As Everards lays the groundwork for its new brewery and headquarters, managing director Stephen Gould tells Finn Scott-Delany about the company’s progressive attitude to tenant relations, stable growth and not losing sight of the day job
With a tenanted pub estate numbering 176, Everards might seem immune from the impact of the pubs code, which applies to pub companies with more than 500 sites. But for a family brewery and operator that has made a virtue out of its progressive relationships with tenants, this assumption is not quite true.
While the big groups may have already begun to offer a variety of agreements for tenants, the arrival of the pubs code last year has put pressure on the likes of Everards in attracting the finest licensees, as pubcos up their game.
The Leicestershire brewery pre-empted this trend towards flexibility with its widely lauded Project William initiative, which installs first-generation brewers and beer aficionados into failing, dilapidated sites in the hope of turning them around. The model is based around operators being given greater freedom to buy a variety of beer on the open market or their own products, while Everards take a greater return due to the higher risk of the sites.
If anything, the innovation might be a victim of its own success, managing director Stephen Gould admitting growth has slowed as pub groups get a better handle on their estate.
“The past three years has certainly been slower in terms of acquisitions,” Gould says as he discusses almost 10 years of Project William, which now has a c30 sites.
“Part of that is large pub groups have a better idea of what they own. Asset management and estate management has improved markedly. If you’ve got 4,000 to 5,000 pubs, you don’t always have a handle on what you’ve got and we were beneficiaries of that in the past.”
Common sense approach
Project William has even influenced the way Everards works in its core estate, with the King Richard III in Leicester, a collaboration with St Martin’s coffee, including some “William-esque” elements in the contract, allowing the tenant to work with Framework Brewery.
Despite its success, Gould seems taken aback by some of the plaudits lavished on the scheme, which he sees in many ways as a common-sense approach.
“If you own a building and want to attract talented people to bring a business back to life, it makes sense to agree a commercial structure that works for both parties.
“The outcome has been – shock horror – a regional brewery allowing someone else locally to sell lots of real ale.
“When you peel it back, it’s not hugely radical. The more radical bit is picking the pubs that have failed that we know can be transformed, which is high risk. Those pubs failed for a reason.”
The pubs code has created similar challenges, but the competition for talent has merely strengthened Everards’ resolve to double down on its philosophy to relationships.
“The main outcome is a proliferation of agreement types to retain talented people”, he says. “That’s a good thing. Most talented people know what they want. Therefore, our primary currency is attracting and retaining the best licensees.
“That’s why we have to over-leverage on family, relationships, long-term solidity and investment – and the fact we know everyone’s name. We’ve been like that for years, but we need to keep being like that more in order to compete.”
Talk of good relationships are commonplace in business, but for Everards’ ten-anted estate – it sold off its c30 managed pubs some years ago – such relationships are crucial.
So much so that it is taking this core value into its next adventure – the anticipated move and rebuilding of its brewery HQ.
Working with other businesses
Everards recently received unconditional planning consent for retail development at its current home, which if the sale of the land goes ahead (negotiations were ongoing at the time of going to press) will become part of the Fosse Park retail park.
This will allow the brewery to start on its £30m Everards Meadows project nearby, its new headquarters, with a smaller brewery, restaurant, pub, coffee roastery, start-up office space and a cycle centre.
Gould said the site will exemplify Everards’ approach to dealing with other businesses, which will operate the various ventures at the site.
“Over the past few years, we effectively developed companies whose primary purpose was building relationships with business owners and communities”, he says.
“We’re not the retailer, we don’t have a monopoly on good ideas, or a grand plan to delight customers – but we know people that do.
“If we take that into Everards Meadows, it will be a wonderful representation of our purpose.
“Our view is to be an enlightened and commercial brewer – but also a progressive trading company through our property.”
While Gould is confident the sale to Fosse Park owner the Crown Estate will go through in the coming weeks, he admits there is anxiety over each stage of the process, such as securing planning permission for the current site.
“We’ve always been very positive about the economic benefits of Everards Meadows and an extended Fosse Park.”
The show must go on
Even if a deal cannot be reached, Gould says the planning consents secured put the business in a strong position regardless, and it also has an option of moving to
Optimus Point business park, where it has a site for a logistics centre. He expects the group to move out of its current home in the summer to Optimus Point, and into the new home towards the end of 2018.
But the now eight-year project has not distracted from the core business, with a rebrand of its main beer products last year leading to a 6% sales uplift on the previous six months.
The company rebrand, now underscored as Everards of Leicestershire, aims to convey a sense of place and family tradition, as well as give a more subtle corporate identity.
If all the parts of the property jigsaw come together, Everards hopes to add 40 new sites over the next four years.
“We’re fortunate to be attracting really talented people,” Gould adds. “We’re very much about supporting people of all shapes and sizes with different business plans, not to present a formula. I think those days are gone.”