St Austell: ‘We’re looking for more iconic pubs’

A combination of food and drink innovation, excellent service, and an exceptional customer experience has contributed to St Austell achieving its second successive year of record sales, CEO Kevin Georgel tells MCA.

The Cornwall-based brewer and pub operator reported £229.5m in total revenue for 2023, up 10% on the previous year. Operating profit, meanwhile, was up 15% to £13.2m.

“We’re delighted with the progress we’ve made in 2023; that’s converted to profitability as well,” Georgel says. “The results compare very favourably when you consider the challenges the sector has had.

“Alongside the top line, we’ve also grown market share and focused on cost control and conversion.”

The business is looking forward to the Euros this summer, with Ludo Sports Bar & Kitchen – St Austell’s venture with ETM Group directors – going from “strength to strength.”

“We’ve seen a further step up in trading performance in recent weeks,” Georgel says.

The first Ludo opened in Bath in May 2023, with the directors actively looking to expand off of its success by adding more sites in Bath and surrounding areas.

The “quality and atmosphere” has been well received, Georgel adds, as the business looks to build its ‘experiential hospitality’ credentials. It is also keen to drive innovation through collaborations and partnerships.

“We’ve seen the benefits of those through [Cornish craft brewer] Harbour Brewing Co and ETM [directors]. We’ve got a lot on our plate with those two, but always have an open door.”

While keen to continue delivering organic growth, St Austell is also “clearly on a growth agenda,” with an appetite for further acquisitions.

The business acquired Bath Pub Company and its four sites last year, and remains on the lookout for individual sites that fit within the portfolio.

“We’re blessed to have some of the finest pub assets in the Southwest,” Georgel says. “We’re looking for more iconic pubs in great locations with outside space and also accommodation – a significant and growing part of our business.

“It’s a clear strategy and we believe it’s working.”

In terms of insights into consumer behaviour, he explains that he has seen a continuation of “fairly established” trends around premiumisation and higher customer expectations.

“In order to win market share, you have to focus on the overall experience, with interesting menus, innovation in drinks, and exceptional service. People expect staff with good product knowledge.

“It’s a continuation of the same dynamics…we’ve invested £15m into the existing business and creating inspiring environments, underpinned by the quality of our food and beer range.”

Innovation in the drinks portfolio has paid off, Georgel adds, with St Austell working hard to meet a range of consumer preferences. The company will enter the low- and no-alcohol category next year.

“We took a minority share in Harbour Brewing Co in 2022 and have worked hard to deliver the strategy on that investment. It’s worked well across our trading regions and created a route to the craft market.”

St Austell remains committed to investing in more traditional categories like cask ale, but underscoring its portfolio is a real focus on quality and consistency, according to Georgel.

“We’re excited about our plans for the low- and no-alcohol category…it’s about ensuring our portfolio meets the needs of all customers.”

As for cost pressures, utility bills decreased in 2023 compared to 2022 but remain £2.5m ahead of 2019. The business has nevertheless seen more stability in the cost outlook while entering the new financial year.

Ahead of the general election in July, Georgel tells MCA he’d like to see “a fair and reasonable tax regime” to reduce the tax burden on hospitality.

“The industry is very aligned. We play a significant role in creating employment, in social communities, and in creating growth, which we know is what the economy needs.

“We can deliver on a range of opportunities, but to do that, we need someone to take a meaningful look at the tax regime. We need someone to really grab on the issue of business rates – it’s an outdated and disproportionate approach.”

Laura McKay, marketing & communications director for St Austell, will speak at MCA’s Pub Conference this month. For tickets and more information, please click here.