Jack of More Trades
When I joined the hospitality industry in the mid-1980s it was with Bass plc. Bass at the time whilst well known for brewing and owning pubs also had a variety of other associated businesses under what I soon discovered was quite a large umbrella. During the 1980s and 1990s these businesses included Hedges & Butler, its wine & spirits arm, Britvic, the soft drinks company, Augustus Barnet, an off-licence chain, as well as Crest Hotels. Coral racing was also part of the company at that time and they even dabbled with Horizon Holidays for a short time.
So why did the company do this? The simple answer was that they decided it was better to spread the risk across a number of differed, albeit hospitality related sectors rather than rely on everything running perfectly in just one or two, such as beer and pubs.
This approach was probably best vindicated on the 23rd of September 1996 when Frankie Dettori won all 7 races at Ascot, completely wiping out Coral’s profits for the financial year which would end just seven days later. Thereby not allowing anytime to claw back their loses.
Fast forward to the Spring of 2020 and many hospitality operators have had their pubs, bars and restaurants closed for weeks on end.
So while there are clear benefits to focussing on a core offer, are operators putting their businesses at risk by putting all their eggs in one basket?
Take it away…
Notwithstanding the impact that the Covid-19 pandemic will have had on the UK’s food delivery and takeaway market the sector was already seeing significant growth. Industry estimates for 2019 suggested that the market was worth some £8.5bn and growing, with around 10m customers. The long term outlook is that this is only likely to increase.
Of course providing a takeaway option might not be right for everyone. And in the case of fine dining restaurants it may also be too off brand to be worth considering. For others however it is definitely something worth thinking about. Advances in technology means that if you decide it’s not practical for you to make your own deliveries then there are companies such as Just Eat and Deliveroo who are geared up to do it for you. At a cost of course.
So what are some of the benefits?
The most obvious one is increased revenues. Very few kitchens are busy all the time and so takeaways can provide a useful boost. Depending on how creative you want to be you can always try offering a takeaway service on specific days or times to ensure that it does clash with the rest of your business. These leads to the next benefit which is to spread your fixed costs. Even when you take off the online commission which the delivery companies with charge, circa 25%, you should be getting a positive return. Finally by providing food in this way you may be able to create more repeat business as well as showcasing your offer to those who may be reluctant or unable to visit you in person.
Take it outside…
When you mention outside catering to some people it conjures up images of burger vans or at best tents at local food fairs or stadia. But the world of out of home catering has come a long way in recent years.
The interesting thing with it is that it seems to be able to operate right across the industry from the highest level of fine dining to the previously mentioned burger vans. They key is to identify what level of food and service you and your team can deliver and then actively market your offer to those customers who have a need for the same.
At the higher end of the market there is clearly a demand for chefs to visit individual houses, use their kitchens, cook a meal and then tidy-up afterward. You can see this by the number of companies who promote private chefs. There should be no reason, the right insurance and security checks aside why this isn’t something one could consider offering – at the right price.
And then of course there are the more traditional routes such as weddings or other special events. Taking your offer on the road not only creates additional revenue it also gives you the opportunity to show case your menu to an audience which may not have previously seen it. Depending on the occasion and facilities this may mean food can even be pre or partly cooked prior to arriving at the event to reduce the risk and complexity.
Stay indoors…
When looking at additional revenue streams it’s not all about leaving your own premises. It still amazes me how many operators don’t maximise the space that they already have. One of the arguments I have heard in the past is “we don’t hold functions because we would have to turn away our regulars”. Now of course you need to be sensitive to your loyal customers but at the same time you are running a business and need to look at every opportunity there is to bring money into it.
One way to combine both new and existing customers may be to have special themed evenings. This not only helps created some additional theatre it can be a great opportunity for you and your team to showcase their culinary skills. It is also a great opportunity to up-sell things.
Back to school…
Something else which has been gaining in popularity over recent years has been the growth in pubs, bars and restaurants offering ‘Masterclasses’. These can range from some quite basic drink mixology sessions right through to full on cooking classes. For example the national pub chain All Bar One currently offer the chance to mix, muddle and mash three of your favourite cocktails starting at £25 per person. In contrast you can receive a morning of close tuition from one of Gordon Ramsay’s Chef de Cuisine to help you prepare a special three course menu, which you will then enjoy with selected wine pairings presented by their Head Sommelier. The price of this at the time of writing was £1,000 per person.
As with the outside catering and indeed any takeaway offer, the important thing is to make sure that what you look to deliver is in keeping with your overall brand offer. Any additional revenue streams you explore need to add value and not in any way detract from your core offer.