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Morning Briefing for pub, restaurant and food wervice operators
Fri 3rd Nov 2017 - Friday Opinion
Subjects: Local loyalty, the devil’s in the detail and great opportunity lies in the ‘dustbin of demography’ 
Authors: Glynn Davis, Paul Chase and David Martin

Local loyalty by Glynn Davis

When Fuller’s purchased and reopened the Great Northern Railway Tavern just down the road from my house in north London it effectively handed me the ideal pub as my local. It is the second-closest boozer to my house and has a superb selection of beers, employees who are knowledgeable about these beers, a lovely Victorian structure that Fuller’s has lovingly (and expensively) restored to its original glory, and a high quality menu of snacks and main dishes.
 
I try to visit the pub as often as I can but since it reopened my total number of visits to this glorious place has equated to a disappointingly low number. This is because I’m like a growing number of people that no longer really have a local. If I lived in the middle of nowhere then I’d absolutely have one local and I would invariably visit no other pub.
 
As it is, I, like an increasing number of people, choose to live in an urban environment and this has had a detrimental effect on my having a local. Recent research from Marston’s On Trade Ale Report found only 34% of drinkers have one pub or other drinking venue they use most of the time and can call their local. This number would undoubtedly have been significantly higher if we went back only a few years.
 
Instead, 44% of people stated they visit a small number of favourite establishments, while 22% visit many different places and claim not to have a true favourite venue that could be classified as their local – even if it is not necessarily the closest pub to their residence or office. 
 
Clearly my job fuels a desire to experience as many places as possible, and not just stick to the same pubs and bars. But I suspect I would adopt just such an approach to my drinking location choices without the impact of my work. My feeling is I’m not alone in my peripatetic nature of drinking and this is becoming a mainstream activity as consumers are fed a constant array of venue options on social media – including the hottest new places on the block.
 
I’m just as promiscuous with restaurants. Being fully aware of new openings and rave reviews results in a venue being marked on my “must visit” list and hopefully a future visit does actually take place. Invariably it does not, and the restaurant gets pushed off the list by an even newer place. With only a limited budget and only so many nights of the week to play with I wholly fail to fulfil my restaurant visiting ambitions.
 
What this scenario does for the chances of me revisiting favourite places is disastrous. When specific places are highlighted in the media as being on the chopping block (mainly caused by avaricious property developers) a pang of regret comes over me because I’ve not visited them for years and therefore likely contributed to their demise. Some such as The Gay Hussar and Gaby’s Deli in central London have been saved and I’ve been mightily pleased. But have I returned? Maybe once, but certainly no more.
 
A friend’s parents visited the same Indian restaurant in west London for Sunday lunch at the same time, sitting at the same table, and eating the same dishes for 25 years. They probably had the same conversation each week too. Many times the owner simply didn’t bother charging them. They were part of the fixtures and fittings. I (and my wife too) don’t feel we are quite ready for such a situation just yet.
 
But to have a handful of places that we return to – and therefore support financially – certainly has some appeal. We have Locanda Locatelli, Andrew Edmunds, Gymkhana and Passione & Tradizione as places that we are determined to return to having enjoyed visiting a number of times in the past. Could we classify them as locals – definitely not, because none of them would recognise me in the slightest if I walked through the door.
 
Ahead of any return trip to these favoured restaurants, I am absolutely intent on next week visiting the Great Northern Railway Tavern. No hot new place will divert me from my mission to show a bit more loyalty to those places I should really call my local in more ways than it simply being close to where I live.
Glynn Davis is a leading commentator on retail trends 
 

The devil’s in the detail by Paul Chase 

Most social or economic issues worthy of debate have some basis that can be expressed in numbers. Getting to the truth of those numbers can sometimes be very difficult, and requires a lot of digging. Over the past week there have been a couple of notable examples of how the truth of numbers has exposed the lies and half-truths contained in the statements of those heavily invested in perpetuating the “Big Lies” surrounding alcohol use and its alleged harms.
 
The most notable example is a result of Freedom of Information requests lodged by the indefatigable Chris Snowdon, director of lifestyle economics at the Institute of Economic Affairs, into how the “lower-risk” drinking guidelines published by Public Health England (PHE) in January 2016 were revised downwards. You may recall prior to this date there were weekly guidelines of 21 units of alcohol for men and 14 units for women. The revised guidelines reduced the weekly level for men to 14 units, the same as for women, and famously declared “there was no safe level of alcohol consumption”; and any level of consumption raised the risk of premature death, or developing an alcohol-related disease, particularly a cancer.
 
PHE was advised by a group of academics called the Sheffield Alcohol Research Group (SARG), best known for its work in modelling the effects of introducing a minimum unit price for alcohol. SARG is the go-to group of academics for the neo-temperance movement, and most of its more £3m a year income comes from government departments or groups that support minimum unit pricing and other anti-alcohol policies.
 
However, Snowdon discovered SARG’s initial draft report to PHE stated, in line with the epidemiological evidence, the risk of death from an alcohol-related illness was lower for light drinkers than for teetotallers, but then rises. According to this initial report drinkers’ mortality risk rises to that of a teetotaller at 17.6 units a week for women, and 21.2 units a week for men. On this basis, the guidance for men of 21 units was appropriate and the guidance for women of 14 units was slightly over-cautious. So, how did the guidance get revised downwards?
 
It appears PHE pressured SARG to alter its analysis to support its tough new approach that emphasised the potential harm of low-level consumption. It is generally accepted there is a threshold above which a person needs to drink to put themselves at risk of conditions such as alcoholic liver cirrhosis or alcohol-induced pancreatitis. What the revised draft of SARG’s report did was to remove these thresholds at the behest of the Guidance Development Group to make moderate drinking look more dangerous than it is. Eliminating these thresholds from the model would make it appear there was no safe level of alcohol consumption for several of the most serious alcohol-related diseases, and the computer model would be forced to assume any amount of drinking caused these diseases and therefore, some moderate drinkers were dying of them.
 
As the emails that Snowdon uncovered demonstrate, SARG was very reluctant to do this, but it appears this really is a case of “he who pays the piper, calls the tune”. The Guidance Development Group was packed with temperance activists – including professor Sir Ian Gilmore, from the Alcohol Health Alliance, and Katherine Brown, from the Institute of Alcohol Studies (aka the UK Temperance Alliance). This is the kind of distortion of science that happens when activists start with a conclusion and then pressure their researchers to work backwards to justify it. Dame Sally Davies, the chief medical officer of health who presided over this disgraceful exercise in misleading the public, must now resign.
 
The other notable change coming down the line is how the Office for National Statistics (ONS) defines alcohol-related deaths. The term “alcohol-related” does not mean “caused by” alcohol, although neo-temperance would like you to think it does. This deliberate confusion has enabled the “Big Lie” that alcohol use generates a million hospital admissions a year, but it also inflates the number of deaths arising from alcohol use. The ONS defines alcohol-related deaths as deaths that are alcohol-specific or wholly attributable conditions (for example, alcoholic liver disease). Conversely, PHE uses the term to mean wholly attributable and partially attributable conditions (for example, hypertensive diseases, various cancers and falls). The key distinction here is ONS looks at the facts surrounding deaths as recorded on a death certificate, whereas PHE conflates deaths from alcohol-specific conditions with deaths where alcohol might have been implicated as a partial cause, but actually this is assumed on the basis of a computer model, not proven.
 
Great credit is due to Chris Snowdon for his work in debunking the junk science of the revised drinking guidelines, and a detailed analysis of what he discovered can be accessed on his blogsite www.velvetgloveironfist.blogspot.com. One by one the “Big Lies” of neo-temperance are unravelling. The truth is in the numbers if you dig deep enough; the devil is in the detail.
Paul Chase is a director of CPL Training and a leading commentator on alcohol and health policy

Great opportunity lies in the ‘dustbin of demography’ by David Martin

Last year, I wrote a piece on over-65s for Propel, falling straight into an old industry trap of talking about them as a single group. The “over-65s” has become an outmoded dustbin of demography, a lazy equivalent of “all others” – although in mostly young marketing departments it might also be a proxy for “don’t know”. It’s a classification that has been around forever but its continued use not only ignores all evidence of increasing longevity but also hides a valuable target market.

It is easy to overlook just how dramatic the change in life expectancy has been in recent history. Women have always lived longer than men but when my grandfathers were born, around the start of the 20th century, male life expectancy was less than 50. For male babies born now it is 79. 

When the state pension was introduced in 1948, a 65-year-old could expect to enjoy it for 13 to 14 years. However, for “late boomers” who are now aged 65, life expectancy is 83 for men and 86 for women. They can hope for 20 or so more years of pensionable income. Therefore, putting a 65-year-old into this data dead end makes little sense. Perhaps the planned move of the state pension age to 67 in 2028 will encourage some different thinking but for an out-of-home industry increasingly seeking scarce sources of growth, it’s surely time to open up a view on 65 to 74-year-olds.

The 65 to 74 cohort is substantial in size, it’s growing in numbers, it is increasingly likely to remain active in the workplace, and it’s a significant segment in our market. Yet we typically hide them from view by lumping them in with the oldest people who are much less likely to go out to eat or drink.

About 30 years ago, there were little more than five million 65 to 74-year-olds in the UK – now there are more than 6.5 million. In ten years there will be about half a million more, or a 9% increase. It’s an invaluable – and guaranteed – source of growth during what is looking like a difficult decade of post-Brexit adjustment.

Relatively few data sources acknowledge the difference between this age group and over-75s, but two recent examples reveal something of their behaviour and attitude. Firstly, the Ofcom Communications Report, which shows almost eight-out-of-ten 65 to 74-year-olds have internet access at home, compared with little more than half of the 75-plus age group. Had those two age groups been bundled together, it would seem all over-65s are potentially hard to reach online.

Then there is the Office for National Statistics’ Measuring National Well-being project. Whatever you think of its merits, it recently reported 65 to 74-year-olds have the highest levels of life satisfaction, the best ratings for feeling worthwhile, and the highest happiness ratings – a sound foundation for out-of-home food and drink occasions.

The 65-plus population is also increasingly involved in the labour force. Their employment rate has doubled since 2001, from 5% to 10%, and the numbers of them in employment has doubled since 2003. Recent work by financial services company Hargreaves Lansdown shows as many as one-in-nine women stop work after 70, double the level recorded as recently as 2012. For men, the equivalent figures are 15% today compared with 10% in 2012.

In a post-Brexit environment where young migrant foodservice workers may be hard to find, 65 to 74-year-olds will merit a new perspective from HR, just as much as from the marketing department. But what is their value to our market? As already noted, most data sources don’t care to report on 65 to 74s. They are deemed uninteresting. However, using disaggregated data from CGA’s Brand Track survey, we can see the activity of this age band in the out-of-home eating and drinking sector – and it crystallises the importance of viewing them differently, and discretely, from those aged at least 75.

Using claimed frequency data from the Brand Track survey, we can estimate consumers aged 65 to 74 are likely to account for about 10% of all adult eating-out visits. This is about five times more than the traffic coming from those aged 75 and above. The 65 to 74 group also accounts for about one in ten out-of-home drinking visits; older consumers meanwhile unsurprisingly contribute a negligible share of market traffic. From the same CGA data source, and looking at estimated spending on out-of-home food and drink, 65 to 74-year-olds probably account for more than 10% of the total – about four times the level contributed by those aged at least 75.

Put differently, 65 to 74-year-olds account for 55% of the UK’s 65-plus population but they account for about 80% of their eating-out occasions and 90% of their drinking-out occasions. Yet when they are conventionally hidden in data reporting, we risk overlooking them in our strategic and brand plans.

For the grey-orientated pub dining market, these arguments are even more pertinent. Across the five largest pub restaurant brands, Brand Track data suggests 65 to 74-year-olds typically account for about 15% of diners in a six-month period – about five times the number of 75-plus diners they attract.

It is old news to say the eating-out market has become oversupplied, and that one operator’s gains are another’s losses. In the metropolitan millennial market, the focus of so much industry development, it’s also worth noting a recent report from UK think-tank Resolution Foundation on spending across the generations. Amid many fascinating insights, it shows since 2000 our coveted 25 to 34 market has suffered constrained spending growth compared with other groups because of the effect of increasing housing costs – and this effect also applies to their spending on eating out.

So here’s the real “old news” – there’s a financially favoured 65 to 74 population out there, one that may already account for 10% of market spending and that will add half a million consumers in the next decade. It will be a lucky operator who can afford to ignore them. But first, we’ve got to measure them.
David Martin is managing director of market and customer insight resource Red Circle

 
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