A nagging dilemma

Young's has a dilemma. Should it abandon its outgrown site to expand? Andrew Catchpole meets the brewery's chairman and chief executive.

There is an innocuous-looking door on the wall in the tap room at Young's. Opening it gives me the fright of my life.

There on the wall behind the creaky wooden frame, is a startlingly realistic life-sized portrait of the brewery's 80-something chairman. A schoolboyish chortle escapes from the real-life version standing by my side.

The octogenarian gentleman in question is John Young and the false-door-with-portrait is clearly his idea of a great wheeze. His colleagues - including both family and non-family members of Young's board of directors - seem faintly bemused by his maverick take on the world.

But then the contrast of Mr Young senior - who spends most of his time touring Young's estate, jollying along both managers and tenants - and chief executive Stephen Goodyear, who oversees the day-to-day running of this £60m company, in many ways cuts to the heart of the challenges facing medium-sized family brewers today.

"We are, by our very nature, in a niche position," Stephen says, as he heads up a tasting of Young's latest seasonal beers. "As a vertically-integrated brewer and pub operator with an emphasis on our cask beers we could hardly pretend to be mainstream. This business is all about offering something distinct."

"With a company like this the USP is all about adding a bit of sizzle to the industry while letting people know that they will find certain values under the Young's banner."

The character embodied by John Young (pictured, with chief executive Stephen Goodyear)​ certainly adds sizzle to the company, but in an industry dominated by huge pubcos and the power of multinational brewers, Young's has to sell a lot of beer to ensure its survival.

"The beauty of this business model is that we can focus behind one brand," says Stephen. "And, after JD Wetherspoon, Young's has the next biggest turnover of beer per pub in its estate."

The high-profile advertising campaign that has driven sales of Young's bitter forward has an obvious knock-on benefit in promoting Young's branded pubs. But with only 200-odd pubs, located both in its London heartland and across southern England, this brewer clearly can't rely on the economies and benefits of scale that many of its rivals enjoy.

The obvious move to release capital for expansion would be to sell the Ram Brewery site which occupies prime real estate in the heart of Wandsworth. For two years now the company has been locked in an internal review of the site, which City estimates have valued at upward of £50m.

Releasing this capital would clearly allow Young's an unrivalled opportunity to expand but at the loss of its traditional home. "Of course we are obviously aware of the brewery's roots and place in the community here and so this makes any decision about the future very difficult," says Stephen.

There are shareholders to satisfy who will ultimately make the decision when the final results of the review are made known.

It's difficult to imagine the Chairman - as John Young is almost universally known - countenancing such a move, but business is business and Young's may be forced to move on.

Younger generations of the brewing family are waiting in the wings, though it is by no means certain that they will inherit quite the same characterful local brewing mantle that still lives on with John Young.

Young's facts​

• Young's was established in Wandsworth in 1831 but beer has been brewed on the site by the Wandle River since 1581.
• The Young's estate comprises 205 pubs, fairly evenly split between tenanted and managed, with 387 rooms spread around its pubs across London and southern England.
• Young's turnover for the year to March 2004 was £112m with £9m profits before tax.