HISI2016 COMPETITION

TOPIC OVERVIEW

Competition is integral to the business of food and beverages. Hospitality has, and always will be, a fast-moving race of winning over your customers, constantly seeking innovation, and maintaining your reputation as one of the best - if not the best - in your field. But, as with any industry, there are benefits to knowing who your competition are. Who shares your market? How do your costs compare? Is your business in a highly condensed area? With the demand for take-away food and restaurant dining on the climb, the Australian food and drink landscape is looking to become more competitive than ever - are you prepared?

FACTS AND FIGURES

A large proportion of those in the hospitality industry are old hands at the game (trading for longer than four years). Yet despite the somewhat congested market, our findings show that new players on the scene (1 in 4 cafes and 1 in 5 restaurants) are confident of their future success, entering with eyes wide open.

YOU’RE ALERT, BUT NOT ALARMED

The general attitude is one of awareness, but not concern - 69% of cafés/coffee shops, and 65% of take-away outlets are not concerned with nearby competitors. Cool, calm, and collected - that’s what we like to see.

ALMOST HALF ARE FEELING THE SQUEEZE

Large clusters of restaurants are a great convenience to the consumer, but a concern to restaurant owners trying to mark their territory. 41% of restaurants surveyed felt the pinch, saying they felt there are too many competitors within close proximity.

TIME TO STAND OUT FROM THE CROWD

Although competition in the industry is fierce, 1 in 5 operators (20%) say it doesn’t matter because they have a niche product. The lesson here? Make sure your product is unique and high quality, and always be informed of what your competition are doing.

RESTAURANTS FEEL SAFE

Restaurants have traditionally owned the food market, but with the rise of high-quality, healthy take-away food available, we asked: are they scared of losing their relevance? Not so. 67% of restaurant owners say they aren’t concerned about the competition from nearby cafes, pubs and other venues selling meals .

OPPORTUNITIES

NEW TECHNOLOGY

Gain an edge over your competition by creating a fuss-free and modern environment for your customer with the latest in consumer technology. These include: • Online booking systems • Contactless EFTPOS systems, such as Paypass or Paywave • Electronic ordering, like iPads, or touch screens • Automated marketing via email to your loyalty database

DIRECT ENGAGEMENT

Now, more than ever, new pathways have been opened up between yourself and your consumer. Use these to get up to- date responses, and create direct conversations. You can use the variety of social media channels such as Facebook, Twitter, Instagram; or EDM (electronically distributed mail) to communicate new offers, news, surveys, answer product queries, or other important information.

A NEW AUDIENCE

Did you know 85% of Australians use a Smartphone? And 92% of all households have Internet access.3 The demographic is shifting to an online forum - make sure you’re catering for their needs. Food preferences are changing quickly, too. The sprawling Baby Boomer population is getting older, and investing in healthy food options. In turn, the growing Gen Y demographic provide more diverse food requirements than previous generations, with a rising demand for vegan, vegetarian, halal, kosher, and allergy-specific options. Your new audience is better educated than ever before on health and smart food options. Fast food will always have its place in Australian food culture, but ensuring you provide a diverse and interesting menu will ensure you remain relevant and popular.

HAVING THE RIGHT EQUIPMENT

With a slick and modern kitchen, you will be able to increase both the quantity and quality of food being produced. Don’t be left behind as your competition moves ahead - make sure your kitchen is performing at the best rate it can.

FINDING GREAT STAFF

Having a great kitchen is nothing without a solid team working in it. But finding reliable, long term staff in the hospitality industry can be difficult. To build a great team, make sure you: • Take your time to select the right staff: look for enthusiastic, committed, and passionate people who are honest and experienced in their field. • Correctly handle onboarding staff, training, complaints, holidays, and outgoing staff. • Take your time: food is only part of the picture when it comes to a successful restaurant, cafe, or take-away shop – great service is crucial too. So take your time in the interview process to make sure you’re choosing someone who fits your work culture. • Find out their skills: people often have more to offer than meets the eye. Maybe your new waiter also happens to be a talent in online coding to help you with your website. Ask the right questions, and you can build a multi-disciplinary team.

CHALLENGES

URBAN VS COUNTRY: WHO’S DOING BETTER?

It comes as no surprise that the sentiment of optimism and excitement in new hospitality business is clustered in our nation’s urban centres. In the city, a huge 92% of publicans are feeling very confident for their futures, with A-grade investments in equipment, menus, marketing, and decor raising both volume and spending from their consumers. In comparison, with only 69% of regional pubs feeling confident about the future, is Australia’s famous pub culture being replaced with its modern successor, the urban gastro-pub? Hospitality in rural Australia is suffering, with their dwindling consumers opting for multinational fast-food take away like McDonald’s, and ageing owners resistant to investing in the updates they need to ensure their future.

FOCUSING ON ONLINE OPPORTUNITIES AS MUCH AS YOU DO OFFLINE OPPORTUNITIES

As the old saying goes - a business owner must always make time to work ON their business, not IN their business. Branching out into new technology or online platforms is a pie-in-the-sky dream unless you dedicate time to the cause. Get your online profile started by: 1. Making sure your website is up-to-date so customers can find you easily online 2. Setting up social media platforms like Facebook and Instagram 3. Making sure your business is on business directory listings like Zomato If you don’t have these skills personally, seek out help from online consultants, or engage your staff - who knows what skills they can offer!

INCREASING YOUR VALUE PERCEPTION

As with any retail business, you must spend money, to make money. In order to raise your prices for consumers (and therefore increasing your revenue) you must first work to significantly increase your value perception. Consumers in the current industry climate are prepared to spend big on take-away or eat-in food - but first you must convince them of its worth. Here are our top tips to increasing your value perception.

PROMOTE POSITIVE CUSTOMER FEEDBACK

Positive testaments of your product will be the best sale point possible. Advertise positive customer feedback at every touchpoint possible - on your website, on your menu, even on your shopfront.

GIVE A STRONG GUARANTEE

Preaching value is only powerful when backed with confidence. Make sure you make firm and assertive statements regarding the quality of your food and service - it will create an environment of trust for your consumer.

CREATE A NARRATIVE

Satisfy growing consumer curiosity about their meal by creating a narrative around the produce or product - is your salad using ‘farm fresh’ ingredients? Why did you choose that brand of coffee? Tell a story, and connect the consumer to their meal. Start with this: what is it that makes your restaurant or cafe different to everyone else? Is there a story behind your name? Is your family from the Mediterranean and you have incorporated traditional elements into your venue as a homage to your heritage? It will make a huge difference in a congested and highly competitive market.

REVIEW YOUR LANGUAGE

Food advertising has long been considered an art: using just a few choice words, you can convince your viewer to choose you over the competition. Creative copy is everywhere, so pay attention to the language you are using, on everything from your menu descriptions to your window advertising.

USE PHOTOGRAPHY

They say the way to someone’s heart is through their stomach - well, the way to someone’s stomach is through their eyes! Invest in high-quality photography of your dishes, interior, kitchen, and ingredients. A picture does indeed, after all, tell a thousand words.

EDUCATE YOUR STAFF

A simple fact dropped by your staff to a customer at the point of sale, or whilst ordering, can shift food choices or brand awareness significantly. For example, requesting that your staff strive to make your consumers aware that you’ve actually switched to a premium ingredient, is a great way to upsell a product and increase your value perception. There’s something special about country cafes. With the unique personality and home-made freshness that only a small business can provide, The Red Velvet Lounge welcomes you from first sight. Nestled into the lush countryside of Cygnet, around 55 km from Hobart, The Red Velvet Lounge sits snugly between the picturesque mountain ranges and quiet streets of the small town. Famous for its cakes, biscuits, and sourdough bread, The Red Velvet Lounge is famous among locals and visitors alike - which, considering its recent turn of events is nothing short of remarkable. In November of 2014, the historic 100-year old building tragically caught fire, and was burnt to the ground. Believed to have started in the kitchen and spreading quickly to their famous dining area, both investigators and insurance companies couldn’t offer much further explanation for the fire than this: it was just damn unlucky. Owner Steve Cumper was devastated. The kitchen – the heart of his iconic restaurant and cafe - was destroyed. His dining area was unusable. He was losing money by the day as his bills ticked over. But worst of all, his insurance policy didn’t even come close to covering the hundreds of thousands of dollars’ worth of damage the fire had caused. to pull up“. At this point, I thought the fire was a sign stumps,” says Steve, a hospitality veteran of over 30 years. “But we had such an overwhelming response from the broader community who organised a fundraiser. “Attending were a whole lot of industry people and organisations who banded together to raise $35,000. And that really steeled our resolve to get up and keep trying.” Among the people to hoist Steve and his staff back into business were Silver Chef. Already a loyal customer of the Silver Chef brand, the equipment lost in the fire had only just been paid off for full ownership by Steve a short time earlier. “I contacted Silver Chef,” remembers Steve, “with a ‘Wish List’ and a ‘Reality List’. Luckily, they were able to help me with both.” Indeed, the existing relationship between Silver Chef and Steve meant that replacing his kitchen was as easy as a phone call. With an incredible $75,000 loan from the government, Steve had only a small gap to cover when it came to setting up a new and renovated kitchen. To preserve his cash flow, Mr Cumper decided to rentto- buy nearly $90,000 worth of kitchen equipment and stainless steel benches through Silver Chef, rather than buying it outright. “I was working to an incredibly tight budget and didn’t want to tie up what cash I did have in expensive kitchen equipment,” says Mr Cumper, whose wages bill alone is about $300,000 a year. “The ability to get the equipment you want immediately without having to outlay a shed-load of cash is very attractive; renting-to-buy the equipment was a no-brainer.” Silver Chef’s willingness to fund new and used equipment also helped The Red Velvet Lounge keep its costs down. On Saturday evenings, The Red Velvet Lounge transformed from a cafe into a fully-fledged restaurant, and the kitchen reflected this versatility. Almost everything prior to the fire was from brand ‘Simply Stainless’ - four work benches, dishwasher, sink benches and gantry. Following the fire, The Red Velvet Lounge saw a whole new kitchen installed. The combination of new and second hand equipment now included exciting new options like a Robot Coupe ice cream machine and Henkleman vac packer. In addition to restocking the essentials, Steve also chose to add in a new Expobar coffee machine and versatile Mecnosud spiral mixer. His new kitchen was complete. Steve Cumper is no stranger to the perils of the hospitality industry. Starting out at the tender age of 16, Steve overcame many hurdles to win the successful name he currently has in the Australian food and beverage industry. He was the winner of Country Style magazine’s first ever National Country Chef of the Year award, and the iconic Red Velvet Lounge was even included in a 2014 issue of the Wall Street Journal. When asked what ‘Plan B’ was if the cafe could not be rebuilt, Steve laughs. He cheekily adds, “The only real back up plan was for me to go back to male modelling.” And it was this determination and passion for his work that has seen Steve rise from strength to strength since the reopening of The Red Velvet Lounge earlier this year. One cannot help but marvel at the highly responsive and innovative era businesses are lucky enough to operate in these days. It was not long ago that losing your business meant, well, losing your business. To watch your building burn to the ground spelt the end of the road for many, as raising the cash to rebuild would have taken years. In 2015, however, response time is the basis on which so many companies are growing their offering. Steve Cumper agrees. “The nature of lending money has changed over the years. Quite frankly, people could not have found the spaces in between established commercial markets to find, purchase and create a new market.” As Steve has shown, by having the right equipment, at the right time, everyone is a contender - regardless of difficult circumstances. So, we asked - how would you describe the new and improved Red Velvet Lounge? Steve says the refurbishment has allowed him to replace an “idiosyncratic space that had patinas of interest layered over the years” with a more appealing one. “It’s a beautiful space—it’s lofty, airy, light, warm and the same bonhomie we were noted for is still in the bricks— that’s going nowhere.” Also unchanged will be the “frocked-up yet unpretentious” country food for which The Red Velvet Lounge is famous, including its Nanna-style cakes—“think upside down quince cake with custard”.