A Deep Dive into NZ’s 5 Largest Food & Beverage Operators
Beneath the surface buzz, especially after the whirlwind of the last few years, there are some serious strategic shifts happening.
Big players have been making some big moves – acquiring, merging, restructuring – and their decisions ripple right through the industry, impacting everything from supplier contracts and staff opportunities down to the menu choices we see as customers.
We’ll be taking a deep dive into five of the most influential hospitality operators in Aotearoa right now. We’ll look closely at their origins, how they're structured, where their revenue comes from, who's calling the shots, and the real-world challenges they're wrestling with. Think of it as understanding the blueprints of the industry's biggest engines: Restaurant Brands NZ (RBD), Compass Group NZ, Star Hospitality Group, Good Group Hospitality, and Foley Hospitality. This deep dive aims to unpack their inner workings and what they reveal about the state of play in NZ hospitality.
1.Restaurant Brands NZ
Origins & Ownership
Restaurant Brands New Zealand (RBD) feels like it’s been part of the Kiwi landscape forever, and in many ways, it has. They started out in the late 80s and mid-90s by acquiring the local master franchise rights for KFC (1989) and Pizza Hut (1995). They hit the NZX back in 1997 and steadily grew, adding Carl's Jr. to their stable in 2011 and, significantly, launching Taco Bell here in late 2019 – a move likely smoothed by their earlier US$105m acquisition of the Taco Bell/Pizza Hut franchisee in Hawaii and Guam in 2017. They even had a long run operating Starbucks Coffee in NZ from 1998, before deciding to sell that off in 2018 to focus purely on the high-volume fast-food game.
The real sea change came in 2019 when Mexico-based Finaccess Capital snapped up a controlling 75% stake [finance.yahoo]. This wasn’t just a line item on the share register; it plugged RBD into a global network with serious financial backing – the NZ$578 million partial takeover price reflected that [Reuters] – and gave them access to international QSR know-how from an investor with skin in the game elsewhere. You see Finaccess’s influence right at the top, with their CEO José Parés Gutiérrez now chairing RBD’s board [Nzherald]. While still an NZX-listed company adhering to local rules with independent directors, this structure fundamentally changed their capacity for growth, enabling huge offshore acquisitions like buying up significant chunks of the KFC/Taco Bell network in California (69 stores in 2020) and entering Australia via 42 KFC stores in NSW (2016).
Business Model & Market Footprint
At its heart, RBD is about executing the franchise model with precision. They hold the master rights for the big Yum! Brands (KFC, Pizza Hut, Taco Bell) and CKE Restaurants (Carl's Jr.) stables in NZ. Most of their revenue comes from directly operating the lion's share of these outlets – particularly the 100+ KFC restaurants nationwide, which are the engine room of the NZ business (just look at FY18 figures where KFC pulled in $320m of $421m NZ sales). They do earn franchise fees too, notably from supporting the independent operators running many regional Pizza Hut stores, a result of a strategic move back in the 2000s to franchise out those locations. Their NZ operational footprint currently stands at 155 company-owned restaurants (as of FY2024 [nzherald]) spread across more than 70 towns and cities, serviced by regional offices and a key Auckland supply hub. While international operations now exist, NZ remains the core, delivering 42% of total group revenue in FY2024 [finance.yahoo]. This sheer scale gives them immense leverage in procurement and efficiency across their brands.
Financial Pulse & Performance
RBD’s overall financial performance shows a business generating massive top-line revenue, crossing the billion-dollar threshold in recent years. For the full year 2024, total group store sales reached a record 1.394 billion, marking a solid 5.4%. 26.5 million for FY24 – which works out to only around a 1.9% margin on those huge sales figures. Encouragingly though, this profit figure represented a significant 62.6% jump from the previous year, clearly signalling recovery traction and the impact of cost-control efforts post-pandemic [nzherald].
The real engine room, undeniably, was New Zealand. The NZ segment delivered the highest profit of any region RBD operates in, hitting $41.7 million (a hefty increase from 26.7m the year before). This stellar local result was powered by record sales from the ever-popular KFC brand and the successful ramp-up of Taco Bell, reflected in positive same-store sales growth of +4.6%, 625.9 million for the year.This strong Kiwi performance was crucial in bolstering the overall group result, helping offset weaker performance in the Australian and Californian divisions which were grappling more severely with cost-of-living pressures and higher input costs.
Group EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortisation) also showed gradual recovery, reaching 194.3 million in FY24, or 13.9%, 1.30 billion by 2024, supporting ongoing new store builds (like the eight opened in NZ during FY24) and crucial refurbishments across the network.
Leadership & Governance
RBD saw a significant leadership transition recently. Russel Creedy, Group CEO for nearly 16 years who steered their international expansion, retired in March 2023 [nzx]. Showing faith in homegrown talent, Arif Khan, the former NZ General Manager instrumental in the Taco Bell launch, stepped up first as Acting CEO then Group COO [nzherald]. Julio Valdés became the new CFO in 2023. Finaccess's influence is clear at the board level, providing strategic guidance, but independent directors ensure local focus and compliance. Strong relationships with franchisors remain vital – Yum! Brands, for instance, retains approval rights over major acquisitions involving their brands. Operationally, divisional CEOs run each geographic territory, reporting up the chain [annualreports].
Strategic Moves & Innovation
RBD’s strategy hinges on strong franchisor partnerships and selective, often large-scale, acquisitions which provide diversification and operational learning (e.g., the Hawaii deal teaching them Taco Bell ops pre-NZ launch). Partnering with delivery aggregators like Uber Eats and Menulog, alongside developing their own robust online ordering apps (especially for KFC and Pizza Hut), has been critical in capturing the booming digital sales market. Internally, they're adopting data analytics and AI forecasting for efficiency. While QSR loyalty programs aren't huge traditionally, they've launched the Taco Bell rewards app globally and use tactical promotions for Pizza Hut. Sustainability is increasingly visible, aligning with global Yum! targets on packaging (reducing single-use plastics), responsible sourcing (cage-free eggs), energy efficiency (LEDs), and food waste (partnering with food rescues), highlighted via programs like "KFC For Good" [Annual Report details]. They also respond to health trends with menu diversification.
Reputation & Risks
RBD benefits enormously from the public affection for KFC in NZ – it’s almost a cultural icon. Media coverage often focuses positively on their financial results and expansion [nzherald]. However, they operate under the constant shadow of fast-food critiques (health impacts, low wages) and have a history of labour disputes, from the significant "SuperSize My Pay" campaign in the mid-2000s [labornotes] to more recent strikes over wages. Managing customer satisfaction across thousands of daily interactions with over 3,700 NZ staff [annualreports] is a huge operational challenge where lapses quickly hit social media. Key business risks revolve around managing margins amidst inflation, intense QSR competition, changing consumer health perceptions, ensuring supply chain continuity, navigating evolving labour regulations, and adhering strictly to franchisor standards. They tackle these through scale efficiencies, targeted innovation, proactive pricing, and leveraging their corporate structure, but it remains a high-wire act.
2. Compass Group NZ
Origins & Ownership
Most Kiwis probably encounter Compass Group NZ’s services regularly without ever registering the name. Since setting up here in 1987, this wholly owned subsidiary of the UK-based global giant, Compass Group PLC, has become the dominant force in contract catering across New Zealand [compass-group]. They didn't grow by building cafes, but by strategically winning long-term contracts to manage food and support services within institutions. Being part of the global behemoth gives Compass NZ access to unparalleled systems, buying power, and international expertise, even though day-to-day operations are managed locally under the NZ entity structure. Key moments in their history include landing massive government deals, notably the transformative 15-year hospital catering agreement across multiple DHBs starting in 2014 [BusinessDesk], which significantly scaled their healthcare presence via the Medirest brand.
Compass Group NZ
Business Model & Market Footprint
Compass NZ's model is fundamentally B2B contract services. They don't run restaurants for the public; instead, they secure long-term agreements to manage foodservice and support services within client organisations – hospitals, schools (Chartwells brand), universities, aged-care facilities, corporate offices (Eurest brand), defence bases (ESS brand), and even high-end venues (Restaurant Associates arm). Their revenue comes via fixed fees, per-meal subsidies, management fees, or sometimes direct sales in on-site cafeterias, rather than public retail. This model has embedded them deeply across over 300 locations nationwide. A dramatic illustration of their scale and strategic importance came in early 2024 when they took over the massive Ka Ora, Ka Ako school lunch contracts from the collapsed Libelle Group, boosting their daily school meal output to potentially over 125,000 meals [RNZ] – a volume likely making up a significant chunk of the MoE programme's estimated $130m annual spend across all providers [BusinessDesk]. They also cater for major corporates like Fonterra and manage Air New Zealand lounges.
Financial Pulse & Performance
The sheer scale translates into huge revenues – likely comfortably above $200 million annually based on recent growth and contract wins [BusinessDesk]. However, profit margins in contract catering are famously thin. Historical analysis showed an incredibly low average net profit margin of just 2.5% ($55m profit on $2.2B revenue). Profitability has fluctuated, doubling post-2014 hospital contract to $7.6m (2018) but dipping during COVID lockdowns ($3.2m in 2020) before recovering strongly to ~$7m in 2021 [BusinessDesk].
Their financial strategy relies on operational efficiency – impressively reducing non-labour cost of sales over time despite inflation, likely via tough procurement. Labour remains their biggest expense (51 cents per dollar of revenue in 2021), sensitive to NZ's rising wage floor and demands for the Living Wage, especially in public contracts. While backed by the global parent's financial strength, the pressure to deliver returns is constant.
Leadership & Governance
Paul Harvey took the helm as NZ Managing Director promising a "fresh direction" as of 2024 , reporting into Compass's Asia Pacific structure. Governance is ultimately driven by Compass PLC in the UK, with strict adherence to global codes of conduct and compliance standards. Locally, a leadership team manages functional areas and sector-specific brands are overseen by dedicated managers. Governance often involves close collaboration with key clients like government agencies, acting almost as co-governors of service delivery.
Strategic Moves & Innovation
Compass's strategy is overwhelmingly focused on winning and retaining large, long-term contracts. While large-scale M&A is rare, they strategically absorbed the Libelle school lunch operation when it failed [RNZ], demonstrating their capacity. Key partnerships are with their institutional clients and essential suppliers like food distributors (Gilmours was noted). Innovation is often driven by global systems or client needs: deploying cook-chill systems like 'Steamplicity'; introducing digital ordering apps or cashless kiosks; focusing on nutrition; and increasingly highlighting sustainability efforts (halving food waste by 2030 goal, local sourcing, eco-packaging, exploring EVs for delivery, using the Waste Not platform) [compass-group].
Reputation & Risks
As a largely 'invisible' provider, Compass faces scrutiny mainly in sensitive public sectors. Perception has been mixed – praised for cost-efficiency but criticised for food quality perception (especially in hospitals [Health Coalition]) and the politics of outsourcing public services. Client satisfaction is paramount, monitored via KPIs, but managing expectations vs. cost realities is tough. Key risks are significant contract dependency (vulnerable to political shifts favouring insourcing), public sector cost pressures, critical labour shortages/costs for their massive workforce (est. near 5,000 staff [facebook]), crucial food safety compliance, potential supply chain shocks, and the persistent debate around privatisation. Their scale and global backing are major mitigants.
3. Star Hospitality Group
Origins & Ownership
The creation of Star Hospitality Group in early 2023 wasn't just another deal; it represented a major consolidation, instantly forming NZ's largest pub operator by bringing together Auckland's experienced Joylab group (est. 2008, formerly Barworks) and Wellington's prolific Kāpura collection (est. 2006) [starsocial]. This strategic consolidation brought over 50 diverse venues under a single umbrella, DB. The ownership structure is key: DB Breweries (Heineken subsidiary) holds the majority stake, deepening a long-standing JV relationship with Joylab. Crucially, Kāpura founders Jamie and Andrew Williams retained significant shareholding and pivotal executive roles (Chief Growth Officer and COO respectively) [DB], aiming to fuse corporate backing with entrepreneurial leadership.
Business Model & Market Footprint
Star operates a classic multi-venue model focused on pubs, bars, and restaurants, generating revenue primarily from food and beverage sales, plus functions. Their portfolio, inherited from Joylab and Kāpura, spans from neighbourhood pubs (The Postman's Leg) and gastro-bars (The Lula Inn) to rooftop destinations (Dirty Little Secret) and even fine dining elements (WOLF by Foxglove) [starsocial]. They dominate large parts of the Auckland and Wellington markets, with outposts in Hamilton and Tauranga/Mount Maunganui – though lacking a South Island presence. The DB relationship provides a 'tied house' advantage, likely boosting beverage margins. Economies of scale in procurement/shared services and the unified Star Social Rewards loyalty app are central to their strategy. They also replicate successful concepts like Rosie’s Cantina in new markets.
Financial Pulse & Performance
While private, Star Group's combined scale points to annual revenues likely well exceeding NZ$100 million. Both legacy groups were profitable pre-COVID, though Kāpura carried debt from expansion (their top 10 venues alone had a tentative $21.4m+ valuation in a failed 2021 deal [rnz]). Combined EBITDA margins could hit 10-15% in good conditions, aided by synergies and the DB link. DB's backing provides capital for venue refurbishment and potential future acquisitions (like targeting the South Island). Anecdotal signs suggest strong trading post-merger.
Leadership & Governance
The leadership team fuses both groups: Andy Roberts (ex-Joylab) as CEO, Andrew Williams (Kāpura co-founder) as COO, and Jamie Williams (Kāpura co-founder) as CGO [starsocial]. Experienced C-suite hires like CFO Adrian Emmanuel and CPO Hannah Cairns build corporate capability [starsocial]. Governance involves DB oversight (likely board level) but day-to-day rests with the hospo executive team. Integrating the distinct cultures and managing over 1,500 staff [starsocial] are key challenges, alongside strict compliance across 50+ liquor licenses.
Strategic Moves & Innovation
Future strategy likely involves acquisitions. Key partnerships extend beyond DB to sports (via CEO Roberts' board roles [starsocial]) and tech (building on Kāpura's use of ResDiary and SAP S/4HANA Cloud [resdiary, insidesap]). The Star Social Rewards app is a major digital loyalty tool. Sustainability efforts may align with Heineken's goals, potentially improving waste/energy efficiency and expanding concepts like the Fortune Favours brewpub.
Reputation & Risks
Star benefits from the strong reputations of its individual venues. The merger was seen positively by industry [drinksbiz]. Key risks include successful integration, managing the DB relationship vs craft beer demand, maintaining venue character to avoid a 'chain' feel, ongoing labour pressures, ensuring rigorous compliance, and delivering returns to DB. Success depends on realising synergies while preserving local charm.
4. Good Group Hospitality
Origins & Ownership
Against a consolidating market, Good Group Hospitality remains a powerful independent force. Founded in Queenstown by veteran Al Spary (late 90s) and strategically expanded by CEO/partner Russell Gray (since 2008), this NZ-owned group focuses laser-like on the premium "fun-dining" market [goodgroup]. Operating as a privately held company, their independence allows agility and owner-operator control, a distinction in today's climate. They've expanded from Queenstown to Auckland and notably into Australia from 2021 [onyamagazine].
Business Model & Market Footprint
Good Group’s entire model revolves around owning and meticulously operating a curated portfolio of premium restaurants and bars – they are operators, not franchisors. Their self-described niche is "premium 'fun-dining'" [goodgroup] – delivering the polish, quality ingredients, and theatre of fine dining, but set within a more vibrant, accessible, and energetic atmosphere. This isn't about stuffy formality; it's about memorable, high-quality experiences. Their key NZ brands exemplify this: the luxurious, meat-and-game focused Botswana Butchery (an institution in both Queenstown's historic cottage setting and Auckland's Ferry Building); the lively, stylish Asian-fusion White + Wong’s (also in both cities, with Auckland featuring the adjunct Sardine cocktail bar); and the elegant seafood-centric Harbourside in Auckland [goodgroup, scoop]. They also operate sophisticated bars like Harry’s Pool Bar in Queenstown, and historically managed the F&B at luxury spots like Eichardt’s Private Hotel, showcasing their ability to operate at the highest level.
Their footprint isn't about sheer numbers, but strategic placement. They operate roughly 8-10 core venues in NZ (a 2021 source mentioned 14 venues total then, possibly including smaller or now-divested bars [onyamagazine]), heavily concentrated in Auckland's waterfront/Viaduct and Queenstown's prime lakefront/downtown areas. These high-traffic, high-visibility locations allow them to capture significant spend from affluent locals, corporates, and crucially, the international tourist market. This reliance on tourism is both a major revenue driver (especially in Queenstown) and a key vulnerability, as painfully demonstrated during COVID border closures. Functions and private events form another vital revenue stream, leveraging desirable locations and venue capacities (Botswana's private rooms, Harbourside's large space are popular for weddings and corporate events).
Financial Pulse & Performance
While specific financials are private, Good Group is clearly a substantial business. Pre-pandemic, their venues were high-grossing operations (Botswana Auckland became a top performer soon after its 2011 launch). Revenue likely ran into the tens of millions annually. COVID hit them hard, particularly their Queenstown base; they received government wage subsidies for around 345 staff initially and reportedly had to make over 150 redundancies in 2020 to survive the collapse in tourism and lockdowns [nzherald]. Yet, their ability to "prudently manage through the crisis," utilising subsidies (approx. $2.3m mentioned), negotiating with landlords, and ultimately avoiding a forced sale speaks volumes about their underlying financial discipline and operational resilience. This contrasts sharply with the fate of competitor Nourish Group.
Their history shows careful financial management, such as the strategic sale of their three Wanaka bars in 2012 to reduce debt and refocus on core markets [odt]. This suggests a lean approach, prioritising profitability over growth for growth's sake. They likely achieve healthy EBITDAR margins in good times (perhaps 15-20% estimate pre-COVID) due to premium pricing, despite high costs (prime rents, top culinary talent). Their demonstrated ability to fund significant refurbishments (like Harbourside post-acquisition) and launch new concepts (White + Wong’s Akld 2016), plus the bold move into Australia post-COVID [afr], indicates confidence and access to capital, whether internal reserves or private backing.
Leadership & Governance
The enduring partnership between Al Spary and Russell Gray is central to Good Group’s stability and direction. Decision-making is concentrated, allowing for the entrepreneurial agility often lacking in larger corporations. Gray, a member of the Institute of Directors [onyamagazine], brings financial rigour, while Spary provides decades of industry wisdom. Hamish Klein, the Chief Operating Officer, who’s worked with GGH for almost a decade is the leader steering the ship in New Zealand, ensuring tight operational control and quality maintenance across venues in both Auckland and Queenstown, managed likely via small support offices in both centers. They’ve navigated external partnerships too, like working with investor Brett Gamble via Safari Hospitality for early Auckland expansion. The expansion into Australia necessitated appointing a dedicated CEO for Australia & NZ operations, suggesting a delegation structure in their efforts to scale internationally.
Strategic Moves & Innovation
Good Group's core innovation lies in developing and meticulously executing unique, high-end hospitality concepts. They acquire strategically (Harbourside, prime Ferry Building leases) and build brands (Botswana, White + Wong's) that become synonymous with quality. Partnerships are crucial – strong ties with premium suppliers (boutique wineries like Foley or Aotearoa Fine Wine Estates feature on lists, high-grade meat for Botswana) and luxury brands (like Moët & Chandon for events) enhance their offering and image. Digitally, they adopt necessary tools like online booking platforms (ResDiary/OpenTable) and leverage social media effectively, capitalising on their venues' aesthetic appeal. During COVID, they pivoted to offer at-home meal kits.
Sustainability seems ingrained pragmatically through their emphasis on quality local sourcing (Central Otago lamb, sustainable seafood aligning with Best Fish Guide principles) and reduction of single-use plastics. Their most significant recent strategic innovation is undoubtedly the international expansion, exporting their proprietary brands to competitive Australian markets (Sydney 2022, Melbourne planned), a bold move for an independent NZ group requiring new partnerships with developers and suppliers across the Tasman. They've conspicuously avoided franchising, safeguarding brand control.
Reputation & Risks
Good Group enjoys a strong reputation, built on consistently delivering high-quality food, service, and ambiance, leading to high customer satisfaction, positive reviews, and industry accolades (like Metro Top 50 recognition). Venues like Botswana Queenstown gain extra lustre from high-profile guest visits. They actively manage their media narrative, projecting resilience and quality [ODT]. However, their premium positioning brings significant risks: vulnerability to economic downturns affecting discretionary spending and tourism; intense competition for scarce high-end staff (chefs, sommeliers), particularly in Queenstown; constant pressure from high operating costs; fierce rivalry from groups like Foley and Savor; the inherent risks of international expansion (brand dilution, operational consistency); and the ongoing challenge of keeping established concepts fresh. As an independent, they lack the deep buffer of a corporate parent, making prudent financial management and operational excellence absolutely critical for continued success.
5. Foley Hospitality
Origins & Ownership
Foley Hospitality represents a significant changing of the guard for some of New Zealand's most recognised and respected premium dining brands. This group is the rebranded entity of the well‑established Nourish Group, whose legacy stretches back to the late 1990s. Founded by experienced restaurateurs Richard Sigley and Paul Juriss, Nourish built an impressive collection, including Auckland waterfront icons Soul Bar & Bistro (opened 2001) and the former fine‑dining stalwart Euro, expanding over time with powerhouse brands like Jervois Steak House (JSH) (first in Auckland 2007, later Queenstown), Wellington staples Shed 5 and Pravda Café, and the popular The Crab Shack (initially Wellington, then Auckland). By the late 2010s, Nourish was arguably NZ's premier independent upscale hospitality group.
The seeds of change were sown in 2013 when American billionaire Bill Foley, already establishing a significant presence in NZ through Foley Family Wines, acquired a strategic 24.9 % stake in Nourish Group via Foley Holdings NZ. This partnership offered Nourish capital and potential wine synergies while allowing operational independence. However, the severe headwinds of the COVID‑19 pandemic appear to have significantly impacted the group. After a potential $21.4 million (plus $5.9 million earn‑out) sale of ten venues to Good Spirits Hospitality dramatically collapsed in late 2021 due to “COVID uncertainties”, Foley moved decisively. In early 2022, Foley Holdings acquired the remaining 75.1 % of Nourish for just $9.3 million – a valuation starkly lower than the earlier proposal, indicating the financial pressure Nourish was under after prolonged lockdowns (especially in Auckland). This move made Foley Holdings the 100 % owner, leading to the rebranding as Foley Hospitality.
The ownership structure now firmly places these iconic restaurants within Bill Foley's vast international portfolio, which spans wine (Foley Family Wines, including NZX‑listed Foley Wines Ltd), luxury tourism (like NZ's own Wharekauhau Lodge), and even US sports teams (Vegas Golden Knights). While Foley Hospitality operates as a New Zealand company run by local management, the ultimate strategic direction and financial backing come from Foley, creating clear opportunities for vertical integration and cross‑promotion.
Business Model & Market Footprint
Foley Hospitality operates a diverse portfolio of ten venues across Auckland, Wellington, and Queenstown, each targeting specific segments within the premium market. The core business model remains focused on generating revenue through high‑quality on‑premise food and beverage sales, alongside lucrative functions and events. Their Auckland presence is strong: the high‑volume, high‑energy Soul Bar & Bistro (Viaduct, ~300+ seats including deck); the specialised fine‑dining JSH in Ponsonby (~60‑80 seats); the beloved neighbourhood Italian Andiamo in Herne Bay (~50 seats); the modern downtown gastropub The Brit in Britomart (with its upstairs Talulah Tiki Bar); and the wine‑focused Somm Wine Bar & Bistro (Commerce St). In Wellington, they hold prime waterfront spots with the fine‑dining seafood institution Shed 5 (~100 seats) and the more casual The Crab Shack, alongside the all‑day CBD bistro Pravda Café & Grill. Queenstown features the crucial tourist‑magnet JSH (~50 seats).
This multi‑concept approach allows them to capture various dining occasions, from power lunches at Pravda to celebratory dinners at JSH or casual family meals at The Crab Shack. A key strategic element under Foley is the explicit synergy with Foley Wines. Expect to see labels like Martinborough Vineyard, Te Kairanga, Mt Difficulty, and Vavasour heavily featured, likely benefiting beverage margins and enabling exclusive wine experiences such as winemaker dinners, especially leveraged through Somm Wine Bar. Functions are vital, capitalising on venues like Soul (which historically hosted major events like America’s Cup functions) and Shed 5's desirable locations and private dining spaces. Centralised marketing and procurement across the ~300+ staff likely employed group‑wide provide operational efficiencies.
Financial Pulse & Performance
The stark difference between the failed $27 million potential valuation for Nourish in late 2021 and the $9.3 million price actually paid by Foley in early 2022 highlights the severe financial impact of the pandemic. Nourish likely carried significant debt and faced liquidity challenges after multiple lockdowns. Pre‑COVID revenues were substantial (likely $30‑40 million+ annually across the group, with high‑performers like Soul possibly generating $10 million alone historically). Profitability, while decent for the premium segment (maybe 8‑15 % EBITDA margins pre‑COVID), would have evaporated during closures.
Foley's takeover injected crucial capital stability, presumably clearing legacy debt and allowing the business to focus on recovery. With borders reopened and city centres reviving through 2023‑24, performance is undoubtedly rebounding strongly – Foley himself has publicly noted optimism for double‑digit growth. Venues like Soul are likely seeing significant bounce‑back. While labour and food cost inflation remains a persistent drag on margins across the industry, Foley's deep pockets provide a buffer, allowing investment in maintaining quality and offering competitive wages to retain staff from the estimated 300+ strong workforce. The group's portfolio is also leaner post‑Nourish (e.g., the closure of the renowned but perhaps past‑its‑prime Euro restaurant), which could improve overall profitability per venue. Foley is likely focused on sustainable long‑term returns and the strategic value these restaurants add to his wider ecosystem, particularly as prestigious outlets for his wines.
Leadership & Governance
The transition to Foley ownership saw significant leadership changes. Nourish founder Richard Sigley stepped back from the CEO role. In 2023, Mike Higgins, bringing a strong corporate marketing background from outside traditional hospitality (ex‑Clemenger BBDO), was appointed CEO to drive growth and integrate Foley's vision. Critical culinary continuity is provided by highly‑regarded chef Gareth Stewart, elevated to National Executive Chef across all ten venues. Experienced General Managers in each venue remain vital for day‑to‑day operations. Governance now flows through Foley Holdings, likely involving Foley or his key representatives, ensuring strategic alignment and financial discipline. This shift brings more corporate rigour (KPIs, reporting) and potentially access to global best practices and resources, but the key challenge is maintaining the unique service culture nurtured under Nourish's founder‑led era. Compliance standards (liquor licensing, H&S) are likely receiving even stronger focus under the new high‑profile ownership.
Strategic Moves & Innovation
The headline strategy is maximising synergy with Foley Wines, visible through wine lists, concepts like Somm, and potentially linking restaurant loyalty programs (like the old Nourish Passport) with Foley’s international Foley Food & Wine Society. Culinary innovation continues under Gareth Stewart, keeping menus fresh and participating in key food events. Digitally, they are likely investing in sophisticated CRM and reservation systems (possibly upgrading from ResDiary to platforms like SevenRooms for a unified customer view) and leveraging strong social media marketing for each iconic venue. Expansion could occur through further acquisitions (capitalising on Foley's resources) or replicating the more casual Crab Shack concept. Partnerships may extend beyond traditional supplier deals (Moët Hennessy at Soul) to include unique tie‑ins leveraging Foley’s other interests (Wharekauhau Lodge, US sports teams). Sustainability efforts build on Nourish’s existing practices (e.g., sustainable seafood sourcing aligned with the Best Fish Guide at Shed 5, plastic reduction), potentially enhanced by corporate oversight and alignment with Foley Wines' certified sustainable practices. Strategic portfolio adjustments, such as closing Euro and launching Somm/The Brit, show adaptability to evolving market trends.
Reputation & Risks
Foley Hospitality inherits enormous brand equity and customer loyalty attached to venues like Soul, JSH, and Shed 5. The acquisition was largely seen by media and industry as positive, securing the future of these beloved institutions with strong financial backing. Maintaining that goodwill is crucial. Risks include potential negative reaction if the wine synergy feels overly forced, navigating the challenging cost and labour environment without compromising premium quality, successfully managing the cultural shift from entrepreneurial to corporate, keeping legacy brands relevant against intense competition (Good Group, Savor), and managing the heightened compliance and reputational scrutiny associated with a globally recognised owner. Successfully blending Foley's resources and vision with the unique essence of each restaurant is the key ongoing challenge.
Pulling it Together
Looking across these five distinct operators, the shared pressures are stark, yet their chosen paths diverge significantly, offering rich insights into NZ hospitality's current state:
Ownership Truly Dictates Play
Strategy clearly follows ownership. Finaccess fuels RBD’s global QSR march; Compass PLC underpins massive contract scale; DB Breweries seeks pub network synergy for Star; Bill Foley integrates wine across his hospitality assets; while Good Group's independence fuels focused premium expansion. The money and the mandate come from the top, shaping everything.
Diverse Paths to Scale
Size matters, but how it's achieved varies. RBD uses franchise replication (155 NZ stores). Compass builds scale through massive service volumes (300+ sites, ~5k staff). Star achieves pub density via merger (50+ venues, ~2k staff). Good Group (~8-10 NZ venues, ~3-400 staff) and Foley (10 venues, ~300+ staff) demonstrate scale through portfolio curation of premium brands.
The Universal Hospo Squeeze
Everyone is grappling with the same brutal fundamentals. Input costs relentlessly climb, squeezing margins (RBD's sub-2% net vs Compass's ~2.5% historic). The labour crisis is acute across all segments, demanding higher wages and impacting service. This drives investment in digital efficiency (apps, CRM, booking systems) and pushes towards greater sustainability focus.
It Always Comes Back to People
Despite corporate overlays, hospitality lives or dies by its people. Managing large teams under complex NZ labour laws is a huge operational factor. Retaining key talent – from GMs and exec chefs to reliable frontline crew – is arguably the critical success factor. This human element is where strategic plans meet reality. (Joshua - A thought here: Seeing these challenges reinforces just how vital effective HR strategy and genuine people investment is for any operator, big or small, aiming to thrive long-term in this industry.)
To Close
New Zealand's hospitality sector is a complex arena where these major players exert significant influence through distinct strategies. Restaurant Brands, Compass Group, Star Hospitality, Good Group, and Foley Hospitality each offer a unique case study in navigating intense pressures while seeking growth. Examining their operations – their financial realities, leadership moves, strategic bets – provides crucial insights for anyone involved in this vital industry. Their ongoing evolution continues to shape the experiences on offer across Aotearoa. The pulse remains strong, driven by innovation, resilience, and the enduring hard work of its people
