Your Pub’s Future
“‘Good’ is the enemy of ‘great” said ActionCoach’s Marina Bleahan, one of the speakers at the recent Licensed Vintners Association conference entitled ‘Your Pub’s Future’. Drinks Industry Ireland reports.
4 December 2017 | 0
The recent Licensed Vintners Association-organised conference, Your Pub’s Future, was attended by over 300 publicans eager to learn how to carry out their business better in a competitive market.
Six speakers had been organised to provide a thought-provoking afternoon.
Optimising team performance
The first speaker, ActionCoach’s Marina Bleahan, carries out business coaching, looking to optimise team performance and productivity.
She began by making it clear that we’re in the digital age.
“Traditional training is dead, like the cassette tape,” she explained of the new digital age of training.
The quest to find good staff continues to prove difficult and it’s going to get worse, she warned, so it’s important to invest in training the people you do have.
Perhaps the most important aspect to this is to assess just how engaged your staff are, she suggested.
This can range from highly engaged – where employees do more than expected, to disengaged – where they do just what’s expected but no more and highly disengaged – where they do less than expected, “… the type that doesn’t get up immediately to serve a customer”.
“Globally, 14% of employees are highly engaged” she stated, “but ‘engagement’ cannot be trained.”
And this percentage doesn’t top that for highly disengaged at 20%.
She pointed out that some €3,400 of every €10,000 in labour cost is wasted and asked, “What’s the lack of engagement in your team costing you?”.
Standard company training is the least desirable way to learn, according to Deloitte in 2016.
Businesses with a highly engaged, well-managed workforce are eight times more productive over a 10-year period.
Licensed trade trends & financial analysis
Aidan Murphy is Hospitality Consultant with Crowe Horwath. It’s his job to look at the P&L accounts of businesses. He reckons that of the 740 pubs in Dublin, around 5% have turnovers over €4 million but 75% have turnovers under €1.27 million.
He pointed out where people now spend away from the pub: nightclubs, theatres, cinemas, festivals, house parties and sporting events. The pub must examine how it can partake in the potential for increased levels of discretionary spend and in the potential for increasing tourism to Dublin. He went on to analyse the cost-base for various turnovers with different pub offerings.
Aidan’s presentation led to a short discussion on capital financing for expansion.
Afterwards, LVA Chief Executive Dónall O’Keeffe referred to the dubious advent of Mezzanine Finance for pubs which may not be sustainable depending on your projected turnover for such a loan. Interest could be as high as 10% or 11%, he believed.
Another form of funding, ‘soft’ supplier loans, needs to be tempered by what your own customer-base is compared to the supplier’s own target market and the brand portfolio growth projections agreed with the supplier companies.
“The key question is what percentage of debt is to be at 10-11% when EBIT is at this level or even less overall,” commented Dónall, “The vast majority of our members cannot carry that kind of debt. In a wet house, labour to turnover comes in being responsible for profits in the low 20 percents but with food it can run to the high 20 percents and with good service and upselling it can run into the early 30 percents,” he said.
And for those wishing not to get directly involved in food service in their premises, there’s always franchising it out, he added.
7 ways to re-think food in pubs
Pól Ó Conghaile, Travel Editor with the Irish Independent, offered vintners a taste of food trends worldwide.
He explained that interest in food appreciation has “exploded” with worldwide travel. With 10 million visitors here each year eating three meals a day, that’s a €2 billion spent on food, he said and today’s consumers are “comfortable with casual”.
Pól also pointed to the high standard of food in Irish pubs today, something that simply wasn’t present 20 years ago.
Today’s trend has moved on from the perception of food as an occasional ‘treat’ to being a casual buy.
“Hotels are now thinking about casual customers and adapting their appeal. Such a case-in-point is Belfast’s Bullitt Hotel”.
He also alluded to the growth in casual food trends: doughnuts, baking and burgers; seafood & ‘poké bowls’ and the attention now being paid to ‘farm to fork’ credentials.
The trend towards ‘personalisation’ is exemplified by Starbucks’ practice of writing the Christian name on a customer’s coffee cup for collection, “… and there’s nothing more personal than a good pub,” he added, “Pubs are human places; they’re ‘relatable’ places in a hi-tech world. They’re authentic and individual, not formulaic, providing the customer with ‘a good gut-feel’ about them. Ultimately, pubs are about people.”
The other prominent trend to surface has been that of everything being ‘local’.
The consumer thrives on small authentic local personal experiences and the key to this is to have locals providing that service.
“Visitors want to know where the locals go,” he explained, “And what’s more local than a pub?”
Sharing, too, has become a ‘thing’, so be conscious of the Instagram generation.
These seek eye-candy shots for social media which the outlet can use to their advantage if properly planned.
There seems little doubt, he said, but that food can help you stand out.
Food and drink are converging, he added, looking in the direction of the EatYard project at the Bernard Shaw pub in the capital.
“Outlets like the 777 are extremely popular with women but after they’ve enjoyed the food, the big spend is on cocktails.”
But what are the challenges?
“Irish pubs have come quite late to the table when it comes to food,” he said, “The culture of eating in pubs is more akin to the US and UK at present.
“Then there’s space. A lot of our most atmospheric pubs are small, not spacious enough for kitchens, so is there any point in doing food in such places?”
People also needed to know about the food being served – and he advised keeping the outlook rosy.
“Though your problems might dominate your life, as customers we just don’t care!”
Finally, he advocated keeping it simple.
Sometimes the size of the menu makes many dishes mediocre rather than fewer dishes being especially good, he explained, “I’m not interested in a menu having 50 to 60 dishes that taste ‘OK’”.
As for the future, a few areas need looking at, he suggested.
“Bowls are going to continue to be huge as are Pinxtos (smaller tapas). Snacks such as pastries are going to develop via outsourcing and deliveries to the on-trade while today’s vegan ‘comfort food’ goes way beyond sweet potato fries – and how cheap when set against the cost of beef and seafood.”
What’s happening in London?
Dubliner John Nugent founded Green & Fortune nine years ago and now runs a major hospitality company in London, having been involved at the operational stage in a number of bars and restaurants.
“There are 29 pubs closing every week in the UK,” he pointed out, “Is this generation shunning pubs? Is social media killing the pub? Certainly, the lines are being blurred between drinking houses and food-led pubs.
“Today they’re a combination of tradition and the future where the race for prime sites in London ensures the survival of the fittest.”
Many people without desks or offices want to feel part of the contemporary workforce and this presents opportunities for the pub. However, coffee shops are now opening longer hours and selling “a narrow stock” of alcohol too, thus eating into the pub’s sales space. These ‘disruptors’ are coffee shops by day, cocktail bars by night. In the morning they do breakfasts and they’re creating continuous communities for people without office space.
Could the assets in your pub expand to meet this growing market, he wondered?
Where food sits in the modern pub
In reality, it’s increasingly costly to staff competent kitchens. There’s a general skills shortage out there with many in catering signalling life/work balance issues.
“At the same time the customer’s needs have become increasingly sophisticated.
“The food-led pubs sector grew by 17% in 2015/16 and by 47% in the previous five years,” he said, “The market is under constant pressure to invent and deliver new products with increased frequency and try to hit all the price-points. The competition has changed with coffee shops expanding their menus and the advent of street food stalls.
“Let your food surprise rather than underwhelm,” he advised, “A small, frequently changing menu beats a traditional menu.”
Should outsourcing be done more? Or six-week residencies? Should pubs allow monthly pop-ups for ‘on trend’ street food or to meet emerging chefs?
The non-conventional bar
People are selling you beverages everywhere, from galleries to museums and concert venues to shopping malls, indeed any social gathering.
John has put a bar into Waterstone’s book store in London and he successfully ran a Champagne bar at a train station.
These catch people’s imagination.
Premiumisation & insights
The emerging drinks trends tend to be along the lines of skinny cocktails, premium soft drinks, craft beers, coffees and spirits.
His standouts for conference attendees to take away were:-
- London operators are willing to bring training to the top of the agenda
- The 50-plus generation use social media to check on their night out
- One should reduce rather than increase the size and variety of food formats.
64% of John’s business is pre-booked so he employs sales specialists to bring market intelligence and knowledge of event-management to bear on the sales operation.
“I use a sales executive to market and sell our events – not an operative,” he explained, “I don’t leave it to a bar manager or assistant manager to sell our product. It’s a way of upselling your business to make it a very profitable high margin operation.”
In employing sales-specific staff he expects each to deliver £750,000 a year in event sales.