Pubcos emphasise the importance of being ahead of the curve on brands
It goes some way to explaining why pubcos are now striving to offer their tenants and leaseholders an ever-widening choice of products.
Leading the charge among landlords appear to be Greene King, Scottish & Newcastle Pub Company and Punch Taverns, all of which emphasised the importance last week of keeping pace with consumer demand.
“Customers are becoming more and more discerning, and our tenants and lessees know that they need to continue to meet that need with relevant, compelling product ranges, so it is a growing focus,” a spokeswoman for Greene King, which leases more than 200 pubs through Belhaven in Scotland, told SLTN.
“The market in Scotland has a more dynamic free trade than in England, and so leased and tenanted pubs in Scotland have long realised the importance that quality and diversity of product, presentation and price makes when establishing a point of difference.”
Elaine Kennedy, regional operations director at Punch Taverns, agreed, stating that leaseholders “must provide a reason for consumers to visit their outlet”. “Consumers are trading up, preferring in this climate, where less visits are made, to spend their precious leisure pounds on really great products,” she said. “A changing selection of cask ales is taking pride of place on more bars than ever before, and even our community pubs are varying their spirits offer to feature an upgraded range of spirits such as flavoured vodkas.”
Offering tenants a diverse and up to the minute range is also a priority for Scottish & Newcastle Pub Company, a division of Heineken UK, which leases 160 pubs in Scotland.
Emphasising the importance of tenants being able to “satisfy a wide range of consumer occasions”, trading director Chris Moore said a tenant’s range should ideally reflect an outlet’s style and who it attracts.
He said the firm works in partnership with its operators to hone the range it offers, while keeping a constant look-out for new products that might make a difference to sales.
Among the pubco’s big growth areas in recent years have been, like Punch, cask ale and packaged beers, which is perhaps not surprising given the growth of consumer interest in these categories.
Moore said it supplements the range it offers through the Heineken-owned Caledonian Brewing Company (Deuchars IPA, Caledonian 80/-) and Theakston’s with Cask Orders, a scheme that allows pubs with a good cask throughput to offer a wider range on a quarterly basis. Meanwhile, as interest in world beers continues to grow, the firm has introduced three new brands to its global offer, adding Desperados (France), Affligem (Belgium) and Krusovice (Czech Republic) to its Discover World Beers programme this year.
Moore said pubs must meet certain criteria before a new brand is made available.
“Because we’re passionate about the quality of great cask ale, we recognise the importance of maintaining high throughputs per cask line,” he said.
“With this in mind, we ask that outlets have good throughputs on our core range of cask brands (Caledonian and Theakston’s) before offering the seasonal programme to outlets.”
Greene King is also seeing interest in ale (cask and keg) grow across its leased and tenanted estate – a trend its brewing division has responded to with the addition of new and varied products in recent months.
The spokeswoman said cask ale was perhaps unique in that it gives pubs a chance to offer a product that cannot be replicated exactly at home.
“Cask remains a growth opportunity – it’s the one specific product that cannot be provided in a home environment, it commands a higher price and is a product which has significant emphasis on quality attached to it,” she said.
“Both the Belhaven and Greene King cask range has increased significantly over recent years with the addition of Belhaven Black, Golden Ale and other similar products. There has also been a general polarisation of ABVs with increasing demand for lower ABV products such as Belhaven Golden Ale (2.8%) being balanced by an increase of higher ABV products such as GK IPA Reserve (5.4% ABV).”
And there is evidence that some pubcos are prepared to be flexible with the tie to allow tenants to stock different types of cask ale.
Punch said it’s amended its leases “to include a free of tie line for local cask products, which allows pubs to support their local microbreweries and offers an increased range to the consumer”. Similar scope is offered on packaged products in some cases, it said.
GK said it does offer some buying flexibility with some of its new leases, “depending on the circumstances of individual premises and the business plan being explored”.
Images – Cask ale and world beers are in demand from Greene King and S&NPC tenants and leaseholders.