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Morning Briefing for pub, restaurant and food wervice operators

Fri 16th Aug 2024 - Friday Opinion
Subjects: It’s not easy being green, UK versus the US, being guided
Authors: Katherine Doggrell, Katy Moses, Glynn Davis

It’s not easy being green by Katherine Doggrell 

In hotel land, sustainability is the central talking point of any conference, outside whether there really needs to be any more brands (on its second-quarter earnings call, Accor finally conceded that 46 was sufficient, for now). The reason for this is not morality, but money. The reason we know this is because, if it was morality, an industry that requires travel – and not always by pedalo – would have shut up shop now.

In hotels, investors are living in morbid terror of their properties becoming ecologically obsolete or stranded assets; those that do not fall within sustainability criteria. These criteria have been laid down by law; hotels need to reduce their absolute carbon emissions by 66% by 2030 and by 90% by 2050, to ensure that the predicted growth of the industry does not lead to a corresponding increase in carbon emissions. 
 
The alternative is a hotel that cannot be sold and certainly won’t be increasing in value, and whichever way you cut it, that’s a poor investment choice. Roll in the fact that business travellers will have to justify their carbon footprints, and it’s all very motivating indeed. The hotel sector, which started its sustainable journey by making positive noises about using paper straws, is now in a frenzy of renovation and preparation. The brands are selling themselves to owners not only in terms of demand, but operational sustainability.
 
The issue is particularly pronounced in the hotel sector, where the focus is on the asset. Shifting trends in pubs and restaurants are that much faster, and site turnover is such that’s what’s going to happen in 2050 is much less of a concern. In hotel land, management contracts are signed for 25 years, and the lawyers involved love to tell clients to consider it as akin to a marriage. In this case, the prenup is more rigorous than five-times married Rupert Murdoch. 
 
In keeping with their starring roles in the pre-wedding courtship rituals, pubs and restaurants are more flighty and less inclined towards such long-term commitment. For them, sustainability is more around food and the supply chain. 
 
At one recent industry event attended by this hack, attendees shielded themselves from the bitter July storms on the covered edge of a pub garden to hear about tomato prices. For the uninitiated, pause now if you don’t want to hear about what’s happened to tomato prices in recent years, because you’ll never sleep again. 
 
Last year, average tomato prices reached a 50-year peak of £3.26 per kilo, according to the Office of National Statistics, driven up by factors including the impact of climate change on harvests in key import nations and rising labour costs in the UK. 
 
Some of these costs can be passed on to the consumer but, as the sector has seen, a consumer who is already addressing their own inflated tomato costs at home is not interested in hearing about yours when they go out. In the hotel sector, this has been less a pinch point and more a firm grip around the throat. The law wants things to be done, the guest increasingly wants things to be done, but the money to pay for it comes from…the investor. 
 
This is starting to change, if gradually. Research undertaken by BVA BDRC and Pace Dimensions found that there was an opportunity for hotels to lead on environmental, social and governance (ESG) and attract people to their property, as well as potentially charging a premium. In certain segments. 
 
The pair found that people who were looking to book a five-star hotel were much more focused on other aspects besides price, and that for a five-star property in Europe, people were willing to pay a 30% premium for a hotel that promoted ESG, compared with a property that did not.
 
This was borne out by those speaking as we rummaged around for our galoshes and sou’westers. High-end restaurants have found that mentioning regenerative farming (which loosely translates as “farming like it used to be done before all the phosphates”) on a menu means that diners won’t shy away from increased costs.
 
But in the short term, greater action needs to be taken. Gavin Smith, managing director of Pizza Pilgrims, told the tale of how the group had shifted from flying basil in from Israel, Italy and Spain to using a supplier in London that grew it hydroponically. In the short term, it cost more, but that has evened out because it was a higher quality, and because it wasn’t flying around the place, it lasted longer.
 
But man cannot live by basil pizza alone. According to the Soil Association, the solution is more investment in infrastructure such as reservoirs and more agroforestry; combining agriculture with trees, which can provide shelter for livestock, protect crops and help to dry out soil after floods. Only then can we increase food production in the UK and ease reliance on other counts. 
 
But all that will cost. And while good storytelling will mean that some can be passed on, the reality is that alternatives must be found when foods are not available, a state rammed home by an April fool about rice being grown in the paddy fields of East Anglia. Chickpeas are likely to be a feature, says the Sustainable Food Trust. Anyone for hummus? 
Katherine Doggrell is Propel’s editorial advisor and founder of NewDog PR. This article first appeared in Propel Premium, which is sent to Premium subscribers every Friday. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email kai.kirkman@propelinfo.com to upgrade your subscription.

UK versus the US by Katy Moses

I’ve had the good fortune to make three trips to the US in the first half of this year – business trips (honestly!) to Chicago and Nashville and a personal trip to New York. Being half American, and having more family there than here, I tend to get across the Pond three to five times a year, so I make it my business to really get under the skin of hospitality in the US and, inevitably make comparisons with the UK.

So what are the main differences – and, as importantly, where are the similarities? And, in the spirit of the just finished Olympics, who gets the gold medal?

Service 
Let’s start with the actual hospitality part. It’s well-known that service in the US is, generally, incredibly good – that’s what happens when a system is created whereby servers can double their salary with tips. But I have noticed, the last few trips, that bad service is not unheard of. I have also seen the “recommended amount” to tip increase – up to 35% in many places, which causes fiscal problems for the visiting Brits, who, often don’t take these costs into consideration when working out a travel budget. 

In the UK, however, we are more sparing with our tips but, and this is a big but, we still have fantastic levels of service, and, importantly, what we get is genuine. So who gets gold? If it was just for standard of service, the US would just about get the higher score, but, when you weigh up all the points of note, the UK seems a better value for money proposition – UK gets gold. 

But with 20% of UK consumers saying that they waited too long for their order to be taken on their last hospitality visit and 22% telling us that their food took too long to arrive (insight from our Plan to Plate report, released in partnership with Paytronix), we really do need to keep working on those service standards.

Quality
On my last few trips I have noticed a definite increase in the quality of food in the US. Long known for the quantity of food served in its pubs, bars and restaurants, America, in many ways, has turned its focus on to the quality. The amount of “GM free”, “handmade” and “free range” messaging has absolutely increased in recent years as the consumer leans more towards a health agenda. Avoiding ultra processed foods has become a “thing” over the Pond – but, as ever, there is a polarisation and, as in the UK, there are still many bad options out there – and it tends to be the disadvantaged that suffer. 

The UK, meanwhile, has seen an increased focus on sustainability, provenance and the use of “local” as a byword for quality. A total of 78% of the people we spoke to for the last quarter’s Plan to Plate report said that the “quality of the food” was a deciding factor in the decision of where to go when they wanted to go out to eat – the highest in importance, even above value for money. So who wins on quality? It’s a tough one, but I think the UK just about gets the gold medal. Whether it’s Welsh lamb, Scottish whiskey or Maldon oysters, I think we have some of the best quality food in the world.

Variety 
In the past, say, ten years, the variety of food and drink and, indeed, places to visit to eat/drink has increased dramatically in both countries. In the US, the aforementioned focus on health and wellness has meant a glut of new brands promising functional foods that will help either brain or body. In the UK, we have seen far more adventurous offerings than “traditional British” become mainstream, with the likes of Rosa’s Thai, Pho and Buns from Home growing their estates. 

But where variety really is the spice of life – in both countries – is in the independent sector where we’ve seen fantastic entrepreneurs take risks with new cuisines and concepts. Want to eat cheese on a boat? Head over to Paddington and the Cheese Barge. Want to eat in a real-life prison, being cooked for and served by offenders? Swing by The Clink (various locations). Fancy a kind of strange eggy waffle thing? Chinatown and Bubblewrap is where you need to be heading. In the US, we see variety of food origin coming to the fore – 886 providing a glimpse into Taiwanese food culture, Spa 88 serves Russian food in a spa, or there’s Union, which has great Filipino food. 

So who wins out? On this one, I’m giving gold to the US – maximum points for variety of food and drink, maximum points for variety of cuisines and for some absolutely bonkers concepts.

There are so many other categories that I could assess, and maybe I will after my next trip. But one thing is for sure – both countries absolutely deserve their place on the podium when it comes to hospitality.
Katy Moses is the managing director of research consultancy KAM

Being guided by Glynn Davis

When touring Normandy for this summer’s break, I came across Les Plus Beaux Villages de France, which is a ranking of villages across the country based on their beauty and cultural heritage. The 170-plus locations in this exclusive club are judged by an association whose aim is to promote tourism.

This seemed to highlight the French appetite for classifications. This encompasses wine, whereby they have the Grand Cru and Premier Cru classes alongside myriad other very complex classifications that seeks to put the country’s wine production into various supposedly easily identifiable boxes. Many other countries have adopted similar methods to highlight quality levels.

The one French ranking system the hospitality industry is most aware of is undoubtedly the Michelin Guide and its one-to-three star classifications. They are as much embraced as they are deemed antiquated and pointless. For many people most of the year they have little relevance.

Until that is we reach these current summer months of the year when most of us find ourselves travelling and spending time in unknown areas. Guides and rankings such as Michelin then very much come into their own. They help solve the big problem of where we choose to eat and drink and help us avoid missing out on the best places within our individual budgets.

Serendipity is great but it’s insufficiently reliable for people like me who are paranoid about missing out on those hidden gems. The thought of dining in an average restaurant and then finding out the next day that a vastly superior place was just around the corner is the sort of thing that keeps me up at night. Curiously, it’s the sort of thing that sends my wife to sleep!

The capacity to search for “best restaurants near me” and “best bars near me” via our phones has put into question the value of paid-for content such as guide books and many of the brands I used to rely on – notably Time Out. They have gradually been squeezed out of the market and we have instead been left with the likes of TripAdvisor, the various online booking platforms and other aggregators of reviews from the general public. 

While these sources have the upside of being free, this is their actual value in my opinion. There have been no occasions, however desperate, that I’ve felt the need to wholly rely on such sources on which to choose a hospitality venue. In my opinion, having a 1,000 reviews of a venue from random customers is less value than that of a single trusted source or reviewer.

This trust in a single, or small collective, of reviewers comes from buying into their thinking. It’s the same as buying into any brand where the opinions, ethos, editing and curating chimes with your own tastes and desires. My own preferences include the Campaign for Real Ale’s Good Beer Guide when I’m in search of beer-focused pubs rather than necessarily quaint venues and for food a Michelin star still means a great deal to me when choosing a restaurant for special occasions. I’m also an avid reader of the weekly reviews of independent diner Andy Hayler who mixes Michelin star venues with the championing of local favourites. 

My other go-to is the Harden’s guide. You might argue that this simply corrals the reviews of random diners just like the online aggregators. But there is one major difference – it involves people in its collation. I’ve personally known two editors of the guide and the process very much involves taking the thousands of incoming reviews from diners and then coming to a house conclusion. This weeds out any outliers that invariably tarnish the online operators that seem to harbour their fair share of axe grinders, grudge holders and borderline blackmailers.

As we move deeper into a world that embraces artificial intelligence and the automated generation of content the potential for reviews and recommendations with zero human input or contact becomes increasingly high. This is worrying because it has the potential to mislead people or at best provide them with something of very little value. Amid these developments I’ll continue to rely on those hospitality guide books and reviews that still have humans at the heart of their production and ultimately deliver the sound opinions that I’m happy to buy into.
Glynn Davis is a leading commentator on retail trends

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