Turning a healthy profit from healthy food is not always easy for high-street restaurants. Tom Vaughan talks to three operators who have mastered the art
Take-aways, cafés, fast food. You immediately think of greasy, prepackaged pap (pizzas, fried chicken, soggy sandwiches) and the sort of places where you choose the menu option that's the least unappealing - a culinary form of damage limitation. But quick-turnaround lunchtime food needn't be like this. As the healthy eating movement has picked up momentum this past decade, so high-street operators are reflecting public demand for a better standard of midday meal. Three case studies below show that healthy food and better-quality ingredients are far from incompatible with making a good gross profit.
The last time a member of the press wrote about Fulham deli Megan's they described it as London's best-kept secret. Owner Megan Redel's reaction? "We don't want to be a secret!" Being every bit the owner-operator and not a zealous self-publicist has meant, over the years, that Redel has not received the attention her business arguably deserves.
Formerly an antiques shop, Megan's was transformed into a healthy eating café seven years ago. But the quaint eaterie, with its bucolic garden, struggled in its first few years.
"It was four years of ploughing money back into the business to keep it going," Redel says. "People think it would be romantic to run a place like this, but there's no romance in it - it's bloody hard work. But it can be so rewarding when you see people here having a great time."
When the business opened in 2001 there was a conspicuous lack of healthy eating sites in London. "In New Zealand (Redel's homeland) there are sites like this everywhere," she says. "But seven years ago you couldn't get a salad like this in London, and we struggled to convince people to spend that little bit extra with us."
The restaurant-cum-deli's home-made salad, quiche, sandwich and hot meal offering now attracts about 200 customers a day to the King's Road site. The restaurant and garden can seat 60 in total and about 30-40% of their business is take-away.
With hindsight, what measures could Redel have put in place in those early years to ensure a better turnover? "I'd have implemented better portion control, lots more staff training and a better balance of ingredients. All those small things can make a big difference to your GP."
|!Gordon Ramsay meets the Queen](https://cdn.filestackcontent.com/TuqvQzXJTyieCYW4g4Rp)|
|*Megan Redel, owener of Megan's (photograph by Adrian Franklin)*|
A salad at Megan's now is a balance of cheap and expensive ingredients. "I can't put on an asparagus salad because I'll have to sell it for 70p more (a salad portion now is £2.80 eat-in) and people won't pay for it."
Salads are cooked in batch and laid out on trays at a service point. Inexpensive ingredients such as lentils are married with more pricey produce such as proscuito to balance the GP of the dish. And as take-away salads are sold by weight (from £16 to £21 per kg) Redel has learnt to ignore some ingredients. "For example, spinach," she says. "By the time someone has picked through a box of spinach I can end up paying £8 for the produce but be spending £12 on labour just to cook it. Plus the fact that it is so light it means I make very little money on it."
Similarly, items such as broad beans, which need podding, can be an expensive luxury on the menu. Prudent buying is key to staying profitable, Redel says.
Two chefs and one pastry chef work from 8am until 3pm preparing the three trays of hot food, 10 trays of salads, 40 sandwiches and 70 quiches that the general public consumes. As at Leon (see below), it is easy to predict what will sell when, and there is very little waste from the kitchen.
The restaurant is also trying to break into the evening dining market and a chef works evenings to cook fresh, healthy meals for those keen to experience Megan's at night.
With Megan's having ridden out the tough times, and with a loyal following in the area, one future development that would make the business more profitable would be a second site. Batch ordering would increase the GP considerably by securing much more favourable rates with suppliers. Wimbledon is one possible location but Redel is, at present, undecided. One absolute necessity, she says, is to have a commercial business nearby - Megan's current site has the Fulham Gasworks offices, for instance.
The business is branching out into outside catering at one or two exhibitions a month, and that in itself allows the occasional better deal with suppliers.
Megan's may have pre-empted the healthy eating movement by a few years, but it is testament to the popularity of Redel's well-cooked, fresh food that it has stayed on the scene. Just a few doors down is a site that must have changed hands five times in the past few years.
Address: 571 King's Road, Fulham
Opening times: 8am-11pm
Dishes include: Green bean, proscuito and sunblush tomato salad (£2.60 a portion) tomato, avocado and mozzarella salad (£2.60 a portion) mixed platter for two with grilled vegetables, fish and meat (£15.40) selection of smoked fish, wild salmon and salmon terrine with new potato salad (£15.40)
|![Gordon Ramsay meets the Queen|
|*Henry Dimbleby (l) and John Vincent, co-founders of Leon (photograph by Adrian Franklin)*|
Tasty food, reasonable price, solid GP - the magic combination for a healthy eating restaurant, says Allegra McEvedy, Leon's co-owner. And it's a combination the three founders of the nine-strong fast-food site (the other two being John Vincent and Henry Dimbleby) often botched up during their first year in business.
The trio launched their first restaurant in July 2004 in London's Carnaby Street, with the aim of proving fast food needn't be unhealthy, greasy rubbish. The first year, though, proved tough.
"We really struggled at first," McEvedy says. "We were opposite a Pret A Manger and found it hard. Because we were using free-range chicken and good, expensive ingredients people would come in and complain how expensive it was. You wanted to scream at them ‘Yeah? But it's more than just a fucking sandwich, that's why it costs more!'"
These days the company boasts nine sites across London and clocks up between 30,000 and 40,000 transactions a week. But in the early stages, a rather unhealthy GP sat as low as 16% on some dishes while the team struggled to use good ingredients and keep prices reasonable.
In hindsight, there were several things they could have done differently to make for an easier first year, McEvedy says.
Starting with a smaller menu would have been prudent. "In the first few months we chopped 25% off the menu," she says. "I'm a chef and John and Henry are foodies so we wanted to get all these dishes on, but we were asking too much of ourselves."
Keeping costs down with stringent staffing rotas, working closely with suppliers and properly costing out dishes all help to save money - money that can be fed into better ingredients.
For example, when the Carnaby Street branch opened, they offered a ham and pepper wrap that went down a treat with the general public. Its popularity prompted the team to keep it on the restaurant's winter menu, not realising that in October peppers would shoot up four-fold in price, which meant there was barely a profit to be made on the dish. Unfortunately, because it was on their printed menu they had to keep providing it.
Sure-fire ways of getting dishes to hit respectable GPs include working more closely with suppliers, agreeing price-freezes on produce to avoid suffering through fluctuations, using seasonal produce - the Leon menu now changes four times a year - and buying in bulk.
After riding out a hairy first year, the restaurant was recognised at the Observer Food Monthly Awards and public attention shot up. A second site followed in July 2005 at Ludgate Circus and with it a kitchen in Hayes, where meals that keep well over the day - slow-cooked dishes, soups and stews - are made by the team of 17 and sent out to the respective branches. Staff numbers on site vary between three and nine in the various restaurants, depending on size, and dishes that don't keep as well - sandwiches and salads, for example - are prepared fresh each day in the individual kitchens. Except for a few items - such as ice-cream and cakes - everything sold in Leon is prepared by the team that day.
The ethos behind Leon is a fast food service, which means that dishes have to be prepared and placed in the chute for customers. To keep the quality of the offering, they are permitted to sit for only 10 minutes before being discarded if unsold. Although this policy might seem likely to lead to a lot of waste, it is eerily easy to predict the sales figures of each dish in certain time slots, McEvedy says.
A commitment to the environment and to British produce is also evident in the Leon philosophy. Winter herbs are the only items that are air-freighted, with 75% of ingredients from the UK, 20% from the EU and only 5% from around the world - all by boat.
Dimbleby and Vincent hope there will be as many as 2,000 Leons worldwide by 2020, so they clearly believe the public is hankering for healthy fast food. "We don't want to be the only one doing this, though," McEvedy says. "We want to be part of a growing awareness for healthy eating among the public that has grown so rapidly these past few years."
Leon sites: Carnaby Street, Brompton Road, Regent Street, Spitalfields, Ludgate Circus, Cannon Street, Bankside, Canary Wharf - all London.
Opening times: 8am - 9/10pm (depending on site)
Dishes include: Moroccan meatballs (£5.65), vegetable tagine (£4.95), grilled chicken superfood salad (£5.40), magic mackerel couscous superfood salad (£3.95), roasted sweet potato falafel wrap (£3.30)
Four years ago, Pod founder Tim Hall had a minor heart operation. His consultant advised him to change his diet and lifestyle. Patrolling the high-street chains for a healthy lunch, he found the options wanting. So he conceived the idea for Pod, a healthy-eating chain of high-street restaurants (currently with two sites across London and designs on a further three in the near future).
The first Pod launched in London's Moorgate two years ago. Like Leon and Megan's, it struggled at first. "It was a tough time," admits Hall. "It was just a case of opening up, sticking your thumb in the air and seeing how the wind blows."
Hall dedicated the first 12 months to tweaking the product - making sure the public knew exactly what Pod stood for. "We got the communication wrong at first," Hall says. "We weren't clear that we were focusing the amount of time we were on nutrition. So we improved the communication. For example, even though it isn't a typical Pod product, we still ensured that customers knew that bacon sandwiches were made with good bacon on a healthy malt bread - that sort of thing."
Pod food is nearer to the £5 mark for a salad or hot meal, and Hall admits that this puts them at the expensive end of the high-street lunchtime market. "It's not cheap to compete in the high-street at lunch," he says. "Renting the kind of sites that are going to put you in competition with McDonald's and Pret A Manger costs."
The key to capturing a solid customer base is to secure a site near local businesses and make sure you impress customers on their first visit. "If you are on the high street, people will naturally want to try you as they may well have been working in the area for five or six years," Hall says. "But they can be ruthless. If it isn't good on their first visit, they may not come back for a year."
In those first 12 months the Pod team concentrated on making sure the food they served was tasty and healthy and that this was communicated well to customers. Every dish is identified - superfood, low-fat, vegetarian, wheat-free, dairy-free or gluten-free - and each contains a sizeable description. Through such means Hall has ensured the average spend in Pod is 30% higher than high-street competitors, allowing the company to spend more money on ingredients.
A kitchen team of 12 per site prepares the meals fresh each day and most of the ingredients are bought in fresh. The answer to affording fresh, seasonal and high-quality ingredients and keeping prices relatively low is maintaining a high volume of custom. The 12-seat Moorgate site serves about 1,000 customers a day, with 90% take-away business, while the second site, opened in London's Tower Hill seven months ago, serves about 700 with about 60% take-away business.
Hall admits that, although the first site is profitable, units will not make as much money as Pret A Manger equivalents until the company can buy more in bulk. With £1.5m already spent getting Pod to where it is today, Hall has his eyes on three more London sites in the near future. Is he concerned that the boom in healthy eating will throw up more competitors in the future? "At the moment there are few if any chains doing this as well as we are," Hall says. "Leon sites are the only ones that come close. But the more that other restaurants raise expectations over healthy food, the more we can profit from that."
Sites: Moorgate, Tower Hill both London
Opening times: 6.30am-4pm Moorgate 7am-5pm Tower Hill
Dishes include: Tuna, slow-roasted tomato and basil sandwich (£2.95) herby spring bean salad (£3.95) Vegetables Provençal (£4.50) Spring lamb stew (£4.95)