The Sector Comes of Age
by Paul Charity
The provision of food and drink on an out-of-home basis is as old as time itself. The UK’s network of coaching inns is testament to the systemised provision of refreshments at key geographical locations as travellers made their slow and weary way around the country. For centuries, every town and city in the UK was well-populated with inns and taverns serving their local populations with a hearty if basic offering of recognisable staples.
It is in the last quarter century, though, the UK foodservice scene has changed beyond recognition, making a quantum leap in terms of the quantity and quality of branded offers. Now the UK foodservice scene lays claim to world-class credentials, second only to the US in combining the key constituent components of individuation, quality, value and consistency.
Let’s rewind to 1990 to get a flavour of the level of progression within branded foodservice in the UK in the past 25 or so years. Branded operators were few and far between. Luke Johnson and Hugh Osmond were still three years away from investing in PizzaExpress and creating a UK-wide network of restaurants. JD Wetherspoon had a turnover of £7m. Pubs were still required to close at 3pm on a Sunday before being allowed to reopen at 7pm. The branded coffee shop hardly existed and branded quick-service restaurants tended to be US imports – McDonald’s arrived in the UK in 1973. Food in pubs existed at a basic level of tired staples – and the term gastro-pub was yet to be invented.
Fast-forward and progress has been dizzying. The UK now offers world-class branded formats run by world-class individuals. The UK’s leading companies have fast-tracked themselves, assimilating the lessons around systemisation offered by our American cousins, who still lead the world in replicable branded offers driven, invariably, by the power of franchisable retail content. But talent has flooded the UK scene. Our aforementioned leading companies have moved their skillsets on an upward curve, producing talented individuals who have, in many cases, formed their own companies. US companies opening in the UK have also spawned a generation of executives equipped to start their own foodservice brands. High quality branded concepts are disruptive within their market places. This opportunity has attracted individuals from the banking, law and accountancy professions, who have relished the challenge to make their mark – and their fortunes – in the entirely democratic world of foodservice; if you offer tasty, good-value food, consumers will seek you out and fill your tills.
The success of the UK’s branded foodservice entrepreneurs can be measured in entirely objective ways. UK consumers make the second highest number of eating and drinking out of the home visits in Europe. UK consumers make 142 visits each per annum, second only to Italy, whose figures are skewed by much bigger breakfast usage (30% of all visits) and average 176 visits each year per capita. The UK foodservice market has the biggest domination by brands of anywhere in Europe. In the UK, visits to brands by consumers rose to 58% of all visits in the year to June 2014, up from 52% in 2008. (The next highest country is France with 45% of all visits to branded chains).
The UK dominates the European list of large companies by turnover with circa 40 companies achieving turnover of £100m or more. No other country other than the US is producing so many foodservice brands with the universality to appeal to overseas markets. A non-exhaustive list would include Costa Coffee, Jamie’s Italian, Wagamama, Caffe Nero, Pret A Manger and PizzaExpress, with the latter attracting investment from a Chinese private equity buyer, Hony Capital, intent on expanding the brand across China. Lastly, it’s worth noting last year saw 16 new branded concepts opening in the UK each week – an incredible 800 new branded concepts in a single year. My own estimate is the UK now has more than 2,000 operators of branded foodservice concepts. Some of these smaller, emerging brands will undoubtedly grow into world-class operations with a worldwide operating footprint.
A particular feature of US foodservice has been its versatility in taking global cuisines and creating its own formulations – before re-exporting them. So aside from the US staples of burger, fried chicken and ribs colonising the globe, we have US reinventions of Italian food and drink, in particular, conquering foreign markets – pizza (Domino’s, Pizza Hut) and coffee (Starbucks) are the obvious examples. It was with some pleasure I dined at Soho House in Chicago last year and noted the company had exported its Dirty Burger, Chicken Shop and Pizza East brands to the US in a classic coals-to-Newcastle exercise. Could UK foodservice firms now go one step further and export our systemised and branded takes on Indian, Chinese, Thai, Japanese, Italian, and indeed, US food around the world? Who would bet against?
Paul Charity is managing director of Propel Info. This article is an abridged version of his foreword to the new book, Effective Brand Leadership – Be Different. Stay Different. Or Perish, by Professor Chris Edger and Tony Hughes