Develop a Profitable Takeaway & Food Delivery Business

With lockdowns, it may be the only way to make sales. After 18 months of Covid restrictions, there are many lessons and discoveries learned by experienced operators. This webinar recording shares them with you, including:

• What makes a profitable and popular takeaway menu in 2021
• Best ways to promote your takeaway & delivery menu - apps, websites, advertising and flyers
• Organising production and service spaces for speed and efficiency - equipment and layout
• Managing delivery - how to get the best from services like UberEats and DoorDash
• Lessons learned from 18 months of lockdowns and Covid operations
• Stories from the field with experienced foodservice operators
  
  

Guest experts on the webinar: Kit Houston - Houston's BBQ in Melbourne
Rino Saccoccia - All Aboard Seafood, Perth
Lawrence Pelletier - RedCat Hospitality IT
Presented by Ken Burgin and Nikki Smith from SilverChef.

Key Points from the Profitable Takeaway and Food Delivery Webinar...

After 18 months of Covid experience, there are many lessons learned by experienced operators. In this webinar, three experienced operators shared lessons learned and opportunities they are building on.

Menus and Production

• There's value in smaller, more focused menus - adjust the menu size to the situation eg smaller for drive-through and on an app.
• Use large, easy to read menu boards, plus traditional ‘menu engineering’ principles to display the most profitable items where they will attract attention.
• Work to integrate different ordering screens (from delivery apps) onto a single screen – reduce double handling, errors and frustration for kitchen staff.
• Watch for additional tech services as they become widely used and available through your POS supplier eg Kitchen Display Screens, drive-through queueing and order management etc.
• Upgrade equipment to ensure minimum wait at peak times eg high-capacity fryers, hot-holding ovens for pickup bags etc.
• Look for drive-through opportunities when you choose a new site, or adapt what you have. Be aware of traffic issues that will attract the police if waiting cars are queueing on the street.
  
  

Working with Delivery Services

• UberEats is not the enemy - be ready to negotiate and make use of their new lower-cost options - Uber Direct & DoorDash Drive. With these, you do the promotion and they handle the billing and delivery.
• You are free to set a different (higher) price on the delivery apps, so that you cover their commission – at All Aboard Seafood they have it 25% higher. The experience over the last 18 months shows that customers are surprisingly insensitive to prices once they decide to order through an app.
• Most operators know that DIY delivery is painful and hard to organie, with peaks and troughs in delivery times. Let Uber, Deliverro and DoorDash handle the staffing for you.
• Make time to meet your account manager with the delivery services (yes, they do exist) and find out what other benefits they can offer eg priority placement. Also what information they can give you about popularity of items on menus similar to yours.
• Explore what beverage companies like Coca-Cola can do to redesign your UberEats app, so that you sell more beverages. They know the best way to promote upselling, and will add good photos – initial results from this at All Aboard Seafood have been excellent.
  
  

Marketing and Promotion

• Your website needs constant attention and upgrading with new offers and seasonal photos, plus integration with your online ordering system.
• Use photography offers from delivery companies to upgrade your product images – this can be worth thousands of dollars. Attractive photos always lead to more sales.
• Use the shopping options available through Instagram and Facebook to integrate with your ordering system.
• Use Instagram for Instagram Live, IGTV and traditional posts – combine with regular competitions to maintain interest.
• Work your email list – look for opportunities to grow this through the customer data you already have, and email them at least once a month.
  
  

Transcript of the Profitable Takeaway and Food Delivery Webinar

Welcome, everyone. It's Ken Burgin here from SilverChef. Great to have you at this webinar, our biggest one for quite a few months, and a topic that people are very interested in. We have some great guests to look at this topic from different angles.
Important to read our disclaimer, understand that we're here to give you good advice and good information, and ultimately the responsibility is yours for how that's used.
Introducing our guests to you today. Rino Soccaccia from All Aboard Seafood in Perth. I've known Rino for quite a a few years, and he’s a very successful operator, really has a great feel for what his customers want and what the local area wants - Rino's been doing e-commerce almost longer than anyone I know. When you look at the website or his shop, it looks fairly traditional, but he's anything but. Kit Houston from Houston's BBQ in Melbourne, operating for last, is it 18 months, two years now, Kit?
Kit Houston:
Two years now, . Five years in total. Two years from a shop.
Ken Burgin:
Lawrence Pelletier from Redcat, one of the leading point of sale and IT platforms. He's going to give us a great overview of what's happening in the industry with takeaway delivery, etc. My colleague, Nikki Smith, who's one of our business development managers at SilverChef. She's got a real finger on the pulse for equipment trends.
First up, I've going to introduce Lawrence Pelletier and ask him for an overview of what's happening around delivery and takeaway. You're watching this very closely, have been for quite a long time and it's changing fast.
Lawrence Pelletier:
Thanks, Ken. For a bit of context, we deal with everybody from smaller groups right up to the big boys, like the Schnitz's and Nando's and Grill'd, Noodle Box and Boost Juice, and all those. So we see sort of a really interesting cross section, if you like, of different types of food or different types of offers and how those are reacting. I'd probably say probably a couple of the biggest things I've seen is a real shift where people are really leaning in... And this is basically since COVID has kind of kicked in.
In the early days, everybody panicked a whole bunch and didn't know what to do, and then I think most of our customers started to really lean into delivery and the delivery aggregators, or the delivery partners, that was probably stage one, and a big part of that was all around, "How do I work with these guys efficiently?" Maybe from a technology perspective, it might be, "Well, how do I manage these different tablets and how do I get it into my kitchen? So is my system integrated or could it be integrated?" and all those sorts of things. So there was a lot of technology questions around that.
Ken Burgin:
A lot of places had four or more different screens.
Lawrence Pelletier:
I've seen 20 in one shop, right, where they'll have multiple brands and all sorts of craziness. So that became a real challenge, and I think a big part of that was the realisation, and if you haven't come to this realisation yet, it's good to know because I still come across people who are pressured by the Ubers of the world to keep the same prices in their shop as they do on Uber, etc. And the reality is you are free to set whatever prices you like, and two, the consumer is definitely far less price-sensitive and understanding that if you're going to get stuff delivered, it's , I should say, to charge a bit extra to make it a profitable business for you.
Nikki Smith:
Can I ask on that, is there a general guide on how much? Because I've noticed... It was actually one of the questions I wrote down to ask. I've noticed I don't have all options near me, but Menulog and Deliveroo, the pricing for one of my restaurants that I order from is very different. So who sets that? Is it the deliverers, or is it the restaurant?
Lawrence Pelletier:
It’s the restaurant setting that, and you can put whatever you like. It's completely up to you as a restaurateur, and it comes down to what's an acceptable number that your customers are going to like, are going to be happy with. One of the reasons as a bit of awareness, there's been a long-standing issue amongst all of the different aggregators that there was some pressure on the restaurateurs to have the same pricing, and I think there's been a little bit of ACCC action on that or some discussion. So even though you may hear whispers of that, don't fall for it. You can actually put whatever price you like, it's up to you to set your prices, and it's about understanding what's reasonable to the customer. Most of my customers will put around about a 20%, roughly, increase in their prices, but knowing that sometimes they're paying over 30, 35%, they'll fluctuate that as far up as they can that's reasonable.
Ken Burgin:
Can I ask, Kit and Rino, what's your policy on pricing on the apps compared to in-store?
Kit Houston:
In the early days there were mechanisms in the software that you needed approval to change your pricing, and recently those mechanisms have been taken off, so you can change them. It warns you that you're going above a 20% increase to what it was before and that your customers may not like it, but it's definitely not fixed. I actually had five weeks off Uber Eats because I turned it off and I've ran the last five weeks without it and I made the 30% pretty much straightaway week after week after week.
I've now turned it on again, but have increased my prices the full 30% from what they were five weeks ago with the theory that if you want it on Uber Eats, you can pay for the 30%, and if you don't, then you're more than welcome to come down to the shop. And I ran five weeks of not having it turned on and I didn't lose out, I sort of increased, but hearing that, I might make it 20%. I might go back before I launch it on the weekend, but I thought, "Stuff it. I'm going to add 30%. I don't care what the price is." If you don't want to buy it, don't buy it, but people are happy to sit there and pay $40 for a burger. It's ridiculous, but if they're going to do it, you may as well charge $40 for a burger.
Lawrence Pelletier:
It's about actually being able to manage your food costs and manage your business so that you can actually make money.
Ken Burgin:
Rino, are you same price for the apps?
Rino Soccaccia:
I'm very similar approach to Kit. We actually surcharge 25% flat on top of whatever I'm charging in-store. And going back to a comment Nikki made earlier about having different pricing on different platforms, yes, a couple of them we have better deals than what we have like, say for example, than with Uber, but we still charge 25%. So it's the same price on all our platforms across the board, and I-
Ken Burgin:
I'm glad that came up because I know a year ago people were a bit terrified about surcharging, weren't they, and that's not so much now.
Lawrence Pelletier:
Well, I've actually talked to some customers who've done some really interesting sense testing where they increase the price every week for a little while to see where the volume starts to drop off because it's the only way you'll ever know, and you'll be surprised at how inelastic that is.
Nikki Smith:
If you think about it, when you look at sort of some of the bigger guys that have been delivering pizza forever, it's always been cheaper if you pick it up in store as opposed to delivery.
Rino Soccaccia:
I had an example where we went to a pizza shop and the difference between pickup and delivery, and I think it was Dominoes or something like that, it was almost double, but the other thing too is when we first started with Uber, you weren't allowed to charge more back then. But you know how we got around it? I hired a copywriter and instead of having a hamburger in-store, we put some ridiculous name on it and had real fun with it.
Ken Burgin:
So Lawrence, coming back to you. People have a lot of challenges with getting drivers at peak time sometimes, don't they?
Lawrence Pelletier:
What we're seeing now is a shift to where people have embraced the aggregators as a group, and said, "That's part of our business. We'll have to do it," but the newer trend, if you like, is people moving to a white label delivery. So there's two companies that really do that well, one is DoorDash Drive. So not DoorDash Marketplace, which is what the consumer would see on their phone, but DoorDash Drive. And Uber Direct. So again, not Uber Eats, but Uber Direct. DoorDash Drive's been around for maybe two years now and Uber Direct is only in the last couple of months that they've launched, and what both of those are is fundamentally, it changes the relationship.
Lawrence Pelletier:
So instead of in the current relationship with, let's say, Uber. In that relationship, they would argue they're doing the marketing, they're finding the customer, they're bringing you the customer saying, "We want some food," they're picking up the food and they're delivering the food. So they argue that they're performing a large part of that transaction, and I know that we don't all agree with that, but I'm saying that's their argument, right? So in this white label delivery, your job is to get the order, so you can put it on your website, you can put it on Google, you can put it in an app, however you want to get that order. You get the order and the customer goes, "But I want it delivered." So the best simple example I can give you is if you go onto the Nando's website and you go, "I want Nando's to deliver my food." So it's a Nando's delivery, and that delivery is still a white label delivery.
Lawrence Pelletier:
So that'll be delivered by either Uber Direct or DoorDash Drive, and it kind of magically comes to the consumer. The only hint that they have is that usually there's a link sent out to them where they can watch the little car come towards them on their phone, and that is actually... It'll say that that's DoorDash or Uber, so they'll know who who's delivering it, but it's been proven now that the consumer doesn't care who delivers the food, they want the food to arrive, so that's not an important part.
Lawrence Pelletier:
Now, why this is all important though is it changes the economics magically and completely. So instead of going 30 to 35% to your delivery aggregator, what this does is it says, ", now I'm going to pay..." And I'll do a DoorDash Drive one really quick for everybody. So I'm going to pay DoorDash Drive instead, and if you look at it in some simple maths. You look at a $100 order. This is the one I always use because we can all, I hope, visualise a $100 order. I know that's a big order for most people, but it's a simple math. So in an Uber world or even a DoorDash world, for that $100 order you'd be paying them 30 to 35 bucks depending on what your percentage is to these guys. In a DoorDash Drive scenario, so where it's a direct order, you got to grab the order, right?
Lawrence Pelletier:
Let's say it's web ordering and let's say people probably pay on average, including credit card fees, maybe 5% for that order, right? So roughly your cost of acquisition is about $5 on this $100 order. And then you got to deliver it. Now, to deliver it with the DoorDash Drive and the Uber Directs of the world, it's an individual negotiation and it depends on distance and all sorts of things, but roundabout, if I stuck a number in there, I'd say it's about $11, right? So now I've got, let's call, an $11 delivery fee for this scenario. Now you're up to about $16 to get the order and have it delivered, but the cool bit that comes into the middle of this is well, when people go onto Uber or DoorDash and they order, they also pay a delivery fee, right?
Lawrence Pelletier:
So now the consumer pays, let's say, a $5 delivery fee. So Uber or DoorDash are actually earning your 30, 35% plus the delivery fee. So in this scenario, it's my delivery fee because I have my own online ordering as the restaurateur. I have my own ordering platform, so I'm going to say to the consumer, "if you order from me, my delivery fee is five bucks," or whatever the number is. So if you remember from earlier, $5 to acquire the order, $11 to deliver it, but then I'm getting five bucks back from my delivery fee. So now my overall cost of fulfilling that order, getting and fulfilling is around about $11. It could be 10 to 12, whatever it is, but in that neighbourhood, right? You compare that to an Uber or a DoorDash order for 30 to 35 for the same order. So if you can shift your orders away from those aggregators, even though you're still giving them business, but you're letting them do the delivery bit. We're seeing a huge trend towards that.
Ken Burgin:
So it's putting the onus back on my website or my Instagram activity for promotion?
Lawrence Pelletier:
It's your marketing. So the guys who are doing really well with this are guys like Grill'd, guys like Nando's, guys like Schnitz, all the big brands because people will go to their website or go to their app or find them on Google. Even if you're not a very massive group-
Ken Burgin:
Is this available for small operator, individual operators as well?
Lawrence Pelletier:
Even if you have one shop. At the smallest version, I know that DoorDash, for example, has a portal available. So you could, as a very small operator, you can have a portal, and what you do is you type into the portal, "Hey, I've got an order. It's got to go to this address. It'll be ready in 10 minutes," and that'll actually organise a driver to come and pick it up and take it on your DoorDash account. So you can still do that. I know that DoorDash Drive does that, and I think Uber Direct is working on that. I'm not positive whether they have it set up yet.
Ken Burgin:
And a comment on these two, last year, we did a webinar, not the same as this, but sort of a bit related, and one of our guests, Emma Nguyen, who has a great Vietnamese restaurant, has her Uber and Deliveroo account managers come to visit her every month. She's giving them lots of money, they have to come and talk to her. When I say this, people often say, "What? I didn't know that was such a person exists”. Lawrence, you mentioned to me before about Google Ordering. Is that growing or where does that fit into the mix?
Lawrence Pelletier:
Google Ordering's pretty cool. Everybody can check this one out easy as long as you know how to use Google. If you Google on your phone or on your computer something like, "Food near me," or "Burgers near me," or whatever... I can tell you, Redcat customers, we actually integrate directly in. So if you do like a, "Grill'd near me, or San Churro or Schnitz near me," you'll see them come up in the Google search, and there'll be a button, sometimes two buttons that'll either say, Order to pick up, or Order to Deliver. Basically, you can order for pickup or delivery straight out of Google. So what happens is while I'm in Google... I'm a consumer, I'm in Google, so I'm not necessarily a loyal customer of yours maybe and I've Googled some food or something, dessert or whatever it is, and I can order within the Google page itself. I never leave Google. You go all the way through and you pay and everything and off it goes. So either it gets delivered to you or you go and pick it up.
Lawrence Pelletier:
That's only available through integrations right now though, so you can't really go on and set it up yourself or anything. So you have to have a tech partner that does it. You'll see that a lot of the online ordering guys will do it. So if you went to like a TabSquare or one of those guys, they'll actually often have the ability to put your onto Google, and then Google page will feed into that online ordering mechanism. So we do a direct into our world the same as those guys would, but that's worth doing if it's available to you.
Lawrence Pelletier:
We're seeing in terms of volumes, we're seeing reasonable volume. Not crazy, but there's a couple of things. One is it's not free. Free's the wrong word. Google's not charging, by the way, for the minute, so it is kind of free in that sense, but in a lot of ways it's bonus business because you're getting customers in the door who may not have known about you. So it's a good way for people to discover you, that's probably what I would say.
Ken Burgin:
Lawrence, talking about paperless kitchens. We talked about going from 20 screens or five screens down to one screen. What do you see about the logistics in the kitchen of the order comes in and how quickly it can get out, and how businesses are streamlining that and making that more effective?
Lawrence Pelletier:
The challenge you've got and we've all done this, it's like playing whack-a-mole when you start to have multiple screens and they're going off and you're trying to figure out which one has the order on it, especially anybody doing virtual brands and things, it starts to become more and more screens. So what we've done, we've done a bunch of work to integrate all the orders directly. They come in off of any of the major four systems, they'll come in, come straight off the screen, automatically go out into the kitchen, go through the POS, so they're there for reporting and everything straight into the kitchen, and then what starts to happen is the screens become... They're still there, but you're not having to accept orders and stuff. You're actually using them to manage an order.
Lawrence Pelletier:
So you're really only going to go use that screen if you need to tell a driver or something, like call them early or maybe tell somebody there's a problem with that particular order, that sort of stuff. So it becomes a communication tool, or an order management tool rather than order acceptance, and you're not having to type orders in because depending on how complex your menu is like, so how complex the things are that people are ordering, the retyping of every order can kill you. That is a lot of effort and it's prone to error.
And you can have lots of problems, and even reporting later is painful, right? It's very difficult to keep, with any volume, keep typing those in all the time.
Ken Burgin:
We're going to swap over now to talk to Kit Houston about Houston's Barbecue in Melbourne. There is him looking very serious with the meat coming out of the smoker.
We'll drop Kit's website into your chat as well. So let's talk menu to start with, Kit. When I first saw it, I thought, "Where's the rest of it?" It's very small, it's very focused. There's a reason, you're a very thoughtful guy. Tell us about the menu, how you designed it, and you better give us a bit of background to how you started the business too a couple of years ago.
Kit Houston:
Houston's Barbecue started about five years ago as a one day a week pop-up American smoked meats business. We'd pop-up at breweries, and so on. Two years ago, two and a half years ago, I took a trip to America to make sure my food was on track, and I went to Texas and visited around 30 joints in one week, and I asked questions, learnt a bit and made sure that my food was good, and then when we came back to Australia, I opened up a small barbecue joint. We're at the end of a dead end in an industrial estate, it's an old takeaway shop where you'd traditionally go and get your potato cakes and your dim sims and stuff for a quick snack on your way out. Exceptionally cheap rent, a couple of hundred dollars a week, absolute low overheads, everything else.
Kit Houston:
And we open two days a week, which was a Friday and Saturday. So we only open for 14 hours a week, and during that time we sell in excess of 350 kilos of meat, and we do hundreds and hundreds of meals out the door from when we open until when we closed. That's a real quick overview of what we do. So my menu and why is it so small? Because I don't do much well or exceptionally well, so I focus on the few things that I do exceptionally well.
Kit Houston:
If it doesn't work, if something doesn't sell, if something's beyond my skillset, we get it off the menu as quick as possible and we use what we can in as many different meals and products as possible to keep the menu small, keep it within my wheelhouse and keep it moving out the door. When you've got 40 takeaway meals sitting on a bench going through pretty much our production line, me and my staff can't think too much about what goes into it. We paint by numbers. We build boxes by numbers. We need to go, "One, two, three, four," and then out the door as quick as possible.
And that burger.
Ken Burgin:
Tell us about the burger.
Kit Houston:
That burger on the side, I do on Thursdays, we had preparation for the Friday and the Saturday and I had basically all my labour costs on those days, so we decided to open up for Thursday to cover the labour cost. So we do these burgers one day a week. My entire business is built on fear of missing out. So we only do a hundred of these burgers, and if you don't pre-order, you don't get one, and we've pretty much sold out five weeks in a row every first day for a hundred. We block out two hours in the afternoon, which is the time that my staff do bulk of their preparation for Friday and Saturday because we're a barbecue business, we're not a burger business, and it's a different way of looking for things. I had labour costs that I weren't covering and now I cover them, with the focus then still falls on the Friday and the Saturday.
Ken Burgin:
Interesting way to look at labour costs, which is a stress point for everyone, and in a minute, we're going to look at some of your marketing too.
Kit Houston:
So I've tried all of the devices, and Lawrence, Uber, I agree with before. Uber is an amazing tool. If I was to pay an IT company to develop an app to distribute it into the hands of tens of thousands of people, and then to convince them to use it to purchase my food, I'd be out millions, and to pay 30% for that, the largest marketing company in the world, I think it's fair. I think it's fair. I think it's worth 30%. They manage the people, they manage the software, they manage everything else. I think they still make a lot of money, don't get me wrong, but if you don't put your prices up, if you're not staying on top of it, you can... Volume is not good when you're only making 5% or 3%.
Kit Houston:
I don't care how much you're selling, if you're not making good money on everything, then don't use it. So as you'll see in the bottom there, we use Square, which we use the free version. I'm pretty tight when it comes to spending money on stuff, so I use the free version of Square. You'll see that little Uber tablet there. We had it turned off for the last five weeks, and we made about 28% increase week after week. So having Uber on or off for us is no biggie. Saying that, we're going to turn it back on again this week.
Ken Burgin:
Why will you turn it back on?
Kit Houston:
As another sles avenue. So we've increased prices by 30% and then after talking to Lawrence and Rino, I'll probably bring it down to 20, 25%. I thought, "Look, if I turn it on and somebody buys a $20 hamburger that they can get for $15 in store, then I might as well take their 20 bucks." People want convenience. People, they spend... One of my meals with the 30% on is $110 or something, so if people want to spend that and not drive down here, I can't stop them anyway.
Kit Houston:
So our ticket prints over there on the left, over the B on the BBQ, and then basically there's all of our packaging on the left there. It starts that process there, goes down that centre table. Cut hot meats, which we do in front of everybody, like an old school '80s carvery. They get cut and then move to the centre, and then all the fried goods on the back ball, they get moved to the centre and they all come in, and then when they reached the end of this table here above Jess' head there, they then get put in the warmer on the right-hand side there, and all of our meals sit hot in that warmer, in their bags, ready for the customers. We do almost 30% pre-ordered and paid-for before we even opened.
Kit Houston:
So almost a hundred kilos of meat is sold. We start selling from Sunday for the weekend, Monday, Tuesday, more sales, Wednesday, Thursday, more sales, and then Friday starts and we can have up to 50 or 60 prepaid orders in our system for each day. Tickets automatically print out telling us the customer's coming in, in 15 minutes. We fulfil the order, have it waiting on that right-hand side there in one of those large warmers. They walk in, they've paid, contact-less almost, hand them the bag and out the door they go. They're in and out of our shop in a minute if it's ready, two minutes if it's not.
Nikki Smith:
Do you have procedures in place to ensure that the same volume's going out. So customers are getting the same week after week, but it also controls costs for you?
Kit Houston:
Yes. So in the front there next to the meat on the left-hand side is a weighing machine. So all of our meats are cut like the deli, so we use exact weight.
Ken Burgin:
So what's the cost of that combination here? Is that a combo or is that special photo?
Kit Houston:
That's a family platter, which is there's there's 200 grammes of brisket, 200 grammes of pulled pork, two 100 gramme sausages, two chicken wings. The bread and the slaw with all of our meals is very sort of traditional Texas, and that's complementary. We add that in for free. You've got a reasonable portion of fries there and then two burgers there for the kids. So that is from memory I actually don't know. I don't spend much time in the shop anymore. I think it's around sort of 70-odd bucks, about 70 bucks or so. That'd be a kilo of meat on there, plus fries, slaw and bread in a box, it's a pretty big seller as well.
Ken Burgin:
And on your shelves in your shop, is that a spice rub you sell?
Kit Houston:
So when COVID hit, we kept pivoting, we didn't stop. If I make it in here, I sell it on those racks. So that's our brisket rub, our pork rub our salt and pepper for steak rub. The tall white one in the centre there, that's salt. I resell the salt that I use.
Kit Houston:
Hopefully none of my customers are on here. So kosher salt is non-iodized or iodine salt. In Australia, we don't know that, so I take sea salt and I put it in a bag and I sell it for five bucks. So pepper, the mustard that we use, I sell the drinks that I get in from Costco, I put 30% on those and people buy it. In that fridge, that's all the cold cuts. On the left-hand side is all the raw, so it's the briskets that I use, it's the pork ribs that I use, it's the pork shoulders that I use. I put 30%, or anywhere from 20 to 30% on those. They come in with my supplier.
Kit Houston:
I fill that fridge, people come in, they grab a hot meal, they then grab raw meat, they then grab the mustard to bind it, they then grab a dry rub, they then grab a box of soft drinks, and then on the right-hand side is my heat and serve meals, which is stuff that I haven't sold that night. We Cryovac it up into its beautiful portions, and then we have that in the fridge. And then next to that fridge is a freezer. So once it has finished its life in the fridge, we then freeze it and we go full price, 10% discount, 20% discount, and then every quarter we empty the freezer at a further discount.
Ken Burgin:
I understand Instagram is your number one for marketing. You've got a shop on Facebook, which is interesting to see. We can order through Instagram. Tell us which one's more popular. What's your activity on both? How do you make them work?
Kit Houston:
If I would get rid of Facebook, I would straight away. Facebook is a forced to be connected to Instagram. So Instagram connects to your Facebook profile, you then get your shop going backwards and forwards, and then I get it on both. We link, and you'll see some of those photos have the little shop icon on it, on the copy of the Instagram page. So people will click on our Instagram photo. So I'll put a new burger up, people will click it, they'll buy it there, they then go through to Square, Square then pays for it all online and then they pick the time they want to pick up and the day they want to pick up, and then it's ready when they walk in. Instagram's our number one form of advertising, and then there's this swipe button in Instagram which then posts it to Facebook. But in Facebook, I run messages when people ask me about that. My auto-response has been set up into Facebook to let people know that we don't use Facebook, that I don't check the messages. If you want to get a hold of me, here's the best contact.
Ken Burgin:
And what sort of posts Live posts are you doing on Instagram? How does that work?
Kit Houston:
I have a whole weekly format that I try to stick to. So on Monday I go live. One of the things about Live is just be alive. Don't worry about looking good or bad or stupid or anything, go live and you'll get better at it really quick. Going live shows authenticity. So on Monday I go live, I show my customers and I'm telling my customers what's coming up for the week, what they can expect, specials and everything else, then save it through the Instagram system, make it into an IGTV, make it into a post and you'll start using the software as they want you to use it, and then they'll start promoting your more.
Kit Houston:
On Wednesdays, I do another topic talk on some of the food that I do, and then on Fridays, I'll do a follow-up, a good morning follow-or something as well. I over-post. I go against a lot of recommendations. I can post 20, 30 times a day, two Live videos, some thoughts and feelings that I thought of, I'll stick it up there, and you get 1000 to 1500 views per video and quite a few hundred interactions with photos and so on.
Ken Burgin:
10,500 followers on Instagram, it's nothing to be sneezed at. The last thing, it looks like Kit has got the French nuclear submarine in his shed. It's actually his giant smoker.
Kit Houston:
On the left there, that's a three and a half tonne, 7.5 metre offset smoker. It can cook, I think, probably about three cows maybe, maybe two cows or so. And on the right there… If you've got time in your cafe because of all these lockdowns and everything else, start trying to figure out other stuff you can do that you do every day that you can show other people how to do it. So I opened a school at the start of lockdown before we weren't allowed to travel anywhere. I opened a smoking school. So I teach 12 people.
Kit Houston:
Education's quite profitable. It's three people per smoker, $320 per person, times 12 people, times once a month, twice a month, and they all share the cold meats, which I buy in from my suppliers, and then you can upsell everything in your shop. Do it via Zoom. Do whatever. You've got all this time now, you might as well start doing something a little bit different until the world opens up again.
Ken Burgin:
And I'm going to talk to Rino about All Aboard Seafoods in Perth. So here's the counter. I'm going to give you a little picture. It's clean, it's fresh, it's traditional because the product is as we know it and the sort of food that we trust. I've got a few screenshots from his website with seafood. Rino, tell us about how long you've been there, how's the menu changed in the last few years? A few things like that.
Rino Soccaccia:
Well, look, we've been here about 22 years altogether. Mum and dad opened under a franchise back in '99 when I was in school, and then when I finished school, I came in and we set up our own brand and we’ve gone gangbusters from there, which has been really good. We focus on fish and chips and burgers, quality, and we cook everything to order. We don't do any pre-cooking, so it's not sitting in a bain-marie. And we target more our families and the old school fish and chips as well as a bit of a modern upmarket spin on it as well.
Ken Burgin:
Well, I'm looking at the range of fish you've got there too. You do sell the traditional fish and chips, but you’ve got barramundi, you got cod, King George Whiting, and things like that – quite a variety.
Rino Soccaccia:
Obviously, it varies in quality and price point. So you've got a bit for everything, different tastes, which is quite good. We're always looking at something different. We brought the North Atlantic cod in to bring in a bit more of the old school traditional English fish and chips. We even make our own mushy peas now.
And we've even started doing vegan fish and chips, which is something completely different.
Our menu is quite big. Since COVID, we've had to look at how we can simplify and rein it in a little bit. We've always had the approach of catering for every member of the family, that way you sort of got to be something for everyone no matter what their tastes.
Ken Burgin:
So what's your pricing might compare to other fish and chips shops in Perth, are at you on the high-end, or do you keep your prices cheap?
Rino Soccaccia:
Look, we're probably a bit more than your average corner shop, but fish and chips has always been a secondary income, the little corner old shop that doesn't keep it up to standard or whatever, whereas for us, it's always been full-time.
Ken Burgin:
Rino, tell us about fryers and cooking oil because the price of cooking oil has soared in the last 12 months. That's kind of make or break for you. What brand of fryers are there? Why do you go with that brand? What is your routine for oil filtering and anything you've changed or improved in the last little while?
Rino Soccaccia:
Look, the price of cooking oil's gone up 25%, I think, on average. We were using a Sunola oil, which went from $77 to 125 bucks overnight, so obviously we had to pivot and look at alternatives. We filter our oil daily.
Rino Soccaccia:
Kit and I were talking about it earlier, we have an independent filtering unit, so you empty your tank, into it. It's got a hose on it, so you can wash it all down, get all your finer stuff out, and then we've got a separate net again, which lays a second point of filtration to get all your finer crumbs out of it, and it gives you the longest shelf life. We actually throw out about 60 litres a week, and now with the oil change, because obviously we've had to go to another product, which isn't as good as what we used to use, but all it means it needs to be looked after, and the more frequent you filter it, the more you look after, and even during service, like making sure the staff skimming the oil constantly non-stop as they're using it and moving products around, it really preserves the shelf life of it.
Ken Burgin:
What brand of fryer are you using?
Rino Soccaccia:
I use Waldorf.
I've always used them, and I actually have two different models. So the way our system works is chips start at one end of the chain and fish starts at the other end, and they meet in the middle. We use a high performance unit for the chip fries, which has a turbo, so it's very quick recovery. So as fast as you're pumping your frozen chips, it recovers quicker. And then we have two non-HBO units as well, and we've got a handful of Roband, your bench top fryer for smaller things that don't need the bigger units.
Ken Burgin:
Tell us about packaging, because that's one of those costs that people overlook, but it's actually pretty pricey for every a box of food that goes out. Do you source locally, do you import, or what would you recommend to people who are listening or who are starting out too?
Rino Soccaccia:
Look, branded packaging isn't out of the ballpark for any size business. It's about what you use. We go through a local packaging company and they facilitated the custom print job, and we made the transition from paper probably about 10 years ago, the old butcher's paper. Yes, it was a significant price jump, but there are ways to offset that. For example, in a box, you can only fit so much, whereas in butcher's paper, that lousy hundred grammes of chips at the end of the year, you could be talking tens of thousands of dollars. So that was the biggest advantage of making that move, and it also enabled us to look at different menu items that you can't put in paper. For example, like you're looking at now, salad options and different combinations, it allows us the opportunity to put different packs together. And I think the important thing with the packaging too is to look at something that's unique. The boxes that we use are actually available in a generic print.
Ken Burgin:
Not specially designed to your shape, or anything.
Rino Soccaccia:
They've already been made, already in production, so the custom print actually isn't as expensive as what it could be if we were designing our own.
Ken Burgin:
Tell us about the drive-through, it's something we usually think you've got to be a big chain to do this, but you've been doing this for a few years as well. So what, I give my order here on the little blue box, is that the idea?
Rino Soccaccia:
Yes. We're the same as your major fast food outlets. When we opened the store back in the day, between us and the restaurant next door, parking was always a bit of an issue, so it was a quick thing to implement a drive-through system. What you're looking at now is a real simplified version of it. We recently upgraded it and put some bigger menu frames in so we got more area to advertise.
Ken Burgin:
If you started your drive through from scratch, would you change anything or add anything to it to make it more efficient?
Rino Soccaccia:
Possibly. We've only got one order spot and one window on the side of the building. If we had more space that would be good. Look at McDonald's now, they're doing dual-lane, which we don't have the option to do. We don't have the space, and also the cost as well.
Ken Burgin:
Nikki, you see a few operators putting in informal drive-through or a lot of expansion with takeaway. What sort of equipment are you seeing people using or how are they doing it?
Nikki Smith:
One of the most interesting setups I saw was at Narromine, the Royal Hotel – when COVID hit, they needed to turn over some money, so they turned the car park into a drive-through, so it circles around the pub itself and they put in some conveyor pizza ovens, so fast turnover, easy to prepare, doesn't have to have extremely high qualified chefs to serve up the food. So putting in the pizza oven, turning the carpark into a drive-through so no one had to actually come into the business helps them survive through these times.
Ken Burgin:
Interesting. When everyone registered for the webinar today, one of the questions was, "Has anyone got plans for drive-through?" And about 20% of people said they're either doing it or got planned.
Rino Soccaccia:
On that note, Ken, the important thing too when you're implementing a drive-through, like for us, we actually don't have the majority of our menu on it. We only display stuff that's quick, simple and popular. And so if you want the full menu, it's no different to even like Uber, you come in store and you come inside, and that enables us to, especially for us because we cook everything to order, to pump the cars through quick.
Ken Burgin:
Rino, I'm really interested talk to you about Uber Eats. You use all the services, as I understand, and we got your feedback before about you do a special pricing on the different apps.
Which ones do you get the most volume for?
Rino Soccaccia:
Uber, without a doubt.
Kit Houston:
That's the same here as well.
Ken Burgin:
When we were talking before, you gave me some fascinating information about how Coca Cola re-did your Uber Eats menu. Tell us about what the results were with that…
Rino Soccaccia:
Well, Coke approached me a few weeks ago about joining a growth partnership programme, and so basically what they do is they go into our Uber account and optimise it, so where we can add on a drink as an up-sell. They do all the work for you, they help you with pricing, they help you put photos up, and interestingly enough, in the last two weeks, our drink sales have dramatically increased. I used to focus on cans because you could obviously sell them at a price point where you can still make your margin on it, and interestingly enough, when we did the analysis, if you sell a 600 mil for the right price, yes, your percentages are less, but the actual dollar profit is more. And we've noticed a significant change where simply adding a photo of a drink, which I didn't think would make a huge difference, but it has. It's dramatically changed. And you look at your average price per order, and apparently they're willing to expand that into the other platforms as well, not with Uber.
Ken Burgin:
In 2020, there was a lot of Uber hate. They take your data and 30 or 35%, but what you guys are saying and other feedback on the chat as well, people are now ready and confident to surcharge, but also like you're saying, Rino, let's work with some other partners and see how we can optimise it. We're not necessarily experts at that, or that that's their job, isn't it? They want to sell more Coke of course, but your total ticket spend for each order's going up quite a bit as well.
Rino Soccaccia:
That's right. At the end of the day, why not make them work for it? If it doesn't work and I don't sell the extra drinks, they're not getting anything in return for it. I'll have the photos and have them laid out.
Ken Burgin:
Does Coke charge for this service?
Rino Soccaccia:
No. It was complimentary. We're targeting 40% growth on our Coke account – that’s a lot!
Ken Burgin:
We’’ve all the seen Coke guy come in with their heavy duty PC and they stand at your fridge, and they seem like a bit of a nuisance trying to sell your stuff you don't want. But if we actually engage them, the same as the Uber account manager, there could be great opportunities.
Rino Soccaccia:
And I take the same approach even with my other partners, with all sales reps because at the end of the day, for me to make money, they have to make money, and I think if you take that approach with everybody and work together, in the end, that's when you achieve the best results. And not only that, but they may have different resources, they may have more time to focus on the things that you don't and they're also seeing what's going on out there.
Ken Burgin:
Lawrence, any comments from about partnerships or optimising the apps like this, and making them into more powerful selling tools?
Lawrence Pelletier:
I hadn't actually heard of the Coke partnership concept, that's really cool, but it makes perfect sense, doesn't it? Because generally, they're pretty good at understanding the upsell and they know that their brand sells. Some people see it and go, "Oh!"
Kit Houston:
Lawrence, you've got a great overview of all the platforms. Uber Eats, we tried DoorDash and we tried Menulog or Menu Log and Deliveroo, and I closed them down pretty quickly. They didn't work for us a few years ago. Not now, but a few years ago. So we stuck with Uber. Rino said Uber is by far the biggest seller of his, his delivery partner as well. When you look across all of the platforms, how are you seeing, where are you seeing them all sit? Uber for us, I don't know if your customers are talking to you as well with the integration, Uber for us has now got huge increases in delivery delays. I see the Uber marketing even this week was we're allowing your customers now to change mid-wave. If they can't be delivered, they can quickly change to pick up how. How are you seeing it as somebody that integrates to both all the big guys, the little guys and your thoughts on that?
Lawrence Pelletier:
It is interesting. In terms of volume, I think it's different by state and even region and locality and everything. It can change how powerful, say, Deliveroo is versus somebody else. But if I said generally speaking, what we see is Uber's the dominator by far, usually by a factor of maybe three to eight times over the next guy down, you know what I mean, depending who the number two is. And then depending on the area, the number two will often be DoorDash. I find it interesting. A lot of people say, "Oh, I don't use DoorDash," but they seem to have pretty good volume. So if it was my business, I'd go, "I think I should check out DoorDash." Deliveroo seems to be quite a niche, it's either dead or active in some areas.
Lawrence Pelletier:
I mean, it could have to do with localities and how many maybe people deliver on bikes versus cars and all sorts of things, so for different reasons. And Menulog has been around for a long time, but again, very regional.
Rino Soccaccia:
We're finding the exact same.
Ken Burgin:
Rino, thanks for your very practical observations. You're kind of been doing it for such a long time, and are always ahead of the curve with technology, and Kit, your fresh energy and I think everyone is really admiring your concept and use of social media. You sort of made it sound like a two day work week, but it sounds like a bit more than that.
Kit Houston:
It's not. I lied. It's a small business, it's 24/7.
Lawrence Pelletier:
I'm answering questions still in the background.
Nikki Smith:
Kit, do you take your own pictures on your Instagram account?
Kit Houston:
The really, really high quality ones are done by a customer.
Nikki Smith:
For a free burger?
Kit Houston:
Haha I don't spend money on anything. If I can avoid it, I try and do everything myself, but everything else is pretty much taken on an iPhone by me.
Ken Burgin:
Rino, you got a photo shoot done recently, I think, didn't you?
Rino Soccaccia:
I take advantage of the photo shoots offered by the delivery partners.
Kit Houston:
Definitely. Definitely.
Rino Soccaccia:
I've got Menulog chasing me right now and I had one six months ago, so you use it and take advantage. And then I met a really good photographer, a husband and wife team, and I got their details and I said to him, "When you're in the area and you've got a bit of space to fill in between, let me know”. Try to take advantage of whatever opportunity you can.
Lawrence Pelletier:
From what you guys said too, I have to say, photos of your food has got to be one of the most important simple things ever, right? Nothing sells better than a really good photo, and in the new world, those things start to go on your website, on your Insta, on your Facebook, even potentially at table, or all sorts of stuff. You can use those photos so many times.
Ken Burgin:
And I think one of the keys too is have a shot list. Here's the list of shots I want. I mean, they'll have their list of things, but you need yours as well. I saw an interesting comment the other day about hands holding food being more appetising - like a bowl held by hands than the pile of food. So take both because then you've got two different photos. And another one is play with the food, so it's like one of the noodles being picked up with the chopsticks or the melted cheese dripping off it or something like that. Anyway. That's for another webinar!