Food Quality Drives Pub Traffic – M&C Report

March 12, 2012

Food Quality

Food Quality Dives Publ Traffic

The traditional pub is getting a makeover as operators find opportunities for growth through focusing on food rather than drink.

The recession coupled with decreasing consumer confidence has impacted the pub sector. Technomic data shows that about two-fifths of consumers are visiting pubs less often today than last year, and a majority of these consumers attribute their decreased patronage to having less money to spend on dining out. However, recent figures from the Coffer Peach Business Tracker show signs of improvement in pub sales: like-for-like sales increased by 2.1% in November 2011 compared to the same period last year, the sixth positive month running.

This increase may be due not only to the economic recovery, but also to changes in the pub sector, with these concepts placing greater emphasis on food and offering a wider variety of higher-quality options.

Wet-Led Pubs vs. Food-Led Pubs

Traditional “wet-led” pubs that focus solely on beverages may have lower operating costs overall, but are potentially missing out on new growth opportunities as “food-led” pubs expand their menus, attract new customers and redefine the pub market. The gastropub trend has revitalised pub menu development, and customer expectations for food quality and menu variety at pubs have shifted.

A recent survey by Jones Lang LaSalle Hotels finds that there are 25 pub closures each week. In total, 45% of pub operators reported a decrease in sales since last year. Among wet-led pubs, 66% reported sales declines, but among pubs selling food, 62% reported an increase in sales. These findings are leading some insiders to call food a “lifeline” for wet-led pubs to boost sales and thrive as segment sales slow.

There are operational challenges associated with delivering a solid food offering; employment and equipment costs are just two. The Association of Licensed Multiple Retailers estimates that food-led pubs have operational costs 7% higher than those for wet-led pubs. But many pubs are finding that the higher profits generated by food (an overall 14% improvement in profitability over the past three years, according to ALMR) offset these higher operating costs.

Raising the Bar on Menus

In a survey for Technomic’s recent U.K. Pub Consumer Trend Report, nearly a fifth of consumers, and half of consumers aged 18–24, report that they are visiting pubs more often compared to a year ago. One-third of consumers who are visiting pubs more often than they were a year ago say it is because the food is now higher in quality and tastes better, the top reason for consumers’ increased pub visits over the past year. In addition, more than a quarter of consumers (27%) cite the greater variety of food options available. More males than females cite both of these as reasons for their increased pub patronage, indicating that males place higher importance on the quality and variety of food options.

About three in 10 consumers say they are patronising pubs more often because they have more money to spend on dining out in general. Additionally, a fifth of consumers say they are visiting pubs more often because they are trying to save money and pubs offer a better value than full-service restaurants (22%) and low prices (21%).

An appealing atmosphere rounds out the top three reasons why consumers are visiting pubs more often, with 29% of consumers citing better atmosphere. Nearly the same percentage of consumers (26%) says that pubs are now a good option for dining with their family. Pubs have recently started to make changes to their concept to appeal to families, and this data shows that these changes are driving traffic among some consumers.

Why have you been visiting pubs more often? Select all that apply. (by gender)

Base: 177 consumers aged 18+ who are visiting pubs more often
Source: Technomic, Inc., 2011 U.K. Pub Consumer Trend Report

Although many independent, non-brewery pubs are well-known for offering high-quality food, the quality of food at most pubs historically has not been of significant concern to consumers. However, data shows a shift in consumer perceptions of pub food. Roughly four out of five consumers report that the food’s quality and freshness (82%) and taste and flavour (79%) are important. Quality, freshness and taste are all related; higher-quality, fresh ingredients tend to taste better. More consumers place importance on quality than on overall value for money spent at pubs, and nearly as many consumers place high importance on the food’s taste as on overall value. This supports the idea that quality and taste are driving the importance of overall value at pubs.

More women (85%) than men (80%) place high importance on the quality and freshness of food, perhaps because they think fresh, high-quality options are healthier.

Thinking about all of your visits to pubs how important or unimportant are the following? (by gender, top two box = extremely important and important)

Base: Approximately 350 consumers aged 18+, varies slightly by attribute
Consumers indicated their opinion on a 1–6 scale where 6=extremely important and 1=not important at all
Source: Technomic, Inc., 2011 U.K. Pub Consumer Trend Report

Attracting More Customers

Technomic asked consumers what pubs could do to encourage them to visit more often. Consumers’ top three responses relate to finances. More than half of consumers say that lower prices could encourage them to visit pubs more often. In a related finding, nearly two out of five consumers indicate that they would visit pubs more often if they offered a better overall value, and 31% say food specials or promotions could encourage them to increase visits to pubs.

Variety of food offerings can also drive traffic among some consumers. About a quarter of consumers say they might visit pubs more often if they offered more main dishes to choose from, and 13% of consumers say the same for starters or snacks.

While more males say that lower prices and a better overall value could encourage them to visit pubs more often, more females report that food specials or promotions, healthier food options and more starters or snacks could prompt them to patronise pubs more frequently.

What could pubs offer to encourage you to visit more often? Select all that apply.
(by gender)

Base: 1,000 consumers aged 18+
Source: Technomic, Inc., 2011 U.K. Pub Consumer Trend Report

The New Craft Pubs

It’s worth noting that at the same time food-led pubs are growing, another concept-positioning direction is gaining among some pub operators. Instead of modelling themselves exclusively after food-led pubs, which focus more directly on food than on drink, “craft” pubs give equal attention to both and make ingredient attributes for food and drink the focal point of the menu.

Craft pubs differ from gastropubs, which are known for eclectic, gourmet food offerings—not as pubs where people can just drop in for a drink. Instead, craft pubs are positioned simply as traditional English pubs where beer is a draw, and the menu features classic pub foods, not heightened “gastro” fare. In promoting the sort of traditional pub foods that pair best with English cask ales, craft pubs present rustic versions of shepherd’s pie, fish and chips, pork pies, sandwiches, sausage rolls or cheese and meat platters instead of global offerings or trendy cuisine.

The true point of differentiation for craft pubs, however, is a clear commitment to local ingredients, seasonal components, ethical sourcing and an overall artisanal approach to food preparation. The food may be simple, but its preparation relies on foraging, securing produce from local farms and purveyors, and homemade cheeses, toppings, sauces and other main-dish components. At craft pubs, the food is approachable and familiar, yet attractively presented.

Craft pubs, therefore, reject a description as being either wet-led or food-led. Rather, the concept presents itself as a traditional English pub that welcomes drinkers who aren’t necessarily there to eat, and attracts customers that are looking for classic, authentic and decidedly artisanal pub fare to pair with craft beers, ciders and other drinks.

Key Takeaway

While pubs have traditionally been known as a destination for adult beverages, the past decade has seen pubs expanding food and non-alcoholic beverage items to the point where food is an expectation at many locations. While this has broadened the sector’s audience, pubs are still not top of mind for non-drinking occasions and casual meals, making these areas of opportunity for pubs.

Operators who appeal strictly to the adult beverage crowd may want to consider altering their positioning and marketing message to include non-drinkers in order to boost traffic and sales. Offering non-alcoholic beverages along with a wider variety of food and breakfast fare, while increasing focus on quality and health, may help to expand the customer base beyond the adult beverage consumer.

This article came from a print version of M&C Report


The beef’s everywhere: New Five Guys on Clematis adds to a local burger boom

March 12, 2012

Beef's Everywhere

The beef’s everywhere: New Five Guys on Clematis adds to a local burger boom

The all-American taste of burgers meets the all-American style of business, capitalism.

Diners’ gastronomical need for a tasty burger is getting easier to quench in Palm Beach County and the Treasure Coast, as premium burger chains mushroom across the retail landscape.

This week, the eighth Five Guys restaurant in the area opened on Clematis Street, adding to the Tracys’ domination – father Tom Tracy and sons Ryan, Matt and Pat control the local market – of this food niche.

“What’s more American than burgers and fries?” Matt Tracy said Monday, moments after the new site opened. “We kind of do it the old-fashioned way: fresh, like you make in your backyard.”

But South Florida-based BurgerFi and CG Burgers also are increasing the field here and regionally. And chains such as Burger 21 and Highway 55 Burgers are moving in.

“Our business plan is to convince everyone in America they should be eating natural burgers,” BurgerFi Operations Director Steven Lieber said.

Burger chains, both the fast-food and fast-casual brands such as Five Guys, generate $67 billion in sales each year, though the premium burger segment represents less than 4 percent of sales, said Darren Tristano, executive vice president of research firm Technomic. However, that higher-quality, higher-priced segment is growing at 15 percent a year, compared with 3 percent growth expected this year from the traditional chains such as McDonald’s, said the food industry consultant.

Better-burger chains, so named because of their attention to quality ingredients, are the hot trend for several reasons, said Northwood University professor Janice Scarinci, an expert in restaurants and hotels.

The premium meats and fresh veggies – some chains even feature organic and hormone-free ingredients – appeal to families’ focus on health. Also, the convenience helps working parents and the price is lower than at full-service restaurants, she said.

Lieber, whose BurgerFi chain has corporate offices in North Palm Beach and Fort Lauderdale, said he has three stores now but should have 20 by year’s end. One is open in Delray Beach on South Ocean Boulevard near Atlantic Avenue. Boynton Beach likely is the next destination for a restaurant in Palm Beach County, Lieber said, and the goal is 100 restaurants nationally by 2014.

CG Burgers, an offshoot of Carmine Giardini’s culinary empire that includes a pizza joint and gourmet market in Palm Beach Gardens, has five locations with a sixth opening next week in Coral Gables. The chain is focused on Florida at this point, CG Burgers Holdings President Ron Magruder said, and has locations in Jupiter and Palm Beach Gardens but no more immediately planned in Palm Beach County.

With a tilt toward the gourmet, with meats such as bison offered, Magruder said the chain has no plans to “conquer the world” but expects to do well even in a crowded market.

“I think burgers have been competitive for as long as I’ve been alive,” Magruder said, laughing.

And the South Florida market appears to be good for business. While some nationally known chains such as Shake Shack have only one token Florida spot, Miami Beach, and Smashburger has stayed to the south for its Florida foray so far, other expanding chains are eyeing Palm Beach County and the Treasure Coast.

Burger 21, a Tampa-based chain founded by the owners of the Melting Pot, held a lunch for potential franchisees last week in Aventura and Boca Raton. Franchise Development Vice President Dan Stone said he hopes to announce the first South Florida location in a couple of months. Whether it is in Palm Beach County depends on whose money comes through first.

“While we are new to the burger business, we are not new to the restaurant business or franchising,” Stone said.

Lonnie Mister, who has the Florida master franchise license for Highway 55 Burgers out of North Carolina, is building his flagship location on the Treasure Coast and aims to have a restaurant in Palm Beach County by the end of the year.

“If you go into the hamburger business, there’s really an array of operations that offer an excellent product,” Mister said. Highway 55 will distinguish itself with superior food, better customer service and prices about a third less than the rest of the premium burger market, he said.

View the full article on The Palm Beach Post.