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Expert tips to improve profit in 2024

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We interviewed a panel of industry experts about what’s hot, what’s not and what challenges business owners are facing in 2024. There was a resounding theme: Costs continue to grow and business performance and profit margins are under more pressure than ever.  

In the face of escalating costs, savvy operators are exploring avenues to bolster profitability. Our industry panel anticipate that to achieve better profitability you need to cover every aspect of your business operations. 

 

Is Your Pricing Damaging Your Business?

With the rapid increase of cost of goods and wages over the past year, it’s more important than ever for businesses to review and adjust their pricing effectively. Oliver Brown, Co-Founder - The Big Easy Group, a seasoned professional in the hospitality industry, warns of the detrimental impact of underestimating the importance of pricing. Oliver goes a step further by encouraging the implementation of Eftpos surcharges, emphasising that slipping on pricing can have a ripple effect, and the potential to damage the industry as a whole.

 

Focus on Energy Efficiency

Michael Illari, General Manager – Bromic Refrigeration, highlights the importance of energy and water consumption reduction in the hospitality industry. Appliances that can minimise energy and water usage, along with initiatives to reduce single-use packaging, are becoming focal points for many establishments. Ao Luu, CEO - Luus Commercial Catering Equipment, emphasises the rising trend of induction cooking, which has the potential to increase efficiency by decreasing electricity costs over time.

 

Take Ownership of  Your Menu

Peter Quigley, Executive Managing Director – ERS Catering Equipment, Jamie Thomson and Jason Perez, Key Account Managers at SilverChef, stress the significance of menu management for improved profitability. Jamie advocates for menu size optimisation, with an average of a 15-25% reduction. Peter emphasises the need for operators to comprehend their cost of goods and align their menu with costs and demand. Taking ownership of the menu, according to Peter, involves understanding competitor activity, local market needs, and the capacity of the business.

 

Sustainability

In 2024, sustainability becomes not just a buzzword but a key factor in business success. Michael Illari notes a substantial increase in interest from channel partners regarding sustainability efforts. Kate Burke, Impact Lead – SilverChef, underlines the impact of inflation on the industry, emphasising the need for businesses to manage costs through reducing waste and incorporating seasonality into menus. James Henderson, Director – Hospopreneurs, sees opportunities in plant-based and cell-based meat alternatives, aligning with sustainability and better-for-you trends.

 

Australian-Made Products Facing Market Challenges

Ao Luu highlights the recent trend where customers are less willing to pay a premium for Australian-made products due to inflationary pressures and increased competition from imports. Despite being Australian Made, there's a challenge to convey the value of locally produced goods in the current market, if it is not a core part of business offering.

 

Venue Takeovers

A resurgence of venue takeovers in the post-pandemic world is something to watch, according to James Henderson. Collaborations between bartenders, chefs, baristas, and others, not only drive sales but also foster a culture of innovation and growth within teams. James advises those in the trade to keep a close eye on these initiatives and explore opportunities for collaboration.

 

Food Wastage

Kate and Jamie from SilverChef draw attention to the critical issue of food waste in Australia. With families wasting more than 4 kilograms of food every week and the food waste industry estimated at $30 billion per year, addressing this problem becomes crucial for business survival. Kate also expresses support for organisations like FoodBank, FareShare, and OzHarvest, working tirelessly to make food waste a thing of the past, hospitality operators and owners can learn plenty from their continued efforts.

 

Conclusion

In the dynamic landscape of the hospitality industry in 2024, the path to improved profitability requires a multi-faceted approach. Despite escalating costs, the hospitality industry is a strong and resilient one, and we see a future filled with innovation, new technologies, and exciting opportunities.

While we acknowledge the hurdles, we believe there's a lot to look forward to. From energy-efficient practices to sustainable efforts and collaborative ventures, the future is indeed bright. Our expert panel's insights are geared towards not just surviving but thriving in the evolving hospitality landscape.

As you navigate these challenges, we hope the shared wisdom in this article proves valuable. Cheers to your success!

 

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