Business Leaders Report 2019, powered by CGA, some 57% of business leaders see experience-led venues like permanent street food markets and pop up spaces as the most exciting part of the hospitality market.

It stands to reason. The likes of Shoreditch's Dinerama, a summer pop-up made permanent because of its success, and Liverpool's Camp & Furnace, a street food and event destination in a warehouse, draw in diners in their droves year after year.

Many successful restaurants have also been born from humble beginnings as street food concepts, including Pizza Pilgrims which started in a tuk tuk and now has 11 sites across London and Oxford, and steamed-bun brand Bao. Originally a market stall in a car park, it now has three permanent venues.

For Massimo Montone, founder and managing director of hospitality consultancy Restaurant Keys, it's no wonder operators are clamouring to either launch or showcase their concepts in more casual settings.

"The market is moving that way but restaurateurs are also moving in that direction because of the high rent and business rates they have to pay to open a restaurant in a central location. If you have a pop-up or a market stall, there is less risk involved. Your staff also only need to be good at making one thing."

YFood CEO and founder Nadia El Hadery says the traditional growth strategy of opening as many restaurants as possible across the country is only one option.

"We're seeing a growing trend towards food brands building an audience and a following of people that believe in their values and therefore want to be able to access that through multiple channels, be that a retail product through to a pop-up food experience," she adds. "Depending on what type of audience you're trying to engage with, you might have multiple channels available to you that you wouldn't have considered in the past."

Pop-up takeovers

When it comes to more traditional dining out, the experience is just as important, with 76% of business leaders perceiving quality of experience to be the number one factor for consumers when they choose where to eat and drink out in 2019. And they're acting on it. 68% of respondents said they're planning to implement an experiential mechanic – such as tasting activities, pop-up kitchens and takeovers or cocktail masterclasses - in the next 12 months.

Montone would advise them to stick to their guns. "Bringing in a guest chef for a weekend, for example, can be very beneficial to the business financially as well as boosting team morale," he says. "In addition, you're giving your regulars something new to try and also generating another market because that chef will have his own followers. They may never have heard of your place but they could become your customers."

El Hadery agrees. "Communities play a big part in current and forward trends so if you want to create experiences in your restaurant and are looking to drive footfall, it's a good idea to partner with communities out there that align with your brand and values and collaborate to create interesting and engaging experiences and mash-ups.

"If you're clever about it and think where else are the people I'm trying to access and what can I potentially do for those people, you might be able to leverage someone else's community and bring that following to your business."

Key to the success of a pop-up like this, says Montone, is making sure the numbers add up. "How much do I need to pay the chef to come in? How much extra revenue will they bring in? How much brand awareness will it bring me? How many followers do they have and how many people do they have on their database? Go through the numbers and do your research," he advises. "This is all part of the deal."

Getting the basics right: food, service and staff

Both operators and consumers classify the experience on eating or drinking occasions by staff, service and food quality. For eating out consultant Peter Backman, this comes as little surprise.

"The staff are fundamental to the food and the service; they're the underpinning. The service is everything you experience when you go into a restaurant from the moment you walk in and you're greeted and you're shown to your table," he says. "That's the fundamentals of eating out. When you've left the restaurant, you don't remember any of those things it's everything that adds up and just creates the right experience."

Gabriel Gonzalez has been running the successful Peruvian restaurant group LIMA for the past seven years, but has also decided to branch out into the quick-service sector, opening a Venezuelan concept – SABROSO– where guests can build their own arepas and ceviche bowls at Westfield London's recently-renovated food hall in October.

He says that although his team will have a much shorter time to deliver a great guest experience than in a full-service environment, it's no less important. "People are looking for quality, authenticity and something more casual where they can go more often," he says. "The fact they can customise their experience [at SABROSO] encourages more repeat business because they can build their meal differently each time they come, but the challenge is that you have a much shorter duration of time where you need to attract, convey the message and culture of the brand and sell.

"Now we're competing with the increase in delivery and people can eat from pretty much any restaurant they want from their couch, it's also about how to make people think I'm not going to eat in, I'm going to go out and enjoy this moment. The three combined – food, service and staff – make people choose one place versus the other and restaurants need to deliver every time. Consistency is very important."

Attracting Generation Z

What many operators haven't got at the forefront of their mind yet, according to El Hadery, is that increasingly it's not just about the experience, but what the experience looks like. "Generation Z definitely value experience over possession but they actually value representation over experience," she says. "So that effectively means, for them, what it looks like on social is going to be more important than the actual experience – it's worth keeping in mind."

Michael Blakesley, co-founder of Think Zed, which is a research agency that helps businesses understand and create environments that allow Generation Z to thrive, adds that they are also looking for value, a variety of culinary options and a vibrant social atmosphere, as well having strong opinions about fairness, equality and the ethical and social footprint of a business.

"If they see a brand popping up on a Snapchat campaign or Instagram and it feels and looks and they're saying all the right kinds of things, they will be drawn to it. But I don't believe marketing messages are targeting this segment in the right way. "For Generation Z, the digital world and the on-site world are linked together so brands need to bring a site to life through a social campaign. The brand narrative has never been so important. We're not just selling the food that's in the store, we're selling the dream of the food that's in the store and brands need to embrace that a lot more now."

Key to future success will be enthusing young people about hospitality brands so much that they want to go and work for them. "We're very poor at inducting people into this market," Blakesley says. "We need to get our young people in and really bed them into the brand narrative. That ultimately reflects on how they behave with their customers when they come through the door. It's crucial to delivering the guest experience."

Searcys creates a sense of place This summer Searcys will launch pop-ups in its flagship venues – The Gherkin and St Pancras. While Searcys at The Gherkin will be transformed into a botanical glasshouse, created in partnership with Perrier-Jouët Champagne, the ‘Art of Travel' pop-up at the Champagne Bar at St Pancras will feature city-themed booths, a passport-inspired menu and demos in partnership with suitcase brand Globe-Trotter on how to pack.

"The market realised quite a while ago that experience is something that spikes interest, but to do a pop-up well you really need to plan," says Anna Fenten, head of brand, marketing and communications at Searcys. "It's a big investment and you need to market it well because you have to spike interest in a very short period of time."

She also stresses that it's important to be mindful of why you're going to the trouble to create a pop-up experience. For Searcys, there are three key drivers. "Firstly, it's a brand story," Fenten explains. "We want Searcys to be known for special moments."

Secondly, Searcys chooses moments when they need to stimulate more footfall. "As summer is very competitive, we structure them between July and September when we feel we need that extra push," Fenten says.

Finally, a pop-up can be a great opportunity to bring in new customers. "Our classic audience is 35 and up, professional people who have already experienced a lot of food and drink in their lifetime, but we also want to attract what we call the aspiring connoisseurs – 24 to 35 years olds who are out there to learn about food and drink and have those special moments. If we can appeal to them [through the pop-up], we're hoping they will become our customers for years to come."

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