The Best of British culture

Cains is backing Liverpool's tenure as European Capital of Culture in 2008. Tony Halstead looks into what is a major coup for the beer company

This is a momentous year in more ways than one for Liverpool-based Cains Beer Company. If a major sponsorship and involvement with the city's European Capital of Culture 2008 wasn't enough, the company also has the little matter of integrating more than 100 new pubs into its previous estate of just nine.

Following the acquisition of Honeycombe Leisure last May in a reverse takeover deal worth £37m, Cains became a far larger company with a £65m turnover. If part of the rationale was to give the brewery vital extra production volumes, it has also brought brewery owners Sudarghara and Ajmail Dusanj plenty of new challenges.

Retail revolution

Cains has been a brewer through most of its recent life, with the bulk of the volumes at the Stanhope Street Brewery servicing the own-brand supermarket lager sector. Save for the nine Merseyside-based pubs, retailing has not been an extensive or important part of the Cains business.

Now that has changed irrevocably, for the Dusanj brothers have taken on a mixed bag of pubs with a decidedly varied history of trading success.

"It's fair to say the new estate mixes the rough with the smooth and we have a lot of work on hour hands," admits Sudarghara.

"There are some excellent sites, which are trading very well indeed, but there are others where quite a bit of remedial work is needed."

The contrasts across the estate range from well-heeled country pubs - such as the Swan at Tarporley, Cheshire, and the Devonshire Hotel in Grassington, North Yorkshire - to large, urban-based units, many trading under the brand of Last Orders.

But the Dusanj brothers are game for a challenge. A total of £5m will be spent this year, refurbishing pubs and converting some of the Last Orders houses to a new concept - Best

of British.

The Dusanjs hope this will pioneer a new style of community pub aimed at giving wet-trade regulars a new level of quality, including a new food offering and an obvious accent on Cains' distinctive range of branded beers

and lagers.

Best of British is part of a structured three-year investment plan for the enlarged pub estate and the hope is that the bulk, if not all, of the Honeycombe pubs will have been refurbished by the year 2011.

Hands-on approach

Unlike some takeover deals, Cains did not buy Honeycombe "blind". The brothers knew exactly what they were taking on and actually visited every one of the 108 pubs in the days leading up to the announcement of the deal.

"We sometimes visited as many as eight pubs in a single day, but we had to do it because we were determined to get first-hand knowledge of what we were buying," says Ajmail.

"Although the estate is exclusively based in the north west and is very compact, it still required an exhaustive amount of road pounding to get all the visits in. But we got there and we were satisfied we were acquiring pubs where, in many cases, there was the potential to grow the business."

By the end of January, Cains was able to report that initial trading had met expectations, despite the attendant problems of the smoking ban, raw material price increases and a downturn in consumer spending.

"Cains and Honeycombe integrating as one company was always based on a deliverable turnaround strategy and still is," says Sudarghara.

"A number of challenges certainly exist, but the progress made so far has been encouraging. We are confident the model we have put in place will rejuvenate the pubs and build on the success of the brewery and its brands across our estate, plus the off and on-trade."

Well-placed business

Sudarghara adds that the current trading climate for the industry is difficult, but not unforeseen and the business is well placed to build a profitable future under a strong brand with an experienced team.

There were not many people in Liverpool who knew much about the Dusanj brothers when they arrived to take over the struggling brewery four years ago. But the duo have taken the city by storm and given a clear indication that their presence is no passing phase.

The Dusanjs said at the time that getting the company back into profit was their immediate job - that was achieved 12 months ago. "Now we have got the real job ahead of us," says Ajmail.

Cains and the Capital of Culture

Of any brewer, Cains will claim the lion's share of the exposure and publicity that Liverpool's reign as 2008 European Capital of Culture brings. It is one of the major sponsors and its brands will enjoy limelight status at most of the major events and ongoing exhibitions being staged in the city throughout the year.

In fact, the year of culture has already brought the brewer valuable kudos. Its official year-of-culture beer - Finest Lager - is enjoying immense popularity and features a limited-edition label designed by retro pop artist Sir Peter Blake, famous for his iconic artwork for the Beatles' Sgt Pepper's Lonely Hearts Club Band album.

Blake, who is widely regarded as the founder of British pop art, was delighted to get involved with the label.

"Sir Peter has built a strong affiliation with Liverpool and getting him to design the label was a real coup for us," says Sudarghara Dusanj. "The design is striking and complements wonderfully our Best of British activity."