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Wed 13th May 2015 - Propel Wednesday News Briefing

Story of the Day:

Enterprise outlines £500m a year takings target for managed pubs: Enterprise Inns' plan to create an estate of 800 managed pubs would produce turnover of around £500m if the company hits the mid-point of forecast sales levels for its three types of managed pub format, with average pub turnover of around £625,000 a year, or £12,000 a week. This turnover level is about £1,500 per week per pub below the average takings per week in the Orchid Pub Company estate when it was sold to Mitchells & Butlers last year. The figures could be higher if Enterprise achieves the upper end of turnover targets for each of its three types of managed pubs as it targets around 800 sites by 2020. The company expects to open between 15 and 25 premium managed pubs each year in partnership with a "managed expert" – Rupert Clevely was named as its first joint venture partner yesterday. Sales are expected to be £20,000 a week plus after a £400,000 investment per site. Its Bermondsey Pub Company model sits in the "managed mainstream" and has two preferred retail offers, a 70% wet-led "meeting place" type pub and a "friends and family" model that is 55% wet sales and 45% food sales. The company projects sales of between £12,000 and £18,000 a week after £200,000 of investment. Enterprise thinks it can convert between 35 and 50 pubs a year. The third managed format is called Craft Union Pub Company and is a community hub, wet-led offer, with 80 to 90% of sales coming through drink. Enterprise forecasts a conversion capability of 100 to 125 pubs per year with sales of between £7,000 and £12,000 per week after investment of £75,000. It has six of these so far. Enterprise pointed out that 30% of its estate already has a full-time manager employed by its existing agreement holder. The company forecast it would have around 100 pubs run in partnership with a managed expert by 2020, around 200 Bermondsey sites and around 500 Craft Union sites by 2020.

Industry News:

NPD Group to present at the Propel summer conference: Cyril Lavenant, of the insights firm NPD Group, will look at the current performance of the UK foodservice market, areas of growth and how the UK is performing within a European context at the Propel summer conference on Thursday 2 July at the Oxford Belfry, to be followed by the Propel summer party. Multi-site operators can book up to two free places each by emailing 
Entrepreneur claims to have opened UK's first cycling pub: An entrepreneur called Adrian Oliver is claiming to have opened the UK’s first cycling pub, near Faversham, Kent. The venue in Graveney, formerly called the Four Horseshoes, and now renamed The Freewheel, doubles up as a bicycle workshop. The pub, which had been closed for a year, was reopened last week by Oliver, who is the co-founder of the cycle training company CycleAge. He told the Kent Messenger: “When I went to view the property, there were cyclists going past even then, so I saw the potential. The pub is ideally located two minutes from the national cycle route, which runs all the way through Kent, so there was no better opportunity for me here. On Monday, we had a barbecue serving the poshest sausages from a local farm just down the road and lots of local beer. We had loads of bikes on show and our seven-seat monster bike even made an appearance." The Y Talbot pub in Tregaron, Ceredigion, has a page on its website dedicated to cycling and specifically mentions facilities for cyclists including secure bike storage and a drying room.
US consumers going out less but trading up: Consumers in the United States are going out less often but buying more expensive drinks when they do. Peter Reidhead of the research firm GuestMetrics, which monitors drink sales at 6,000 US bars and restaurants, said: "When consumers do go out, they're trading up to more expensive drinks." Wines costing more than $10 (£6.40) a glass now make up 48% of the volume of wine sold, GuestMetrics data shows. Craft beers make up 31% of all beer sales at bars and restaurants. Both categories saw their market share grow about 6.5% in the past year. Bartenders generally charge $6 for a craft beer, Reidhead said, versus about $4.25 for a “domestic” mainstream beer. Bart Watson, staff economist at the Brewers Association, said craft beer was "an affordable luxury," much like speciality coffee, and if beer goes upmarket the way coffee has over the past couple of decades, craft beer has plenty of growth left. Specialty coffee makes up 37% by volume of US coffee sales, Watson said, while craft beer makes up just 11% of beer volume. Spirit drinks costing more than $12, GuestMetric's "luxury" segment, are still rare, making up just 3% of the volume of spirits sold at bars and restaurants. But that market share is 15% larger than in 2013.
Ikea to open pop-up breakfast-in-bed cafe: Ikea is to open a pop-up breakfast-in-bed cafe in Shoreditch, East London from 18 to 20 May. Beds, either single or double, are available to be booked for free between 7am and midday, where customers can choose from a “pillow menu”, with so-called “sleep specialists” on hand to help clients drop off after a traditional Swedish breakfast. The cafe is also open between midday and 3pm, where sleep-inducing teas will be on offer. It will be at Blackall Studios, Leonard Street, Shoreditch.
ALMR unveils new members: The Association of Licensed Multiple retailers has unveiled a host of new members, bringing the total number of members to 180 companies employing more than 370,000 people. New member include Smoke BBQ, Creative Leisure and Pasini Leisure, with Epos Group, Leisure PR, Lime Green Communications and Woods Whur joining as supplier members. 
Pizza Hut US poaches Sonic chain’s innovator as vice-president of innovation: Pizza Hut in the United States has poached Claes Petersson, vice-president of research and development and packaging at the fast food restaurant chain Sonic, to join as vice-president of innovation. The role is a newly created position for Pizza Hut. Sonic, which has more than 3,500 outlets in 43 states, has credited new product development as a key factor in its strong financial performance. It recently opened a 3,500 sq ft research and development centre at its Oklahoma City. Petersson was named one of the 50 most powerful people in foodservice by Nation’s Restaurant News, for his role in developing new menu items, ranging from a lighter line of soft drinks and slushes with real fruit to pretzel hot dogs and upmarket chicken burgers.

Beds and Bars boss aims to engage industry in sailing event: Keith Knowles, chief executive of the pan-European hostel and bar company Beds and Bars, is aiming to turn an annual sailing regatta into a cross-industry event. At the weekend his business beat Young & Co, Shepherd Neame, St Austell Brewery and Brilliant Beer Co in the regatta event. Knowles, who now has to organise next year's event, having won this year, said: "It is great to have been part of this long-running event for the last four years, an industry event that has run for 26 years consecutively. Next year, we will aim to have 20 crews split between brewers, pub groups, suppliers, and our friends from the causal dinning sector. A new twist to the event for next year will be that I ask each crew to raise a thousand pounds for charity, with the winning boat deciding which charity it goes to. This is a great event for networking, adding a competitive edge of being in a sailing regatta. The crews can be novices, as skippers can be provided by Sun Sail who facilitate the event. It's a fantastic team building weekend, and now will raise a meaningful sum for charity." A provisional date for next year's event is 6 to 8 May. Knowles can be contacted on

Jamie Oliver’s website hit by malware for third time: Jamie Oliver’s website has been hit for a third time by malware that potentially infects the computers of visitors to the site. It is the third attack on in four months. The security company that found the problem, Malwarebytes, said the attack, which redirects users to malicious software, is similar to the previous two. A spokesperson for Jamie Oliver said they were working “to find the issue”. Malwarebytes says the problem was caused by a link on the site redirecting users to what appears to be a compromised website that contains links to download the malicious code. “The team in charge of Jamie Oliver’s website has acknowledged the issue and is taking steps to remediate this problem once and for all,” the security company told the BBC.

Company News:

Wetherspoon sends email encouraging customers not to 'pre-drink': JD Wetherspoon has sent an email to its database encouraging customers not to pre-load, and promoting an array of premium drinks for £1.99. The email says: "Don't pre-drink – what would your mother think? Start your night right with to brands at your local JD Wetherspoon. When the prices are this good, there's no need to pre-drink at home. For just £1.99 with mixers, Jim Beam, Disaronno, Captain Morgan's Spiced, Magners, BrewDog Punk IPA and Hooch are yours to enjoy." The "Don't pre-drink" promotion is also being advertised via Facebook and Twitter and with posters in pubs.

BrewDog hits £5m crowdfunding mark, drops Equity for Punks IV prospectus on City: The Scottish brewer and retailer BrewDog has hit the £5m milestone within 20 days of launch of the launch of its latest £25m crowdfunding drive. The company said it had now broken its own independent crowdfunding record, set in 2013, when it raised £4.3m in a six-month Equity for Punk funding round. This latest Equity for Punks crowdfunding drive,  which has a closing date of April 22, 2016, aims to raise £25m from the issue of 526,000 shares priced a £47.50 a share. The company said the money raised would be used to fund the expansion of its brewery and international bar division, as well as launching new projects “like a craft beer hotel, custom sour beer facility and a distillation plant”. BrewDog said it was on track to break £50 million in sales in the 2015 year. Yesterday, to celebrate Equity for Punks IV, it dropped prospectuses for the fundraising on the City of London. It said: "We took to the skies over London to do a little old-school propaganda outreach, as we dropped Equity for Punks share prospectuses over the city and fat cats over the financial institutions of London. We wanted to mark the launch of our share offer and send out a message to the industrial beer fat cats. The financial institutions of the city, with their relentless focus on profit, gave rise to the culture which created industrial beer. We wanted to take the problem out at the source."
Tortilla signs franchise agreement for Dubai: Tortilla has signed a franchise agreement with Eathos, the restaurant operating platform based in Dubai. Richard Morris, managing director of Tortilla, said: “We are thrilled at the opportunity to take great quality Mexican cuisine to the Middle East. It’s been a fantastic year for us after passing the milestone of 21 sites and we’ve got another exciting year ahead where we’ll be expanding our core business by another ten sites. Franchising in Dubai is the next step in our company’s progression and we are looking forward to working with Eathos to roll this out.” Faysal Younes, chief executive of Eathos, said: “We are very proud to introduce the Tortilla brand to the Middle East market and address the increasing demand in the fast casual segment, particularly in the Mexican space which features strong residual demand and remains under-served. Tortilla represents an authentic and established concept and will bring to the table a wide array of support to make this partnership a success. Eathos will bring its deep knowledge of the region, an impeccable execution model, and unprecedented access across key target markets for Tortilla.”
Geof Collyer – Enterprise's strategic review should move share price in line with NAV by 2020: Deutsche Bank’s leisure analyst Geof Collyer has argued that Enterprise's strategic plan should close the gap between its current share price and its net asset value by 2020. He said: "Enterprise has detailed its response to recent changes in legislation that could have had a deleterious impact on its profit streams. Instead of downgrades, we would expect progressive upgrades to forecasts and valuations over the coming years as the group achieves far greater control over its profit streams, which will also become more varied. The timing may not suit everyone, as the plan extends out to FY 2020, but the progressive move from directly controlling less than 5% of the Ebitda to almost 50% within five years should have a profound impact on the valuation. Our analysis of the review would suggest that our earlier view was reasonably accurate in terms of how Enterprise would restructure its business. However, it is planning a more assertive business mix than we had envisaged, with almost double the planned number of managed pubs versus our estimates. This should narrow the discount to NAV from around 55% today to less than 10% by FY’20E – potential upside of about 180%. Moving towards a sum-of-the-parts valuation, by FY’20, we estimate that circa 25% of Ebita could be coming from a managed estate (three different formats), circa 25% from the commercial property estate (with REIT conversion potential), and the remainder from a much higher quality tenanted and leased estate – each part with different valuation parameters. We have trimmed our forecasts by around 2% due to higher central cost investment for retail, but have retained our 215p (fully diluted) price target.”
Grillstock to open in Leicester next month: The Grillstock barbecue chain will open up in a former PizzaExpress in St Martin's Square, Leicester next month, with the creation of 45 jobs. Jon Finch, co-founder of Grillstock, said: “We’re stoked to be opening in Leicester, a city that reminds us of our home in Bristol with its underground culture.” The chain’s signature communal tables will have space for up to 110 diners. It currently runs restaurants in Bristol, Bath and Walthamstow, East London. A spokesman for PizzaExpress said: “With two other restaurants in Leicester, including one in nearby Highcross, we decided it was the right moment to close our restaurant in St Martin's Square."
New Cotswolds site takes Brakspear managed estate to five: The pub operator and brewer Brakspear has expanded its managed pub estate with the purchase of the George Hotel in Shipston-on-Stour, Warwickshire. The addition of the Grade II listed building brings Brakspear’s fledgling managed estate to five sites. The George Hotel is on Shipston’s main square and is a food led-business with a restaurant and two private dining/function rooms, and 16 letting rooms. Trading will continue as usual while Brakspear plans a major refurbishment, designed to bring the quality of the site up to the standard of the other four managed houses. Tom Davies, Brakspear’s chief executive, said: “We’re delighted to have acquired this large, characterful site in a prime location in the Cotswolds. It has exciting potential as a destination food pub serving an affluent local market, and as a location for an overnight or weekend stay in one of the most visited areas of the country. As with all our managed pubs, we’re keen to develop the George in a way that retains its individuality and heritage, while adding elements that have worked at our other sites. We’re looking forward to starting the refurbishment later this year.” The George is Brakspear’s second managed site in the Cotswolds, joining the Porch House in Stow-on-the-Wold, which opened in October 2013. The pub will be overseen by operations manager Mat Aket, while executive chef Antony Ely will be in charge of menu design, introducing a quality pub food offer similar to that in Brakspear’s other managed pubs. Davies said: “With five pubs now trading, we are half way towards our target of ten managed houses. While this goal isn’t set in stone, we believe it is achievable within the next couple of years, provided we are able to acquire pubs which fit our criteria, and we have built a managed structure with Mat, Antony and others at our head office, which will support an estate of this size.“ Brakspear’s first managed pub, the Bull, on Bell Street in Henley-on-Thames, opened in March 2013, followed by the Porch House, the Running Horses in Mickleham, Surrey and the Chequers in Marlow.

Brewhouse & Kitchen to open second brew-pub in London next month: Brewhouse & Kitchen is to open its second London site, this time in Highbury, in early June, featuring a large craft microbrewery in open view. An original urban tram shed building is being transformed with capacity for 350 people and front garden for 80. It is located next to Highbury and Islington Tube and Overground station. Highbury is the sixth Brewhouse & Kitchen opened by Simon Bunn and Kris Gumbrell. With a team of on-site brewers at each pub, the company has now brewed some 50 different small-batch craft beers. Bunn said: “Brewhouse & Kitchen Highbury is set to offer all the beer adventures of our first successful London pub in Islington, and much more. Getting immersed in the beer making experience – if simply to enjoy tasting better or to have some fun and learn hands-on techniques – has really put Brewhouse & Kitchen on the beer map.”

Leeds Brewery plans new city centre pub: Leeds Brewery plans to open a new pub in the city centre with views of Leeds Minister. The company already operates the White Swan off Briggate, the Midnight Bell in Holbeck; the Brewery Tap near Leeds railway station and Crowd of Favours near Kirkgate. It wants to convert a Grade-II listed building on Church Row, which has a courtyard area at the back with views of Leeds Minster. The 19th century building was a pub before becoming offices and was then unoccupied for some time, falling into a state of disrepair. Sam Moss, a director of Leeds Brewery, said: “It’s in a prominent site in an area of town that’s getting better and better. The courtyard area looks onto the fantastic windows of the Minster – it’s a view that hasn’t been seen for the last 30 years.” The new pub will on two floors and will stock Leeds Brewery beers and serve freshly cooked food based on traditional pub classics.
Greene King rated as overweight by JP Morgan Cazenove: Greene King has had its stock rating noted at “overweight” yesterday morning by analysts at JP Morgan Cazenove has set a target price of 920p on its stock. This indicates the analyst believes there is a potential upside of 12.3% from yesterday's opening price of 819p.
TRG Concessions to open eighth franchised Giraffe site: TRG Concessions is to open a new Giraffe site airside in Birmingham Airport on 22 May. TRG has invested in excess of £1m into the 173-cover, 3,800 sq ft site. It will be the eighth site in the ten-year partnership between TRG and Giraffe. Sam Anstey, Giraffe’s director of franchising and brand marketing, said: “We are proud to be partnering up again with the Restaurant Group Concessions and open at Birmingham Airport this month. We will continue our long-standing relationship with TRG, who have been the perfect partner for us and invested considerably in delivering our award-winning brand within UK airports.”

Wrap it Up! reports total sales up 18% in first quarter: Wrap it Up!, which is currently overfunding on Crowdcube, with £695,000 raised against a target of £400,000 in return for 10.38% of its equity, has reported total sales rose 18% in its first quarter compared to the same period last year. The company said: "This is across all stores, including those that are franchised. When stripping out new stores, the sales growth was an inflation-beating 6%, with company and franchised stores experiencing similar growth. Overall growth in 2015 is expected to be driven by new stores, including our three newly opened stores from the Adobo acquisition, which are set to increase turnover by circa 32%."
Caffe Nero – we've taken action over hygiene at zero-rated Cheltenham store: Caffe Nero has said that it has taken action after its site in Cheltenham High Street was zero-rated for hygiene standards, with problems such as poor hand-washing technique, dirty floors, poor lighting and staff changing being done in an office with CCTV. A Nero spokesperson said: "We were extremely disappointed to get this rating as we take health and safety very seriously in all of our Caffe Nero outlets. We have already actioned all the points raised by the environmental health officer and look forward to a revisit." Two other businesses in Gloucestershire received the same zero rating ,including Winchcombe Food and Wine in Winchcombe Street, Cheltenham.
New coffee shop concept Black Penny opens in Covent Garden: A new coffee shop concept, the Black Penny, has opened on Great Queen Street, Covent Garden, Central London. It claims to be emulating the first coffee houses in England, in the 17th century, which were “a den of drinking, dining and debate”.  The new venue has a “seminar pit” downstairs which will host spoken-word poets, lectures and events all “designed to encourage conversation and debate”. Upstairs it has a noticeboard where customers can add details of other events or other facts and thoughts they might have. Coffee comes from the leading coffee roaster Alchemy. It launched yesterday, offering coffee and lunch for 1p. The venue said that in the 17th century coffee shops charged one penny for admission, a cup of coffee and a chance to engage in the talk of the day, earning them the nickname of “penny universities”. A 50% discount is being offered during the venue’s soft launch, from 13 to 17 May. 
Former Nobu chef Scott Hallsworth to relocate Joe's Oriental Diner: The former Nobu chef Scott Hallsworth is to relocate his Joe's oriental Diner concept from Chelsea in West London to The Laundry, a much larger location in London Fields, Hackney, North London. A spokesman said: "Joe’s Oriental Diner evokes the dive bar subculture of the Orient, where all walks of life meet to enjoy music and good times. The Laundry will enhance the offering, reflecting Scott’s version of pan-Asian food that stays honest to the bare bone, gritty roots of recipes consumed in the ports of Asia.” Originally built in the 1960s as a commercial laundry and now a large creative hub, the Laundry building is home to numerous music and arts workspaces as well as a 720-capacity basement event space. 
Suchef to open fifth site this month: Suchef, the healthy eating brand, is to open its fifth central London site on 25 May, on Chancery. Its other outlets are in St Paul’s, Farringdon, Aldgate and Old Street. The Suchef name pays tribute to the work of the sous chef, the second-in-command and often the engine room of the entire kitchen. Suchef will also offer a free local delivery service, with a minimum order £15.
Nando's releases ‘playful' order memory video: Nando’s has released Rapid Order Rap, a YouTube video it says is a “playful” way to teach diners how to remember their orders. The video is also being used to boost subscriber numbers to Nando’s overlooked channel, The Drum has reported. At the end of the video, viewers are encouraged to subscribe to the brand’s YouTube channel, which suggests that more YouTube activity could be forthcoming. Nando’s released the ad on Monday on its social media channels, urging fans to adopt the #RememberYourNandos hashtag.
Former Smith & Jones pub closed by developer to reopen after public demand: A former Smith & Jones-run bar in Hull that closed last year after it was bought by a developer is to reopen in response to public demand. Courts Bar in Bowlalley Lane, Hull city centre, closed in July last year after it was bought by the building firm Lewis Ashley Group. The firm had intended to transform the entire building into flats, but decided to only convert the upper levels and renovate the ground-floor bar instead. The new manager of the bar, Matthew Townsend, told the Hull Daily Mail: "The Lewis Ashley Group had planned to convert the bar into flats, but they had a change of heart when they saw the huge number of comments from customers. I think that persuaded them to change their minds and keep it open as a bar." Townsend said the reopened bar "is going to have more of a sports bar theme during the week and then it will have a party atmosphere at the weekend.” It will initially employ ten staff, but Townsend said the number could rise in the next few months if the management decides to launch a food menu. He said: "Sadly, when the flats upstairs were converted we lost the space that used to be the kitchen. However, serving food is something we are hoping to look into. "There is a big basement downstairs, so converting that into a kitchen is something we might do in the future." The bar is due to reopen on Thursday 21 May. It will be open seven days a week with late-night opening hours on Thursday, Friday and Saturday.
Meantime to stage BrewFest for the fourth time: The Greenwich-based Meantime Brewing Company is holding its BrewFest beer festival, celebrating modern craft beer and brewing, for the fourth time at the end of this month. BrewFest will take place over three days, from Saturday 23 May to Monday 25 May,  at the Old Brewery, in the grounds of the Old Royal Naval College in Greenwich. The event will have three main bars, representing craft beer from the UK, the United States and the rest of Europe. BrewFest will have more than 80 draught lines and 150 different beers on offer “from rare speciality brews through to firm favourites,” the company said. Experts will be on hand to suggest beer and food pairing options. The Meantime Half Pint Truck will be on the site over the weekend, with live music performances and tutored tastings on offer in the Old Brewery main room in the evenings. Richard Myers, marketing director at Meantime, said: “We started BrewFest in 2013 as a celebration of the modern craft beer scene."
Liverpool nightclub unveils re-opening date: The Liverpool city centre nightclub Garlands is to reopen later this month after serving a three-month closure order. Promoters say the venue will return “bigger and better” as doors open again at the Eberle Street site. The club is due to reopen on 23 May, ending a closure period that started on 12 February.
Fishmonger diversifies with fish restaurant: Aberystwyth fishmonger Craig Edwards has diversified by converting public toilets on the town's shoreline to a fish restaurant called Gorgeous Pysgoty. The project has been welcomed by locals as a first-class example of the regeneration of rundown old town buildings and of a sustainable business model. Edwards, who used to run a hotel restaurant, but later trained as a fishmonger, said: “It’s been a lot of hard work, but we’re really pleased with the results.”

Panera Bread poaches Darden's and McDonald's executives: The leading American bakery chain Panera Bread has hired two executives from competitors Darden Restaurants and McDonald's. The chain said the new executives would help with its growth initiatives, including food innovation and improving its stores. On Monday, Panera named Drew Madsen as president. For the past nine years, Madsen was president and chief operating officer of Darden, which owns the Olive Garden chain. He will report to chief executive Ron Shaich. Panera also said that it hired Ken Koziol as executive vice-president late last month. Koziol had the same title at McDonald's. Panera Bread operates about 1,900 outlets.

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