Natalie Cartmer, Account Executive, London
In recent months there has been a rise in activists targeting fine dining restaurants, disrupting service and even forcing temporary closures.
In November 2022 Animal Rebellion activists occupied celebrity chef, Gordon Ramsay’s flagship eatery in London – Restaurant Gordon Ramsay. Fourteen members of the group entered at around 6pm and occupied tables, eventually leading to the restaurant’s temporary closure around two hours later.1
This was no isolated incident. A month later, the same group launched a spate of protests affecting restaurants up and down the UK. In London, eight members of the group occupied tables at Heston Blumenthal’s Knightsbridge restaurant. While, at the other end of the country, fellow activists targeted the Michelin-starred House of Tides in Newcastle.2 Similar incidents have affected establishments like Salt Bae’s restaurant in London and chef Simon Martin’s Mana, in Manchester.3
Worryingly for restaurant owners, Animal Rebellion has pledged to continue its campaign calling for more plant-based menus.2
The impact of activism on restaurants
Whatever you think of their methods, it seems these kinds of protests are here to stay. In fact, they are part of a wider rising tide of activism focused on environmental, social and governance (ESG) (a set of standards measuring a business's impact on society, the environment, and how transparent and accountable it is4) issues affecting a range of sectors. These are not just driven by activist groups, but also by customers and shareholders too.5
However, for restaurants affected by activism tactics such as disruptive sit-ins, the impact can be far-reaching. Clearly, there’s the loss of custom that comes with service disruption and temporary closure, but there’s reputational risk too – particularly if activism is amplified via social media.
These are very real risks for any fine dining restaurant. Given the sector is still recovering from disruption during COVID-19 closures and train strikes, any loss of custom and lost income can have serious consequences. Good service and reputation are vital ingredients for success in a highly competitive market.6
The biggest worry is that the financial impact of temporary disruption or closure will be compounded by customers choosing to stay away in future. Customers might sympathise with protestors or worry about being caught up in future activism.
How to defend against restaurant activism
At present it seems that activists are largely targeting high-profile fine dining restaurants, though there’s no guarantee that their campaigns won’t target a wider range of outlets in future. With that in mind, it’s vital that all restaurants take steps to make sure they’re protected against activism.
As with any risk, the right approach is a combination of risk management – with a focus on ESG, activism and reputation – and the right insurance protection.
Managing restaurant activism risk
There’s no escaping the fact that interest in ESG is on the rise. In fact, many companies are under increased pressure from customers, activists and regulators to improve their ESG performance, while insurers are more actively scrutinising ESG policies.4
So, given that recent restaurant activism has a clear ESG focus, it’s important to understand the principles of ESG, assess current performance and make improvements where possible.
This may help to make your restaurant a less attractive target for activists. Although, despite its focus on sustainability and animal welfare, activism targeting Mana in Manchester demonstrates that there can be no guarantees.3
With that in mind, it’s also vital to take a detailed look at reputational risk and risk management – both in general and through an activism lens. You may need expert support with this, but there are a number of actions that you can take to both assess and manage risk from activists.
- Assessing the restaurant’s response to potential activism, especially to possible activist campaigns related to ESG.
- Considering whether the business would benefit from professional advice on how to avoid or minimise the risk of activism.
- Evaluating vulnerabilities that activists might exploit and, where possible, benchmarking your response and plans against those of your peers. This can help to identify possible weaknesses early and address them before an activist campaign can be organised.4
Restaurant activism and insurance
Another important step is to review your insurance arrangements, which should be undertaken in conjunction with risk management. This is to assess how well they respond to activism risk and its knock-on effects – like loss of custom, business interruption and reputational damage.4
Ideally this should be a wide-ranging review, looking at the restaurant’s insurance cover as a whole, as well as two particular covers, including:
- Directors’ and officers’ insurance (D&O): A standard D&O policy may protect individual restaurant directors against claims arising from activism, but do not generally cover attacks against the business itself.
- Business interruption insurance: Similarly, while business interruption insurance is designed to help replace lost income during a period of disruption. Many policies are limited to physical incidents affecting property, such as fire and flood, so may not protect against losses incurred through activism.
During this kind of review, the key is identifying gaps in cover that may leave a restaurant exposed in the event of an activism incident. Then you can put comprehensive protection in place - potentially including specialist activism cover - that directly addresses the threats identified during risk assessments.
This can be a complex and time-consuming task, so we advise seeking support with everything from reputational risk management through to insurance reviews.
Help is at hand: Silent insurance review for restaurants
If you would like more information about dedicated activism insurance cover. Or if you need help to review your restaurant insurance arrangements in the light of increased activism risk, contact me at Natalie.Cartmer@marshcommercial.co.uk or ask a Marsh Commercial specialist to carry out a confidential, silent insurance review*.
*Full details silent insurance reviews will be explained to you upon request.