From high street chain to global food hub: John Vincent’s ambitions for Leon

John Vincent doesn’t do small talk. He launches straight into a conversation about UK potato yield: it’s shrinking at an alarming rate of 4% a year, he says. “Isn’t that terrible?”

His concerns extend well beyond the plight of the potato. He is acutely aware that Leon is trading amid tumultuous conditions, and the uncertainty of Brexit. Most pressing is business rates, which are “a complete and utter disgrace” and responsible for “a lot of businesses going under today”, according to Vincent.

“We’ve also had rents go up, although they’re stabilising now,” he says. “So, the cost base has really changed in this industry and businesses that were making 20% restaurant profit are now making 8% restaurant profit. And when you’ve got 8% overhead, that’s literally 0% profit.”

Yet while the economics of the restaurant sector are “completely deteriorating”, casual fast-dining chain Leon is more than keeping its head above water. In the past five years, average store sales have grown 45%, as it’s continued to evolve its range to meet changing tastes. Indeed 53% of its current range is vegan or vegetarian. “I know it sounds a bit funny but not everyone in the food industry seems to care about food. A lot of businesses have been quite ops-minded. Food and people must come first.”

“I’m sure we could’ve been more strategic, but so far so good”

It’s still losing money, which Vincent puts down to continued expansion, including 13 stores last year in the UK and a further two US restaurants in its nascent US operation. But with £25m funding from Active Private Equity and Spice Private Equity, which bought a sizeable stake in May 2017, he’s not worried about Leon’s current financial position.

“We’ve got about £14m cash in the bank. We’ve got restaurant profit before overhead of about £12m. We’ve got enough [cash] to help us grow.”

“If we stopped growing today, we’d be significantly profitable,” he says. But he’s keen to continue the expansion drive. On the day of the interview, Leon has just added a new store in Leeds to its roster of 60 UK restaurants, and Vincent says there is plenty of appetite for new openings, with new stores set for Beaconsfield and Southbank and plans for a futher 25 throughout the year. “Every time we post anything, we get so many people saying ‘open in Glasgow’, or ‘when are you coming to Bristol?’” In these difficult times, though, every new opening has to be a carefully calculated decision. Vincent looks at “the logistics and supply chain lines” alongside data on footfall, office density and credit card spend in a particular area.

“We look at all sorts of data that predicts how the restaurant will do. Then there’s a 10-page property recommendation form that justifies why the restaurant should be there. So, if it ever doesn’t work, we can go back and look at why.”

And there have been a few times it hasn’t worked. “We closed Brompton Road early on,” says Vincent. “It was behind a tree, you couldn’t see it from the street, and people used to just want to smoke their big pipes. The trouble is it can be a £600,000 mistake when you get one wrong.”

Diversification

Given the high stakes of a restaurant portfolio, Vincent is keen to diversify into other areas. Hence a three-year contract with Sainsbury’s in October. The deal stipulates exclusivity on a range of 14 popular Leon SKUs including aioli, ketchup, chilli sauce, olive oil and a range of sourdoughs.

This foray into grocery was, Vincent admits, a “big leap”. But it was a necessary one to create “really exciting products that people are actually excited about” in supermarkets. “Fast food is fundamentally fun – if you think about McDonald’s, they’re selling fun as well as food – so how can we bring fun and excitement and real innovation into grocery, where often perhaps grocery companies have been a little bit monolithic?”

The early signs are positive. The aioli has already been rolled out to a further 300 stores after sales exceeded their forecast by a reported 60%. “Consumers are really excited about it. They’re writing about it and posting about it.”

Leon will be capitalising on that feedback with more products. Under Charlotte Di Cello, MD of Leon Grocery, it will launch three dips – houmous, tzatziki and pea & lentil – alongside a kefir. That will be followed by a range of compotes and preserves in February: raspberry, date & cardamom, and apple & fig (or ‘figapple’). Looking further ahead, Leon also has big ambitions for the freezer cabinet, as well as going deeper into chilled produce. “We have a very long list of things we would love to launch,” says Di Cello.

Snapshot

Name: John Vincent

Age: 48

Family: Married with two daughters

Pets: A golden retriever called Sunny

Potted CV: Sales and marketing at P&G; strategy consultant at Bain & Co; co-founded Leon with Henry Dimbleby and Allegra McEvedy

Best career decision: Starting Leon in 2004

Worst career decision: Not starting Leon sooner

Business idol: Jimmy Allen

Business mantra: Be more like water and trees; experimentation and consistency

Best piece of advice given or received: Do what you say you’re going to

Hobbies: I grew up sailing and cooking

Great books: Founders’ Mentality; The Hidden Life of Trees; Winning Not Fighting

Great films: True Romance; Léon

Desert island meal: Saffron risotto followed by fish and chips

Vincent stresses that grocery was far more than an afterthought for Leon. It would have happened earlier, if only it hadn’t “taken so long to get even half-good at restaurants”. “To try and do fresh fast food – it was such a new thing to do,” he says. “We’ve had to learn so much, and I think we just didn’t have the bandwidth to do grocery whilst also trying to reinvent fast food.”

Plus, there’s been the small matter of global expansion. It’s been 16 years since he set up the chain with Henry Dimbleby and chef Allegra McEvedy. But having assumed full responsibility in 2014, he’s been focused on rolling out the formula to seven countries.

The most exciting is the foray into the US. There are now three restaurants, all in Washington, with a further three planned in 2020. “The US is obviously a big focus. It’s the home of fast food, you’ve got to get it right. So many chief executives have screwed up by assuming the UK is the same as the US, it’s not at all. We’ve always known that’s going to be a long haul.”

In Europe, Leon has 11 further outlets in Norway, the Netherlands, Switzerland, Gran Canaria and Ireland, but Vincent is keen to open more. “It’s going to be about Paris, Barcelona, Madrid, maybe Lisbon as the first focus”, he says. He would also “love to do Australia, but the wages are so high”. “I just want it as an excuse to go to Australia,” he admits.

Then there are the more outlandish ambitions. Vincent is buzzing with ideas for the evolution of Leon beyond a restaurant chain. “It could be an app that links up all the suppliers in the world with all the fast food operators to make sure that on a Friday night, you go on your app and you find the five places local to you that have got good sustainability and welfare practices.” Essentially, Vincent wants Leon to be the “global hub for anything to do with good food”. “What you’ll see in the next couple of years from Leon is much more focus on being a digital hub, using the restaurants as one important channel for communicating that.”

His goals are unashamedly ambitious. “We need to grow at about 20% to 25% every year, do grocery globally, and be really good in America – those are our priorities.” And if he can solve the potato problem while he’s at it, all the better.