Since Pod’s 2005 launch many operators have jumped on the healthy food bandwagon. Founder Tim Hall talks to M&C Report about plans to revamp and reposition the brand
It’s not often you meet someone who has good things to say about the banking sector and the financial crisis. But if you ask entrepreneur Tim Hall, the recession has been a good thing for the restaurant industry, and not just for his now 23-strong healthy eating chain, Pod.
The economic downturn helped lower prices for suitable sites thus enabling his own company to expand, and, Hall says, it has raised the quality of food operations for the consumer.
“Six or seven years ago there were lots of interesting brands emerging, but nothing like the torrent now,” he says. “What has happened is that a lot of young, talented people who would previously have looked for a career in the City have been put off by the fact that pressure on the banks means they cannot pay as much. Instead, an increasing number are looking to this sector and they are well-funded – that didn’t happen prior to this recession.”
The result, he explains, has been an increasingly competitive marketplace. In a good way.
“It used to be that start-ups often got a lot of things wrong, but you look at a lot of the new concepts now and the quality is so high, they are almost good enough to roll out from the first site.
“It has meant that everyone has had to raise their standards, which is great for the customer. And it challenges the operators to really focus on the customer experience, whereas in the past there was a bigger emphasis on the food,” Hall explains, adding that he is not suggesting anyone spends any less time focusing on the food, it’s just that ‘the experience’ has become a more important part of the overall offer.
Objective perspective
Although an entrepreneur from a non-food background himself (something he sees as an advantage in that he is able to apply a true consumer’s view of the brand to his business) it seems as if 41-year-old Hall feels he is from a slightly different generation from this new wave of start-ups. In truth, he was one of the pioneers – both on the UK fast-casual scene and in the healthy-eating movement.
The ability to pre-empt consumer trends seems to be inherent in him. His first taste of entrepreneurship came while studying at Durham University. Hall recognised that all the students patronising the college bars would probably love to go off site to a nightclub given the opportunity.
“I approached this scary man who ran a local nightclub and said, ‘I reckon I can get people into your club on a Monday, Tuesday and Wednesday night – I would charge £1 for them to get in; I keep that and you keep all the bar money’,” he recalls. “Within three weeks they had queues around the block.”
This success led to an offer from a London nightclub impresario to run club nights – an opportunity he declined as he did not want his career to take him into that world and, “I did not want to end up as a 40-year-old nightclub owner.” Indeed, it is hard to imagine the father of three children under the age of five in that environment.
Since then Hall has worked in advertising and retail and run businesses in the automotive and formal menswear sectors. As an early mover in fast casual and healthy dining, Hall had the experience to recognise that all the current activity in the restaurant industry had the potential to make his own expansion plans trickier in terms of competition for sites, at a time when prices were relatively good. True to form he had the foresight to do something about it.
So the company doubled in size by the end of the financial year in October 2012 – an aggressive expansion rate that Hall says was too fast although necessary to establish the brand’s place in the exploding fast-casual sector.
Hall is relieved that the “hit rate has been excellent” in terms of the new sites Pod has opened. Since that “crazy” time of growth, he has concentrated on galvanising the company infrastructure and reappraising the brand before embarking on the next phase of expansion, which will be at a much more manageable pace of six sites a year, reaching 40 by the end of 2015; (he was previously quoted saying that this goal would be achieved earlier, but believes he must have been asked at the beginning of the period that Pod was opening one site a month – when he thought that was a sustainable rate.)
The Pod revamp
At this interview, Hall is not quite so forward with information regarding the subject of the revamp of the Pod brand, although he does discuss the thinking behind it.
“We have been reviewing the overall look and feel of all the stores and by the end of this year you will start to see the rollout of some exciting changes,” he says.“A lot of the values we launched with were seen as pioneering at the time – things like health, caring for the environment and provenance – but they are now mainstream,” he explains.
“Seven years ago, none of the other operators cared about things such as packaging, but now you would think they were born in a furnace of environmental awareness.
“I recognise we didn’t invent those values, but now they are mainstream we are going to implement a big change in the way we position Pod because we believe the things for which customers have always seen Pod as pioneering are no longer pioneering.
“There are things about Pod that are genuine and valued and that make it stand out in our marketplace, but the issue is we have not been shouting about those things; we have been shouting about the things that everyone is now shouting about.”
Again, he is coy about disclosing too much regarding what those are at this stage. As someone who launched his business following the diagnosis of a heart condition, Hall is delighted for the welfare of the nation that the health trend is so big with no sign of slowing.
However, it makes him laugh, with just a hint of irritation, that certain operators have jumped on the bandwagon by simply using the word ‘healthy’ on their menus and even in their décor, even though their unhealthy food has not changed.
Further expansion phase
As a rule, however, he is not one to begrudge emulation of successful menu items or operational processes – it is just not a practice he enjoys himself: “It is a perfectly valid model to emulate another successful operation, and, of course, as with any retail business, we learn from other people’s ideas ourselves as well. However, we like to constantly innovate.”
Hall loved the energetic, creative phase of starting up the business back in 2005, but has evolved with the company to really enjoy his current focus on managing the organisation and says that he has no desire to start up anything else in the foreseeable future.
Any talk that the company is about to sell is inaccurate, he says – the company does have many smaller investors who would be seeking an exit at some stage, but funding from JGR Capital, shareholders and bank loans should enable the current growth plans to come to fruition before this takes place.
“There will be another phase of growth of circa 10 to 15 sites, plus further sites in the pipeline before we look at any future commercial strategy,” Hall insists.
He comments that it will probably be a year before the company considers taking a site outside the capital, admitting it is not the right time for the brand to start diverting operational resources away from its core London portfolio.
In addition to the standard 12,000sq ft, 40-seat high-street sites that normally cost under £300,000 to set up, the irregular nature of the property market in London gives Hall the opportunity to try out different formats, although this is a constant work in progress.
The recently-introduced platter delivery service is working well and Hall reckons deliveries will grow to 5% of revenue within 18 months.
This financial year, the company is on track to turnover between £15m and £16m, representing good growth from the previous 12 months.
However, it is that Hall is planning to reposition Pod that make the prospects for the business look undeniably healthy.
