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Thu 17th Oct 2013 - Craft brewers, Greene King, K10, Marston's and Prezzo

Story of the Day:

Mezze begins private equity talks as it eyes roll-out: Mezze, the six-strong West Country operator led by Alex Tryfonos and now turning over £7m a year, has begun talks with potential private equity backers as it plans the next stage of its growth. It is understood that the company is in early stage discussions with Risk Capital Partners and Piper Private Equity. Tryfonos told Propel: “We are looking seriously at private equity backing as an option. We have a roll-out model in place and would like to open 15 sites over the next three years. The banks are now beginning to lend – so I see a few more options now we’ve hit the £7m turnover mark.” Mezze has two more openings lined up for 2014 after opening four sites in the past 18 months. Its most recent opening, The White Lion in Portishead, Somerset, an Enterprise Inns site, has been averaging takings in excess of £40,000 a week. The pub is a short distance from Portishead marina and had been closed since October 2010 before a £1.6m investment, with Enterprise Inns making its biggest investment of 2013 with a contribution of £600,000. Mezze at The White Lion now features a new roof top terrace and a Mediterranean garden. The new site is the third Mezze opening of the year after additions in Clutton, Somerset and Ham Green, near Bristol.

Industry News:

Brewdog founder James Watt – we need a definition of craft beer: Brewdog founder James Watt has argued that a clearer definition of craft beef is needed to protect producers and consumers. He said: “I categorically believe we need to define craft beer in order to protect the fledgling craft beer movement in the UK and in Europe. I believe if we do not look to put an industry recognised definition on craft beer then the large, monolithic brewers will simply exploit all that we have worked so hard to build.” Watt also argued a definition is required to guide consumers in this “new and emerging category in the UK” and to ensure that true craft brewers can charge a fair and sustainable price for their beers. He added: “We want retail stores, bars, restaurants and hotels all to have a craft beer section in their offering. It is almost impossible to get them to commit to this without being able to offer them an official definition of what craft beer is. What we then don’t want is for them to a create a craft beer section in their shop or menu only for this to be carpet-bombed by beers that are not craft. I also accept that any definition will be at least slightly controversial, that it will be imperfect and that people will love citing potential exceptions (as they do in America too). However, I certainly don’t believe these are reasons not to put an official definition in place. If people focus on the bigger picture rather than small exceptions, its benefit is undeniable to everyone who loves great beer. I also propose that the definition of craft beer is a beer brewed by a craft brewer at a craft brewery. The challenge then becomes around defining craft brewer and not craft beer.” Watt argued that a craft brewer should be: small (less than 500,000 hectolitres a year), independent (not more than 20% owned by a non-craft brewer), authentic and honest.

Vince Cable calls on ONS to provide more reliable data on zero hours contracts: Business Secretary Vince Cable has asked the Office of National Statistics to take a closer look at how it draws up data on zero hours contracts after concerns over the reliability of existing data. The ONS estimates there are 250,000 people on zero hours contracts but the Chartered Institute of Personnel and Development thinks the number is at least four times bigger. The ONS reports that the problem in collecting reliable data arises because existing surveys ask people if they work on a shift basis but doesn’t then ask if a zero hours contract applies.

Domino’s to launch fewer items, put focus on digital innovation: Domino’s Pizza in the United States is to reduce new menu launches and put a new focus on digital innovations that improve customer experience, according to chief executive Patrick Doyle. “We’re running national television (ads) talking about the speed and ease of ordering digitally from Domino’s, which is not something we’ve taken head-on before,” he said. “We’ve still got a very good pipeline out there, but we’re not in the ‘product of the month club’ anymore. We’re building momentum by focusing on fewer, bigger things that truly enhance the experience for the customers.” He pointed to the chain’s current push for customers to create their own “pizza profiles” on Domino’s digital ordering platform, which now accounts for about 40% of its orders in the US, as an example.

Britain’s high streets ‘changing from retail to experiential’: The nation’s high streets are changing from a primary location for retailers to “experiential places”, with growing numbers of food and beverage outlets, according to the Local Data Company. LDC’s research into the number of town centre businesses opening and closing found that in the top 500 town centres, convenience stores, coffee shops and cheque-cashing outlets all saw their numbers rise in the first six months of the year, but shops selling non-perishable stock or “comparison goods” declined by 0.9%, with shops exposed to competition from e-commerce hardest hit, with an overall decline of 13%. Pubs and off-licences also saw numbers fall as more people shifted to buying alcohol in supermarkets. Matthew Hopkinson, director at the Local Data Company, said: “With nearly 50,000 businesses having opened or closed in the first half of the year it is clear that there are significant changes taking place. At the top level it is positive news, with positive growth, but more detailed investigation shows that it is the independents that are positive, while the multiples have declined. Dig deeper and you will see that the country’s retail locations are changing from a primary location for comparison goods retailers to experiential places, with growing food and beverage outlets, services and entertainment. The data shows the significant ongoing decline of traditional shops, with food, beverage and entertainment taking their place. The pressure from online competitors, supermarkets and out-of-town providers will only increase. The big question is, how aware are the stakeholders in our retail places of these changes, be they the local authorities, banks, occupiers or investors?”

ALMR hails Super Tuesday after three councils withdraw restrictive measures: The Association of Licensed Multiple Retailers (ALMR) has welcomed decisions on Tuesday from three local authorities to vote against imposing restrictive measures on pubs and bars. Strategic affairs director Kate Nicholls said: “(It) really was the trade’s Super Tuesday, where our concerted efforts to convince councils of the merits of working in partnership with us and against EMRO and levy consultations came to fruition. In Warrington, we successfully convinced the licensing committee that an EMRO would be hugely damaging to local businesses, with trade simply migrating away. In Woking, the licensing committee rejected a proposal for a levy and an EMRO after we persuaded them of the merits of partnership working, and in Norwich we forced a rethink and delayed proceedings until the new year.”

Cambridgeshire celery awarded protected status: Celery from the Cambridgeshire Fens has been awarded special protection under European Union labelling laws. Fenland celery is the first English vegetable and the 55th British food to earn recognition for its quality, history and links to a specific area.

Company News:

McDonald’s plans marketing drive for premium McCafe sub-menu: McDonald’s is planning a marketing drive in 2014 for its McCafe brand, under which it is unifying its premium drinks and sweet snacks. The McCafe logo appeared on hot drinks and small carry-out bags for its baked goods from yesterday (16 October) as the restaurant looks to drum up awareness after the brand’s soft launch earlier this year. The sub-menu was introduced nationwide to bring together McDonald’s treats and desserts items, but has only been promoted through its iced fruit smoothies and iced frappés to date. It is being led by the launch of the McDonald’s Mocha today, which is being promoted in-store and via a voucher from the brand’s mobile app.

BII Licensee of the Year wins marketing director role after Propel story: The BII Licensee of the Year 2012, Mahdis Neghabian, has been hired as the marketing director of the publisher Inapub after her availability was advertised in a Propel story. Neghabian said: “I am so excited to be joining a young and positive company that is doing so much to help the licensed trade. I was keen to stay in the industry and this is the perfect opportunity to use the skills I have gained to help other pubs across the country grow their business.” She won the coveted Licensee of the Year title in 2012 for her work in transforming the fortunes of her North London pub, The Camden Eye. After seven years, which included taking turnover to more than £1m a year, she left the job last month. InaPub chief executive Barrie Poulter said: “We are delighted to welcome Mahdis to our growing team of talent at Inapub. Her appointment highlights our ambitions as the company continues to go from strength to strength. Mahdis’s vast experience will be a huge benefit to us in communicating our message and helping licensees make the most of our online platforms that are becoming increasingly important to pubs across the country. We saw the story that Mahdis had stepped down as licensee of The Camden Eye in Propel and got in touch. She is a perfect fit for our team at Inapub, where actual experience of running pubs is part of our DNA.” Neghabian was overwhelmed by responses after Propel carried the story on her departure. She told Propel: “I got an overwhelming amount of response – I spent the whole day answering emails, phonecalls and text messages.”

Greene King to re-open historic hotel destroyed by fireworks: Greene King will re-open one of its Old English Inns sites, the Ryde Castle Hotel on the Isle of Wight, tomorrow (18 October) 18 months after its roof collapsed because of a fire caused by fireworks being set off from the roof. The historic castle was built by Henry VIII to help defend England against the Spanish.

Compass Group opens 50th franchised Costa site: Compass Group has opened its 50th Costa franchise site, in Moorfields Eye Hospital, London. The partnership between Costa and Compass started in 2008, when the first full store opened at Ealing Hospital, West London. A steady one store a month has been opened since then. Oliver Cock, commercial managing director at Compass Group UK & Ireland, said: “The Costa brand is popular across our business and it’s great to be able to celebrate this successful partnership with the opening of our 50th store, with many more set to follow in the coming months.”

Wetherspoon opens in Ashby de la Zouch: JD Wetherspoon is to open in Ashby de la Zouch, Leicestershire on October 22 after spending £1.6m redeveloping the Grade II listed Shoulder of Mutton, in Market Street. The new outlet will be open from 8am until midnight seven days a week. Food will be served throughout the day, until 11pm every day. Children, accompanied by an adult, will be welcome in the pub until 9pm. However, as a condition on the licence, both the adult and child (babies and toddlers excepted) must order a meal, if the adult wishes to consume alcohol.

Couple plan more micro-pubs after success of first: Julia Charlton and Gareth Waite are planning to open more micro-pubs in Nottinghamshire after the success of their first, the Beer Shack. The Beer Shack, which opened in Nottingham in August, was the second pub of its kind in the city. The pub, which has a capacity of around 35, has served more than 70 different beers and ciders so far. Waite said: “It is going well. We are usually busiest on the weekends, and sometimes on a Saturday night we have had to turn people away because we are too full.”

Marston’s share price rose 58-fold during Thompson tenure: Marston’s saw its share price rise by a multiple of 58 during the 35 years that David Thompson, who stepped down as chairman at the start of last month, worked at the company. The overall growth of 5,722% works out as an annual growth rate of 12.3%, at a time when the stock market as a whole managed compound growth of just 5% a year. Thompson said: “I have been chairman for 13 years and on the board for 33. That’s a pretty good innings, and it has been thoroughly enjoyable.” His departure ended a 120-year period that has always seen a Thompson at the head of the company, formerly called Wolverhampton & Dudley Breweries. The new chairman at Marston’s is Roger Devlin.

McDonald’s partners National Literacy Trust: McDonald’s is partnering the National Literacy Trust to provide “reading tips” to its child diners. The company already offers a “Happy Reader’” voucher in every Happy Meal box sold, which allows parents to acquire a children’s book worth around £4.99, for just £1 from the retailer WH Smith. Now the National Literacy Trust has teamed up to advise on suitable recommendations for Happy Meal book promotions and to review and advise on the design and content of all text-based elements of the McDonald’s Happy Meal, including the Happy Meal box and activity sheets. The charity will also share industry research and insight to help develop the Happy Readers programme “in a way that will add most value for children, parents and families”.

Sixth buffet restaurant to open in Nottingham: A sixth buffet restaurant is to open in Nottingham. The owner of May Sum, Daniel Doctzan, has applied to open a new venture called Pan Asia BBQ. Other buffet restaurants in Nottingham include Red Hot World Buffet and Flaming Dragon in the Cornerhouse and Peechy Keens, in Upper Parliament Street. Doctzan said: “What we offer is completely different to what the others offer. This unique style of being able to choose your food cooked for you or by yourself is a completely different and new service.”

Pub sells for more than £1.25m after five offers above asking price: The Tavern in Cricklewood, North London, has sold for just over £1.25 million through the agent AG&G, after receiving ten offers, half of them above the original asking price. AG&G’s James Grimes said: “The property generated a huge amount of serious interest, especially from investors and developers attracted by the great location on Cricklewood Lane in prime commuter territory, just 250 metres from the local railway station. You can be in St Pancras in less than 15 minutes.” The new owner aims to turn the substantial, locally listed late Victorian building into flats.

Prezzo to open Wokingham Cleaver: Prezzo, led by Jonathan Kaye, will open a Cleaver site in Wokingham, Surrey on 2 November on the site of the site of a former Prezzo. The new Cleaver is one of three due to open before Christmas after the success of the first site in Cobham, Surrey. In addition, Cote is rumoured to be opening in the former Lloyds TSB building in the town. Jeremy Stevens, managing director of Warrant Investments, landlord of the former Lloyds TSB bank in Broad Street, Wokingham, said: “We are about to conclude a letting of a good-quality French-orientated restaurant. From a property point of view Wokingham is very affluent and desirable and this letting is something the people of Wokingham will appreciate.” The new restaurant is expected to open in the spring.

Intertain wins planning consent for first-floor balcony at £4m rebuild: Intertain has won planning consent for a first-floor balcony at its £4m re-build of The Walkabout in Blackpool, which was destroyed by fire in June. Blackpool Council planning chairman David Owen said: “I think it is a very attractive refurbished site, following what was a dreadful fire. It will be a complete rebuild and it appears to have been done with a great deal of flair and a wish to impress. I expect anyone concerned with the town centre economy will recognise they have worked hard to provide an enhanced environment for their customers.” The site is set to re-open on 31 October.

M&B pubs join forces to beat Guinness World Record: More than 300 Mitchells & Butlers pubs will be joining forces on Saturday 26 October in an attempt to smash the Guinness World Record for the largest car wash, and raise money for The Prince’s Trust. Teams from the 300 pubs will be aiming to wash more than 6,300 cars in under eight hours. The event is part of Mitchells & Butlers’ fundraising for the Prince’s Trust Million Makers scheme. Million Makers is a national competition, challenging teams of employees and university students to come together and raise £1 million for The Prince’s Trust and “make a real difference to the lives of disadvantaged young people across the UK”.

Nicholson’s to launch four-week beer festival: Nicholson’s, which has grown cask ale from 11% to 20% of total drink sales in three years, is holding a four-week cask ale festival at its 77 sites that aims to encourage those new to cask ale and reward existing cask ale supporters. Nicholson’s will provide a 10% discount on all ales to those signed up to its cask ale club. A selection of 50 cask ales will be supplied on rotation offering a balanced range of IPAs, pale ales, traditional ales, dark ales and speciality brews. During the four-week festival, Nicholson’s pubs will run additional promotions on their social media channels. The first promotion, #cellartourthurssday, offers Twitter followers the chance to win a cellar tour at their favourite Nicholson’s pub, along with dinner and drinks for five people. Every Sunday, Nicholson’s will provide the chance to win a commemorative T-shirt made especially for the festival, featuring all the brewers being showcased during the event. The T-shirts will be available through free raffles taking place in the pubs during the beer festival. The Autumn Ales festival takes place between 21 October and 17 November.

Loungers opens first site of three before Christmas: The café bar concept Loungers, headed by Alex Reilley and Jake Bishop, has opened the first site of three new venues planned before Christmas. It opened in Heswall in Merseyside on October 16 and plans further openings in Formby in Liverpool on 20 November and Truro in Cornwall on 18 December. The Truro site will be the first incursion into Cornwall.

Urban craft brewery planned for Glasgow city centre: A planning application has been lodged to bring an “urban craft brewery” to a historic brewing site in Glasgow’s East End. The Williams Bros Brewing Company has chosen Drygate, in the shadow of Glasgow Cathedral, to establish the Drygate Brewing Company. The site, adjacent to the Wellpark brewery, and which previously housed a box factory, is owned by C&C Group. The new venture is a collaboration between Williams Bros Brewing and C&C Group and will look to develop a centre of brewing excellence as well as a destination for tourists and craft beer aficionados. The development is a response to the unprecedented growth of craft beer in recent years. Craft beer has grown by over 40% in the Scottish off trade in the last two years.

Fuller’s names Parcel Yard as its Pub of the Year: Brewer and pub retailer Fuller Smith & Turner has named the Parcel Yard, at Kings Cross, London as its pub of the year. The Parcel Yard is Fuller’s largest pub, with a 10,000 sq ft site overlooking the platforms in a Grade I listed area of the original station building.

Sushi brand K10 launches event space in City: K10, the conveyor belt sushi restaurant, has launched a new event space above its restaurant in Appold Street, on the eastern edge of the City of London. The contemporary space is “very versatile”, the company says, and will accommodate more than 70 people seated and more than 130 standing.

McDonald’s franchisees question chicken wings price points: A survey of McDonald’s US franchisees conducted by the brokerage firm Janney Montgomery Scott has uncovered criticism that they are too costly. “Good product – too expensive,” one of the 29 franchisees surveyed (representing a total of 183 stores) said of Mighty Wings. Several other operators echoed that assessment of pricing. “Hard to sell for $1 per wing when we still have the Dollar Menu,” one operator said. “Pricing seems high when many retailers are offering for as low as 25¢ at happy hour,” said another. “Too expensive for this economy,” is another opinion. Though the wings themselves get good marks, some operators question the sauce options. “Customer reaction is very positive, but if it doesn’t have hot sauce then it is just a piece of chicken. It’s running less than 2% of sales,” one said.

Orchid Pub Company apprentices take over pubs and deliver 51% sales boost: A total of 108 Orchid Pub Company apprentices have taken over a company pub for a day as part of an Apprentice Takeover challenge – and delivered a 51% sales boost. The pub company’s 108 apprentices took over their pubs for a day with the task of developing and running a sales-building event from start to finish. They had to come up with an idea, promote and publicise it across social and other media channels, provide a full cost-benefit analysis and ensure that everything went according to plan. Maria Allen and Callum Harkness at Crown Point, Sevenoaks, held a psychic night and delivered 162% growth. Tom Waite and Jack Aynsley at Old Ball, Leeds, held a Sports Community Quiz and delivered 135% growth. Debbie Smerdon and Sam Golding at The Bread & Cheese, Benfleet held a Bingo Band Night and delivered 141% growth. June McAvoy from The Halfway House, Clwyd held a pamper night and delivered 91% growth. “It was certainly no mean feat but every single apprentice rose to the challenge and there were some very impressive results,” said Lucy Craig, development manager at Orchid Group.

Star Pubs & Bars co-invests £500,000 in Stoke Poges pub: Star Pubs & Bars is co-investing £500,000 in The Stag in Stoke Poges, Buckinghamshire in partnership with new lessee of the pub, Cevat Bumali. Work on The Stag includes the demolition of redundant buildings, which are being replaced by rear and side extensions to increase the internal seating area, a new bar and the addition of a carvery.

UK’s ‘best pub licensees’ choose Enterprise for second site: Richard and Loren Pope, who are often cited as the UK’s best single site licensees, have taken an assignment on The Joiners Arms in Quarndon, Derbyshire, an Enterprise Inns site, for their long-awaited second pub. The Popes have turned The Bull’s Head in Repton, Derbyshire, from a closed pub to a £3 million turnover-a-year site. Elements of their retail offer have been “borrowed” by many other operators: Marston’s has installed the Popes’ pizza offer in a number of its Revere premium pubs. Now the Popes have acquired the remaining 18 years of a 20-year lease at the Enterprise pub ten miles from Repton where they are tied on beer – they bought the freehold of their Repton pub from Punch Taverns several years ago. Richard Pope told Propel: “We are looking forward to a different relationship with Enterprise Inns from the free-of-tie one we’re used to – and if it works there is no reason why we can’t repeat it. The cashflow benefits of taking on a leased site ought to accelerate our growth and get us to site number three sooner. We needed a second site that we were totally confident on, and this is a great site. It’s been closed during the day and our first interim plan is to start serving food within six weeks – and stop losing money at the site. We plan to spend many hundreds of thousands of pounds with an increased trading area and a new kitchen. We would hope to have the fully refurbished pub open by November 2014.” The village of Quarndon offers, along with Repton, the best demographic profile in the area surrounding Derby. Pope said: “The situation is uncannily similar to Repton. The demographic is similar, the site is similar and the position of the property is similar.” General managers have been appointed for each site. At the Propel Multi Club Conference in June, Richard Pope said: “We have aspirations of running more than one pub and we have spent a long time now with processes and systems making sure we can manage The Bull’s Head without having to be there every day. We want to get two sites performing well and then we want to go all the way to 12 sites.” The Bull’s Head has a team of 90 staff and has 1,500 to 1,600 bookings each week. In addition, the website gets 200 to 400 visits per day. Pope told delegates he imported his wood-fired pizza oven directly from Italy, from where he also imports his pizza flour. “We sold 700 pizzas last Saturday and Sunday, and now pizza is about a third of our food offer.” The pub also makes its own ice cream, gelato, sorbet, chocolate and bread. Gelato now accounts for around 70% of puddings sold. Spirit chief executive Mike Tye has referred to the Bull’s Head as a good example of a brand because of its many and varied points-of-difference. Richard and Loren Pope were chosen as BII Licensees of the Year in 2010.

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