In hard times like these, retail and leisure landlords need to be creative. In an increasingly challenging market, sometimes shops and restaurants just aren’t enough to get people through the door.
Former banker Johannes Hainlein reckons he has a potential solution. How about the smell of fresh popcorn to lure people through the door?
How about getting Popppy?
Popppy popcorn is a German popcorn vending machine business which has taken off in its homeland and Switzerland and is looking to replicate that success in the UK.
“The vending machines help to create a fun environment, and a lot of sensible investors in the real estate world will understand that they can use this to work their assets better,” explains Hainlein.
The former Lazard M&A banker has quit the City to focus on running Popppy’s UK operation from the garage of his home in West Kensington, W14.
“Amazon, Apple, Google, Disney and Mattel all started in garages too,” he laughs.
Despite only recently launching in the UK, Popppy has already become flavour of the week with some retail and leisure landlords.
“Amazon, Apple, Google, Disney and Mattel all started in garages too.” – Johannes Hainlein
It has already secured partnerships with Orion Asset Management and Sovereign Centros and is trialling the concept with intu.
Freedom Leisure, which owns the Guildford Spectrum Leisure Centre in Surrey, has also signed up and says the machines work well near the ice rink as a snack for parents watching children, or during ice hockey games.
But Hainlein has big plans for the UK business. He wants around 150 sites in the UK by the end of this year, initially focusing on areas inside the M25 and the South East before looking for national coverage.
Hainlein‘s garage is full of vending machines ready to be delivered and installed and, with the funding place, he is ready to get popping.
No-brainer
One of the major advantages for landlords, he says, is that Popppy vending machines cost them nothing and require little to no maintenance, as the machines are self-cleaning.
Popppy pays for the installation, maintenance and re-stocking of the machines and, in return for space in a centre, gives the landlord 20% of the net sales. If a landlord does choose to take on maintenance and re-stocking, that share rises to 25%.
Hainlein says Popppy is typically looking for five-year deals with landlords, but is willing to be flexible.
RETAIL IN CRISIS: Everything you need to know
The machines, which cost around €6,500 (£5,800) each to make, require a single plug socket to work. The popcorn is priced at €2-4 (£1.80-£3.50) per portion, and in successful locations in Germany it sells in the region of 90-100 portions per day.
It accepts cash and contactless payment and the popcorn-making process takes 90 seconds.
For Hainlein, it is a no-brainer – a no-cost solution to increasing dwell time and keeping customers happy.
“The whole tourist environment works really well for it too,” he explains. “Think of the queue outside Madame Tussauds, for example. If you think of it strategically, especially where there are children having to wait, then that is the perfect environment.
“We haven’t tried the whole office environment yet,” he adds. “But that could work very well in a large office environment, particularly if you have multiple tenants in there.”
Health benefits
The major difference between Popppy popcorn and the traditional stuff is that the flavour is included in the corn before it is made, and comes out when the corn is heated in the machine – meaning no fats, oils or butter.
Health wise, this creates a fat-free snack that is only 130 calories per portion, and also vegan.
With Britain now the fattest country in Western Europe – and obesity set to overtake smoking as the most preventable cause of cancer – delivering confectionery that doesn’t add to this problem is paramount.
“We had a vegan over for dinner the other day who was very excited to be able to eat popcorn, because usually it is made with butter.” – Johannes Hainlein
In a bid for a healthier nation, getting property landlords on board with less calorific snacks may not be such a bad idea, particularly as health and wellness become increasingly important in the industry.
“I have one of the machines at home in my front entrance, and everybody that comes by says that it tastes better than what they are used to,” says Hainlein.
“We had a vegan over for dinner the other day who was very excited to be able to eat popcorn, because usually it is made with butter.
“It creates a fun environment which I think a lot of sensible investors in the real estate world will understand.”
Although Popppy has mostly focused on retail and leisure environments for its machines, Hainlein thinks that the health aspect is something that could make it work well in other environments.
“Think about hospitals – when people take chocolates to sick people, that’s not as nice as popcorn. It would also be a good alternative to junk food in schools as a healthy snack,” he says.
Flexible concept
Hainlein is already in discussions with a number of UK landlords and is confident his expansion plans will be a success.
“To the untrained eye then the vending machine industry is quite odd, but it is a big open market here in the UK. The concept can work in offices, leisure centres, schools and adventure parks. Anywhere that is a tourist attraction,” he says.
“The set-up is fluid and flexible and I think we stand a very fair chance of having 150 [in place] by the end of this year, if not even more.”
With the logistics and funding in place and a production line geared up to build as many as 200 units a month, it may soon be time for Hainlein to move out of his garage.
To send feedback, e-mail amber.rolt@egi.co.uk or tweet @AmberRoltEG or @estatesgazette
