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Evolving fast: Q&A Insights From Restaurant Chain Amid the Pandemic

02 February, 2021 |   | 

Like other quick-service restaurant chains, Farmer J was caught in the storm of the COVID-19 pandemic. Now, in a revealing interview packed with helpful insights, two of its executives share how the London-based business managed to adapt quickly, sharpen operations and improve margin control. It’s essential reading for operators looking to survive and evolve in 2021.

Farmer J offers seasonal, fresh and healthy food, packed with bold flavours. Known as “the Home of the Fieldtray”, the restaurant lets customers build meals by choosing a main, a grain, two sides and a sauce.

It’s a hugely-popular concept. Typically, the company’s sites in central London would each be serving up to 300 meals an hour. But the COVID-19 pandemic threatened to stop Farmer J in its tracks.

In this interview, Jonathan Recanati, Founder and Managing Director, and Rob Hodges, Head of Operations, explain the extreme challenges and new opportunities that arose — and also they offer timely advice about what they discovered.

Q: Can you take us back to March 2020 and what happened with the business?

JR: We were steaming ahead in terms of sales. We had three openings lined up and we were making improvements in operations as well. Then COVID-19 happened.

RH: We saw a drop of 50% in our trade from the middle of March as awareness grew about the pandemic, so we reacted and closed the restaurants a couple of days before the Prime Minister announced the national lockdown.

Q: What did you do next?

JR: After shutting we basically wanted to reopen as soon as possible. In the meantime, we had to figure out how to keep the brand alive.

RH: We started talking about what could we do as a business to keep people in their jobs — bearing in mind this was before the furlough scheme was announced. So we started looking at grocery boxes. Very quickly, we set up a web page where customers could build a small, medium or large veggie box. They could also order our pre-marinated chicken, steaks and some cheeses and milks. We had an online dashboard and platform for deliveries and we sent out about 30 to 40 boxes which were packed by the team at our King William Street branch. It was quite successful until Easter when the supermarkets got up to speed again. Then orders dropped to just two or three a day.

JR: The moment the panic buying stopped, the demand went down. It was clear that it wasn’t going to be a massive revenue generator for us.

Q: Like many restaurants, did you switch to delivery-only at that time?

RH: Yes. All our restaurants are in the City and there were no customers around because of the lockdown. We’ve always had a strong presence in Deliveroo — so we focused on that. We opened up our Finsbury Avenue restaurant and made it Deliveroo-only from the start. When we got up and running, our volumes were about 25% of normal sales before pandemic.

Q: Did that mean reconfiguring your business?

JR: Before COVID, our business was based on throughput. You have three hours and the customers don’t stop, so you keep on producing food. That’s a very specific way of working. But throughput changed and it was very difficult to predict demand, so we had to adapt how we hold food, the equipment we use, staff rotas, and any potential cracks in our operations. The business needed to know how to operate when you don’t have a massive queue out of the door.

Q: Were staff happy to return?

RH: Before COVID-19, we’d have up to 18 team members on site at a restaurant. This reduced to about six at the start of our delivery-focused model. We emailed everyone and asked who would like to come in and work. We didn’t want to force people and some were willing. We completed risk assessments, everyone had separate workstations and we put other safety measures in place.

Q: Was supply an issue when the crisis started?

RH: Yes. Some of our suppliers were closing. Others were talking about what stock they did or didn’t have — and what replacements they could send to us. With our Syrve POS software, we were updating product templates, so managers could order the correct substituted items. Previously, our suppliers were delivering five days a week — and now it was often just once a week. We had to consolidate our orders and talk to managers about what they could and couldn’t order on a daily basis. That meant closely managing how we sourced items, the volumes and watching shelf life.

Q: As you reconfigured the business to delivery-only at that stage, how did you retain your brand’s appeal while keeping a tight focus on cost control?

RH: The big appeal with Farmer J is our field trays — and how customers can completely customise the menu and their meal. So we wanted to be able to give the customer choice, but obviously, try and limit how much we will have to produce in the restaurant.

JR: Looking more closely, we realised how much fat we had. We stopped breakfast, but also reduced our menu for the rest of the day. We took out the dishes that are not massive sellers as well as dishes that required a lot of labour. As a result, we had a leaner menu that required fewer chefs. We’ve also designed our recipe cards so there’s no room for interpretation and potential wastage.

Q: Can you explain more about how the menu changed?

RH: Meatballs were the most complex item. They are hand-rolled in the restaurants each day and can take up to two hours. We removed them from the menu and just focused on our core mains: two chicken options, steak, salmon and our version of the tofu option. We went from five hot sides down to four and then five salads down to four. We kept our favourites, such as cauliflower, broccoli, mac-and-cheese and kale ‘slaw.

Q: Did you change your pricing structure at the time — and how did customers respond?

JR: We made some modest increases to prices but combined this with a relentless focus on quality — and this approach worked. We had to be honest with ourselves. The fact is, we sell fresh food that’s made on site. And it costs more money. But it’s a great product.

RH: We received no negative feedback at all. Our customers have been very loyal . We’ve had some fantastic feedback from them saying ‘we’re so glad you’re open’, ‘we’ve missed the field tray’, and lots of positive reaction as we got up to speed again.

Q: Quality seems to be a big focus for you?

JR: We learned not to be afraid that if you’re doing something really well, you can charge the right price for it. What’s essential though, is that you must absolutely deliver on it! Restaurants cannot over-charge and then under-deliver.

RH: That’s why we’ve had a laser focus on product quality. Farmer J is famous for its food quality and we haven’t let anything get in the way of that. We make sure that we deliver, every time.

Q: In those early months, did you take part in Feed the NHS?

RH: Yes. On top of regular sales, we were sending out 120 meals a day to the NHS. And we actually supplied over 10,000 meals in total. That’s something our team members are really proud about.

Q: As well as removing items from the menu, did you add any?

RH: We always want customers to discover something new and this has been important in increasing sales. But during the first lockdown, we probably had too many product launches. Now, we’re far stricter with ourselves that recipes cannot be too complex.

JR: If we come up with a new salad or a hot side, there’s a maximum of ingredients that we put into the recipe. We’ll be really realistic with how we cost it up and the portion size, while allowing some margin for error. Now we launch less … but do it more successfully in terms of execution.

Q: As the first lockdown lifted, did you open other sales channels?

RH: Plenty of customers were working from home and so deliveries were ideal for them. We were hitting about 25% of normal sales with most orders coming via Deliveroo. Then we launched our click-and-collect service from our website, allowing customers to pre-order and come to a collection point without having to queue. Over the summer, takeout orders were happening too — and some workers were drifting back to the office. With all channels combined, we started hitting about 50-75% of our previous sales numbers.

Q: How did staff roles change to fit the new business model?

RH: Previously, we’d have eight or nine people working on the line, serving customers and doing very specific roles. But now half the number are involved — and they work dual positions. We’ve upskilled our team so each person is a specialist in every single position on the line. Meanwhile, in our kitchens, we have maybe four chefs instead of six or seven and we designed fresh prep plans that need fewer people. As soon as the clock strikes 11am, we open on Deliveroo and the hot food goes onto the line.

Q: With lower throughput and demand being hard to predict, waste could be more of a challenge, right?

JR: With our Syrve software, we track stock, record wastage every day and record variants — so mistakes and issues can be spotted quickly across all restaurants. Of course, when you change or remove a recipe, there’s a risk that some stock accumulates. You have to be on top of that.

RH: We divided waste into different categories: lunch line, lunch cooked, dinner line and dinner cooked, as well as what’s out-of-date. We were then able to break waste down into those five key categories. We can see what’s being thrown away by the kitchen and what’s wasted because it’s been on the line for too long. We’re able to drill into each category and say to a restaurant your out-of-date ratio is too high, you’ve over-ordered, or raise any other waste issue that needs addressing.Syrve_Speak with an Expert Banner

Q: How do you handle forecasts?

JR: The volumes are smaller, so it’s all about making sure that our managers are forecasting correctly. Using our Syrve software, we look at the previous day’s trade and the previous week’s trade, and take other factors into consideration, making sure that that forecast is updated. Then our production plans are built off the back of those forecasts.

Q: Let’s talk sales and other KPIs …

JR: When sales are higher, KPIs tend to improve simply because there’s less wastage. During 2020 we reduced margin leakage. We were very conservative with our sales assumptions but adamant about sticking to them. Head office stepped in to support the teams and make it happen. Our whole approach is about being better than ever to survive. Sales have fluctuated because of lockdowns and tier changes.

RH: Average spend went up significantly from about £18-19 to £25. At the start, people were ordering one field tray and a drink. Then it become couples or households ordering two or three field trays. We also launched a new dessert and snacks like brownies and flapjacks. These all drove average order value because customers are more comfortable ordering extras from the privacy of their screens, rather than face-to-face. With Deliveroo and click-and-collect we found that average order value goes up and when customers are ordering from both platforms.

Q: How do you see your performance on Deliveroo?

JR: It’s good. We’ve been focused on hitting the Deliveroo matrix, reviewing our ratings continually, and really improving our food quality.

RH: We’ve increased our Deliveroo ratings in all our restaurants — and they now sit between 4.8 and 4.9. Prep time is key. In the zones where we operate with Deliveroo, prep time among operators is over 10 minutes, from the moment the order arrives to it being collected by the driver. We challenged our teams to get this below five minutes — and they typically achieve this, so we’re higher up on the Deliveroo pages and more visible to customers. We’ve added about 20-25% new customers through Deliveroo as well as getting existing customers coming back to us.

Q: Has your tech helped with getting accurate KPIs and in other ways?

JR: We have a weekly flash where we can see all our KPIs. This is based solely on Syrve and our accounting systems. The reports are normally pretty accurate, pretty granular. They form the basis for discussions with general managers, so we can act on any issues right away. When we get to the month end, our management reports are very pretty close to our weekly flashes — and that’s a sign that everything is working properly and integrated. Before Syrve, the results were never accurate, either because of a bug with the system or they came in too late.

Q: Is it important that your tech is essentially one system that covers your entire operation?

JR: Yes. And it really helps to have everything else integrated with the EPOS system. Syrve integrated us with Deliveroo and our click-and-collect platform — and can do it easily with anyone where we’ve requested integration. That’s a major plus that stands out with Syrve.

Q: Has the food and beverage industry been slow to embrace technology — and is that changing?

JR: Yes, definitely. Everyone is changing their approach. They have no choice. But there are a lot of tech companies out there that over-promise and under deliver. It can be tough for operators to find the right provider because a solution needs to be user friendly and come with great customer service. You need an omnichannel solution with everything integrated — labour, stock management, delivery and more — because you’ll want to control everything. The omnichannel needs to sit with the operator and nowhere else.

Q: What advice would you give to other restaurant operators today?

JR: Appreciate the small wins. Focus on what you do well — and make sure that continues. Also, make sure that whatever you deliver to the customer is the best version of your brand. If you identify something you’re not doing well, then fix it right there. Don’t wait or kid yourself it’ll get better. That said, don’t try to win too many battles at the same time. Start with one battle and then move on.

Q: How can companies survive and evolve?

JR: You have to be way more agile and more resourceful — because the industry has changed and there are more competitors and different types of competitors. Customers are always moving around more. Nothing is guaranteed. I see a lot of dark kitchen companies popping up with virtual brands selling whatever the data suggests that people want. But food is not a way to print money. There are easier ways to make money. In the restaurant business, what’s most important is being passionate about what you do. At Farmer J, we still love what we do and we’re proud of our food. To succeed, you have to really love your product. That’s my message.

Q: How will you look back on this period?

JR: Obviously, it’s a crisis for our generation — and the industry. Many businesses have been lost. But the ones that survive are now much stronger. At Farmer J, we feel less spoiled and more appreciative. The goalposts have moved. But when we return to some sort of normality, we want to keep our benchmark high — like it is today.

Q: What’s the future for Farmer J?

JR: Currently, we have four locations in London and we have aggressive expansion plans for 2021 to double our estate. You’ll see us opening restaurants in areas that are not 100% offices. We’ll also be really trying to improve our digital footprint through services such as click-and-collect. Loyalty will be important too, as we try to increase engagement and get more insight into our customer base. And we’ll retain the integrity and quality of the Farmer J brand. That’s where it all starts and ends.

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Simon Dadswell

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