Golf clubs across the UK are increasingly struggling to make their food and beverage (F&B) operations financially viable. Drawing on industry benchmarking and first-hand experience, Steven Brown explores why many F&B models are failing – and outlines the practical principles clubs must adopt if they want their catering operations to become sustainable, rather than a drain on resources.
“There is steady decline in the numbers of golf clubs making money,” says an excellent report from a US club benchmarking white paper on food and beverage operations – but this is not confined to just the USA.
Having visited literally hundreds of golf clubs in the UK and across Europe, parallels to this disturbing and growing trend are emerging. What then is the cause of this?
My own experience tells me that, in a nutshell, it is due to some if not all of the following reasons:
• There is no three-year food and beverage plan in place.
• Rising costs are being ignored together with no increase in retail pricing.
• Lack of support from members.
• A lack of understanding of members’ specific needs.
• An acceptance of ‘break even’ being acceptable.
• A fundamental lack of understanding from those charged with overseeing the operations.
• ‘We are cash rich and can afford to lose money on food and beverage!’
Tell me another business that can operate on these parameters. No club would operate the collection of annual subscriptions and visitor green fees on that basis, so why the food and beverage? It doesn’t need to be like this. So, what is the answer?
Is it in investment? Don’t believe for a moment that refurbishing the clubhouse will turn your fortunes around – it may in the short term due to people’s inquisitive nature, but novelty fades fast.
Don’t believe that cutting back on staffing costs and sourcing cheaper but inferior products will turn your fortunes around – they won’t.
What will turn your fortunes around is fully understanding that, like any business, you need:
• Tried and tested workable daily protocols.
• Experienced practitioners that understand how to achieve realistic targets by being proactive and not reactive.
• In depth two-way communications with your customer base.
• Acting on all the meaningful data generated both internally and
externally.
• Investing in your staff’s knowledge and development through training programmes and work experience at successful clubs.
• A decision from the outset about whether your food and beverage unit is to be a ‘profit’ centre or a ‘loss leader’ simply designed to enhance the customer’s experience.
As a businessman, I loathe the thought of any food and beverage operation being set up to lose money, but I respect that if that is the plan from the outset and if, of course, you are sourcing money from other elements of the business to cover the loss, then so be it.
The key is, in instances such as this, to control those losses without damaging the customer experience. If you don’t achieve this, and you are not cash rich, you will simply end up ‘stealing’ money generated from members and visitors to spend into an ever-increasing black hole.
The US model, which we accept is a different concept, that being based upon family and community values, is not simply to make large profits from food and beverage, but instead to provide a fabulous visitor experience using funds generated from other income streams within the club.
In the UK, we would need a cataclysmic sea change of both thinking and operating to mirror this approach. We are not universally ready for that (although it must be noted that I am seeing investment from some organisations in the UK that are beginning to adopt that different trading model) but we might need to be prepared to consider alternative trading models going forward.
In the meantime, if you are going to support a successful food and beverage operation using the existing trading model, then please pay attention to the key criteria:
• Set realistic retail prices and review members’ discount levels (prepare yourself for a revolt from the members).
• Control every cost element that relates to the operation but not at the cost of quality.
• Understand all data generated and use it to control and direct the future course of the business.
• Invest in staff development and selection.
• Conduct an in-depth, dedicated, food and beverage survey.
• Focus on the customer experience.
• Be flexible, innovate and be prepared for change.
The black arts of food and beverage management can be fully understood with knowledge, focus, planning and an understanding of your customer base’s needs and wants.
It’s not a mystery, merely a challenge, and one many clubs are facing more often than we would like. Keep the faith and give a little time to establishing an operation that will, in the fullness of time, cause you less problems and steal less of your time than it currently does.
Build an F&B operation that rewards your efforts – not one that drains them.
Steven Brown FBII.t.p. from Inn-Formation can be contacted on herinn@aol.com or 07785 276320
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