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Morning Briefing for pub, restaurant and food wervice operators

Tue 4th Aug 2015 - Propel Tuesday News Briefing

Story of the Day:

Luke Johnson – the majority of my ‘super-winners’ have been in the food and drink retail sector: Sector investor Luke Johnson has told Propel that the majority of his “super-winners” in investment terms, which amount to fewer than ten in total, have hailed from the food and drink retail sector. In his Sunday Times column, Johnson reported he had fewer than ten “super-winners” in his entire investment career. By “super-winners”, he was referring to research by investment adviser Cambridge Associates that found only 7% of “venture capital” investments produce a return of more than five times the original capital (the “super-winners”), 8% return between three and five times capital, 22% return between one and three times capital and more than 60% of institutional venture capital investments return less than the original capital. Asked how many of his “fewer than ten big hit super-winners” have been in the food and drink retail sector, he told Propel: “The majority. Interestingly, I’ve hardly ever lost money in the sector. A few deals have shown mediocre returns: but very few have been net losers. I wish I could say the same for other industries I’ve backed.” Johnson, who owns stakes in Grand Union Group and Eclectic Bar Group, will be taking part in the Bar and Nightclub Conference, organised by Propel and the Association of Licensed Multiple Retailers on Tuesday, 27 October, sitting on a panel discussing the prospects for the sector chaired by Fleet Street Communications managing director Mark Stretton. For tickets see below.

Industry News:

Peter Marks to present at Bar and Nightclub Conference: Peter Marks, chief executive of the UK’s largest nightclub operator Deltic Group, is to present at the Bar and Nightclub Conference, which is being held on Tuesday 27 October at Bafta Piccadilly. He will set out the key steps in building a sustainable bar and nightclub company. The conference, the first stand-alone event for this part of the market, examines the key issues affecting the markets with contributions from key figures within the sector. Tickets are free for operators and cost £145 for Association of Licensed Multiple Retailers (ALMR) supplier members and £195 for ALMR non-suppliers. Tickets can be booked by emailing Jo Charity on

Free craft ale and beer festival showcasing Wales’ best independent breweries taking place at King’s Cross: A free craft ale and beer festival showcasing some of Wales’ best independent breweries is taking place at King’s Cross in London next month. Courtyard, which is being staged by Welsh music festival organiser Green Man in partnership with developer Argent, is being held from 10-13 September at Lewis Cubitt Square. As well as an array of beers, ales and ciders, the event includes craft brewing lessons and interactive workshops while visitors will also be able to sample Welsh street food. Breweries attending include Apple County, Brecon Brewing, Gray Trees, Hallets Cider, Purple Moose, Tudor Brewery, Waen Brewery and Y-Bryn. Among the up-and-coming musical acts set to perform are Inbibio Sound Machine, The Wave Pictures and Stealing Sheep. The event is ticket-free and packages are available in advance offering deals on the beers and ciders, which also guarantees entry. Green Man director Fiona Stewart told Propel: “We want this to become an annual event. We are trying to give these independent breweries a platform to showcase their talent.” Green Man is the largest music festival in Wales, which is held annually in the Brecon Beacons.

US craft distilleries boom in wake of craft brewery surge: The number of US craft distilleries has boomed in the last decade in a growth curve that parallels the rise in craft brewery numbers. Ten years ago, there were circa 50 craft distilleries in the US – the American Craft Spirits Association reports there are 769 now. “Of those 769 distilleries, I would venture that only 50 make any money,” said Tom Mooney, president of the American Craft Spirits Association. “The typical craft distillery today has revenues under $1m.”

Seattle restaurant reports success after adopting $15-an-hour minimum wage two years early: A Seattle restaurant, Ivar’s Salmon House on Seattle’s Lake Union, has reported success after adopting Seattle’s $15-an-hour minimum wage two years early. Menu prices are up 21% but customers no longer need to tip – wages are as much as 60% higher. Seattle’s law, adopted last year after a strong push from labour and grass-roots activists, increased the city’s minimum wage to $11-an-hour beginning 1 April – above Washington State’s highest-in-the-nation $9.47. Scheduled increases that depend on business size and benefits will bring the minimum to $15 within four years for large businesses and seven years for smaller ones. Ivar’s Seafood Restaurants president Bob Donegan said: “It’s been a surprise. The customers seem to like it, the employees seem to like it, and it seems to be working, at least in this location.”

Meantime launches ‘BrewFest and Friends’: Meantime Brewing Company has launched “BrewFest and Friends”, a celebration of quality local London produce, plus over 180 of the best craft brews from around the globe. Launching on Greenwich Peninsula, from 29 to 31 August, the three-day festival sees Meantime’s hugely successful BrewFest concept return bigger and better than ever before with over 80 draft lines and 180 different beers available. Featured “Friends” will include local retailers, selling everything from arts and crafts to luxury gelato, some of London’s finest street food and London musicians, performing a range of live music, from jazz to rock and roll. Richard Myers, marketing director at Meantime, said: “The idea behind ‘BrewFest and Friends’ is one born out of a passion for high quality ‘craft’ products and the close ties we have with other local producers, largely from our hometown of Greenwich. We think ‘BrewFest and Friends’ presents us with the perfect opportunity to showcase and celebrate some fine local artisan products and producers that we know our new and existing BrewFest fans will enjoy alongside the main attraction – the beer.” BrewFest and Friends is open from Saturday 29 August between 11am-10pm, Sunday 30 August between 11am-10pm and Monday 31 August between 11am-7pm. Tickets cost £20 in advance or £25 on the day, including entry, five beer tokens that are exchangeable for a one-third pint each, a Meantime branded glass, wristband and a “BrewFest and Friends” programme.

Company News:

New craft beer cafe-bar featuring UK’s first ‘pinball hall concept’ set to launch in Birmingham: A new craft beer cafe-bar featuring the UK’s first “pinball hall concept” is set to launch in Birmingham. Newly formed Tilt Brum has applied to Birmingham City Council to open the venue in a vacant unit in the grade II-listed City Arcade off Corporation Street. The company is looking to renovate the existing ground floor and basement space to create Tilt, serving eight draft beers, about 35 bottled brands and a rotating selection of coffee beans. Tilt Brum is aiming to open the cafe-bar in September and also plans to run training schemes and scholarships in due course. A design statement accompanying the application said: “The business vision is to open a modern, multi-functional venue that will develop the concepts of espresso-based coffee drinks and craft beer bar which is supported by a pinball hall concept that will be the only one in the UK. There will be an extensive and high quality beer range from UK and European breweries and a selection of coffee beans independently selected from UK coffee roasters.” Co-founder of Tilt Brum Kirk Sadler told the Birmingham Post: “We want to continue bringing independents back into Birmingham. It’s a beautiful building and we’re keen to breathe a bit of life back into the units there and we hope we’ll encourage other artisan businesses to come in.”

Filmore & Union to accelerate expansion after overfunding on Crowdcube:
Healthy eating company Filmore & Union has overfunded by more than £430,000 on its crowdfunding campaign, enabling the company to accelerate its expansion plans across Yorkshire and the north of England. Filmore & Union launched its campaign with Europe’s largest online crowdfunding platform, Crowdcube, in May this year with a target of £500,000 and has now successfully raised a total of £931,960 from 317 investors in return for 22.28% equity. The extra funding means that Filmore & Union can open more sites in a shorter space of time than initially planned, with a new site in Ilkley scheduled to open next week followed by restaurants in Harrogate at the end of August, Beverley in September, and an extension of the company’s Wetherby restaurant, also scheduled for September. Filmore & Union is going to use some of the capital raised to invest in a brand new cold press machine, which is relatively new to the UK from America, and retains more of the nutrients, fibre and even protein from the fruit and vegetables. The company was founded in 2011 by Adele Carnell, a former wellness clinic owner, and nephew Will Pugh, a Michelin-trained chef, who were frustrated at the lack of healthy, unprocessed food on the high street

Oxfordshire inn wins Good Food Guide readers’ award: An Oxfordshire inn that opened just over a year ago has beaten eateries across the UK to be crowned the overall winner of the Waitrose Good Food Guide Reader’s Restaurant of the Year Award. The Miller of Mansfield in Goring had been nominated as regional winner for the south east and also crowned overall winner by the editors of the guide. The establishment, run by husband and wife team Mary and Nick Galer, was recognised for its “intricate” food and “brilliantly priced menu”. The Galers previously worked at Heston Blumenthal’s The Crown and The Hinds Head, but opened their own restaurant just over a year ago. Mary Galer said: “Our approach to dining is very straightforward. We serve traditional British food cooked with the best ingredients we can find, in a professional but friendly setting. There are thousands of other restaurants out there, but we hope this sets us apart from the rest. Winning the award’s been a huge morale boost for our staff, and it reflects all the hard work they’ve poured into the business since it started 15 months ago.” Elizabeth Carter, Waitrose Good Food Guide editor, added: “Our overall winner shows that top quality food doesn’t have to come with a top priced bill.”

The Cinnamon Club closes for £1m refurbishment: Westminster’s modern Indian restaurant The Cinnamon Club has closed until 10 September for a six-week refurbishment, costing in the region of £1m. The restaurant will reopen with a contemporary new look and a new menu from executive chef Vivek Singh and head chef Rakesh Ravindran Nair. Now approaching its 15th year, The Cinnamon Club’s new menu additions will include a selection of large feasting dishes designed for sharing and brought to diners on a trolley and carved tableside. A celebratory Sharing Feast menu will also be available for tables of four or more, while the ten-course tasting menu will feature new signature dishes. Singh said: “The Cinnamon Club has never been content with standing still and has always pushed the boundaries with creativity and innovation. The refurbishment is another step in that direction to ensure we are at the cutting edge of London’s dining scene.”

Deltic Group to reopen Exeter site as Unit 1: Deltic Group, the UK’s largest nightclub company, is to reopen its Exeter site, Arena, as Unit 1 after a refurbishment. The club, on Summerland Street in the city centre, will close this Saturday for a refurbishment. It will reopen to the public on 5 September under the new name. Leanne Goddard, the club’s general manager, said: “Arena might be closing after 15 years in the city but we are confident that our existing and new customers will really enjoy the new look and feel of Unit 1. It is a vote of confidence by Deltic to invest in Exeter and contribute to the late night economy that plays such a vital role in a thriving city.” Improvements will include a new DJ console, plus three new bars and six VIP booths with table service. The investment by Deltic will also create 30 additional jobs.

Cotswold hotel hits the market with £3.95m asking price: A three-star hotel is on the market for £3.95 million. Cotswold Inns and Hotels has appointed Colliers International to market the Bear of Rodborough. The 46-bedroom hotel stands in almost three acres of grounds. Colliers International hotels director Peter Brunt said the hotel had shown good turnover of £1.9m net under management. He added: “The Bear also benefits from planning consents, which could allow for significant expansion of an already thriving business.” The grade II-listed building is believed to date in part back to the 17th century and has been operating as a coaching inn since the 18th century. Brunt said: “Unusually for a Cotswolds hotel, The Bear is not dependent solely upon tourist visitors – although there are plenty of those. Business travellers, functions and local trade make up a good mix that ensures a healthy turnover all year round and for a management-run hotel, it can generate an enviable bottom line.”

JD Wetherspoon closes Brigg pub for three days in horse fair week:
JD Wetherspoon is closing its White Horse pub in Brigg, Lincolnshire, which opened in January this year, for three days – two days last weekend and also tomorrow (Wednesday) – because it doesn’t have the staff numbers required to cope with customer numbers in horse fair week. Before the weekend, White Horse manager Gavin Ellis said: “We didn’t have enough staff to cope with how busy it is going to be. Everybody has been made aware and we will be open again on Monday morning at 8am.” JD Wetherspoon spokesman Eddie Gershon said it had assessed the situation and felt it could not run the pub in the manner its customers expected with the number of staff working there and with the expected influx of people from the event itself. He added: “The pub licensee was advised of the date of the event by the council. The licensee contacted a number of other businesses in the area and was told that they would be closed for the weekend. Wetherspoon felt that it would be difficult to run its pub with the number of staff employed there and decided to close Saturday and Sunday. The pub will be open as normal Monday and Tuesday. The pub will also close for one day on Wednesday and reopen Thursday morning.”

Papa John’s franchisee plans rapid South Wales expansion: A Papa John’s franchisee plans to open three more sites by the end of 2015. MBA graduate Umar Malik opened his first Papa John’s franchise on Dilwyn Street in Swansea last October after moving from the Midlands to Swansea to pursue what he believed to be better growth potential for the chain in South Wales. A further site has since launched in Morriston. Malik’s business has 65 staff, 45% of which are full-time, and the two stores are on target to hit turnover of more than £1m in the first year. As well as plans for a further three stores by the end of 2015 – in Newport, Neath and Cardiff – he is also eyeing potential sites for next year in places like Bridgend, Llanelli, Gorseinon, Port Talbot, Porthcawl, and a second in Newport. “I didn’t know much about the area when I came to Swansea,” he said. “But Wales has become my home now really. It’s given me the chance to make a success so it has got that special thing. As long as I don’t mess it up, I have reserved the M4 area for two years, so nobody else can come in.”

PizzaExpress fined £200,000 over safety failings: PizzaExpress has been fined £200,000 after a maintenance worker was seriously injured after falling five metres out of a restaurant window onto the pavement below. Kamil Pisarek, who was 28 years old at the time of the incident, suffered serious spinal injuries and was left a tetraplegic after surviving the fall on 8 December 2011. On the day of the accident, the former head chef required Kamil to carry a heavy hot cupboard up a back staircase leading from the first to the second floor, assisted by three other employees. The hot cupboard, weighing 168kg, became stuck on the first landing in close proximity to a low-level first floor window. While trying to free the unit, Pisarek fell backwards through the window and onto the pavement. Westminster City Council prosecuted PizzaExpress (Restaurants) after an investigation identified serious safety failings. PizzaExpress (Restaurants) had pleaded guilty to breaching section two of the Health and Safety at Work Act 1974 for failing to protect the health, safety and welfare of one of its employees. The company was also ordered to pay costs amounting to £58,453 at a sentencing hearing at Southwark Crown Court.

Pesto to open first Marston’s site in September:
Pesto, the brand led by Neil Gatt and Sara Edwards, is to open its first Marston’s site in September – also its first branch in Leicestershire – at the site of the old White Horse in Desford after a £550,000 co-investment. Edwards said: “With our refurbishment plans for our latest restaurant we wanted our design to really make Pesto at the White Horse become a key local landmark with an inviting, modern exterior while still respecting the existing architecture and location. The restaurant is hoping to fill about 40 vacancies for a variety of roles ahead of its opening, with potential for further team growth in the future.”

Marston’s wins planning battle to convert pub into supermarket: Marston’s has won a planning tussle to convert The Seven Stars in Sedgley into a supermarket. Last year it looked like a battle by locals to save The Seven Stars had been won as Dudley Council’s development control committee rejected an application to extend the pub on Gospel End Road as part of proposals to turn it into a Morrisons food store. However Marston’s, which previously said the pub was surplus to requirements, lodged an appeal against the council’s decision, which was upheld by the planning inspectorate. Activists, including political rivals from UKIP and Labour, have united in their disappointment over the decision, with Sedgley councillor Bill Etheridge calling it “a slap in the face for people who dared to stand up for what they believed in”.

Soho House doubles US office space: Soho House has signed a ten-year lease to double its office space in New York’s Chelsea area. The club and hotel houses its executive offices at A & R Kalimian Realty’s seven-storey property at 513-519 West 20th Street, near 10th Avenue. Soho House, which moved into the building in 2012, will grow to 10,200 sq ft from 5,000 sq ft on the fifth floor. Joseph Cayre’s Midtown Equities took full ownership of Soho House’s New York operation in February, buying out billionaire Ron Burkle’s stake for $67m. In the city, the Soho House club is located at 29 Ninth Avenue in the Meatpacking District. Soho House’s New York club, which opened in 2003, is one of five outposts in the US and 14 around the world.

Ask Italian marks new kids’ menu with social media campaign: To celebrate the launch of Ask Italian’s new kids menu this week, the group is launching a fun social media campaign, centered around the brands’ kids ethos of #ServingUpSmiles. Launching on Ask Italian’s social media channels yesterday (Monday, 3 August), the #ServingUpSmiles campaign revolves around a short film of kids sampling different foods – from tastes they love such as chocolate and strawberries, to more “mature” flavours like olives and luganica sausage. The film has been created to show that Ask Italian know exactly what children like to eat, and can be viewed in its entirety at where the full kids menu can also be explored. For the summer holidays, Ask Italian has launched the new menu with a special summer edition – complete with pop-out finger puppet characters Luca and Lucia (and a puppet template for kids to draw themselves), and a nationwide colouring competition, where budding artists can show off their best colouring skills to be in with a chance of winning a £50 family meal voucher. Ask Italian marketing director Corinne Prior said: “Whether it be the food, design or atmosphere in our restaurants, we always take inspiration from Italy. The Italians are passionate about family dining and sharing meals and this has inspired our new kids menu, where we strive to serve dishes they will love to eat whilst also keeping them entertained. Testing out our new menu on the toughest critics out there (a group of our younger customers), we’re confident we’ll be serving up smiles across the country this summer.”

Robinson Retail introduces Costa to the Philippines: Robinsons Retail, the Philippines’ second largest multi-format retailer, has brought Costa Coffee to Metro Manila in its first foray into the food and beverage sector. It has launched two branches: one in Eastwood City in Quezon City and another in Robinsons Place in Manila. Another three stores will be opened by the end of 2015 in Bonifacio Global City (Taguig City), Tera Tower (Quezon City), and Robinsons Place Antipolo (Rizal). Corinne Milagan, general manager of Costa Coffee Philippines, said it aims to build 70 stores in five years. A local media source argued this was “conservative considering their connection to the shopping malls, residences, and office buildings of Robinsons Land Corporation”.

Butcombe reports 23.4% increase in bottled ales sales:
Butcombe Brewery has reported a 23.4% increase in the sale of bottled ales as leading supermarkets and convenience stores move to satisfy demand for good quality regional products. There has been a 50% increase in the number of outlets listing Butcombe beers, meaning that June saw the highest production of its bottled range in the history of the brewery, which is based at Wrington, north Somerset. Martin Holland, national account manager for Butcombe, said: “Consumers are beginning to understand the breadth and quality of British ale and retailers want to meet this demand by expanding the ranges they sell. The demand is driven by the big increase in profile of quality ale in pubs as well as supermarkets and off-licences and we are working hard to drive greater volume by attracting more stores to our product, and increasing our own customer base.” Butcombe’s sales are growing at more than twice the category average (23.4% compared to average bottled ale category of 9.5%: Nielsen Scantrack sales value Moving Annual Total June 2015).

Fleurets relocates East Anglia office to Cambridge: Agent Fleurets is relocating its East Anglia office from Sudbury, where it has traded for 36 years, to Cambridge. “The Fleurets board recognises the need to expand our company’s presence in East Anglia as it is one of the fastest growing regions in the country,” said director Bob Whittle. “To support this growth we need to have modern offices and easy access to a good road network in order to best serve our clients. Being based in Cambridge is a strong strategic location for us.”

Multi-site owner fined £3,000 after cockroaches found next to open tubs of ice cream at Newcastle restaurant: Lau’s, the family-owned multi-site Chinese restaurant operator, has been fined £3,000 and ordered to pay £3,200 costs after cockroaches were found next to open tubs of ice cream at Lau’s Buffet King in Newcastle. Restaurant owner Jun Lau and the company Junny were prosecuted after failing to put in place procedures to control pests and to keep the restaurant clean. Newcastle Magistrates’ Court heard customers complained for months of seeing cockroaches scuttling across tables and floors at the Stowell Street venue as well as flies breeding from drains. Newcastle City Council’s two-month long investigation led to the 200-seater restaurant being shut down for eight days earlier this year after it was deemed a danger to the public. Despite repeated warnings to call out pest control and deep clean the premises, complaints continued from members of the public between November 2014 and January this year. A council report said: “Further evidence of cockroaches was found in the downstairs pot wash room indicating that the whole premises were infested. Officers decided that the premises presented an imminent risk to health and needed to close.” Lau is part of the Lau family business empire, which owns six Chinese restaurants across the north east, including Buffet King, which opened in 1999.

Coffee Republic opens 25th coffee bar in Golders Green:
Coffee Republic has opened its 25th coffee bar in Golders Green, north west London. The company has opened the franchised 99 sq ft 25-seat venue in Golders Green Road less than a week after opening a site in Bedford. Coffee Republic is set to double the size of its UK estate by the end of this year. The company is experiencing the most successful period of growth since new owners took over in 2009 and currently operates four managed sites and 21 franchised venues.

Gala Bingo set to build first new club for nine years, scraps plans to close nine venues:
Gala Bingo is set to build a £5m club in Antelope Park in Southampton – its first new club for nine years. The company has also scrapped plans to close nine clubs and aims to invest £40m into its programme of club refurbishments. Both decisions have come as a result of a bingo tax reduction from 20% to 10% announced by the government in the 2014 budget. The new venue in Southampton, which will create 50 jobs, will provide two separate sections in which to play the same bingo games, in order to attract a younger clientele while allowing Gala’s traditional audience to play in a quieter environment complete with sound proof glass. It will also have a slot machine arcade, a pub-style food menu and an outdoor terrace. Simon Wykes, managing director of Gala Bingo, said: “Gala Bingo is delighted to keep its commitment to the treasury with the construction of a new-build club. With a total investment of £5m, the new Southampton club is a first in so many ways for Gala Bingo. It’s not only the first, full new-build Gala Bingo club in nine years; the concept caters for all types of bingo players, both regular and new.”
Technomic and Propel partner for UK and US foodservice trends and direction conference: Insights and research firm Technomic is partnering Propel for a full-day conference looking at UK and US foodservice trends and perspectives. The event is on Friday, 18 September at One Moorgate Place in London and attendees will also get a free copy of Technomic’s Top 500 US Chain Restaurant Report and the UK’s leading 100 foodservice brands worth a combined £800. Technomic’s vice-president Dave Henkes will give an industry update on UK foodservice and compare it with the US as well as providing forecasts and beverage trends in both markets. Fellow vice-president Darren Tristano will examine best practice in menu, concept and service among growth concepts as well as looking at consumer demands. Technomic’s Patrick Noone will provide insights on current UK trending menu flavours and preparations and consumer priorities and attitudes. Paul Damico, group president of Focus Brands – which operates several fast-food concepts in the US including Schlotzsky’s Bakery & Café and Moe’s Southwest Grill – will share best practices around creating a unique positioning, culture and growth strategy. Propel managing director Paul Charity will also lead a discussion of senior executives about current consumer trends, menu and beverage trends. Those taking part are: Jon Yantin, commercial director of the ONE Group, Chris Gerard, founder of Innventure, James Nye, managing director of Anglian Country Inns and Ben Levick, director of operations, TCG Group. Tickets are priced at the two-week early-bird rate of £295 plus VAT for operators and £495 plus VAT for suppliers and are available by emailing

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