Wells & Co: ‘The future of the pub industry is really strong’

With more than 140 years of brewing beer and running pubs under its belt, fifth-generation family business Wells & Co has seen its fair share of tough economic times, but despite the impact of the pandemic, it is very hugely optimistic about the future of the great British pub.

The eager anticipation from consumers for venues to reopen and their willingness to brave the cold, wind and rain to sit in a pub garden back in April was the perfect demonstration of the public’s love affair with their local boozer, for group managing director Peter Wells.

Formerly commercial director, he took on his current role in in January last year – an unenviable time – and has maintained a positive attitude, channelling his energies into investing in both its managed houses and pub partner sites, with a keen eye on future growth.

Turning pub car parks into extended gardens, with Astroturf, marques and heaters has been the order of the day in order to boost capacity when indoor areas were closed and social distancing restrictions in place. This investment has been paying off with sales performance well ahead of expectations. Since reopening in April sales are around 10% up on 2019 on average across its Heritage and Gather pubs, 20% down at its Neighbourhood pubs due to their smaller internal and external spaces and suitability for vertical drinking.

The split into those three distinct pub collections – across its managed and leased and tenanted portfolios – was a piece of work that was undertaken during lockdown last year in order that the business could better target its support packages and to streamline any changes being made across the estate.

Its Heritage sites are the large gastro pub venues, with around a 55%/45% food/drink split and a more affluent target demographic. Gather refers to its larger suburban sites which see a stronger trade at the end of the week and into the weekend, and feature more entertainment and a larger cocktail offering, while its Neighbourhood Pubs are what were previously housed under the Pizza, Pots and Pints name – “the backstreet sites that people want to have at the end of their road”.

Wells & Co were previously working on expanding the Pizza, Pots and Pints format as part of a joint venture with Steven Wilkins, owner/founder of Little Gems Country Dining. That partnership “came to a natural conclusion” in the spring, with Wells & Co taking back to two of the pubs that were under its own leases, and Wilkins taking the two remaining sites.

All of its 18 managed sites and the 137 of its 143 pub partner sites are now open – the remaining six pub partner sites are currently undergoing the recruitment of new licensees, but Wells says it was seeing lots of interest. “I think people see the pub as a great opportunity for a career so I am feeling fairly positive on that side of things.”

Managed ambition

The future growth of the business however is focused on the expansion of its managed pubs business – and at a quicker pace than previously planned – following the success it has seen since reopening after lockdown this year.

It is currently concluding work on a significant development in Bedford called The Gordon Arms, which will open in August, and it will be bringing four of its tenanted and leased sites over to the managed pub business when their leases expire later this year.

“Quite quickly we’ll start to see those numbers grow and then there should be another four that will be coming across next year,” he says. Wells said the pub operator and brewer was not looking to take back control of sites where tenants were in place, but when leases come to the end of their term then it may look to take those back.

The business is also acquisitive but Wells says there were not the opportunities to buy new sites that perhaps they had imagined there might be earlier on in the pandemic. “We had assumed there would be freehold business falling out of the system left, right and centre and there would be very rich pickings.

“The reality is the top operators are always going to want great pubs to add to their portfolio so I think it’s still going to be a very competitive market. To expect to pick up bargains is a little bit wishful thinking at the moment, which is slightly disappointing,” he admits. “I can definitely see values holding.”

In addition to its growth plans in the UK, Wells & Co also has 17 managed pubs in France and is keen to expand this side of the business – although this has proved even more difficult during the pandemic due to the travel restrictions. It has kept the formula simple and focused on providing welcoming places to drink, with live music, sports, events, dart, and, of course, the pub quiz. “We don’t dabble in food too much. The model works really well for us and we are always looking for more pubs over there.”

It currently has sites in Toulouse, Paris, Bordeaux and Lyon and views university towns as a big opportunity in terms of the demographic appeal of its pubs. “On a rainy Tuesday night they are really busy. None of them are very big but they have a great atmosphere,” adds Well.

A return to brewing

Having stepped back from the brewing industry for a couple of years, following the sale of its Eagle Brewery and most of its brands to Marston’s in 2017, the financial year to September 2020 saw the business open Brewpoint – a new state-of-the-art brewery, restaurant, bar and offices, in Bedford. Brewing commenced in October and the business has been seeing strong demand for its beers, which it has been promoting via its order and pay app.

“Much to our excitement we’ve gone almost to full capacity straight away, which was not exactly what we had planned for but it is a nice problem to have,” explains Wells. Within its managed estate, its keg beers have really been taking off, in particular Checkpoint, a 4.5% IPA and its pale ale Onpoint at 4%. It is just launching its Midpoint lager into the estate as well. “They are small batch premium products, with lots of hops in them so are at a more premium price but we have seen sales of these really fly,” he says.

Staffing and supply issues

Despite its positive outlook about future growth the business is grappling with many of the same issues faced by other pub operators currently. While many businesses have lost staff to the draw of a less stressful, and less taxing on the feet, delivery job during time on furlough, the problem has been exacerbated for Wells & Co due to its proximity to Milton Keynes – home to many large company depots including Amazon – which it has lost six chefs to – Tesco and Asda.

However an even bigger challenge in recent weeks has been within its supply chain with driver shortages causing huge disruption to deliveries to its kitchens over the past month. Wells explains that kitchen staff would put in orders but wouldn’t know exactly when they would turn up and they would generally not be fulfilled with everything they requested. “The biggest challenge are those later deliveries, which are happening more and more, meaning the kitchen are losing prep time.”

There had been several instances of deliveries turning up at midday and kitchen staff then having to prep and serve at the same time which was putting lots of pressure on everybody and inevitably impacting service. Thankfully he says the fact that these issues have been well-documented in the press has meant that many customers have been aware of these sorts of problems and understanding on the whole.

The current struggles haven’t dented his optimism about the future of the business, however. “We have a very clear vision about where we are going with the business, and that is based around growth within our managed pubs both here and in France,” he says. “And also to continue supporting our pub partners and making sure we can drive up the average EBITDA per pub, which comes from greater support, in terms of investment and management, and making sure we have the right tools to be able to help them improve their business.”