One of the words of the year for the eating and drinking out sector has been partnership - as casual dining brands seek new avenues for growth, pubcos re-evaluate their relationships with tenants in the wake of the pubs code and delivery platforms play an increasingly important role in the presentation of brands. James Wallin looks at the impact of these collaborations on the sector.
Partnerships have been everywhere in 2017 – from Zizzi launching counters in Sainsbury’s to PizzaExpress and Pret tying up with motorway service operators and YO! Sushi seeking complementary skill sets through its acquisition of Bento Sushi.
In the pub sector, Greene King has followed Ei Group’s lead in creating joint ventures with leading operators, while established brewers continue to buy cool by joining forces with craft brands.
In this month’s print edition, MCA shines the spotlight on perhaps the sector’s most important partnership – with the delivery operators that are increasingly the face of brands to many of their customers.
Not that partnerships are anything new. The pub sector is built on the age-old relationship between landlord and publican and our interview in this edition with Nick Light of Ei Group shows it is a model that continues to evolve to this day.
Equally Pret’s partnership with first Welcome Break and now RoadChef is travelling down a well-trodden path for food-to-go brands – a move the brand has been mulling over for many years.
However, the readiness with which casual-dining brands are seeking to find other avenues for growth does seem symptomatic of the changing times for the sector. The smart operators know that physical expansion will not drive sales in the way it has done over previous years, and are all too well aware that this is not an excuse that will satisfy their backers for long.
Zizzi’s trial of a pizza-to-go counter in Sainsbury’s Balham branch is a good example of innovative thinking from both sides. The move provides the Azzurri Group brand a prominent shop window in a high-footfall location while the supermarket can capitalise on the theatre and atmosphere Zizzi can bring to a relatively sterile atmosphere. Azzurri Group chief executive Steve Holmes has told MCA he would be keen to do more, opening up a potentially substantial pipeline with relatively low cost of entry.
This is also far from an alien concept for shoppers, with unbranded rotisserie chicken and hot pizza counters already found in supermarkets across the country. The recent success of sushi operators in this space will no doubt have emboldened operators and I would expect more of these tie-ups to pop up.
It is only one area in which casual dining is branching into retail. PizzaExpress and Nando’s have gained valuable extra sales and brand exposure through the stocking of their pizzas and sauces respectively. Even Harvester is now getting in on the act, selling a range of its signature sauces in response to consumer demand. It’s a low-risk strategy that is sure to be picked up by more brands.
The opportunity for high-street brands to get more exposure at motorway service stations is likely to be another area of focus. Tossed has been a trailblazer in this regard – offering a healthy alternative to the typical motorway fare – but it’s never been entirely clear how much of a boost this has given the core estate, or how well the concept plays further into the regions. The potential for the current crop of high-street casual-dining brands offering a sit-down experience at service stations is still a relatively immature market – and Ed’s Easy Diner may not be the perfect bellwether – but the attraction for brands is clear. They have a captive audience in a part of the market that is growing and is hungry for an offer that is receiving a sometimes lukewarm response on the high street.
YO!’s acquisition of the Bento Sushi chain is perhaps the most interesting recent combination – bringing together experts on opposite sides of The Pond in retail and eating out. The potential to share skills and grow two strands in two markets is on a scale that few other partnerships could hope to match.
The question is what will be the next partnership to emerge and how can operators drive growth. Anyone with the answer to this $1bn question would be the most attractive partner of all.