Module 1. Experienced Street Food Success? What next?

Streetfood Opportunities for Regions is an Eramus+ funded programme

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The Current Market • There’s no denying that our food habits

have changed enormously in recent years. Street food, casual dining restaurants and snack foods are all increasingly popular with the public, signalling radical change in the structure of the market.

• Such a shift in our eating practices seems inevitable in light of our seeming addiction to fast living but what’s now clear is that customers are seeking fast food which also has demonstrable nutritional value. We have moved on from a simple need for convenience. Here we will look at the reasoning behind the dramatic changes in our eating practices .

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Changing Times• Customers are seeking fast

food which also has demonstrable nutritional value.

• We have moved on from a simple need for convenience.

• These days the public have an appetite for quality, affordable food in a convenient setting.

Time• The average lunch time has

decreased from 1 hour 40 minutes to just 40 minutes during the last 20 years.

• This has disrupted the catering sector's traditional offering and presented a gap in the market for mobile caterers.

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Consumers are eating less• The average restaurant

ticket has decreased by 20% in the last twenty years.

• 70% of diners now opt for snacks and ‘small plates’ for their lunch.

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StatisticsThe snack food and take away markets now have a turnover of £1.8 billion, which breaks down roughly as:• 28% in cafés• 23% in fast-food outlets• 13% in franchises (large stadiums, leisure parks,

etc.)• 12% in food shops (bakeries, delicatessens, etc.)• 10% in mobile, seasonal and daily circuit food

outlets• 8% in transportation sites (motorway stopovers etc.)• 4% in service stations • 2% in delicatessen departments at major retail

outlets Statistics from rungismarket.com

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Street food and fast service outlets

The sector serving food at less than £8 per meal (i.e. the street food and fast food industry) underwent the highest amount of growth over the last 10 years; some 67%.

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Opportunities • Street food was originally

introduced in response to a need to feed the working classes, it has since evolved and customers seem to be attracted to the prospect of eating fine food in a setting which accomplishes the arduous task of being communal yet intimate.

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• Multiculturalism has had an organic influence on the mobile catering industry. Where once we may have enjoyed street food in the form of a greasy burger or hot dog, we now relish the opportunity to dine on Dosas, Satay, Burritos, Tacos, Bao and more. We even have street food awards the length and breadth of the country, celebrating these wonderful food types.

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150 consumer interviews150 face-to-face interviews with consumers at four London street food locations found:

• 50% of consumers buy street food at least once a week

• More than 20% buy street food three times a week (mainly at lunchtimes)

• The five most popular street food cuisines are Mexican, Chinese, Thai, Indian and British

• Consumers’ favourite street food dishes are sandwiches/wraps, noodles/rice pots, burgers, vegetarian cuisine and hot dogs

• 64% of consumers are happy to spend more than £5 on street food Source: http://www.mcphersons.co.uk/pdf/liabilityQB_July.pdf

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Results• 80% of respondents noted that they

liked the new flavours and spices they had discovered through street food, therefore suggesting that the popularity of street food doesn’t just lie in its convenience and context.

• Over half of the interviewees said they hoped to increase the amount of street food they consumed over the coming year.

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“Street food is changing the way people eat, providing consumers with an easy way to try different tastes and flavours. The profit opportunity street food offers operators is clear… With many successful operators already hanging their hats on it.”- Steve Kent, Marketing and Business Development Director at Santa Maria Foodservice

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Your challengeHow will you bring your authentic street food concept to a larger audience?• Franchising or licensing your

brand?• Multi-site mobile units such as

kiosks?• Fixed premises such as cafés

and restaurants?

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What is a Market Disruptor?• Market disruptors are individuals or companies who achieve

success by filling a gap in service. They are quite simply opportunists – skilled in developing start-ups.

• In the short term, these companies:1. Thrive and invite a huge amount of attention. 2. They make money quickly. 3. They hire quickly. 4. Their company culture appears rich and attractive. 5. Most importantly, they cause huge disruption to the

established restaurant and takeaway markets.

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Street food as a disruptorWhy is street food a market disrupter to the restaurant and fast food industry?

• It is fast moving – new food concepts appear every day

• Operators are very responsive - locations and menus can change daily if needed

• Traders have a very low cost base – they are not paying high street rent and rates

• Their pricing model allows them to offer customers lower prices

• They are passionate about what they are doing

• High street businesses are unable to compete on these points.

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Technology Changing the Food Industry

• If you are considering expanding your business, then you would be wise to not underestimate the power of technology with regards to increasing earning potential whilst simultaneously decreasing lengthy, laborious ‘housekeeping’ tasks.

• In an incredibly short amount of time, we have gone from visiting our local takeaway in person to using mobile apps, effectively cutting out the personal service we have historically been used to.

• Mobile technology and smart phones have reshaped the way food businesses serve customers. In turn, customers are also changing the way they interact with food businesses. Most of these advances are not engineered to replace employees, but rather assist them with their work.

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Technology is your friend!Apps have revolutionised the way we order food through:• The individual business

app (popular with big brands)

• The aggregate app e.g. Just Eat, Hungry House, Deliveroo

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Advantages to using Technology • The typical food ordering app shows an outlet’s

complete menu so the consumer can order exactly what they want for pick-up or delivery. They can register their credit card and pay for their food through the app.

• Aside from the obvious benefits for customers, food ordering apps can also be advantageous for food businesses. Some of the more advanced food ordering apps use GPS to communicate the customer’s whereabouts to the food outlet. They’ll receive a notification when the customer is close-by so that staff can get the order ready.

• What’s more, apps like these can function in the same way as loyalty cards. If a customer has ordered from your food outlet through the app before, they’re more likely to use it again. Customers can actually save their favourite meals to re-order at later dates, after all.

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Technology is everyone's friend• New technology is also making life a little

easier for back of house staff in food outlets. Tools now exist to help chefs monitor the progress of meals and to stay on top of potential waste of perishable foods. You can actually receive alerts when foods are coming close to their expiry dates now.

• There are also a number of apps and software available now to assist management teams control HR within the business. Managers can use these programmes to create shift schedules, track hours and manage wages.

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Time to evaluate

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Benchmarking: 10 Areas to FOCUS on

1. Work out your key business drivers- What is most responsible for your business’s success and makes it unique? The dishes? Your customer service? Your social media presence?

2. Pick your benchmarking partners- Select similar-sized food businesses as well as companies within other sectors to benchmark your business against. Those of a similar ilk to yours will help you assess standards within the catering industry, whereas the different companies could give you pointers on other areas you could excel in.

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3. Look at other business’s objectives- What makes them unique? What’s giving them the edge? Do your benchmarking partners have any of their own drivers that you could adapt for the benefit of your business upon expansion?

4. Note your business’s efficiency- How effective are your production processes? Are your competitors running a more efficient ship than you? Are they using different or new processes that your business could benefit from?

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5. Consider your resources- Are there any different areas where your competitors allocate resources in comparison to your business? How many employees do they have? Are you investing time and money in similar areas?

6. Compare costs- Are your outgoings higher, lower or similar to the average? This might be harder to work out, but we’ll provide a table of industry averages later on. Are there any areas where you can make savings?

7. Work out how productive your employees are- Assess the productivity of your business by calculating how many sales are made per member of staff employed. Are your sales looking healthy? If not, explore where the problem could be.

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8. What are your profit margins?- Compare your own gross and net profit margins to see how efficient your sales are. Is there room for improvement? Are your competitors doing better than you?

9. Concentrate on customer service- How long do your customers spend in the queue? How many of them come back more than once? How many could you call loyal?

10. Start monitoring- Monitor your chosen benchmarking partners and keep notes on their results in these same areas. Knowing more about your competitors will help you to make improvements to your own business.

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Homework: BenchmarkingTypical benchmarks

Key Benchmark Ratio Annual turnover range

£0 -

£100,000

£100,000 - £300,000 Greater than £300,000

Variable costs / turnover 34% – 43% 33% – 40% 33% – 40%

Average 38% 37% 36%

Fixed costs

28% – 35% 43% - 47% 52% - 53%

Average

31.5% 45% 52.5%

Total fixed and variable costs /

turnover

62% – 78% 76% – 87% 85% – 93%

Average total expenses 70% 81% 89%

Exp Nett Profit before wages 30% 19% 11%

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Homework: BenchmarkingAdditional benchmarks

Benchmark ratio Annual turnover range

Business turnover £0 - £100,000 £100,000 - £300,000 Greater than £300,000

Labour/turnover

17% – 26% 18% – 28% 25% – 33%

Rent/turnover

7% – 14% 5% – 10% 4% – 8%

Motor vehicle expenses/turnover

4% – 7% 2% – 4% 1% – 2%

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Case Study• UK street food pioneer Yianni Papoutsis started up the MEATwagon in

2009, selling dirty burgers from a £3,000 burger van in London car parks.

• Along with a number of other early street food entrepreneurs, Papoutsis would put on what became known as the Towpath Festivals. Spreading the word on Twitter caused foodies to flock and enjoy new food in a party atmosphere.

• Later, when the MEATwagon was stolen, south London pub owner Scott Collins encouraged Papoutsis to set up and cook in a room above his latest pub in New Cross. Things went well and less than ten years later, the MEATliquor chain boasted a multimillion pound turnover. So what are the five secrets to their success?

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Case Study: MeatLiquor

Click the link below PDF to follow

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Looking for inspiration?

MOTHER CLUCKER

LEMLEM KITCHEN

MIKE + OLLIE SAVAGE SALADS

THE BOWLER

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Inspiration continued…

YUM BUNS

MORTY + BOB’S

SMOKESTAK KORRITO

31BAD BROWNIE

Click the link below to get a taste of how you can turn your dreams into reality through the use of street food: https://www.youtube.com/watch?v=CS19RxsgGTY

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Carts

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Carts continued…..• The main advantages of trading from a food cart

include cost and height. As you would expect, carts are inexpensive to purchase and run so can be a good option for anyone wanting to expand with minimum investment. In a cart you’ll also be able to trade from the same level as the customer, which is hard to achieve in a truck or trailer.

• The downside of trading from carts is that you have to transport them to site (which could mean wheeling them manually for some distance). With a cart your stock levels are also limited because of the lack of storage space on board.

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Shipping containers

Click on the link to see how something as simple as a shipping container can make the best, most unique restaurants about!

https://www.youtube.com/watch?v=5pAAlZ0wx68

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Shipping Containers continued…• Shipping containers offer a cheap way of

creating good, usable space; if bought second hand they can cost less than £1,500 (€2,000).

• The disadvantage of running a food business from a shipping container is that its size will make it difficult to transport to site. The effort and money that you’d have to put in every time you needed to move the unit means that you’d really need a semi- or permanent pitch for it to be cost effective.

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Novelty vehicles

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Electric vehicles

It’s as simple as that…

https://www.youtube.com/results?search_query=electric+vechicles+restaurant

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Electric Vehicles continued…• The kerbside appeal of novelty vehicles can

never be underestimated. Thing is, conversions costs can be very high – particularly if the vehicle you’re working on is very old. Novelty vehicles can also quickly lose their ‘originality appeal’ if they become popular (just think how many Citroen H vans you see in street food these days).

• Still, if you can find something really unusual that looks good and can convert it with a lower influx of cash you could just be onto a winner.

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Wearable grills!The wearable grill stands out, is fun and is simple.But how many covers could you produce with this sort of set-up? And how many different dishes could you put on your menu?

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Discuss the pros and cons1. Open a second location2. License your food product3. Create new products4. Align your business with another5. Make your business into a

franchising opportunity for others6. Look for government contracts7. Target different markets8. Become a supplier9. Merge with another business10. Expand globally!