André Lacroix built Burger King International in the 90s. Today he looks at the industry from the outside and has a few tips up his sleeve. He shared them in his keynote speech at this year’s European Foodservice Summit.
No longer directly involved in the restaurant industry for years, the former president of Burger King International and now CEO of the Intertek Group mentally put himself back into a foodservice leadership position for a moment. “This is pure fiction, don’t hold anything against me here,” he added humorously.
Lacroix acknowledged that he expects big changes for the hospitality industry in the next 25 years, perhaps more than in previous decades. At the same time, he said, the opportunities are vast. “Your industry is facing immense growth. The population is growing. People want to order food from the comfort of their homes. And people will continue to travel. That’s not going to stop,” Lacroix said.
Core values remain
Certain basic values of a company remain valid, such as respectful and appreciative treatment of all stakeholders such as suppliers, guests, employees, investors and franchisees. At Burger King and McDonald’s, some of the most successful ideas and products in the past came from franchisees. Suppliers want to be part of a functioning ecosystem characterised by true partnership. “They don’t want to work at gunpoint,” Lacroix said.
There are also certain points on which he would not compromise, now as then. “If I worked in your industry today, I would never compromise on the consumer,” Lacroix said. “Deliver a perfect customer experience at a fair price.” He had critical words on the last point in particular: “I know that in the last two years rents, wages and the cost of energy and food have risen dramatically and are being passed on to consumers. However, not always fairly.”
As examples, he cited, on the one hand, a personal experience at LaGuardia Airport where a simple sandwich was priced at around US$20. On the other, he cited a story from the Financial Times that spoke of “hyperpretflation” at the British chain Pret. After the Corona pandemic, prices for desserts and drinks there had doubled in some cases. “Offering high value at an attractive price is essential for your industry,” Lacroix warned. Otherwise, frequencies would inevitably decline.
The margin must be right
Despite inflation, no compromises should be made in margin management, says Lacroix. Just increasing sales is not enough, only with a better margin ratio can investments be made in the future of a company, he said. “If I were to work in your industry again, I would establish margin equity growth as a lifestyle,” Lacroix said.
This is not an easy task in view of inflation, but there are levers, among others: Lacroix mentioned upselling, cost management, process optimisations and a focus on top locations, for example.
- Lacroix considers four other points to be essential, which he would focus on today if he were once again at the helm of a restaurant company:
Supply chain management. After the unprecedented supply chain disruptions caused by the Corona crisis, Lacroix sees this as a central construction site for multi-unit companies. This applies both to the selection of supplier partners, but also to partnership support to ensure high, consistent quality. In times of social media, the customer does not forgive quality deficiencies.
- Sustainability. Every top executive should establish, promote and live genuine sustainability efforts at the heart of his or her own corporate values. And also communicate them proactively to the outside world.
- Data Science. In addition to digitalisation strategies, restaurant companies should also concern themselves with deriving entrepreneurial recommendations for action from their data, also with the help of artificial intelligence. “Every company should employ at least one data scientist,” said Lacroix.
- Good leadership. “Be paranoid every day about how you lead,” Lacroix said. A good leader combines strong values, vision and the ability to inspire employees. Only those who put people at the centre will get top performance back.
In conclusion, he had both admonishing and encouraging words: “I will continue to observe you. You have the talent, the energy, the training, the time and the opportunities. Have fun reinventing your business at the speed of light.”