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Fri 9th Jan 2015 - Friday Opinion
Subjects: Greene King’s horses for courses, buy-one-get-one-free, the juice opportunity and crowd-funding predictions for 2015
Authors: Martyn Cornell, Paul Chase, Ann Elliott and Luke Lang
 

Greene King backs horses for courses by Martyn Cornell

A couple of years back, Greene King was in trouble with traditionalists for a rebranding at a couple of its pub-restaurant concepts that gave them identical pub signs, featuring just the pub name, the brand name and the company name, all in corporate colours. The move was swiftly denounced as “a tragedy”, “awful”, “a real disappointment” and “cultural vandalism”. The furore was an indicator of how attached we are to the idea of the pub as a named, individual outlet, with that name part of the character of the establishment, and a link to a tradition we like to think goes back hundreds of years. Think how very differently we treat the names of restaurants, or coffee bars: nobody blinks when a restaurant changes hands and the new proprietor paints over, say, “Luigi’s” on the fascia board and calls the establishment “Pizza Perfetto” instead, though “Luigi’s” might have been serving pasta alla Romagna to local diners for decades. Nobody is bothered that all Pizza Huts, or all Caffe Neros have corporate fascias. But go too far in making the British pub look corporate, and you will be in trouble. Painting all its pubs red is regarded as part of the hubris that led to the downfall of Watney’s, once one of the country’s biggest brewers and pub owners.
 
I doubt that the defenders of traditional pub signs have noticed, but Greene King has been making up for its perceived gaffe back in 2013 with some clever and inventive pub naming at its Hungry Horse brand. A new Hungry Horse pub restaurant being built near Broadstairs and Ramsgate is to be named the Hooden Horse, after an ancient local tradition involving the carrying of a wooden horse’s head mounted on a pole, with a sackcloth attached to hide the bearer. Another new Hungry Horse outlet, on the corner of Ordnance Road in Buckshaw, near Chorley, Lancashire, is called the War Horse, a nod to both the former Royal Ordnance Factory which once stood on the site of the village and the currently highly successful book, play and film of the same name by Michael Morpurgo. Other Hungry Horses named in the same “localism” style include the Super Mare at Weston Super Mare – I love that one, a marvellous brand-linked pun on the town’s name – the Flying Horse near Manchester Airport (trivia: historically, pubs called the Flying Horse were often so called because they had a “flying horse” swing, the sort operated by the people sitting in the swing pulling on ropes, in the grounds); the Glass Horse in St Helens, home to the Pilkington glass works; the Race Horse at Chester, home of the oldest race course in Britain; the Sea Horse at New Brighton, by the sea; and the Iron Horse near the disused railway in Thornton-Cleveleys, Lancashire. All these inventive localised names help give what is a national brand roots in the local community – and “roots in the local community” is what pubs generally need to strive for to be successful.
 
A pub name, of course, is often one of the oldest examples of marketing around. If a pub was named the Shears, it will be because the original landlord was touting for the custom of local tailors, while the Coach and Horses was catering for travellers, and the Unicorn was inviting expatriate Scots inside. The sign of the Swan with Two Necks showed the establishment sold wine (the name being a corruption of “Swan with Two Nicks”, the two nicks being those put in a swan’s beak in the annual swan-upping ceremony on the Thames to show that a particular swan belonged to the Vintners’ Company). In the 17th century, Tories would be lured to drink at the Royal Oak, named for the occasion King Charles II hid from the Parliamentarian forces in an oak tree after the Battle of Worcester. The Cricketers is inevitably going to be right by the village green, indicating by its sign that thirsty bowlers and battered batsmen are welcome, while the Six Bells will be similarly placed close to the church to wet the throats of campanologists after a tiring set of grandsire triples. And so on: there are hundreds of example, some distinctly obscure. A pub named the Flying Dutchman was so called to attract the racing set, rather than fans of Wagnerian opera, since it was named for the winner of the 1849 Derby. A similar event gave rise to the name of one of my favourite vanished pubs, in Mile End, East London, the Why Not Beat Dragon. It might appear indecipherable at first, but the pub was named after a race at Newmarket in the 17th century when a horse called Why Not did indeed beat another horse called Dragon. Alas, no one has yet come up with a good explanation for the name of another of my favourite vanished pubs, the Dumb Flea, which once served the populace of Meldreth in Cambridgeshire.
Martyn Cornell is managing editor of Propel Info
 

Buy-one-get-one free bans work – or do they? by Paul Chase

The health lobby are very concerned that things might be getting better in relation to alcohol consumption. By “better” they mean population levels of consumption falling. So they need to assert that if things are getting better, it is because of them, and in particular because of the regulation they have persuaded government to enact.
 
Thus this week we see articles in the Scottish press and on the BBC website referring to “new data” from Scotland, headlined “Buy-one-get-one-free law leads to drop in Scottish alcohol consumption”. The articles declared that Scots are drinking one million litres less booze a year after a ban on multi-buy and buy-one-get-one-free deals. Researchers found that the “new law” led to a fall in alcohol consumption of “almost 3%”; actually it was a fall of 2.6% according to the University of Glasgow that did the research. Mark Robinson of NHS Scotland claimed: “These findings show the Alcohol Act had the intended impact of reducing alcohol consumption in Scotland by placing restrictions on how alcohol is displayed and promoted.”
 
Now, the “new law” referred to here was the Alcohol etc. (Scotland) Act 2010, which came into effect in October 2011, and the drop in consumption refers to the year following the ban. Therefore the law is not new and neither is the data. This “news” was a story regurgitated from 2013 by lazy journalists looking for a New Year booze story. But is the claim that the 2010 Act caused this fall in consumption true? According to Dr Jim Lewsey, senior lecturer and co-author of the report, it is: “Similar declines were not observed in England and Wales, where the Alcohol Act does not apply, once the possible impact of other factors, such as changes in income and alcohol prices were taken into account. This provides evidence that the effects were associated with the Act and not some other factor.”
 
Well, actually alcohol consumption in England and Wales HAS fallen, by 18.9%, from a high of 9.4 litres of undiluted alcohol per person in 2004 to 7.7 litres in 2013. In 2012-13 alcohol consumption in England and Wales fell by 2.1% to its lowest level since 1990 – and without the extra restrictions introduced in Scotland. But if restrictive laws on promotions are the answer to excessive consumption, why does alcohol consumption in Scotland remain 19% higher than in England and Wales?

The NHS Scotland/Glasgow University study is not the only one to examine the impact of the BOGOF ban in Scotland. A study published in January 2014 by the Society for the Study of Addiction concluded: “There was no significant effect of the multi-buy ban in Scotland on volume of alcohol purchased either for the whole population or for individual socio-economic groups. There was also no significant effect on those who were large pre-ban purchasers of alcohol. Most multi-buys were for beer and cider or for wine. The frequency of shopping trips involving beer and cider purchases increased by 9.2% following the ban, while the number of products purchased on each trip decreased by 8.1%. For wine, however, these effects were not significant. Banning multi-buy promotions for alcohol in Scotland did not reduce alcohol purchasing in the short term.”

This was a substantial study involving a total of 22,356 households in Scotland, England and Wales. What is interesting about it is that it suggests that the multi-buy ban did not affect the overall amount of alcohol purchased, but did affect the pattern of purchasing. This is the result of misbegotten social engineering – the main effect of the ban on multi-buy promotions, according to this study, has not been to reduce overall alcohol consumption, but just to increase inconvenience for shoppers while raising the price they paid for the alcohol they were always going to buy anyway.

But the real intention of NHS Scotland running the same story two years in succession was to bang the drum for minimum unit pricing. Whilst the researchers themselves say that the drop of consumption of 2.6% is “statistically insignificant” [even if it happened – PC], they also acknowledge that “there is currently no direct evidence linking multi-buy promotion to alcohol consumption in the off-trade.” So why run such a non-story? NHS Scotland’s Mark Robinson concludes: “Although these effects are welcome [if statistically insignificant – PC] alcohol consumption in Scotland remains and a large proportion is still sold at relatively low prices. There is evidence [which he doesn’t cite – PC] that the positive effects of the Act [the statistically insignificant positive effects – PC] would be enhanced by minimum unit pricing to prevent the sale of cheap, high-strength alcohol.”

So let me see if I have got this exactly right: the welcome effects of a statistically insignificant drop in alcohol consumption arising out of the BOGOF ban, if they happened at all, would be enhanced by minimum pricing which, as proposed in Scotland, has not been tried anywhere in the world and is likely to be rejected by the European Court of Justice as breaching European competition law.

How desperate is that?
Paul Chase is a director of CPL Training and a leading commentator on on-trade health and alcohol policy

The healthy opportunity for pubs and restaurants by Ann Elliott

I can’t have been the only person to have received a Nutribullet for Xmas (well not the actual thing, more like an IOU for one) which supersedes the Breville Blend-Active that I have been using for a while (as has everyone else in the office by the look of it – our fridge is awash with bottles filled with vile looking green sludge).
 
According to one pressed juice site, “Drinking our fresh pressed juices will provide an instant nutrient and sustained energy hit. Give your body the tools to heal and thrive, deal with stress or illness, sleep better, and feel more dynamic and energised with pressed juices. Packed with a multitude of vitamins, minerals, antioxidants, enzymes and other plant nutrients, pressed juices is simply the best way of getting the ‘good stuff’.”
 
Wow. Who needs anything else?

Yesterday I called into Pret A Manger to pick up one of its Green Goddess drinks and to set the day off to a cracking start. It has two taste profiles, both of which are brilliant, refreshing and make you feel very virtuous. What I love about Pret is how innovative and creative its drinks range has become. It has a small but beautifully formed Ginger Pick Me Up (75% apple and 25% ginger) plus a Pomegranate and Chia Pick Me Up, both of which are just gorgeous, cost £1.99 and slipped into my handbag without losing their lids ( a major positive).

Its range now includes a Pure Pret Yoga Bunny (how good does that sound?) and a Banana and Cashew Almond Shake. In total I think there were more than 30 soft drinks in the fridge not including Coke and water. Customers seem spoilt for choice.

Over the road was a Joe & The Juice, which I thought was worth trying as an alternative to Pret. It is a bit too grungy, with hit-and-miss operational standards (grubby price signs being one, for me, but the staff are friendly and the range is comprehensive. I had a Young Blood with celery, lemon, apple with additional ginger which cost £4.05 and was truly tasty with a bit of a kick. It does have a superb range of juices so worth another visit.

Last stop was Leon and its Clean Green Shake, made with avocado, kale, blueberries, ginger, lemon and coconut water. This was cleanly and beautifully communicated both internally and externally and was a fabulous drink, though probably not enhanced by trying to drink it while walking rather vigorously down Oxford Street.

As The Evening Standard said: “Wellness has become the buzzword of the summer – and a glut of health food trends has arrived. If you’re not on a juice cleanse, or thinking about ‘juicing up’, you’re 200ml short of a detox. All over London juicers are talking about micronutrients and cell health and wondering how much ginger or turmeric to blend. But if we are going to part with anything up to £7 for a bottle, we want to know whether any taste good.”

The newspaper mentioned a range of juices and juice bars in London in its article, including Mount Street Deli, Spianata, The Detox Kitchen, Ali Baba Juices, The Source, Bobos Juices, Lovage at The Ace Hotel, Radiance Cleanse at Avenue, The Good Life, The Juice Well, Roots and Bulbs and Press at Ham Yard Hotel

Globally the fruit and fruit-related juices sales by volume peaked in 2003 at 4.22 billion gallons and despite perceived health benefits, juice sales in the United States have fallen every year since 2007. This is probably because juice is relatively expensive compared to other refreshment options. In addition, whole juice has high sugar content arising from natural fructose and that is a negative for consumers counting calories and parents worried about childhood obesity. As a result, there is a move away from “obvious” juices into those offering clear health benefits. Coffee chains have caught on to this, if venture capitalist investment is anything to go by. Starbucks acquired Evolution Fresh last November for $30 billion, and is now selling Coconut Pineapple and Super Greens alongside vanilla lattes.
 
This to me is such an opportunity area for restaurants, bars and pubs in our sector. This is not just a trend: this is going to be a way of life for so many customers from now on. I cannot be the only person blown away by what is out there in juice bars and coffee shops but wishing I could get the same choice when I have a meal.
Ann Elliott is chief executive of the leading sector marketing and public relations firm Elliotts – www.elliottsagency.com
 

Crowd-funding predictions for 2015 by Crowdcube founder Luke Lang

1.  The banks will continue to fail SMEs
The funding void that banks have left for start-ups and growing businesses will continue to be filled by the alternative finance sector. We’ve had a lost decade of bank lending now – and this could become a lost generation the way things are going; the young budding entrepreneurs of the future are growing up thinking that “banks don’t lend”.

2.  We’ll see crowdfunding ‘roadkill’, as the market consolidates and rationalises
There has been a plethora of new platforms in the past 18 months, and the current number is unsustainable. Many of the new players are poorly executed and have not gained anywhere near the level of traction required to make a serious impact. I am not convinced that niche investment crowdfunding platforms will ever be able to compete against the market leaders with hundreds of thousands of investors. There will be one dominant player, and then a small number of second-tier providers.

3.  The JOBS Act will either still be in deadlock, or prove unworkable
The Jumpstart Our Business Start-ups (JOBS) Act in the United States, which is designed to encourage the funding of small businesses, has been in development for years now and the parties involved still have not got their act together. At the moment it looks as though the two opposing parties might continue to argue the toss, dragging out the process further, or create a regulatory environment that crowdfunding struggles to thrive in.

4.  Government-backed initiatives will help tech businesses shine
The London Co-Investment Fund (LCIF), in which Crowdcube is a partner, is a milestone moment for the development of tech businesses in the capital, and will make a big impact on the funding gap they face. A large proportion of the investment will be deployed next year, rapidly benefiting tech start-ups. We think this will prompt the government to funnel more public money into initiatives like this, and that the LCIF model will be rolled out across the UK.

5.  The ‘old firm’ will stop flirting with crowdfunding, and get properly involved
As crowdfunding matures as an investment model, and investors realise returns – particularly when the first exits start to happen – those investment brokers who were sceptical a couple of years ago will start moving into the crowdfunding space. Their clients will be demanding the opportunity to invest in early-stage start-ups and mini-bonds through platforms like ours, and brokers will seek to partner with providers. We are also likely to see mini-bonds included in ISAs for the first time.

6.  More household names will choose the alternative finance route
More established brands will look for investment through crowdfunding and mini-bonds, following in the steps of the Eden Project, River Cottage and Caterham F1, which all raised finance through Crowdcube last year. The mini-bond is geared towards bigger raises, and is an appealing option for those wanting a large capital investment. Big names are starting to see the potential of this new way of raising finance as a differentiator, and they are excited by the ability to engage customers and communities. In light of the response to Caterham F1’s pitch this year, we are expecting more Tier 1 sports teams and clubs to look at crowdfunding as a way of building relationships with their supporters as the trend towards “fan ownership” grows. The fans get a return on their investment, a say in the running of the team and a direct benefit from their investment – improved facilities, for example. There’s something neat about that.

7.  Online investor communities will flourish
Online investment models will evolve from rather linear, one-dimensional, transactional processes to environments that have more of a vibrant social networking feel. Investors will be able to follow and comment on businesses, businesses will be able to syndicate people together, and interactive communities will begin to develop.

8.  Alternative finance companies will become brands
Alternative finance platforms will invest more time and money in marketing and building their identities and reputations in 2015, with the aim of creating strong brands that can protect them against attack’ from new and emerging companies and foster investor loyalty. Brand will be a crucial weapon as the market expands and players seek to grab market share.

9.  Investors’ appetite for niche, complex businesses will grow
We are already seeing companies from specialist sectors, which address highly complex business and social problems, successfully attracting investment through alternative finance. The biotech company Cell Therapy, for example, has just funded on Crowdcube, and this is the kind of business we did not expect to be approaching us four years ago. As the number of registered investors on crowdfunding platforms rises – we expect to have as many as 300,000 on Crowdcube by the end of 2015 – the understanding and range of interests of the investor base broadens and deepens, increasing the capacity for niche businesses to find their audience.

10.  Entrepreneurs will take the opportunity to make an exit
2015 will mark three to four years since the first crowdfunded businesses launched, and it is likely that entrepreneurs will start taking the chance to exit, and the investors who backed them will get a return as they are successfully sold. That is an incredibly exciting prospect.
Luke Lang is co-founder of the crowd-funding website Crowdcube

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