Conventional wisdom says that the catering trade performs badly during recession, but just like every other sector this trade is seeing its winners and losers, and the broad message is that those who offer value for money are performing well.
Value for money does not mean cheap. Even the most expensive restaurant will be seen as good value provided food, service, bar bill and general “feel” justify the cost at the end of the meal.
Take Le Gavroche, one of London’s top eateries. According to legendary owner Albert Roux, the restaurant is a full as it has ever been. What has happened though is that instead of ordering wine costing hundreds and in some cases thousands of pounds, customers are trading down to more sensibly priced tipples, a pattern seen in many other up market restaurants, according to a piece in Bloomberg news published last week. The same piece interviewed several other expensive restaurant owners. Most are reporting that business is generally holding up, but all are heavily focussed on service and value for money, as well as keeping a very close eye on costs.
On the other hand, some celebrity chef ventures have not been able to keep going. Anthony Worrall Thompson, has just closed 4 of his 6 restaurants, Aldo Zilli has shut his Brighton café, Raymond Blanc has shut his Manchester restaurant, and Tom Aikens has gone bankrupt, although managed to reopen elsewhere, allegedly leaving a trail of unpaid suppliers in his wake. Even Gordon Ramsey has a reputed £10m overdraft, although he claims overall business is good.
Presumably all these names will be reviewing exactly what they are offering consumers to tempt them to spend when times are so difficult, and why in so many cases their business models have not worked as planned.
But moving out of celebrity chef territory, and into a world more familiar to the average diner, there are sectors of the catering trade performing well.
Fast food businesses are motoring. Domino’s Pizza has grown profits by almost a quarter, they plan to open 50 restaurants this year, and will be creating 1500 new roles. KFC is undergoing a £150million expansion, opening 250 new outlets and creating 9000 new jobs, Subway is adding 600 new stores and 7000 new staff. McDonalds added 2 million new customers a month in 2008, grew sales in the “low double digit” range, and is opening 20 new restaurants. What characterises all these firms is that they offer predictability in taste and price, and are seen as value for money.
Fast food’s performance contrasts alarmingly with what is going on in pubs. According to the British Beer and Pub Association 39 pubs are closing every week, due to a combination of tax hikes on beer prices, the smoking ban, and the recession. But here again, value for money wins out. Wetherspoons, with its focus on cheap food and beer, has grown sales by 2.6% in the quarter to 18th January 2009.
Mid market, mid priced, and middling quality outlets are also struggling. Its these outlets who are promoting heavily with offers more usually associated with Tesco like buy one meal get one free, or “eat early eat cheaper” and set price lunch deals. There has also apparently been a big rise in on line restaurant vouchers.
So in the catering trade, as in every other sector, its value for money which is winning out. If food or drinks are ludicrously priced, with average quality, tiny portions, and surly service, then customers will vote with their wallets, and take advantage of the “Eat in for a tenner” type offers promoted by the likes of Marks and Spencer.
Marcus Wareing who operates from the Berkeley Hotel in London’s Mayfair, summed it up well “The slowdown has made me more aware – conscious of waste, making sure margins are right, seeing what we can do to bring customers in. We are not offering lots of cheaper menus…..but we are ensuring that the customer receives value for money. This slowdown will shake up the industry. In some ways it is a good thing as it makes us all think more.” Wise words.
Monday, 23 February 2009
Monday, 16 February 2009
Livestock and the Environment - Where is the Voice of Farming?
Livestock and the environment are in the spotlight again, and the frustrating thing for anyone involved in food or farming is the one sided nature of the debate. All the media coverage boils down to one message – “meat and dairy environmentally bad so eat less”. We hear little about the food value of the products, the role that livestock plays in keeping Britain’s countryside beautiful, or the steps that agriculture is taking to reduce its environmental impact. The headlines are worrying because a cut back in consumption will eventually affect the price paid to farmers for their products, and it is difficult to understand why the industry seems voiceless and invisible.
Capturing most headlines is the proposal by the NHS to cut back on the amount of meat it serves to patients. This, they say, will help reduce their carbon footprint, and will be beneficial to the long term health of patients. Whilst those with sick loved ones might worry about whether recovery will be as quick without the benefit of a balanced diet, and the cynic might wonder whether the driving force is to reduce NHS costs, nonetheless the fact is that the NHS serves up millions of meals and such a move will impact meat sales.
Less headline grabbing is the report “Food Futures” by think tank Chatham House.
Read the detail and you see a real anti meat and dairy bias. Meat and dairy are blamed for health issues. Global agriculture is said to be responsible for 14% of non carbon greenhouse gas emissions, and that a third of this is due to livestock. And they quote an EU report which says that meat and dairy are the main source of green house gas emissions in the food and drink sector. They trot out the old statistic that a kilo of grain fed beef requires 15 cubic metres of water versus cereals which require between 0.3 and 4 cubic metres, forgetting to mention that most livestock in the UK is pasture fed. Most alarming of all, the Chatham House solution is for government to dictate what we can and cannot eat, saying “The food system will need to reflect society’s choices as much as individual preferences”.
Then last week at the Meat and Livestock Commission’s Outlook conference a speaker from the Food Climate Research Network said that eating meat had to become more environmentally viable either by the industry reducing emissions or people eating less meat. She said that a meat tax might help and that there were moves to add the cost of emissions to the price of a food in order to encourage consumers to rethink what they are buying.
Fortunately a more balanced view of things emerged at the same conference in the shape of Mike Coupe, trading director of Sainsbury who said that cutting carbon emissions by limiting food choice is a “form of communism”, and that a tax would be unlikely to change people’s meat consumption unless it was huge.
The key point is that the issue of agriculture and climate change is not going to go away.
Few will dispute the need to take climate change seriously. But the debate is totally one-sided. Consumers not getting a balanced message about the value of meat and dairy products and the livestock which supply them.
So what should be done?
In a nutshell, simple fact backed messages must be communicated regularly and by independent, respected sources as well as the industry itself. A one off burst of activity just will not work.
There are three messages to convey
1. Meat and dairy are high protein foods, containing vitamins and minerals essential to good health. As the Food Standards Agency says "Meat is a good source of protein and vitamins and minerals, such as iron, selenium, zinc, and B vitamins. It is one of the main sources of vitamin B12, which is only found in foods from animals, such as meat and milk.”
The FSA also says “ Milk and dairy products such as cheese, yoghurt and fromage frais are great sources of protein and vitamins A and B 12 . They're also an important source of calcium, which helps to keep our bones strong. The calcium in dairy foods are easy for the body to absorb”.
2. Without cattle and sheep grazing the hills and moors our countryside would become overgrown in just a few years
3. Livestock farming has a plan to reduce greenhouse gases. (Assuming it does have a plan of course. A trawl through websites from the NFU, Dairyco, the NBA and the NSA does not turn up an easy to read summary of how the industry is tackling climate change. Contrast this with the National Cattlemens' Beef Association of America page on beef cattle and the environment.)
Funding for the information campaign can be found from any number of places. For a start I’d suggest ditching the Red Tractor and redirecting the levy funds, on the grounds that the Tractor means no more to the average consumer than a Union Jack.
Then, what about forensically examining the evidence that Meaty and Lamby are persuading people to buy more meat. Would the funds be better spent supporting a targeted campaign.
The big question is why the industry is not doing more about an issue which has been on the table for years, and which is growing in importance.
Capturing most headlines is the proposal by the NHS to cut back on the amount of meat it serves to patients. This, they say, will help reduce their carbon footprint, and will be beneficial to the long term health of patients. Whilst those with sick loved ones might worry about whether recovery will be as quick without the benefit of a balanced diet, and the cynic might wonder whether the driving force is to reduce NHS costs, nonetheless the fact is that the NHS serves up millions of meals and such a move will impact meat sales.
Less headline grabbing is the report “Food Futures” by think tank Chatham House.
Read the detail and you see a real anti meat and dairy bias. Meat and dairy are blamed for health issues. Global agriculture is said to be responsible for 14% of non carbon greenhouse gas emissions, and that a third of this is due to livestock. And they quote an EU report which says that meat and dairy are the main source of green house gas emissions in the food and drink sector. They trot out the old statistic that a kilo of grain fed beef requires 15 cubic metres of water versus cereals which require between 0.3 and 4 cubic metres, forgetting to mention that most livestock in the UK is pasture fed. Most alarming of all, the Chatham House solution is for government to dictate what we can and cannot eat, saying “The food system will need to reflect society’s choices as much as individual preferences”.
Then last week at the Meat and Livestock Commission’s Outlook conference a speaker from the Food Climate Research Network said that eating meat had to become more environmentally viable either by the industry reducing emissions or people eating less meat. She said that a meat tax might help and that there were moves to add the cost of emissions to the price of a food in order to encourage consumers to rethink what they are buying.
Fortunately a more balanced view of things emerged at the same conference in the shape of Mike Coupe, trading director of Sainsbury who said that cutting carbon emissions by limiting food choice is a “form of communism”, and that a tax would be unlikely to change people’s meat consumption unless it was huge.
The key point is that the issue of agriculture and climate change is not going to go away.
Few will dispute the need to take climate change seriously. But the debate is totally one-sided. Consumers not getting a balanced message about the value of meat and dairy products and the livestock which supply them.
So what should be done?
In a nutshell, simple fact backed messages must be communicated regularly and by independent, respected sources as well as the industry itself. A one off burst of activity just will not work.
There are three messages to convey
1. Meat and dairy are high protein foods, containing vitamins and minerals essential to good health. As the Food Standards Agency says "Meat is a good source of protein and vitamins and minerals, such as iron, selenium, zinc, and B vitamins. It is one of the main sources of vitamin B12, which is only found in foods from animals, such as meat and milk.”
The FSA also says “ Milk and dairy products such as cheese, yoghurt and fromage frais are great sources of protein and vitamins A and B 12 . They're also an important source of calcium, which helps to keep our bones strong. The calcium in dairy foods are easy for the body to absorb”.
2. Without cattle and sheep grazing the hills and moors our countryside would become overgrown in just a few years
3. Livestock farming has a plan to reduce greenhouse gases. (Assuming it does have a plan of course. A trawl through websites from the NFU, Dairyco, the NBA and the NSA does not turn up an easy to read summary of how the industry is tackling climate change. Contrast this with the National Cattlemens' Beef Association of America page on beef cattle and the environment.)
Funding for the information campaign can be found from any number of places. For a start I’d suggest ditching the Red Tractor and redirecting the levy funds, on the grounds that the Tractor means no more to the average consumer than a Union Jack.
Then, what about forensically examining the evidence that Meaty and Lamby are persuading people to buy more meat. Would the funds be better spent supporting a targeted campaign.
The big question is why the industry is not doing more about an issue which has been on the table for years, and which is growing in importance.
Monday, 2 February 2009
Animal Welfare - What Does the Public Really Think?
Animal welfare issues are again in the news.
Last week alone saw Hugh Fearnley Whittingstall take on Tesco in the cause of truthful labelling on chicken, Jamie Oliver supporting British pigs, a concerted advertising campaign by Sainsbury promoting their Freedom Foods pork, chicken, and salmon, and news of their ban on caged eggs. We also heard that Tracy, marchioness of Worcester has done a programme advocating better pig welfare, to be screened tonight.
On the other hand, last week also saw a piece by Andy Bond of ASDA in The Grocer claiming that worrying about animal welfare is yesterday’s agenda, and that celebrity chefs are patronising cash strapped consumers. Waitrose who have for years promoted high animal welfare standards seem to be losing sales, and organic meat products, which support high welfare, have apparently seen a big sales drop in the last three months.
So do consumers care?
The facts suggest that many already care enough to have changed how they shop, and that the more information they are given about the issue, the more prepared they are to change. It’s by no means everybody, and even the worried have limits on how much they are prepared to pay, but there is a growing movement to higher welfare products.
IGD research continues to find this. They say that whilst price has increased in importance as a factor influencing shopping habits, the number of consumers who have specifically bought foods with high animal welfare standards has increased from 11% in 2007 to 18% in 2009. They also point out that use of free range eggs has now moved to processed foods such as mayonnaise and pasta.
TNS the market research group in a survey commissioned by Compassion in World Farming have reported that free range chicken sales grew by 35%, and higher welfare sales by 42%, between December 2007 and December 2008. They also say that in December alone, standard chicken sales dropped by 11% in total and by 55% in Tesco. Free range, higher welfare and organic chickens now account for about 15% of sales, still small, but growing fast.
On to pigs. Jamie’s programme attracted 1.9 million viewers, less than the 3 million for his chicken programme, but nevertheless a sizable audience. It is early to judge whether it has made a difference although Waitrose have reported that their sales of pork (all British of course) rose by 20% following the programme.
It looks as if Andy Bond’s sweeping statement that consumers are not prepared to pay for higher welfare products is just not true, and if we are talking patronising, then for Bond to lump all his customers into one box and not recognise that people have different priorities, pressures and values, seems patronising in the extreme.
Most supermarkets, even Tesco and ASDA have acknowledged the trend and sell a higher welfare chicken to help the conscience stricken but cash strapped consumer.
Sainsbury have introduced a Freedom Food endorsed option costing about £1.50 more for the average bird, but with a clear explanation of the better rearing conditions. Sainsbury have also kept their range of basics, free range and organic for those who want alternatives.
They are adopting the same approach on pork. Again, it’s Freedom Food endorsed, again there is an explanation of why it is better for the pigs, and the extra price is small at about 50p per kilo more than standard.
Where will the animal welfare issue go from here? I feel that as awareness of how farmed animals are raised grows, consumers will increasingly look for higher welfare options. It may take years, and it will require commitment from well known respected champions like Hugh and Jamie who will not be put off by vested interests coming down on them like the proverbial ton of bricks, and equally will seek out the full facts before acting. It was a bit depressing for example that Jamie in his admirable support for British pigs did not mention that there are still some unsavoury yet legal pig raising conditions here such as housing the animals on slats. But you have to start somewhere.
There is evidence too that animal welfare concerns could extend to other species. The long running Anchor advertisements for butter from “free range cows”, with the implication that not all cows run freely in the sunshine as consumers would like to believe, would be an example of a company, foreign at that, spotting both the trend towards higher welfare.
Finally, it is not too difficult to imagine that better welfare conditions become such an issue that supermarkets decide to raise the bar for producers yet refuse to pay more.
claiming that worrying about animal welfare is yesterday’s agenda, and that celebrity chefs are patronising cash strapped consumers, and a concerted advertising campaign by Sainsbury promoting their Freedom Foods pork and chicken, and their ban on caged eggs. This week Tracy, Marchioness of Worcester, will be seen on More 4 TV in the cause of pigs. Meanwhile Waitrose who have for years promoted high animal welfare standards seem to be losing sales, and organic products, which also promote high welfare, have seen a big sales drop in the last three months.
So do consumers care? The facts suggest that many already care enough to have changed how they shop, and that the more information they are given about the issue, the more prepared they are to change. It’s by no means everybody, and even the worried have limits on how much they are prepared to pay, but there is a growing movement to higher welfare products.
The IGD continues to find this. They say that whilst price has increased in importance as a factor influencing shopping habits, the number of consumers who have specifically bought foods with high animal welfare standards has increased from 11% in 2007 to 18% in 2009. They also point out that use of free range eggs has now moved to processed foods such as mayonnaise and pasta.
TNS the market research group in a survey commissioned by Compassion in World Farming have reported that free range chicken sales grew by 35%, and higher welfare sales by 42%, between December 2007 and December 2008. They also indicated that in December alone, standard sales dropped by 11% in total and by 55% in Tesco. It should be said though that the percentage of sales in free range, higher welfare and organic remains small.
On to pigs. Jamie’s programme attracted 1.9 million viewers, less than the xx for his chicken programme, but nevertheless respectable. It is early to see whether it has made a difference although Waitrose have reported that their sales of pork (all British of course) rose by 20% following the programme.
It looks as if Andy Bond’s sweeping statement that “xxxxx” is just not true, and if we are talking patronising, then for Bond to lump all his customers into one box and not recognise that people have different priorities, pressures and values, seems patronising in the extreme.
Sainsbury have spotted the trend, and have been very shrewd in the way that they have tackled the issue. In an effort to help the conscience stricken but cash strapped shopper, they have introduced Freedom Food endorsed, higher welfare chicken with a clear explanation of why it is better for the birds. It does cost more but only about xxxx a kilo, or £ for an average bird. They have also kept their range of basics, free range and organic for those who want an alternative.
They are adopting the same approach on pork. Again, it’s Freedom Food endorsed, again there is an explanation of why it is better for the pigs, and again, the extra price is small.
Where will the animal welfare issue go from here? I feel that as awareness of how farmed animals are raised grows, consumers will increasingly look for higher welfare options. It may take years, and it will require commitment from well known respected champions like Hugh and Jamie who will not be put off by vested interests coming down on them like the proverbial ton of bricks, and equally will seek out the full facts before acting. It was a bit depressing for example that Jamie in his admirable support for British pigs did not mention that there are still some unsavoury yet legal pig raising conditions here such as housing the animals on slats. But you have to start somewhere.
There is evidence too that others are looking at animal welfare conditions from a different angle. The long running Anchor advertisements for butter from “free range cows” would be an example.
Finally, it is not too difficult to imagine that better welfare conditions become such an issue that supermarkets decide to raise the bar for producers yet refuse to pay more.
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