Ecommerce in the pub industry

Is there a future for ecommerce in the pub industry? Phil Mellows reports.

Do you remember EggsBenefit? What was all that about? In June 2000 the ecommerce website EggsBenefit - which we can only presume is a tortured pun on the well known hangover cure eggs benedict - was launched to the hospitality industry with a huge dose of hype.

EggsBenefit, we were promised, would transform the way licensees, restaurateurs and others purchased food and drink, saving them time and money. EggsBenefit was the trade's ticket to the 21st century.

Five months later, EggsBenefit was dead. Staggeringly it had failed to attract a single paying customer. Operators, among them Punch Retail, now Spirit Group, were given a free trial of the system, and some were even given free PCs to get them on line. But nobody really wanted it.

It was bad timing, of course, the year the dotcom bubble burst, and EggsBenefit was by no means the only victim.

At one stage, it seemed as though new ecommerce websites aimed at the hospitality industry were being launched at the rate of about two a week.

It was obvious that the vast majority would not last much past Friday, but a couple with solid pub industry foundations were exceptions. BarBox from Bass, now Coors, and Pubserve from Bulmers. These two have now been merged under BarBox.

More recently, another system has begun to establish itself. Freshnet's origins go right back to the dotcom boom but founder Stewart Brooks has resisted getting carried away by technology and over three years has patiently developed a website he is confident can benefit licensees.

To do that he has worked closely with, among others, Hall & Woodhouse's (H&W) 100-plus managed pubs which are currently using Freshnet to produce savings in both time and cash.

Another regional brewer, Wadworth, has since come on board and the firm is also talking to Fuller's, Young's, Greene King and Charles Wells.

As the name suggests, Freshnet specialises in fresh produce, perishable fruit and vegetables. Stewart argues that large managed chains have reduced costs by centralised purchasing - but quality has been the price.

Internet technology, however, makes it possible for managers and chefs to continue buying produce from local wholesalers, as long as they are willing to join the scheme. In H&W's case, 90 per cent of its existing wholesalers agreed to go online.

At the same time prices in the marketplace are monitored by Freshnet and capped on a weekly basis. Registered wholesalers are obliged to match or better the capped price, effectively achieving one of the key benefits of central purchasing without having to use a limited number of suppliers.

"Previously, buyers tended to place orders by telephone or fax without having any real detail on current market prices," said Peter Ellis, H&W's project development manager. "It was only when the invoice came in that you had a complete picture of the costs, which made budgeting difficult.

"With Freshnet all prices are listed alongside the product and we are notified if any particular goods have dramatically risen in price and are given alternatives. This gives us more control over costs and we don't get any nasty surprises when the invoices come in."

In fact, Peter reckons the system is saving the company at least 10 per cent on its fruit and veg.

A common worry with buying over the internet is knowing whether your order has got through and that the delivery will come in time. Through Freshnet, licensees and chefs can track the progress of an order and know when to expect delivery.

Another factor is speed. It's not always the case that new technology is faster. The EggsBenefit "memorial site" (www.eggsbenefit.com) admits that "far from streamlining the ordering process, the system almost seemed to hinder it".

If ecommerce is no quicker than picking up the phone there is hardly any point in taking the risk to switch from a tried and tested ordering system.

Freshnet is a good example of a website designed for speed and not beauty. It is extraordinarily dull. It doesn't sing, it doesn't dance, there are neither whistles nor bells. But this, if anything, has been the lesson of the internet over the last few years.

Site design must begin with the end-users and their practical needs. Animated cucumbers and yodelling endives only get in the way.

H&W's experience is that Freshnet has also cut administration time. Having everything on computer means you don't have to spend time processing and archiving paper invoices. A job that used to take one person a week is now down to 20 minutes. Everything is paid for through Freshnet with a single invoice.

Online ordering also makes it easier for headquarters to analyse spending patterns across the estate.

"This is helpful for pubs which are not doing so well as we can compare their spending habits with more successful pubs and recommend what is working well," said Peter.

From the individual pub's perspective there is a historical record of all fresh produce that has been bought which can help with stock taking and show up seasonal variation in demand.

Freshnet is tailored to each customer's needs. A pub only sees the local wholesalers it deals with.

"The system comes in many guises," said Stewart. "We set up a template but there is total flexibility about what can be purchased."

• www.freshnet.uk.com

Freshnet: case study​

Mark Heffer, who runs three food-led pubs in Dorset, has used Freshnet for the past six months, and for him there is no going back.

"It has saved us considerable time and effort - plus book-keeping fees," he said. "The set prices mean my chefs don't have to waste time haggling and we can track orders from start to finish. It's also very easy to use.

"The only thing it doesn't do is give you that hands-on feel you get by going to the market. But it's the 21st century and this is the only way to go."

Mark is pictured (left) with Freshnet's Stewart Brooks.​

Barbox​

Barbox, the ecommerce site operated by Coors, has grown to more than 7,600 subscribers who between them make at least 1,500 orders a week.

As well as offering online purchasing, the site has a community feel to it, with advice and ideas.

But according to marketing manager Marcus Loudon its main appeal is that it is "a very quick and easy way of ordering beer and other goods".

"They really like the fact that they have access to exclusive online promotions, can see their own pricing and have easy access to a full history of their own orders," he said.

Barbox continues to grow and Marcus believes the future is to add more suppliers to its existing list of business partners.

• www.barbox.com

Pictured: Helen Lane, licensee of Archees in Woking, Surrey, found fame as Barbox's 6,000th subscriber​

The tenanted sector​

Ecommerce is a great idea in theory. The challenge lies in making it worthwhile, and that's especially true for the tenanted pub sector.

While there has been plenty of interest in on-line purchasing from the big tenanted and leased groups, the one big experiment came to an unfortunate end when Grey Archer collapsed last July.

Part of Nomura, Grey Archer offered ecommerce to Unique Pub Company licensees, offering the benefits of group purchasing and giving them free computers and training to get them started.

But Nomura pulled the plug when it decided to exit the pub industry.

Keith Hufton, who was responsible for marketing the system, has turned his attention to another venture, Indicater, which offers complete on-lin