MagnetismZurich, Switzerland: Attracting over 200 senior executives from 17 countries, this September’s Third European Foodservice Summit once again proved a world-class networking and idea-generating forum. Key themes among the Summit’s 16 speakers: the complexities of customer attraction and retention; the key role of branding; Europe’s growing strength in concept development; difficult markets (from teenagers to Eastern Europe); and underlying emotional imperatives, whether designing restaurants or encouraging staff to innovate. Held for the second time at Zurich’s Lake Side Casino, this year’s conference took the theme of ‘Playing the Attraction Game’, with numerous examples of high profile concepts and innovative thinking from all around Europe.
Youth trend forecaster DeeDee Gordon, founder and CEO of Look-Look, set the stage with a key topic: how to attract, and keep, the attention of 14-24 year-olds - "the most influential of all consumer groups." Accounting for 18 % of the world’s population, they have big spending power - particularly on clothing, entertainment and food - and are still learning to make their own decisions.
"Whereas by the time their 30, people are stuck in their ways," Gordon pointed out.
Key changes for this group compared with 10 years ago:
- they travel a lot more
- they are multi-tasking, constantly switching between internet chatrooms, email, pagers and on-the-move communication technology
- they are the technology experts within their families
- they have been subject to an immense increase in marketing and have become "expert editors of culture".
Youth culture is increasingly "multiple identity" and this can suit the development of hybrid concepts combining foodservice with other activities: coffee bar plus laundry, cinema plus pizza parlour, cocktail bar plus manicure. Self-expression and customising also offer potential, as with cook-your-own barbecue and fondue concepts. Around 65 % of global youth dines out more than twice a week but it’s not all grab-and-go. Gordon quoted a recent survey where over half the young people interviewed favoured the cosy lounge environment of cafes against 23 % favouring fast-food. Since 9/11 - which happened at a time when stress among young people was at an all-time high - there has been a notable swing to homely comfort foods like macaroni cheese and traditional desserts.
Comfort versus angst
Some of the issues raised by DeeDee Gordon concerning the speed and complexity of trend development were echoed by Dr. David Bosshart, director of the Gottlieb Duttweiler Institute in his analysis of Market Magnetism. "The more information we have, the less we feel secure and the less we can predict," he said. People feel more stress but also more boredom. To deal with these and other contradictory forces, marketers must develop strategies which achieve a connection between the comfort world and the angst world. "Our lives won’t get any easier but products must promise that they will." Brands can help by reducing disappointment.
One of Europe’s greatest branding success stories was recounted by Jan Kjellman, head of Ikea Food Services AB. The strategic value of a coordinated foodservice policy was realised as the business spread internationally. Ikea founder Ingvar Kamprad discovered that, as the company’s stores got bigger and customers came from further away, that "it is difficult to do business with hungry customers".
Foodservice facilities - comprising a restaurant, Exit Bistro, Swedish Food Market shop and staff restaurant at each store - have now grown to the point that, out of 290 m visitors last year, 150 m of them were foodservice customers.
Restaurants strive to offer a competitively priced, nourishing meal with a taste of Sweden. They can have up to 600 seats so depend on tightly organised logistics, purchasing and customer management. Free refill drinks help cut queueing through the self-service counters while Exit Bistros speed customer flow by reducing the need for staff to ask questions. Does foodservice make money for Ikea? Kjellman said it was profitable - but customer satisfaction was the priority.
Europe’s answers to the burger
This year’s panel discussion posed foodservice executives from Switzerland, France, Norway, Spain and the Netherlands with an intriguing question: what comes after the hamburger?
The classic burger format of protein between two layers of carbohydrate is still ideally suited to today’s on-the-move lifestyle. But Christopher C. Muller, associate professor in hospitality management at the University of Central Florida and a regular fixture at the Summit, highlighted a significant swing away from beef on US menus. Chicken now gained 17 % of all restaurant orders compared with 13 % in 1989 while hamburgers slipped from 17 to 15 % in that same period.
However, total volumes of food sold have doubled in that time and, with over 14 billion hamburgers consumed in the USA last year, the big three burger chains - McDonald’s, Burger King and Wendy’s - are still massively influential on what people eat, making as much money in seven and a half weeks as US movie theatres make in a year. So the taste for burgers is unlikely to change any time soon.
Can European concepts challenge this classic US fast-food concept?
Paul Bringmann, managing director of the Les Halles foodservice operation within Dutch department store chain Vroom & Dreesmann, highlighted the "unbelievable" growth in demand for sandwiches using speciality breads.
"I think that McDonald’s will have to move more in that direction," he suggested.
Does fast-food need to contain meat at all? That might sound heretical to the big burger chains but Switzerland’s young Tibits concept successfully fills a vegetarian quickservice niche with fresh, meat-free ingredients sold self-service by weight within an environment of fast casual elegance.
"American products are definitely not as important as they used to be," said Rolf Hiltl, owner of Europe’s oldest vegetarian restaurant and a co-owner of Tibits. Hiltl attributes Tibits’ success to unique ambience, novel advertising and exclusive products. Diners customise meals by mixing hot and cold ingredients from the boat shaped food counter at each unit, which combines restaurant, licensed bar and take-away. Hiltl said that the concept was created with young people in mind - "but older people adapt to it, too."
Josette Quiniou, director of research and strategy at France’s Elior, now number 4 among Europe’s biggest groups, felt that burgers still had a place on European menus but would be increasingly challenged by new dining experiences. With 40 % of its revenue outside France and over 10,000 outlets in 12 countries, Elior plays the attraction game in two ways, as a major contractor and as an operator of branded concession catering with its own fast casual brands such as Pomme De Pain and TJ’s.
Sten Magnus, president of Norway’s Umoe Catering, said that chicken now out-sold beef at Burger King units in Norway but hamburgers were still a big seller at branches of TGI Friday’s, his other franchised chain. In a small country, you had to be focused, he said.
"In New York you can have outlets selling soup to defrocked Lutheran priests."
But in Norway with just 4.4 m people, you need a broader approach. Burgers appeal across the social spectrum, from plumbers and electricians to lawyers.
Steven K.Winegar is managing director, business development and brands, at Zena, one of Spain’s largest operators of branded foodservice. His company operates chains of theme restaurants (Fosters Hollywood), tapas bars (Cañas y Tapas), and pizza/pasta restaurants (Nostrus y California). Imported franchises like Burger King, KFC and Pizza Hut are an important part of the business but Winegar believes that Zena’s home-grown concepts could be highly exportable. A prime example is Cañas y Tapas, which draws upon Spanish cultural affinities but also has other qualities which suit today’s market needs - authentic Andalucian decor, flexible menu of natural ingredients and adaptability to different locations and day-parts.
The conference’s core theme of customer attraction received an in-depth pan-European analysis from Gretel Weiss, editor-in-chief and publisher of FoodService Europe and foodservice market expert Herwig Niggemann. They identified 5 highly relevant issues - ‘think paths’, incorporating substantial growth potential for the future: themes ranged from speciality breads to Asian menus.
From ciabatta to croissants, bread-based menu products offer the attraction of immense variety as well as flexibility in fillings, pricing and sales locations, from bakery cafes to petrol stations. Products readily adapt both to on-the-move and fast, casual dining needs and are relatively easy to chain and brand, with many opportunities yet to be developed.
Bread also attracts the health-conscious consumer.
"Nobody relates bread to junk food," Gretel Weiss pointed out. Such qualities have encouraged a diversity of innovations across Europe, from Belgium’s Le Pain Quotidien and France’s Paul to Spain’s Bopan, the UK’s Pret A Manger and Germany’s Brezel Ditsch. Herwig Niggemann foresaw a rebirth of 1980s star concept the market restaurant, as operators refined the key appeal of freshness and cornucopia-like choice with latest ideas in customisation and the "shoppertainment" of open merchandising and cooking.
"Freshness must be celebrated", Niggemann said, but this in turn demanded sophisticated planning. The concentration of activities in the front of house not only attracted customers but posed risks in terms of hygiene and customer flow management.
Key priorities for the renewed success of market restaurants include simple recipes - including seasonal, regional and ethnic ingredients - and eye-catching combinations (especially greens and grains since meat is no longer a particular priority).
The growing phenomenon of "public living rooms", another key trend charted by Gretel Weiss, came from the need for community. "In so many households today there is no other person resident," she pointed out. Thus people increasingly look on restaurants, pubs and cafes as their second kitchen and living room - in effect, an alternative home. A key concept is lounge-style eating and drinking with soft seating - even bed-style as at Amsterdam’s Supper Club - colourful, cosy ambience and plentiful opportunities for flirting.
Today’s consumers increasingly look outside their home for meal solutions. Herwig Niggemann suggested that retailers rather than restaurateurs have taken the initiative in developing concepts which combined freshness and convenience. But although they have a big advantage in being able to offer variety, Niggemann felt that they would never understand the rules of foodservice.
"The management structures of supermarkets don’t suit complicated foodservice operations."
How are flavours changing?
"Asia continues to provide dishes which are completely different to all of Europe’s styles," Gretel Weiss told delegates. Such food, with its emphasise on vegetarian ingredients and just-in-time-cooking, stands for freshness and light, healthy cuisine.
It fulfils the consumer hunger for new and intensive tastes, at the same time as taking account of their need for "exotic without risk".
Opportunities are growing in several ways. While Wagamama and Yo! Sushi have imported pure Asian concepts, ethnic food demand has also been driven forward by modules in food courts and Asian promotions in restaurants and canteens, complete with the ‘shoppertainment’ of wok cooking and sushi preparation. Fusions like French-Korean have also widened the market.
Changing the Management mind-set
The bewildering speed of cultural and commercial change highlighted at the conference puts considerable pressure on foodservice management to enter new markets, develop new forms of cooperation and handle new challenges.
"Don’t try harder - try to do it differently", was the message from Professor Peter Kruse of the University of Bremen, an expert in the application of chaos theory to management. Kruse argued that short periods of instability are beneficial for companies in freeing up thought processes.
"You cannot simply say to people: be innovative and spontaneous. You need a culture of change." He suggested practical ways to achieve it, such as a Christopher Columbus mind-set in setting out for an unknown Continent. "Leaving the harbour" can be stimulating, providing management understand how to balance stability and instability.
Key points of advice:
- don’t try to steer or regulate in detail
- help unconventional thinkers get to the top
- lead like a facilitator, not a conductor.
How should design contribute to the attraction process? For Chicago-based Jordan Mozer, emotional design makes for good business. While many basic aspects of the process are mechanical - such as safety and completion on-time and within budget - design must also acknowledge the connection between the soul of the business and its customers.
"We are all taught to analyse and be logical but we don’t spend a lot of time talking about how places feel," he told delegates. The emotional responses of the guest - and also employees - to a building or room can be aided by such means as "punctuation" eg lighting which distinguishes bar, dining room and private party space and enhances mood changes at different times of the day.
There is more than one right answer.
"I believe idiosyncrasy to be good business," Mozer said. "Instead of going head-to-head with the competition, come at them sideways with something unexpected."
At the Cylinder diner which Mozer designed at the Autostadt theme park in Wolfsburg, it would have been "really kitsch", Mozer felt, to use real seats from automobiles but these helped inspire the special furniture used.
"Something special occurs when there is interpretation/abstraction."
Ways in which the European foodservice industry is capitalising on market opportunities were analysed by Peter Backman, chief executive of Horizons, London. Charting the latest top 100 foodservice groups in Europe, Backman showed that European foodservice, with 22 % of the world market, is still overshadowed by the USA, which has over one third of global foodservice sales.
He also highlighted why large and increasingly multinational groups were now so important in foodservice.
"The bigger you are, the bigger you get," he said. The benefits of scale were ever more apparent in access to finance, branding, employment and purchasing cost reduction. Much also depended on the sector.
With Compass Group, Sodexho Alliance and upwardly-mobile Elior occupying 2nd, 3rd and 4th slots in the top 10, contract catering is now the biggest segment for group activity followed by QSR - where McDonald’s still reigns supreme - roadside and travel catering. The UK is the most "grouped" country, followed by France and Germany. Most up-and-coming markets are Spain, followed by Italy and Finland.
Eastern European perspectives
How do you attract customers in the emergent and - in many cases - still chaotic markets of Eastern Europe? Sebastian Gruetz, Moscow-based marketing director of the BP Retail Business Unit for Central and Eastern Europe, gave an in-depth account of his company’s experience in operating petrol station foodservice in Moscow, Poland and the Czech Republic. Successful establishment of foodservice/retail businesses in these countries benefited from plenty of persistence, good brands, and flexibility in dealing with legislation, bureaucracy and weak infrastructure.
Quick casual elegance
The host of interconnecting factors which shape today’s dining demand were defined by Jeremy Spencer, director and general manager, new concept, at 6 Continents, Europe’s 8th largest food service operator.
"Eating-out is everyday," Spencer said. "We do it to simplify our lives."
Customers with this mindset want quick casual elegance rather than sophistication. They don’t want to have to pre-book and they want balanced rather than large portions. Selling meals is more about experiences than products and good ingredients are becoming more important than recipes. Seasonality is increasingly prized and healthy eating is not seen to be as dull as it used to be.
"It’s cool to be into cooking and food."
Key social trends which underpin market change include
But alongside the opportunities there are threats. Echoing earlier points concerning meal solutions, Spencer warned that supermarkets continue to lead on food innovation.
- more lone parents
- more older people with money, and older people getting younger
- more women in employment
- the growth of the Reverse Commute, with the city becoming a playground outside of work hours.
"The foodservice industry needs to embrace risk," he declared. "Ultimately, industry professionals will be the long-term winners. This is not a sector for the amateur."