The remarkable rise of Starbucks in China

56 alan hepburnOur man in Shanghai, Alan Hepburn FIH, provides an analysis of Starbucks’ expansion in China, a country with no tradition of coffee-drinking. What lessons are there for other western businesses looking to break into this vast market?

Last week I was sat in the 30,000 sq ft Starbucks Shanghai Roastery, about five minutes walk from my apartment in Shanghai. I was there for a business meeting, trying to decide between Sumatran, Ethiopian or Nicaraguan, when I realised I was next to a couple of friends. After a quick chat, it occured to me that even in a city of 35 million people with change being constant and exponential, it’s a small world.

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Howard Schultz at the opening of Starbuck’s Shanghai Roastery in December 2017

I arrived here in 2000 as manager of the Portman Ritz Carlton and remember chatting with Howard Schultz when he came to open the first Starbucks in the city (Beijing opened the first one in China in 1999). I somewhat naively asked if he was planning on opening many? He looked somewhat incredulous at my ill-judged question. “We expect 100 in the first year,” he said. They now have 3,000 stores in China and are opening one every 15 hours – projecting 5,000 by 2020.

I was new to China and frankly had not observed much coffee-drinking going on. But what I had missed was … well, pretty much everything.

What Starbucks saw in China was four things: firstly the growth potential in the middle/upper middle class who want to buy an upscale Western experience.

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The floor space of a Starbucks in China is substantially bigger than in the West. People have business meetings, social gatherings, go on dates and get interviewed for jobs in China’s Starbucks. The saying here is: “The first two thirds of your cup is for enjoying, the last third is for staying.” Three quarters of all coffee drunk in China is consumed by 25-35 year olds and 99% of retail coffee sales is instant, but that will change.

Secondly, Starbucks’ growth in China shows the importance of not removing the essence of what makes you successful elsewhere, but shows how this needs to be adapted. As Roy T Bennet once said: “The past is a place of reference, not a place of residence.”

The Macha Frappuccino (220 – 440 calories depending on size) is a huge seller here. Green tea powder, loads of cream, milk and vanilla syrup and not a hint of coffee in sight. I have struggled in the past to get a simple espresso, as very few people are drinking them in China. But that will change.

The Roastery here is a modern-day F&B masterpiece with all the theatre of coffee roasting, artisan bread-making and stunning retail. But take a look at what people are consuming and it’s a lot less coffee than you might expect. But, as I say, that will change.

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The Chinese are not big coffee drinkers, but that has not been a barrier to Starbucks’ success

Thirdly, brands which understand progression from entry-level to premium do very well here. There are famous dumpling shops where you pay four different prices according to where you consume the same dumpling.

The last thing Starbucks understood was marketing. Their social media presence was well-established and generally ahead of most Western brands in China during its first decade here. The rest tried catch-up and some succeeded but most failed. Telling your brand story here needs content and context and it better be entertaining and fun. I spoke with the head of marketing for one of the world’s biggest and coolest sports fashion brands two years ago and he was telling me they had just moved into mobile platform selling. That’s like arriving today in Scotland and telling them you just invented whisky.

Sadly, many Western brands can’t grasp the speed of change and that the Chinese consumer is dynamic, developing and learning quickly. By the time many companies work out their ‘China strategy’ the market may have moved or changed.

I’ve lost count of the number of UK companies (including the famous ones) I speak to and meet with who bring a rigid ‘what made us successful in the past will determine all our action for the future’ attitude and end up closing shop, heading home and blaming China.

Don’t get mad, get prepared. Starbucks’ next Roastery opens in Milan, the home of great coffee and design.  But before we mention coals and Newcastle, I’m betting Starbucks have that well-covered too.

Alan Hepburn FIH has spent more than 30 years in Asia in the hospitality and lifestyle sector. Having run some of the world’s best hotels , he then developed, opened and operated China’s first luxury lifestyle company: the multi-award winning Three On The Bund in Shanghai. The Hepburn Group is a Shanghai/Singapore-based boutique consultancy that works with hospitality and F&B companies from the West, helping them navigate the challenges of market-entry and growth in China and Asia.

 

 

 

 

 

 

 

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The positive impact of the Royal Wedding by Neel Radia FIH, national chair, National Association of Care Catering (NACC)

Neel Radia image“The nation is gripped with Royal Wedding fever, as we prepare to celebrate the marriage of Prince Harry and Meghan Markle. The NACC’s members are certainly no exception. We’ve heard from care caterers and chefs up and down the country who are putting in a tremendous amount of effort to ensure that their residents enjoy a Royal Wedding experience to remember.

As with most celebrations, food is playing a leading role. Our members are using their expertise in creating delicious, nutritious meals, suitable for a care setting, to give the elderly and vulnerable they care for a real treat.

Indoor and outdoor festivities include, for example, coverage of the wedding on televisions and large screens, street parties, wedding buffets, wedding breakfasts, Afternoon Teas and BBQs, all featuring carefully-planned, mouth-watering menus, plus beautiful lemon and elderflower cakes to match the famous couple’s wedding cake of choice.

Residents will be involved in the preparations, helping decorate venues and cupcakes, making their own fascinators and being invited to dress in their finest attire for the big day. They will also enjoy music, entertainment, quizzes, dancing, and one care home has even reported that their wedding breakfast will include life-size cardboard cut-outs of Prince Harry and Meghan Markle themselves!

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As well as enjoying delicious food, residents will benefit emotionally and socially. The Royal Wedding provides a fantastic opportunity for them to socialise with fellow residents, staff and visiting relatives and community members. I’m sure the parties will be an enthusiastic subject of conversation in the build-up to the main event and for some time after. The celebrations could also, importantly, help evoke fond memories of their own weddings and family occasions, as well as Royal Weddings of the past. I’m sure some residents will have seen many a Royal Wedding over their lifetimes, including that of Her Majesty The Queen herself!

The NACC sends the Royal couple many congratulations on their wedding day and we wish our members and their residents a wonderful weekend of festivities.”

Institute of Hospitality Northern Ireland Awards for Professionalism. Winners Revealed

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The Institute of Hospitality Northern Ireland Branch has revealed the winners of the 23rd Institute of Hospitality Awards For Professionalism at a glittering event recently held at Titanic Belfast.

The highly coveted awards recognise talented individuals who have contributed to their business and the industry over the past year.  For 2018 there were 21 categories with four new categories including; Duty Manager of the Year, General Manager of the Future, Human Resource Manager of the Year and Unsung Hero.

This year saw a record number of entries with the independent judges citing this year as being extremely competitive with a very high standard of professionalism demonstrated by candidates.

The 23rd Institute of Hospitality Awards For Professionalism winners are:

Rachel Carson Outstanding Apprentice

Outstanding Apprentice of the Year Award sponsored by People 1st
Rachel Carson – Ballyrobin Country Lodge (pictured above)

Stefanie Brooks Human Resource Manager

Human Resource Manager of the Year sponsored by Gen Tech
Stefanie Brooks – Hastings Culloden Estate & Spa (above)

Caitriona Lennox Business Development Manager
Business Development Manager of the Year Award
sponsored by Johnsons Coffee
Caitriona Lennox – Mount Charles Group (above)

Bull & Ram Hospitality management team

Hospitality Management Team of the Year sponsored by firmus energy
Bull & Ram (above)

Roisin McErlean Independent Bar manager

Independent Bar Manager of the Year sponsored by Molson Coors
Roisin McErlean – The Tipsy Bird (above)

Jose Castano Duty Manager

Duty Manager of the Year sponsored by McAlindon Wines
Jose Castano – Hilton Templepatrick (above)

Friederich Machala Contract Catering Chef

Contract Catering Chef of the Year sponsored by Irwin’s Bakery
Friederich Machala – Sodexo (above)

Paul Cunningham Restaurant Chef

Restaurant Chef of the Year sponsored by Henderson Foodservice
Paul Cunningham – Brunels Restaurant Newcastle (above)

John Paul Taggart General Manager

General Manager of the Future sponsored by Tourism NI
John Paul Taggart – Odyssey Bowl (above)

Laura Wilson Unsung Hero

Unsung Hero of the Year sponsored by Net Affinity
Laura Wilson – Sodexo (above)

Thomas Stinton Student Potential

Student Management Potential Award sponsored by Stephens Catering
Thomas Stinton – Ulster University Business School (above)

The further winners are as follows:

Contract Catering Manager of the Year sponsored by Deli Lites
Caroline McClelland – Mount Charles Group

Supplier of the Year sponsored by NIMMS
Leah Robb – Robb Brothers Wine Merchants

Restaurateur of the Year sponsored by Hugh Jordan
Daryl Shields – Bull & Ram

Front of House Manager of the Year
sponsored by Avvio
Lucy Waugh – Bullitt Hotel

Lecturer of the Year sponsored by Institute of Hospitality
Sharon Rolt – Belfast Met

Hotel Chef of the Year sponsored by Get Fresh
Conor McClelland – Rayanne House

Hotelier of the Year sponsored by MKB Law
David Morrison – Killyhevlin Lakeside Hotel & Lodges

Coffee Shop / Café Manager of the Year sponsored by Lynas Foodservice
Cathy Moore – Loaf Café Bakery

Housekeeping Manager of the Year sponsored by Lilliput Services
Michael Joseph – The Old Inn

Denis Broderick Outstanding Contribution

The Outstanding Contribution Award sponsored by NI Jobs was presented to Denis Broderick (pictured above) for his commitment and innovative approach to achieve the very best for the industry and the support he provides to those around him.  The Institute of Hospitality President’s Award was presented to longstanding Northern Ireland committee member Michael Cafolla for his dedication and service to the Institute of Hospitality over the years.

Chair of the Institute of Hospitality Northern Ireland Branch, Marianne Hood FIH commented: “We are delighted to reveal the 23rd Institute of Hospitality Awards for Professionalism 2018 winners. Over the years the awards have increasingly become an important event for individual industry professionals in Northern Ireland.  Not only do they recognise talented individuals, who have contributed so much to their business and the industry over the past year, but demonstrate a clear commitment to developing and maintaining professionalism within this fantastic sector. We are indebted to a range of long-term, credible sponsors and partners and we thank them for their continued support without which the awards could not happen. We are also indebted to our dedicated voluntary committee who are committed to supporting our industry.  We also congratulate our longstanding committee member Michael Cafolla who received the President’s Awards in recognition for his dedication and service.”

Peter Ducker FIH, Chief Executive of the Institute of Hospitality, added: “Over the past 23 years the Institute of Hospitality NI committee has constantly raised the profile of the awards, making them more popular and prestigious than ever. The committed team provides an excellent awards process and event which promotes professionalism and encourages continued professional development within the industry. We congratulate all of the winners and thank them for helping to raise the standards of professionalism within hospitality.”

For further details, visit Facebook InstituteofHospitalityNI,
Twitter @IOH_NI #IOHNI18.

Recruiting for a major new opening

How do you plan and execute a recruitment campaign for a high-profile new hotel business?  Directors of people development at the Principal Hotel London, Sean Wheeler MIH and Melanie Price, talk us through building up to 400 new employees from scratch

The former Russell Hotel, an iconic property in London’s Bloomsbury, re-opened on 16 April after almost two years of closure for refurbishment. (Following a deal with IHG, the hotel is due to change its name again later this year).

What happened to the Hotel Russell employees?

Melanie: The old hotel closed in July 2016, so obviously because of the period of time we were going to be closed, we had to put everyone into redundancy and they all left. We have one lady who still works for us and one individual who came back, but apart from that the rest of the team are new.

At what stage is the new opening?

Sean: We’re probably 25% there. We’ve opened 100 bedrooms but we still have 230 to open; we’ve opened the bar and coffee shop, but there is still the restaurant, the palm court afternoon tea venue, ballroom and meeting and events space to open. There’s still quite a bit to do!

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How far in advance did you plan your recruitment?

Melanie: We had a plan on paper and a plan in our minds but the project was unfortunately delayed a couple of times, which is quite normal. We probably didn’t start our mass recruitment until mid to late February. We recruited our 50-strong team of senior people a good year ago. So far we have recruited 150 people in total.

What channels do you use?

Melanie: We use the Caterer and various other sources, friends, contacts, colleagues. The initial 50 senior people were recommended to us which is important. A lot of people want to do an opening. They’ve read the publicity about the investment and the refurbishment. Our culture and the type of person we recruit is important to us.

For our front-line staff, we did a social media campaign which we found very useful. We’re proud that we probably only recruited half a dozen through agencies.

Sean: We only started the social media campaign in January. In three months we reached 420,000 people and managed to get 14,000 click-throughs to the vacancy page. We targeted the different groups of people we were trying to reach: people working in restaurants, bars, coffee shops, hotels, also some independent restaurants. We work with a company that helps us target certain youth groups.

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What kind of people have you recruited?

Melanie: We’ve got a real mixture. In our coffee shop you’re going to get a much more casual look in there, quite quirky people. They’ve got tattoos, different hairstyles, their uniform is a denim shirt. But then in the Palm Court we have a much more formal look. We’re really proud that we’ve got a real mixture, very diverse. We made sure we recruited for each outlet and that that the people are right for the outlet.

Sean: One of our values is ‘local at heart’ so one of the key things for us is connecting with the local community. In Bloomsbury, that is a very mixed group, so we have the coffee shop, the cocktail bar and the afternoon tea venue. We are trying to attract different types of guests at different times of the day and match the employees to the different types of clientele.

Melanie: Another of our values is warmth and we are particularly keen to make sure the team are warm and welcoming. We have looked outside the box. Some people we have given an opportunity to. They may not necessarily have all the right experience, but they’ve got the personality and warmth. We have some real characters working for us with some interesting backgrounds.

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Was exhibiting at the Passion4Hospitality Careers Fair useful to you?

Melanie: We got one or two concrete leads. Obviously a lot of it is about getting our name out there, so events like that are important. This is our only hotel in London. We have been mainly northern-based so we really have to go out there and establish ourselves and also remind people that we are changing from what the hotel was before.

Is it just people already working you recruit? How about school leavers or graduates?

We have good relationships with schools, colleges and universities. We’re very much open to people with different skills. For them to further develop their careers, it’s more about their culture and personality.

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What happens now?

Melanie: We will have 400 staff once completely open. That shouldn’t be reached until September 2019. We are very hopeful that all our revenues are going to be absolutely fantastic and we’re very positive about that. We will take on another 100 staff before the end of May. It is something we need to do gradually because we are only getting our rooms back gradually. We have another five floors to come back. Having 400 staff walk through the door all at the same time would be very difficult to manage. We make sure everyone goes through their two-day induction, they get re-training, and that training continues on their journey with us.

Sean: We’ve had a lot of great comments on trip advisor about our people. Our values are generous, intuitive, warm, distinctive, and local at heart. The team are actively recruiting for these values. Melanie has done a great job to find so many people who have these values, and she has done it in a very short space of time.

Do you do face-to-face interviews or something more rapid?

Melanie: In the early days with the senior team, we did one-to-one interviews.  We’ve had a lot of open days since. Everyone will always see a member of the people development team and the head of their department. We’ve done that with every person that we have offered positions to. It’s making sure we’re comfortable. It’s about the future candidate meeting more than one person. We think that’s a useful benefit for them.

Interview by Ben Walker AIH

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Focus groups on female leadership

Are you interested in sharing your thoughts on equality in the workplace? Do you work in tourism, travel, hospitality or events?

The University of Greenwich is carrying out research to understand how women regard opportunities to develop onto executive-level posts in the industry.

It does not matter what type of organisation you work for. The researchers are interested in hearing your thoughts. They also want to hear from men – how men perceive opportunities available to women in the workplace is also relevant.

Your involvement in a focus group would give the research team an opportunity to understand your thoughts on the skills required for leadership roles, and how support could be made available that would be recognised in the industry. The aim of the research is to develop a Female Leadership Developmemnt Programme for the Tourism Industry.

A focus group will be held on the following date at the following locations:

  • Thursday 24th May 12.00 – 2.30 Ulster University
  • Tuesday 29th May  12.00 – 2.30 University of Strathclyde
  • Monday 11th June 12.00 – 2.30 University of Greenwich
  • Wednesday 13th June 12.00 – 2.30 University College Birmingham

Food and drink will be provided and travel will be re-imbursed to the value of £10.00.  If you are interested in participating in the research, please contact Dr Menna Jones by e-mail on: m.t.jones@gre.ac.uk

Picture MTJ(3)Dr Menna Jones
University of Greenwich
Department of Marketing,
Events and Tourism
Business Faculty
Greenwich Campus
Old Royal Naval College
Park Row
London
SE10 9LS
Tel. +44 (0) 20 8331 8311

Greenwich
A focus group takes place at the University of Greenwich on 11 June

 

Emirati and Italian Architects win Second Annual Bespoke Access Award to Champion Accessible Hospitality

Robin Sheppard, Baroness Celia Thomas, Maher Hadid (MnM Studio Architects)web res
Robin Sheppard, Baroness Celia Thomas, Maher Hadid (MnM Studio Architects)

At the second annual special event held at the Palace of Westminster on April 18th, MnM Studio Architects, along with Maria Brighenti and Marcello D’Orsi, were announced the joint winners of the 2017/18 Bespoke Access Awards, a design competition to create accessible solutions, run in association with the Royal Institute of British Architects (RIBA) and featuring a prize fund of £30,000.

MnM Studio devised an innovative accommodation solution based around the four senses of smell, taste, sound and sight, with extensive use of Braille throughout. Termed “empathy through aesthetics”, the system aims to support the emotional state of the guest, while maintaining a distinct visual appeal via a stylish, curved design.

“’Empathy through aesthetics’ perfectly encapsulates what we are aiming to do with the Access initiative”, commented Baroness Celia Thomas, Chair of the Judging Panel and Patron of the Awards. “The emphasis placed on the emotional state of the guest was particularly impressive, given this is an area that is often overlooked.”

Alongside MnM Studio, freelance Italian architects Maria Brightei and Marcello D’Orsi were successful in the Architectural category, as well as being announced joint winners of the overall Celia Thomas Prize, worth a total of £20,000. Their design, which focused on the means through which existing accommodation can be renovated with the disabled traveler in mind, concentrated on the public spaces of hotels, and how subtle enhancements can be made to significantly increase the ease with which they are passed through.

Robin Sheppard, Baroness Celia Thomas, Marcello D'Orsi web res
Robin Sheppard, Baroness Celia Thomas, Marcello D’Orsi

“I was particularly struck by the attention they had paid to the customer journey through reception and the lobby areas”, commented Alan Stanton, Stirling Prize-winning architect and member of the Judging Panel. “These are areas often overlooked by both architects and business owners alike, and it is easy to think of them as merely transient. But they can significantly improve or disrupt a guest’s experience, so it was exciting to see them highlighted and approached with such care.”

“The architectural community across the country has really embraced the Access Awards since their launch in 2016”, added Jane Duncan, RIBA Immediate Past President. “It is tremendously encouraging for the future of accessible tourism to see this year’s awards attracting interest from around the world, as well as ideas shining a light on some of the more often-overlooked aspects of disabled travel.”

The competition attracted submissions spanning the length and breadth of the UK, as well as from across Europe and Asia. Entrants competed across an expanded range of categories, including Product Design, Architecture, Service Applications (Digital) and Service Applications (Training). Alongside the overall Celia Thomas Prize, worth £20,000 and believed to be the largest cash prize in the UK for a design concept.

“We were extremely pleased to see the competition attracting a truly global roster of entrants this year”, said Robin Sheppard FIH, Chairman of Bespoke Hotels and recently appointed Hotel Sector Champion for Disabled People. “The Access Awards continue to grow and evolve, but the high quality of entries ensures our collective focus remains on improving the experience for all hotel guests, whether disabled or otherwise.”

The entries were judged at the turn of the year by a panel which included Paralympic gold medalist Baroness Tanni Grey-Thompson, Stirling Prize-winning architect Alan Stanton, Baroness Celia Thomas, Tom Perry, Head of the Cities Programme at the Design Council, Graeme Whippy, Disability Specialist for Channel Four, Alastair Hignell CBE, alongside Robin Sheppard.

Full list of winners:
MnM Studio Architects, Dubai
Joint Winners of the Celia Thomas Prize

Maria Brighenti with Marcello D’Orsi, Italy
Joint Winners of the Celia Thomas Prize

MnM Studio Architects, Dubai
Joint Winners of the Architecture Category

Maria Brighenti with Marcello D’Orsi, Italy
Joint Winners of the Architecture Category

Wilson Mason LLP, Lancashire
Winners of the Product Design Category

Purcell, London
Winners of the Service Applications (Training) Category

Neatebox Ltd, London
Winners of Service Applications (Digital) Category

Full list of judges:
Robin Sheppard, Chairman, Bespoke Hotels Group
Celia, Baroness Thomas of Winchester, House of Lords
Alan Stanton OBE, Stanton Williams
Tanni, Baroness Grey-Thompson, Paralympic Gold Medallist, House of Lords
Graeme K Whippy MBE, Disability Specialist for Channel 4
Alastair Hignall CBE, Trustee of the Leonard Cheshire Foundation
Tom Perry, Head of the Cities Programme at the Design Council
Sarah Weir OBE, Chief Executive of Design Council
Paul Gregory, MCIBSE, MSLL, Global Specification Director for Dyson.

www.bespokehotels.com/access
#BespokeAccess

HQ explores the talent pipeline

001_HQ_SPRING_2018_SPINE.pdfYour latest issue of HQ (second quarter 2018 issue 48) is landing on UK doormats this week. It explores the talent pipeline from a number of perspectives.

Where is our next generation of leaders and senior managers coming from? It is a question often asked  in hospitality management and education circles. Your latest issue of HQ Magazine is packed with answers and opinions on the matter.

Our chief executive Peter Ducker FIH is impressed with the talented and enthusiastic young hospitality management students coming out of universities and colleges. It is up to all of us to ensure they find ways to achieve their full potential within our sector and that we do not lose them to other industries, he says.

Still just 32-years-old, Adam Rowledge FIH is a rising leader on the UK hotel management scene and a superb role-model for new entrants. Our in-depth interview showcases the importance of creating the right culture within the workplace that allows talent to grow and shine.

A UK government review into higher education is now underway, concerned about choice and value for money within a system where almost all institutions are charging the same price for courses. The review may mean some tourism and hospitality courses will either need to change their approaches radically or risk becoming obsolete, says John Swarbrooke of Plymouth University

Of course, a university degree is by no means the only route into a successful hospitality management career. Sue Williams FIH MI, current Hotelier of the Year, is just one of hundreds of professionals who started their careers with the Concord hotel management programme.  Celebrating its 50th anniversary, Glen Harrison MIH reveals all about this unique on-the-job training scheme which specifically targets youngsters coming out of FE colleges who do not want to go to university.

Other contents in this HQ Magazine

  • Peter Jones MBE FIH – Why has the government dropped the T level in hospitality?
  • Passion4Hospitality 2018 – re-live the excitement of our largest ever student and industry networking event
  • The end of business as usual – Angela Roper FIH on vertical disintegration in the corporate hotel industry
  • A winning partnership – how Sheffield Hallam University and Hilton are working closely together
  • Cybercrime and GDPR – what businesses need to do to protect themselves
  • Tableware trends – creativity is all the rage but weird, wacky (and unhygienic) are definitely out