Eduardo Méndez
Founding Partner
Mero Mole
Rodrigo Vargas
Rodrigo Vargas
Founding Partner
Mero Mole
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Insight

Human Factor the Basis for Hospitality Business

Thu, 02/15/2018 - 11:38

The hospitality industry has a problem: it emphasizes sales rather than people. Rodrigo Vargas and Eduardo Méndez, Founding Partners of Mero Mole, a Mexican consultancy specialized in the food and beverages industry, believe the sector needs to refocus to achieve greater success. “The hospitality business is made of people serving people but not many restauranteurs give the human factor the visibility it deserves in their business,” says Méndez.
Mero Mole’s focus is on two verticals: clients and restaurant staff. “Our core business is to revolutionize the consumer experience,” says Vargas. This is sometimes easier said than done given the lack of professionalism in the food and beverage industry, which can often put a restaurant out of business. “The National Chamber of Restaurants and Seasoned Food Industry (CANIRAC) says eight out of every 10 restaurants in the country close within five years."
The firm started by operating exclusively with restaurants but has since expanded its services to four other sectors of the hospitality industry: food halls, malls, urban destinations and staff training. Mero Mole sees the customer as the key to success, both for its clients and its own business. “Our added-value in these sectors is our obsessive approach to improving the consumer experience. We need to evolve formulas that have proven successful,” says Vargas.
The food halls and malls verticals offer significant growth opportunities for the consulting company, which sees food courts usually found in malls as rough diamonds that could be upgraded to what is known as food halls. “We want to replace the traditional food court; having food halls in malls offers a more attractive and complete experience for customers,” says Vargas. “The number of malls will double in the next 10 to 20 years and if the evolution of food courts into food halls does not include a focus on customer experience, they will disappear.” Méndez agrees that food courts offer interesting possibilities. “What we like about food courts is the average spending amount, the high consumption and that they are open to everyone, from families to white-collar workers. However, we believe that fast food brands do nothing to improve the gastronomic offer.”
This emphasis on the gastronomic experience has to do with the change of mentality that consumers are experiencing. “Amazon is having a great deal of success because of changes in consumer habits: today’s consumers prefer to pay for experiences instead of products,” says Méndez. How malls operate is also changing, with a greater percentage of space going to the food and beverage segment, boosting the vertical’s attractiveness to Mero Mole. “There was a time when malls could have 10 percent of their gross leasable area (GLA) destined for food and beverages. Now, they are devoting up to 25 percent of their GLA to this segment.”
Mero Mole arrived to the market three years ago and has since collaborated with more than 70 restaurants. However, according to Méndez, the sector remains wary of hiring consulting services. “In Mexico, there are very few restaurants with strategic consulting services. Many people believe that they can open a restaurant because they know how to cook. This has led to an excess of empty chairs in certain neighborhoods and lagging sales as a consequence.”
In addition to the shortage of professional advisers, both Vargas and Méndez agree that the other constraint the industry faces is the lack of staff training and high turnover. “In the US, official figures put turnover at 72 percent. In Mexico, there are no official figures but it is estimated that turnover is between 80 and 100 percent,” says Vargas. “On average, the restaurant industry provides training to around 60 percent of all establishments once a year.” This statistic, combined with staff turnover, means that there is basically no training in the sector, he suggests.  
To address the training hurdle, Mero Mole created Hero Guest, a tech platform that focuses on providing training to restaurant staff. “We believe that if you do not train your staff, you cannot demand they provide excellent service and if you do not measure it, you cannot improve it. This is what Hero Guest does: trains and measures,” says Méndez. Unlike training manuals and shadowing practices, Méndez says that Mero Mole’s Hero Guest platform intends to make training a fun process.