The LVA held a conference entitled ‘Embracing Change – Driving Your Business Forward’ for its members recently in Dublin’s Morrison Hotel at which a number of speakers offered their view of where the licensed trade is going and where it needs to get to.
10 December 2018 | 0
With the outlook for Dublin’s on-trade economy looking increasingly positive, the ability to adapt and evolve has become ever-more important as the pace of change and competition quickens.
The Licensed Vintners Association ran a seminar recently in Dublin’s Morrison Hotel, ‘Embracing Change – Driving Your Business Forward’, where the guest speakers put some practical flesh on the theoretical bones.
Bill Wolsey – suburban pubs probably the most difficult
The first to highlight the rapidly increasing pace of change was The Beannchor Group’s Managing Director Bill Wolsey. A man of considerable experience in the NI licensed trade, he owns around 15 pubs there as well as a number of hotels including The Merchant Hotel in Belfast and a string of Little Wing pizza outlets.
He bought his first pub for £200,000.
“I put in £150,000-worth of renovations and rented it out at 10% of this with the proviso that if my nominated turnover figure was not reached, I’d take it back,” he explained.
He’s only ever personally run four pubs but after 40 years in the business he says that for the first 25 years there was not that much change but it’s been changing very quickly over the past few years.
“The Prime Minister of Canada said that ‘the world has never moved as fast – but it’s never going to move as slow again’,” he said.
One could call his a family business and he was interested to read a PWC report on why some family businesses succeed or fail.
“The report found that it’s not the second or third generation that cocks it up, it’s the first generation who demand too much by way of payment,” he told the conference.
And so the third generation sells the business as they don’t want to have to work as hard as the second did for their predecessors.
Today, the trade can be broken down into late night bars and food-led bars which will move forward as long as there’s social media to help it do so. He felt it was vital today to have the right social media, the right food and the right music for customers.
But there are also suburban outlets.
“Suburban pubs are probably the most difficult because a good community pub needs to be in tune with the community where a late-night venue would have very little future in the suburbs,” he said, “Here, family-oriented pubs are going from strength-to-strength and will be the pubs of the future if they can charge the right price.”
Bill also spoke of the Millennials and Generation X: “These two generations will want to know the provenance of your pub and whether it’s green,” he explained, “What do you put back into the community? What is the point of your pub?”
But this generation will also drink less product than their predecessors which is why he diversified into pizza restaurants and hotels.
“The day of opening pubs without understanding trends will die and it will die at a much faster rate than has been the case,” he believed, stressing the importance of being able to adapt.
“The old coach houses adapted, TV came and people believed pubs would die but they didn’t, they adapted.
“Millennials may be in at the start of social media but all the statistics point to the fact that while on top of social media, they also want to meet face-to-face, so mastering social media is a must.”
Bill recently made his first pub purchase south of the border in Dublin’s Capel Street and is perfectly familiar with the rise of Wetherspoons, “… but we, as individual publicans, should do better” he commented with eyes firmly on the future of his Dublin venture.
“…..Oh… and on dealing with Dublin City Council on planning… I thought the paramilitaries in Belfast were difficult…,” he quipped in conclusion.
Martin Potts – future of Irish pub food 2019 & beyond
Synergy Prochef’s Martin Potts gave the audience his gastronomic preview of “what’s hot” in 2019.
This included increased interest in:
* provenance of food, healthy food – “… you must have a health-related option on your menu”
* ‘flexitarianism’ – those who change choice during the week, vegetarians, vegans etc
* Middle Eastern cuisines – coming through now which also ticks the health boxes
* chefs into pickling and fermenting
* sharing plates & small food portions – these can be done badly too, so the menu must be authentic.
Customers are much more travelled now, bringing back correct and authentic experiences of what the food is.
You must provide vegetarian and gluten-free options and indicate traceability, provenance and ‘story-telling’ in your offering, he believes.
“Authenticity is key to the food offering as is an awareness of healthy eating,” he stated.
Today’s biggest challenge in the hospitality industry is acquiring chefs, but it is possible to carry on with pre-packed meals.
“Kepak do sous vide lambs, ribs and Jacob’s Ladders,” he pointed out while warning his audience that ‘big’ menus are gone, adding, “It’s also very hard to be profitable from a Sunday to a Tuesday if a big menu is on offer”.
Two questions arise in today’s hospitality trade:
How can I attract a different type of customer?
How can I sell another drink after the meal?
“The customer base is looking for choice, so you need to be able to offer more than two glasses of wine on your list,” he suggested.
Gillian Knight – Recruitment in a full-employment economy
Gillian Knight, the LVA’s Human Resource Advisor, asked if staff are aware of the risks of what they’re offering to those with allergies, for example?
“Recruitment is costly” she explained, “as is training. But a trained staff will reduce claims and accidents.”
Properly organised, recruitment can prevent costly high turnovers of staff but if using an outside trainer it’s important to get that trainer to understand how you’d train staff yourself, so make the trainer aware of your way of doing things.
How to get staff
These days employees want to know what they’re buying into.
Word-of-mouth is still used to recruit suitable staff.
“Bring an expert to the interview to test-out an applicant applying for a particular speciality,” she told the audience.
She also recommended connecting with student bars to see if there’s an overspill of candidates rejected from the college’s own bar that might suit, adding that recruiting via colleges and having a (free) presence on their sites should be done by February for Summer work.
To attract quality candidates one has to offer more: “Show me your bar and show me an interesting job spec. Do you have photos & videos? Can you offer me some unique benefits?
“Gym membership can swing it for some people over pension payments.”
You should be able to demonstrate a clear career path too – “Show those aspiring to a management role that you can offer this, indicate the promotional opportunities – and if they’re not there, say so. Offer flexible hours and if you’ve just taken over a business, offer participation in profits”.
Cost-effective candidate screening & interview tips
Direct some pertinent pre-interview questions to the candidate such as whether their work permit is OK. Do they have language skills? Indeed what level of skills do they have?
Telephone interview candidates at the outset to screen or eliminate some early on.
Video interviewing can also work, she said, “How the candidate presents himself or herself is hugely important in hospitality”.
And be prepared to use technology if interviewing more than three staff. This is now a low-cost procedure.
There’s also merit in a practical trial day.
“This need only take half-an-hour in a bar that’s closed to get a feel for the candidate’s abilities” said Gillian.
A fee for ‘staff referral’ can also work well, she added.
Michael Sheary’s approach to developing a food business
Former publican Michael Sheary opened BuJo, a hamburger outlet focusing on “sustainability, people & technology”, in October 2017.
“People don’t buy what you do, they do buy why you do it,” he believes.
He spent some time travelling across the US to see where food was at globally and came back with hundreds of menus and thousands of pictures.
He noted how important technology, people and service is in every aspect of the food offering (as is interior design and branding to the guest experience).
He’d noted too how operations in big cities were responding to all this and how important speed and convenience were becoming to customers.
He also believes in the adage that ‘Quality is remembered long after price is forgotten’.
A keen advocate of getting out of one’s comfort zone and going to another city on a break to see a different perspective, he said that you also need to put great people around you and get the “right fit” employees.
Seamus O’Hara –Craft Beer in the Dublin trade, where to next?
As far as Seamus O’Hara’s concerned the craft beer revolution has just started.
He founded the Carlow Brewing Company in 1996 and in 2009 he oversaw the construction of a custom-built brewery on the site. Today, half his production is exported.
But he regards the Dublin on-trade as a key market and therefore has an on-trade sales team, a technical team and direct distribution facilities there. He has also opened a craft brewing eatery in Dublin called Urban Brewing.
“This helps us listen and get closer to what customers want,” he said.
Craft beer trends
He cites the strong growth in the craft beer market (five-fold since 2012) and expects the figures to be up again in 2018 by around 4%.
Imported craft beers and speciality beers are demonstrating a similarly healthy growth trend, he said.
Where to next in Dublin?
Could the independent craft beer business reach 10-20% of market share by value in Dublin, he wondered.
“The US craft market in 2017 was 12.7% by volume” he stated, “and 23% by value with it being over 50% in some cities, all told.
“At the same time the overall Irish beer market has been in decline for several years, so craft is a value-added opportunity for Dublin pubs.”
Craft beer targets the premium consumer segments as well as the international market.
Craft can therefore command a higher price, providing a higher cash margin for the on-trade, helping them differentiate their offering from one another for competitive advantage.
“Craft simply forms part of the mix in upgrading/upselling food, spirits and beer – the overall pub experience,” he said.
As a competitive threat, it can’t be ignored as off-licences, supermarkets and restaurants add craft beer offerings to their range as part of a growing trend.
“But the pub is best placed now to capture this growing market opportunity,” he explained, “65% of beer is consumed in bars and the pub environment is the most attractive setting to consume craft beer.”
Customer Service for Profit – Bill Kelly
Bill Kelly of Kelly’s Resort Hotel & Spa in County Wexford put it squarely: does the customer want to be satisfied or loved?
“Maybe both” he answered himself in explaining to his audience how Kellys aims to retain customers at the Rosslare landmark which now employs 210 staff to operate and maintain 126 bedrooms that enjoyed a 92% occupancy last year. This racked up a turnover €14 million through looking after 6,000 visitors.
His father, Billy, used to tell him, “Success is not measured in the number of bookings but the number of repeat bookings”.
And so he takes a rather unusual approach to management participation in that nobody’s allowed to be in the office at meal times, “… everyone must be out on the floor”.
He also took his audience by surprise in confessing, “I’ve never paid a staff member in 33 years…. Not once…. The customer pays them!”
Once staff ‘get’ this notion, they see the importance of keeping the customer happy.
“As for innovation and vision, the time to reinvest is not when the business is sliding but when it’s on the way up, when things are good,” he said.
In coffee service, for example, it’s worth having Barista expertise there.
“It’s a new part of our market, so your non-alcoholic products must be up-to-scratch.”
Furthermore, having wines on display increased the hotel’s wine sales by 35% in one year.
Bill also cited the main reasons for losing customers from a World Travel Survey:
- 1% die
- 3% move away
- 5% form other friendships
- 9% for competitive reasons
- 14% are dissatisfied with product
But 68% are put off by the attitude of indifference shown to the customer by some employees.
So the hotel goes to great lengths to motivate staff to build good relationships with customers.
“75% of our customers repeat bookings with us within one or two years so that now, for certain weeks during the Summer, we have 80-90% repeat business.”
It’s better than having to generate business from new customers which comes in at five times the cost of generating business from existing customers.
Customer relationships & staff
It’s important too to take a positive attitude in handling complaints.
These should be viewed as an ‘opportunity’ as all staff are encouraged to understand the ‘lifetime value’ of a customer which can add up to many tens of thousands of €uro.
“We give authority to our frontline staff so that they can make customer benefit decisions,” he said, “They’re an essential link to the customer and we trust them to make the right decisions.
“We also encourage every member of staff to come up with one or two ‘wow’ moments every day since there are so many possible daily interactions between customers and staff.”
In recruiting, it’s more important to get staff with the right attitude – “… they can always learn new skills,” he pointed out in highlighting that key to customer retention is staff retention.
Finally, he firmly believed Tom Peter’s adage that successful companies are not a 100% better in one way but 1% better In 100 ways.
“We don’t sell rooms, we sell experiences,” he explained.