Cost Sector Catering: What was the inspiration for the 24 concept?
Nicola Morris: The inspiration came from the success of our micromarket business called Avenue C in the US. We discovered the concept while researching a sales tender and looking for comparative services globally. We immediately saw that micromarkets could hold the answers to some of the pressures our clients in the UK were facing. The concept reduces space for service provision as well as providing employee benefits in terms of cost reduction, and with more people’s working day expanding beyond the usual 9–5, employees often want a catering offering that’s accessible at any time.
24 is a convenient and adaptable self-service micromarket offer that provides a wide range of fresh, quality meals, beverages and grab-and-go options to meet the changing needs of workplace catering. 24 combines the latest cashless and card payment technology with access to more than 300 product lines, including wraps and sandwiches, Costa coffee, heat-to-eat meals, fruit, pastries, salads and confectionery.
Flexible enough to fit into smaller locations, 24 is the ideal solution for clients looking to enhance the benefits they provide to employees but may not have the space or budget for a full-service restaurant.
24 is also the perfect addition for medium-sized businesses that want to strengthen their current offering and caters perfectly for sites with multiple office locations, some of which may be remote from the main employee dining restaurant.
How long did it take to bring the idea from drawing board to launch?
We took about ten months to make the transition of the Avenue C micromarket to the UK – including a six-month trial. We quickly recognised that while we could take many lessons and some practical aspects from the US, there was a need to revise the mircromarket solution for the UK consumer and client.
As 24 was planned to be totally unmanned, we also needed to ensure we had the correct accreditation for the payment processes. I had thought that given UK high street supermarkets had already been offering self-service check-outs, this process would be easy – but there was specialist accreditation needed since we had no staff at the facilities. This is unlike supermarkets, for example, which might have a nearby employee on hand to help. This element of the project alone took five months to secure.
Was it trialled?
Yes, we trialled the concept successfully for six months in our own Birmingham office. This was an opportunity to get valuable feedback and to take our time to perfect the offering before it went to market.
The feedback we received from our teams in Birmingham was been taken on board and modifications were made to improve the service. Examples of developments that were made through this process include the introduction of chip and PIN payments, and the loyalty scheme on our 24 card, which gives points for each pound spent and can then be redeemed to further enhance the value.
Interestingly, we also noted that the revenue for 24 was incremental to the other catering services on site, and we saw no erosion to the sales or patronage in other areas, including our free vending.
How has 24 been rolled out?
24 is available as a fully managed micromarket solution to clients across our current Compass Group UK & Ireland business, as well as to new clients; 50% of our trading business and pipeline is now with completely new clients, so we’re starting to see the brand rolled out across the UK to a variety of organisations.
Even more importantly, we have seen the brand resonate with clients in different sectors across the Compass business. What started as a driver for growth within Eurest – our core workplace-dining division – has now proven successful in many businesses and sectors, and it’s proving to have tangible benefits to these businesses.
Is it broadly the same at each location?
The most compelling benefit that has attracted new clients is the fact that we can deliver a foodservice solution at nil subsidy or with significant cost savings. To do this, we have to keep the financial model as lean as possible and, ultimately, this means that the build format is broadly similar across the business – in fact, we have made it modular to enable flexibility. The main variants you will see are colour variations in the design element of a 24 and in the range of products on offer to consumers.
The 24 payment card can be used in all locations regardless of employer or business. This enables us to look at new locations and for customers to know that once they hold a 24 card, they can shop nationally in all our locations – this is great for multisite clients.
How does it change during the working day?
We are mindful that there is no typical working day for colleagues on many sites. For example, if you work nights or are on flexi-time, then lunch may be very different to those who begin at 8 or 9am. In turn, our offering must be able to deliver flexibility – a full-day experience at all times over a 24-hour period.
We are of course restricted by the space we have within a 24, but our goal is to provide the same excellent consumer experience at 3am and 3pm, regardless of what meal you are eating or what drink you want. 24 offers access to more than 300 product lines to meet the changing needs of our consumers and caters for every eventuality in terms of consumer demands.
To fulfil our customers’ needs, this must be well planned and executed. Our teams think of the trading day as a 24-hour period over 365 days in a year.
Has the concept been tweaked since launch?
The concept is evolving, and it’s great to work on something that can quickly adapt and develop in line with feedback our clients are giving us. When you take into consideration that it’s such a new concept in the UK and the 24 brand has been in the market for less than a year, it’s developing rapidly with new opportunities arising all the time. My view is that this is a business that will be evolving as we learn from consumer trends and client needs.
As a brand, 24 has introduced new payment methods and our loyalty scheme, worked on variants of consumer offerings across our client base, and revised equipment specifications and fabrication materials. We have also introduced a manned 24-hour helpdesk to aid our customers should they need any assistance.
We made the decision to launch our first micromarket initially as a fully managed solution in 24, but we are in parallel building micromarket solutions for clients who want a completely bespoke offering or something that is not so extensive. The growth in this market in the US has been so incredible that we want to take all of the knowledge and continue to be at the forefront of the industry in the UK.
Has it increased sales where it has been introduced?
Yes, there’s been a steady sales increase in all active sites. In sites with an existing facility, 24 is used to complement this; we have seen no erosion of existing business and an incremental sales uplift of 14.3% on average. It may be that we are capturing new consumers for whom the traditional foodservice solutions are not suitable, and it’s exciting to see how 24 can complement existing catering operations alongside providing a new alternative to businesses which previously felt introducing a full-service restaurant wasn’t viable.
In sites where there is only vending or a sandwich van, we have experienced over 550% increases.
What other markets could it work in?
We are already investigating micromarkets in other workplaces outside of B&I, and hotels, leisure and multitenanted offices. There is no doubt that as we open more 24s and are able to build more case studies for clients to learn from, we will gain further momentum.
How will you keep the concept fresh in the future?
24 is being really well received by clients and consumers, and our pipeline is very strong. We’re looking forward to ramping up our roll-out; there’s great potential to grow. Workplace catering is changing, and 24 is a great example of how, through innovation, foodservice providers can tackle this change head-on, delivering a tailored service solution that meets the requirements and budgets of a diverse client base.
About 40% of my time is spent on building what we currently deliver in terms of operations and new-business growth, and the rest of my working time is devoted to finding ways to push the unmanned payment solutions, including micromarkets and 24, forward – keeping Compass a market leader. Continuous improvement is key to this. It is very rare that you get to have the opportunity to start a business that can revolutionise a market and set the trends that others follow.