Pubpaper 814 – Losing Pubs and Beer Prices

Posted: 4th July 2015 by santobugtio in Writing

I mentioned a few months ago the story of the illegal demolition of the Carlton Tavern in London by its owners who wanted to build apartments on the site, but had been denied permission and knocked the building down the day before it was due to get its Asset of Community Value status ensuring its use could not changed without the local community having a chance to buy the building.   Westminster Council have subsequently ordered the owner of the property to rebuild the Carlton Tavern brick by brick to its original design.

Another case has come to light in St John’s Wood, again in London.  This time it was a pub of Victorian origin called the Alchemist (originally called the Fishmongers Arms) about a month ago.  The now former pub building is inside the areas conservation zone and is considered one of the landmark buildings in the area.   The pub falls under the jurisdiction of Wandsworth Council who are soon to give 121 pubs in their area of control added protection, which means demolition or change of use to retail (currently not needing planning permission) would now need council permission.  I don’t usually give local authorities praise, but hats off to this decision.

This may have hastened the owners “need” to remove the building from the land he owns before protection kicks in, very much like the Carlton Tavern incident.  The pub was not currently trading, but if a landowner wants an empty building, he can easily make it not attractive for anyone to take on the site and to make the existing tenant leave by simply pricing the rent out of the market.  Wandsworth Council say they could order the pub to rebuild brick by brick in the original style, I hope they do, because otherwise we will get more pubs being knocked down without permission knowing the fine will be more than covered by the profits on the apartments or the sale of the land as a development site.

This happened in the past of course, but usually there was a “mysterious fire” which gutted the building and made it structurally unsafe, owners are just more brazen about it now.

Now onto beer prices, there is a worldwide survey each year on the average cost of a beer across 75 different cities, looking at Europe, Eastern Europe takes the top three cheapest slots with Krakow (Poland), Kiev (Ukraine) and Bratislava (Slovakia).  The Scandinavian and Swiss cities are the most expensive.  No real surprises there, both ends of the scale already have a reputation regarding their beer prices.  Considering the UK and Ireland, as you’d expect London and Dublin are fairly close to the expensive end of the scale.  The other UK cities listed (Edinburgh, Leeds, Liverpool) were all sitting in the cheaper half of the table, surrounded by other European capitals.

The survey only cover hotels in the these cities it should be noted.  So if we take the example of Leeds, they quote £2.99 per 330ml or £5 per pint.  In reality I’d put Leeds about £3.50 to £3.80 per pint on average across normal pubs both real ale and craft.  Oslo works out at £8 per pint, and Helsinki at £9 per pint and from people I know who have stayed in hotels over there that’s about right, with bars charging at least £6 per pint (similar for Iceland, which isn’t on list) which about the same percentage difference as Leeds between hotels and bars.

Take Slovakia and Poland, who’s hotels charge £2.50 and £3 per pint, the beer is known to be cheap over there, assuming the same difference as Leeds it would be about £1.80 and £2 respectively in bars, a price you’d not be surprised to be paying judging from people who have been over there.  In all these places of course you can find cheaper places to drink.  But it shows we can moan about beer prices, and they are high compared to a lot of places in Europe that we typically visit on holiday or business.  But compared to other continents and certain European countries in this survey, we get a veritable bargain.

Remember when we used to consider paying £3 per pint something we’d never do, we’ll most of us do now, and probably nearer to £4 if you drink premium lager.  Our psychological barriers for what we’ll pay will continue to increase, we are not going to give up the pub or beer, it is too ingrained in us.

 

During the industrial revolution, the term “boom town” applied to a lot of Yorkshire towns at one point or another when a major employer came to town and built the new mill or factory, causing an influx of new workers to move into and expand the town into the surrounding area.  This in turn bought in other factories and mills, bringing even more people and jobs into the area.   But the downside of being a “boom town” was when these major employers closed or trimmed jobs due to automation or machines, just look at the developments in textile technology in the later 1800’s which cost countless people their jobs.  The side effect of this is either a lot of unemployed poor people living in the town or people moving away leaving vacant properties and building.  Either way the money is sucked out of the town.

The point of this short history lesson is that towns go through cycles of prosperity, stability and consolidation like everything else in this world.   I’d like to talk about Sowerby Bridge this week and it having its moment in the sun.   Sowerby Bridge experienced a big expansion in its pub market about ten years ago, the Puzzle Hall had been rescued from the thieves literally stripping its materials and was starting to become the de-facto small music venue in the area, The Works had opened and was getting rave reviews and becoming a destination for real ale drinkers.  The Jubilee Refreshment Rooms had opened catering for the same crowd, Bar Franchesca catered for the cocktail crowd and slightly later the Roxy re-invented itself as a late venue.

People flocked to the town including myself, and was widely acknowledged to be the best night out in Calderdale, with packed bars every weekend.   The existing local pubs changed as well, the William IV smartened up and became just Williams, the Turks Head made improvements to appeal to this new crowd.  All this success attracted one of the big pub operators in 2014 when Wetherspoons who took over the Wharf site and expanded the premises beyond all recognition.  Before Wetherspoons came into town, Sowerby Bridge had found its level regarding the number of pubs it could support, probably back in 2012, with enough passing trade during the day, steady weekday evenings and the big nights at the weekend being the big money earners.  The numerous restaurants also attracted a big crowd.

There is something people call the “Wetherspoons Effect”, that says that the other pubs in the town suffer a loss of trade as people move some or all of their drinking to a venue which can beat most other venues in town on price, food offerings, beer choice and pure value for money.  I’m not the worlds biggest fan of Wetherspoons, but even I can’t deny any of those four claims.   I didn’t see it that much initially with Sowerby Bridge, on my visits to the town, trade in the other pubs seems slightly down, but not the big drop people said would happen.  However talking to people involved in the pub trade in the town, this has now happened with footfall and takings slowly on a downward descent, one venue has closed already since they opened, The Engineers (the Bulls Head / Vaults was closed before they came to town I believe).

However the picture is not that simple, just down the road, Ripponden has been quietly building up its reputation for a good night out.  The Beehive and Old Bridge Inn have been servicing the area for years, but the other pubs nearby were in a bit of a state of flux for a while, changing names, switching from bars to bistros to restaurants trying to see what worked in the town.   There now seems to a stable core of pubs, bars and restaurants all within walking distance which is the key for a “night out town”.  Just outside of town, the Fleece Inn has expanded with a huge terraced area and is getting the punters visiting, on the main junction you now have the Millstone, just down the road you have the Silk Mill.  Slightly further on you have one of the original restaurants in the town, Cinnamon Lounge, a fixture in the area, and just on from there towards Rishworth, the Malthouse.   All of these offer a similar mix of craft beer, real ale, good wines and food to varying degrees, meaning most people can have a pleasant pub crawl and find something to drink in most bars.

None of these bars are groundbreaking, but they give the majority of people what they want from a night out. A nice environment, good drinks selection, food if they want it.  Success attracts success and more places will open until it hits a plateau and then it will see select closures as trade moves onto the next place and consolidation of the pub market in the area.  It is as Simba from the Lion King says “Its the Circle of Life”.

Last weekend, I popped over to Huddersfield for the afternoon, and it would’ve been rude not to visit a couple of its excellent hostelries.  The last time I was at the Kings Head within the Railway Station building it was in the middle of a major rebuilding project with the roof being held up by jacked supports and the entire pub sporting a rather unfetching black protective plastic sheeting look.   What a difference 6 months makes!  The place now sports its newly restored decoration with the original look of the room as it was in its time as the ticket office before the days of the Kings Head and its predecessors.  There is some work still to do above the bar and snug, but the high ceilings, blue panels and white coving along with the extra space released from the works has really transformed the place and judging by the band setting up when I was there, the acoustics are not too shabby either.

The pub always had a great range of beers from the real ale world and Purple Moose Madog certainly whet the whistle on the day.  But you weren’t short of choice with range of regular beers from the likes of Farmers, Magic Rock and Timmy Taylor on offer supplemented with a range of local guest beers from Golcar, Slaithwaite and Elland as well as some cracking guest beers from further afield at Oakham (Citra) and the aforementioned Purple Moose from North Wales.  I would have stayed on, but had to meet up with the rest of the family, but another longer visit is certainly in order.  Happily the meet up point was another great pub in the town, Hand Drawn Monkey, located on Wood Street (one down from the main road at the top of town).  This was where the real beer highlight of the day was for me (and it takes a lot to beat a Purple Moose beer).

Along side their own brews, they had a range of beers from the Black Iris takeover the previous week.  The brewer is Nottingham based and has established itself regionally, now spreading its tentacles across the UK.  It’s a brewery I’ve not come across before, but if the three beers I tried are indication of what they can brew, it’s one I want to try more often.  The three beers I enjoyed were all very different.  In no particular order, Homeward Bound Double IPA (7.2%), Drop the Anchor Black IPA (6.5%) and Rise and Shine Coffee Milk Stout (5.2%).  It didn’t do any harm that these are some of my favourite varieties of beer.  First up Drop the Anchor is everything a good Black IPA should be, deep black in colour, a good creamy head, dark malts and good bitterness throughout the beer, with a fresh taste and lightness on the palate with a good long aftertaste lingering in your mouth.

The second beer is Homeward Bound, a copper / amber coloured double IPA with a quickly settling head, the taste is strong without being overbearing and certainly doesn’t hide its strength, with a mix of top end flavours from the citrus family combined with more earth flavours for depth, it drinks nicely and the rich flavours graduate though as the beer level lowers in the glass.  The last beer was Rise and Shine, I’ve always been a fan of coffee stouts, as a lover of both coffee and beer.  This beer had all the coffee taste you’d look for in beer of its kind, with a nice hit from the beans balanced with a cream taste which is slightly sweeter than most (apparently from the lactose added, which also adds to the smooth rich body).  Three very different, but equally good beers. It should be noted that these three beers were all on keg, with some of their offerings also coming on cask.

Before I wrap up this week, I am going to mention something that I really do appreciate in pubs, tasters.  With the wide range of beers and brewers out there, there can be a lot of variation within a beer style.   At Hand Drawn Monkey I was offered a sample of each, as well a small taster of a couple of other beers on the bar as I was talking to the barman and when you can go to a bar and genuinely ask what they recommend, it is a very good sign they know their beer and how to look after it.  I can do the same at the Cross Keys, Siddal with the same trust.  Another pub who has been good at this in the last couple of weeks was the Ship Inn, Brighouse when choosing a cider from their festival range at the 1940’s festival, with samples of 3 or 4 before making a choice.  It shows you have nothing to hide and in the beer world, that can’t be a bad thing.

poster_v2smallThose who want to read about beer, please skip to column 2, because it is that time of year again when I promote the Ramfest Music Festival at Southowram Cricket Club on Sunday July 5th from 1pm, now in its sixth year, raising more money for our two nominated charities and bringing you some of the best bands from the local area. Returning to our traditional Sunday slot, we’ve got 6 great bands for you to enjoy all the way through till 8pm.  Entry is only £5 per adult and £1 per child, car parking is free on site.

Our first charity this year are Ravenscliffe School who are raising money for Ravenscliffe@SpringHall.  This project aims to build a trackside 6th Form and Community Centre at Spring Hall and since 2014, have raised the £2.4 million needed to develop the building, over £1 million of which was donated by local people.  What we want to help to fund is fitting out the building so the kids at the school have some fantastic facilities.

Our second charity is the Young Carers Service, who work with children and young people aged 8-18 who help care for a family member with an enduring illness, physical or mental health problems, learning difficulties or dependency issues.  The provide support via activity sessions, project work, residential weekends and one to one support.

We’ve got some of last years favourites returning to Ramfest this year, with last years headliners International Party Doctors leading the way.  The ever popular and widely acclaimed Psychoslinkys and Jake Smallbones return to the Ramfest stage, Jake becoming one of the rising stars on the Brighouse music scene over the last year.  We are also delighted to announced the return of While the Cat’s Away, a long term supporter of the event who sadly had to pull out of last years event.

This year we add Lewrey, a Huddersfield based band who were part of the BBC Introducing program, before going onto further success.   Also performing are the talented staff and students from Ravenscliffe School who will kick off the event at 1pm.  Supporting all of the bands we have DJ Ben Bottomley keeping the music going all day.  With beer at £10 for 4 pints, some of the cheapest festival beer you will find and four great food stalls keeping you filled all day along with kids entertainment throughout the event, it’s a great day out for everyone.  Please come along and support our great charities and have a great day.

Now back to the beer.  The summer is apparently upon us now, not that the weather tells you that.  Rather every “fruit cider” manufacturer has brought out a new flavour to tempt drinkers into consuming a chemically flavoured poor excuse for a base cider.

P1160030-50pc JPG UploadI was at the Brighouse 1940’s weekend and what was great was to see all the pubs doing good trade and getting in the spirit of the event, although some pub owners are probably glad it is not every weekend for the sake of their health and sanity.  Over 100,000 people are estimated to have visited over the weekend, excusing the pun, practically an invasion of the town.  Also what is nice at weekends like this is being able to walk around town with a beer in hand as you take in the event.

The outside bar was also a pleasant surprise, rather than be the usual 3 mainstream brands and a couple of big brand ales, there was a good range of 4-5 real ales and more cider choice than just Strongbow as well as the expected core lager choice.  Most of the beer sourced relatively locally, they had some good session beers on tap and the weather helped trade, although the stiffer breezier on the Saturday drew more people into the pubs that day I was told.  The Sunday brought out the best sight of the day however, with some bloke in 1940’s dress, pitching a deck chair on the pedestrian crossing outside the Ship Inn, supping a beer, a picture as English as you can get.

It is these sort of festivals which can make or break a pub.  In a pub I am involved in, in Kirklees, there are 5-6 weekends or festivals a year in the town which can define how well you do across the year.   You either are a destination town or you have to drive visitors.  Sowerby Bridge is now a destination for nights out and is well known for its pubs,  Hebden Bridge is a tourist trap (in the nicest way) and thus can support a good number of pubs, but market towns like Brighouse need to bring people in and with this, the music weekend and the other events they bring crucial trade to its shops and pubs.

 

Pubpaper 810 – Big city bars and trend following

Posted: 28th May 2015 by santobugtio in Pub Paper, Writing

Last week saw me in Manchester for a couple of days, giving me a chance to explore the city I still class as my favourite.  Having worked there, I got to explore the city, its bars and pubs and most, if not all, of its streets.  The city has always had a thriving bar and pub scene, but one which follows the trends of the times, as things do in cosmopolitan areas.  Most of the bars I visited 10 years ago are still around, despite the city being dotted with building sites, established buildings being knocked down for yet another glass and concrete tower, and half its roads dug up for the new Tram extension.

It was sad to see the Cornerhouse (next to Oxford Road station) shut, now moved to its recent replacement Home, just down the road.  The Cornerhouse was a regular haunt and its compact 3 floors of cafe and bar, shop, restaurant and event space created really good atmosphere as the noise permeated floor to floor.  The new bar in Home lacks all that, it could just as easily be in a shopping centre if you clad its bare concrete structure.  However it is still good to see that the Northern Quarter is still keeping it’s rough edges.  A mixed of bars, restaurants, independent shops as well as establishments serving the less salubrious needs of the people, it has still got character.

My favourite bar in the Northern Quarter is Odd.  A two floor establishment which sells a handful of real ales, a selection of craft beer on tap and does pretty good food as well.  The atmosphere is chilled and the service good, not leaving much more you can ask from a pub.  This is a bar I visit most occasions when in the city, however as a last stop before heading back to the hotel, we popped into NQ Terrace in the same area.  An interesting cask beer selection, of which I had Magic Rock Salty Kiss, a favourite of mine, along with a good range of world and European craft and keg beers, with typical stripped back brickwork you see in a good number of the bars of this type.

We were in the city to go and see Foo Fighters at the Emirates Old Trafford, home of Lancashire County Cricket Club.  The promoters decided that a reasonable price for the beer was £4.80 for Fosters or Strongbow.  Nearly a fiver for Fosters! It’s the only beer which would be improved by the heavy rain falling at the time filling the glass back up, lets be honest it’d probably be improved by the other use of a pint glass at a 50,000 capacity stadium where you can’t move from your current location.   It is the same at any gig you go to these days, generic beer at premium prices.

But looking at and visiting bars over a couple of days gives you the bigger picture.   Every other bar in the city is now marketing itself as a craft beer bar just because they have a few pumps serving the stuff.  One of the bars I went into was Joshua Brooks just off the main university drag.  A nice bar serving good cheap food, with 4 good beers on pump and a nice range of session ales as well as more interesting beers, which is matched with a similar amount of craft keg.   But they don’t sell themselves as a real ale pub, but a craft ale pub.  Prior to the Craft boom, they might have marketed the real ale element of its offerings, but the trend is to push the craft beer message, the same way that you pushed your wine range as a bar in the 1990s.

Five years down the line, they’ll be selling themselves as offering the next big thing.  You see the same with food, everywhere you go you saw pulled pork and slow cooked meats being offered and promoted heavily.  Pulled Pork is the food equivalent of Craft Beer at the moment, many places offering it, but a lot not coming up to standard.  I like both of these things and make a mean 72 hour pulled pork, doing so well before it became trendy and when they stop being trendy I’ll still keep eating and drinking them both.

The world feels like everything has to be labelled, categorised, filed into its slot.  Bars feel the need to fit into a niche, it is not good enough to just be, and sell yourself on simply on what you are.  The use of the term Real Ale was just as misused 10 years ago.  Another one is just around the corner ready to be abused accordingly.

 

I’ll start this weeks column with a quick note regarding the forthcoming takeover of the London based Meantime Brewery by SABMiller.  Announced a couple of weeks ago, the move is symptomatic of what is happening in the trade on the other side of the Atlantic.  Large brewing concerns want their piece of the Craft Beer sector and as I said a few weeks ago, it is moves like this and the formation of “in house” craft brewers that will dilute the craft beer label over time until it becomes worthless.  Just as Molson Coors brought Sharps Brewery to give it a real ale brand which real ale drinkers recognised, Meantime brewery, incidentally part owned currently by a former Miller Brands director, will become the public face of the SABMillers new premium craft beer range.

Some might say that we have lost a leading independent brewer, but others have been saying it has been going more mainstream for a while now, concentrating on its higher volume core brands than innovating new beers.  Wherever the line lies, the truth is that some Meantime drinkers will move on from the brand due to the takeover, at least as many will be blissfully unaware of the news and keep drinking as before and an equal or more amount will not be bothered.   Whatever it loses will however be more than compensated for on the sales line by the additional bar space it gets from the SABMiller distribution network.  As a business deal there are no losers, however what this could be is the thin end of the wedge regarding the mainstream penetration of the craft beer sector.

But now to the main topic this week, I’ve been writing a lot about the craft beer sector over the last few weeks, so this week I turn back to the world of real ale.   Real Ale is what got me into good beer, so will always be the core of my drinking consumption.   I paid a visit to the Victorian Craft Beer Cafe in Halifax the other weekend, a business owned by the same team who operate and lease the Puzzle Hall Inn, Sowerby Bridge.  They started off with 4 real ale pumps and 10 keg lines, they have now doubled their real ale range to 8 pumps, on the day ranging from 3.8% to 7%.  I sampled one from each end of that range, as well as one of their keg beers.  All were good beers, of that there is no doubt however the real ales gave me more satisfaction and in a mixed session do 99% of the time.

The following day I was at the Beck, Brighouse for a couple of pints whilst my daughter was otherwise engaged in town.  I ordered a pint of real ale, the landlord offering me a taster (I say a taster, it wasn’t far off a half in reality) as others had said it was a bit too citrusy.  I like a citrusy beer so had no problem with it.  However the great thing about real ale is that it is a living breathing animal that changes over time as it sits in the cellar.  The beer was labelled as a hoppy beer, and I have no doubt that a few days down the line towards the last quarter of the barrel that it will be a subtlety different beer and fit the beer pump description a lot more accurately.  I’ve had real ale before where I’ve virtually had the first and last glass out of a barrel and you’d swear they were not the same beer.  This variety of taste is something you don’t get with craft keg.

The downside of this living, breathing animal is that it needs more care to keep it in condition, a small movement of the barrel can unsettle a real ale and make it cloudy for a while (although normally to no detriment to the taste if it was good before).  It needs time to settle before serving and has a more limited shelf life in the majority of cases.   But in my opinion the product is worth the effort from the people the other side of the bar.  It also leads to a good rotation of real ales in our pubs, giving us far more range than we would get if the equivalent lines were connected to a keg.

A good real ale is as good as a drink can get and there are thousands of them out there.  Whatever your taste, there will be a “wow” ale out there somewhere and with the quality of many of our brewers, it is something I experience quite often at the pubs who know how to select and keep good beer.  When the worse case scenario usually is “that’s a decent beer”, real ale can’t be doing that bad.

 

As soon as the legislation regarding large pub companies having to offer “Market Rent Only” tenancies passed late last year I predicted there would be a move by these companies to a managed estate where the “landlord” is merely a manager who is an employee of the pub company.   Currently it operates over 5000 pubs across the country, with only 16 of them being on a managed basis.

The structure of Enterprise Inns will radically change over the next 5 years, with over 1000 pubs planned to be sold in that period.  At the same time they expect to convert up to 850 of their current properties to a managed pub.   They currently offer 5 year agreements to tied lessees, so within this five year period all of their properties will see an opportunity to them to make this move, or conversely see the current tied tenant apply for a Market Rent Only review upon renewal.

They expect that up to 1000 pubs in their estate will move to this Market Rent option by 2020, leaving them with a core of approximately 2500 pubs operating on tied basis.  This change is a significant one for a company which has been effectively operating the same business model in its various incarnations since the 1989 Beer Orders, which at its peak operated over 9000 pubs across this country, nearly 1 in 6 at the time, a figure achieved through the buyout of former Whitbread and Unique Pub Company estates in the 1990’s.

Enterprise chief executive Simon Townsend said the company remained committed to the tenanted and leased division but its plan makes clear that its strategic objective is “to diversify away from a predominantly leased and tenanted business over time”.  He also said it will continue to offer tied agreements of up to five years in length but will focus on growing its managed estate.

Having a large number of tied tenancies on the books has become a poisoned chalice to such pub companies and expect Punch and its peers to make similar announcements over the next few months.  The statement by the Enterprise executive along with the announcements makes it clear that it wants to sell all the valuable real estate worth more as a plot of land and building than it is worth as an operating pub business.  Some of these sold properties will be kept as pubs, but expect to see a lot converted to “other retail uses”.

He also wants to take as many of their pubs out of the reach of the Market Rent Only legislation by making them a managed house, however they are limited by the money needed to upgrade an estate which has in parts been neglected from a maintenance and decor point of view.  Also given their debt pile which costs them £77 million a year in interest and the additional £26 million cost of refinancing the debt this year to the business, that is why they are only planning to move just under 20% of its pubs to this model in the next 5 years.

From my point of view, as a drinker and somebody who knows people who operate pubs, both within the Pub Company world and outside of this world as owners and freehold tenants, all of this is rather a mixed blessing. It can only be a good thing when it comes to more pubs getting the choice of where to buy their beer.  However I feel that the best pubs regarding turnover and profit line will be brought in house to the managed division, whilst the prime locations which are underperforming will be sold on a property and land basis.  This leaves the non prime locations who are not among the top venues regarding turnover and profit who will be allowed to go Market Rent Only.

Leases will only be offered on a 5 year basis, so if one of these Market Rent Only pubs suddenly finds itself in the middle of a new development and a upturn in financial fortunes there is nothing to stop Enterprise simply not renewing the lease and taking the pub into the managed division.  It allows them to cherry pick the best properties on a 5 year rolling basis letting Market Rent Only landlords take all the risk in developing the trade.  Again they have engineered a win-win situation for themselves, but are we really surprised by that?

This week, after a few weeks exploring the beer world far and wide, I’m going to discuss some of our local pubs.  Living in the area for 17 years now, I’ve seen pubs come and go, fall into the pits and rise like a phoenix from the flames.  I’ve seen too many turned into housing and many more forced to struggle due to the likes of Enterprise and Punch Taverns.  But there is a lot of pubs in the area who do a really good job of serving well kept ale and making you feel welcome, the two basic functions of a public house.

I’ve written about Brighouse many times before and the town has benefited from new entrants in the pub circuit, with Jeremy’s and Millers Bar being the headline openings recently.  Both are good bars in their own right and ones I visit on a regular basis.  Jeremy’s has developed a reputation for its live music, whilst Millers Bar is well known for its Craft Beer selection and the recent opening of their beer garden is attracting more families now summer is coming along.

But I’d like to discuss a couple of the established names in the town.  The Ship Inn and the Commercial / Railway Inn have been around for years, both traditional pubs which provide the two key roles of a pub as defined at the top of this article.

I’ll start with the Ship Inn.  I was a massive fan of the place when Mark ran the pub and got on really well with him, Jason and the team.  After they left, I didn’t go in for a long time and when I did start to go in again maybe a year later, I didn’t warm to the pub immediately, it took a long time to build up the liking for the place I had before, it seemed slightly cold to me and the ale selection seemed to take time to get right.

Brighouse, Old ShipHowever Marsha and her team have turned the place around totally now, although I still want the backwards clock returning above the gents toilets door.  The place now is as welcoming as any pub in the area, the rotating beer selection over 5 pumps is well balanced and well kept as is the range of real ciders and tap beers.  The pub has restored its band of regulars and is attracting a mix of people from across the spectrum.   It is a place where you will find other pub landlords drinking and there is no better sign that a pub is doing well if your local rivals are drinking there.  With the back pool room and live music, they have returned the place to what it used to be, a very good small town pub.   Recent refurbishments have helped brighten the place up and you are also guaranteed that very special welcome if you are an Ipswich Town fan and let it be known.

HAL-1058-51900-railway-200x150@2xSlightly out of town there is the Commercial / Railway Inn, next to the town’s train station.  I’ll admit now I only really started drinking there because Jason who previously worked at the Ship Inn worked there also.  This has been run by Trevor and Sue for many years now and it feels like an extension of their home, in fact, some might say it looks like an extension of someone’s home with a bar placed at one end.   The Commercial is good honest pub, it doesn’t try to do anything fancy, serving 3 rotating well kept real ales and a good range of tap offerings again with live music and pool room.  Like Marsha at the Ship Inn, I have a lot of time for Trevor, as it’s not just about pulling pints and taking the money, it is being part of the community and interacting with the people who live in the area.

Many of Trevors long time regulars are like a surrogate family and they are looked after as they get older.  It is the modern continuation of the old school model where the pub was a service at the heart of the community, you knew peoples habits and you knew who to ask if something didn’t seem right.

For some older people, especially where natural old age causes memory loss / dementia, the pub can be the one constant linking the past to the present with things changing all around them.  They may not able to navigate to a new places, but they know the walk to their pub like the back of their hand.   If they visit a few times a week at lunchtime and eat there you know they are getting a decent hot meal that day and talking to people, keeping that critical social contact, avoiding isolation.  Bugger those who say beer isn’t good for you, when you get to that age, you deserve a few beers.

Pubpaper 805 – Brewdogs’ Equity for Punks 4

Posted: 23rd April 2015 by santobugtio in Pub Paper, Writing

Brewdog get a lot of mentions in this column, in fact out of the 234 articles I have done for Pubpaper, 43 have mentioned the Scottish brewery, about 1 in every 6 and this week I’ll be increasing the hit rate for mentions even more!

They made the brewdog_logo_detailnews last week due to the announcement of Equity for Punks 4, their latest fundraising share offering where they hope to raise £25,000,000 to develop their brewing capacity and provide funds to open new bars both in the UK and internationally.  The business by any measure is doing very well, revenue up nearly 400% over the last 3 reported years (and predicted to jump another 56% in the 2015 results), profit is up 1000% in the same period, figures any company would be proud of.

However the Equity for Punks investment is slightly different from a traditional issue of shares, it is not like the stock market where shares can move in price and be traded (well not yet anyway, plans are afoot to introduce a private trading platform for Brewdog shares, and they have not ruled out a public listing in the future).  When you buy shares in Brewdog, you naturally own a part of the company and get voting rights, but you get your benefits back in brand loyalty, through discounts at their shops and bars, the free beer on your birthday in a Brewdog bar, an invite to the party like AGM.

This is a very shrewd move from James, Martin and the team and a pattern that has echoed through the previous three Equity for Punk share offerings.  People invest in the company, then they invest in the company even more by using their discount to buy Brewdog beer and visiting Brewdog bars, it is the gift that keeps on giving for the company.   Just look at the extra benefits you get as an “Equity Punk”, first option on new beers, access to their beer box club and Abstrakt specialist beer club, all of these are extra cost items, all making more money for Brewdog.

You do not invest in Brewdog to make money (unless you are drinking so much Brewdog beer that your discount outstrips the cost of buying the shares), you are buying into the ethos of the company.  I wrote a few weeks ago about Brewdogs dilemma about its craft / mainstream future and by continuing with the non trading nature of the shares which encourages fans of both Brewdog and good beer to invest, they are sticking true to their roots back in 2007.

A lot of the money the company turns over goes back into the company, dividends are not paid out to shareholders.  The three main operators at the company, James Watt, Martin Dickie and Charles Greggor will own 74% of the company after this £25m issue.   Salaries for the directors are not excessive for a £30 million turnover company, with 3 directors on circa £125,000 with others on significantly less.  Employees are paid a living wage, not the minimum wage.  They are creating a significant number of jobs in the area, with 130 estimated to be created with the opening of the new plant this issue is funding.

The demand is obviously there for their beer, there is no other reason to build a new brewhouse triple the size of your existing plant at the cost of £3 million, just to keep up with demand.  There is also no reason to earmark nearly £9 million to open new bars here and abroad unless there is the demand for it.   It is not just over here where the demand is apparent, another £3 million is planned for a US based brewing operation to try and break this tough market with plenty of competitors, although links with US brewers from collaborations won’t hurt them at all.  Eight planned new bars and new markets will add new challenges, although owning a part of your distribution chain, via the planned set up of an “UK Import and Distribution Arm” will certainly help matters.

The core purpose is the same as any other brewer at Brewdog, get more beer to more venues in more countries as efficiently as possible, it is the subtle differences in how the company is run which puts the undeniably large company which Brewdog has become apart from the more mainstream brewers of its size.

 

Pubpaper 806 – UK vs US Craft Brewing Scene

Posted: 22nd April 2015 by santobugtio in Pub Paper, Writing

I’ve discussed over the last few weeks the Craft Beer sector of the market and several times I’ve mentioned that to see where the UK craft beer scene will go, it is good to look at a country about 10 years ahead of us when it comes to the craft scene, this country being the USA.  In the States there is an organisation called the Brewers Association who represent large craft regional brewers, microbrewers and brewpubs.  The rules of its craft brewer designation are simple; that you produce less that 6 million barrels of beer a year (less than 3% of US market), you are less than 25% owned by mainstream brewer; the majority of its total beverage output is via beers whose flavor derives from traditional or innovative brewing ingredients and their fermentation.

The growth of craft beer in the states really started in 1985, at that point there was only 110 brewers in total across the whole of the the country.  Over the next 14 years that number multiplied by a factor of 15, with 1500 brewers operational by 1999.  The number of new brewers then stagnated for about 8 years hovering around that same 1500 figure.  However in 2007 an explosion started, four years later in 2011 the figure had risen past the 2000 brewery mark.  It only took just over another 2 years in early 2013 to reach 3000 brewers and in the following year another 462 brewers started up operations.

Put this into perspective, at the start of Brewing Association records on the number of brewers in the country in 1873 there was 4131 brewers recorded.  At this rate the USA will surpass this number in the next 3-4 years.  This number in 1873 was an historical high for the era between then and now.  The US brewing industry nose dived after this year for just under a decade, losing nearly half of the brewing operations in 1873.  The period from 1910-1920 was disastrous for the industry with numbers falling from 1568 to 669 brewers, the following year was prohibition and the registered numbers of course hit zero.  After alcohol was legalised again in 1933 numbers hit about 800 brewers by the start of the next decade.  This figure gradually drifting down to the figure I started this with in 1985.

In 2014, the scene is quite interesting in America, of the 3462 breweries (or 1 brewery per 92,000 people), only 46 are non craft breweries, of the remainder 135 are big enough to be classed as regional (producing more than 15,000 barrels), 1871 are microbreweries (producing less than 15,000 barrels) and 1412 are brewpubs (where at least 25% of production is sold on site).  The rate of closure of such breweries is low as well, with 7 brewpubs opening for every one closing in 2014 and 23 microbreweries opening for every one which closes.  Brew pubs of course are exposed to the risks inherent with production and retails operations, so the higher rate is no surprise.

Taking a similar set of UK based numbers (the best figures come from Society of Independent Brewers).  Brewpubs are not as popular in the UK as in the US and in no way make up nearly over one third of all brewing operations.  Looking at microbreweries as per the 15,000 barrel limit in America, the responses to this survey would put about 87% of brewers in this category (lumping in the small number of brewpubs with the pure brewing operations, deducting a few percent for the large national brewers and those small operations owned by them). If you assume this over the 1,285 breweries in the UK, then it mean that about 1100 of them are microbreweries, a healthy segment of the market.  The good news is that we have more brewers per capita with one brewery for every 50,000 people or to put it into perspective an average of 4 “breweries per Calderdale” (pop. 204,000), showing Halifax and the surrounding area punches well above its weight when it comes to beer production.  Our growth in the number of brewers is similar to that post 2007 in the US as well, another good omen.

The big difference between us and the USA is that their definition of craft is purely numerical and puts many of the brewers we’d simply call “Small to Medium” sized breweries who we’d not consider anywhere near “craft beer” into that category.  Is this a bad thing, not in this writers eyes, craft is a label and is being diluted by mainstream brewers every day.  It will become meaningless in the next decade or so unless we adopt a precise measure of the term.  Are we following the USA for its good points in developing a craft beer market, absolutely and if we develop our brewpub market as they have that would be no bad thing at all.

References

http://www.siba.co.uk/forms/BeerReport2014.pdf

http://www.brewersassociation.org/statistics/number-of-breweries/

http://www.brewersassociation.org/statistics/market-segments/