Pub's crystal ball: Industry predictions for 2015

Kevin Georgel, chief executive, Admiral Taverns​

Licensees and pubcos could be forgiven for thinking a new year might herald an end to ongoing political flux. However, the timing of the MPs vote on the beer tie and a market rent-only option means, sadly, this is not the case.

Whether the ‘new clause 2’ makes it on to the statute book or not, 2015 must be the year when the industry gets to grips with the tie and why it matters. The fact that such a significant number of MPs seem to think otherwise, and that so many other industry stakeholders still fail to understand the benefits of the model, is alarming.

It must be a period when all those that believe the tie has a future, wake up to the challenge. At Admiral Taverns, we will work hard to show the merits of the model within our community pubs by ensuring we continue to partner licensees to optimise the potential of their businesses through tangible support and investment.

John Pinder, managing director of buying specialist Lynx Purchasing​

Consumers are eating out, so operators are fairly optimistic, but the main trend is that there’s really no single thread — we’re seeing a fragmented foodservice market in which operators are trying out a host of ideas to find the ‘next big thing’. For evidence of this market diversity, just look at the latest Ones to Watch report from Horizons, which lists Fuel Juice Bars, Dunkin’ Donuts, Abokado, Pieminister and Tortilla Mexican Grill as its top five.

That’s a real mix of healthy and indulgent restaurant formats. In terms of menus, pulled pork and other pulled meats remain popular, along with new takes on burgers, kebabs and koftes — all dishes that allow operators to make the most of less-popular cuts of meat. The challenge is the buying power of supermarkets — as soon as a dish becomes popular, retailers will move to secure available supplies and foodservice operators lose any pricing advantage. That, in turn, drives development of new formats and more unusual dishes, bringing the market full circle.

Although this drive for innovation makes it less easy to identify seasonal pricing trends, there are still real benefits for operators who can keep their menus flexible enough to make the most of changes in availability and price when opportunities arise.

Simon Stenning, executive director, Allegra Foodservice​

Despite the recession, consumers have continued to eat and drink out, albeit with a strong need for greater value. While pubs have suffered from the smoking ban, from increased taxes and intense competition, they hold a place in the hearts of UK consumers, and deliver great value. Good-quality pubs are in a strong place to benefit as consumers start to increase their eating-out spending.

While many poorer-standard pubs have closed, the remainder are fantastic eating and drinking venues, delivering great value, through a mixture of all-day dining, an informal environment, familiar cuisine, and friendly service. Pubs have picked up on new trends, such as speciality coffee, artisan pizza, craft beers, WOW (wow over worthy) foods such as dirty burgers, but also deliver family-friendly carveries, comfort foods and lounging spaces.

With an ageing population providing a more significant share of consumers who favour the pub as an eating venue, and with operators investing into their estates, either through brands, or through new working relationships with tenants, we can see a golden era for pubs.

Rooney Anand, chief executive, Greene King​

I think it’s likely to be another challenging but exciting year for pubs. On one hand, there’ll probably be limited real growth in customers’ spending power and renewed competitive pressure from sectors such as restaurants, coffee shops and takeaways. On the other hand, pubs that deliver a consistently high level of customer service and quality, with great value for money, will continue to thrive.

I think winning pubs will look to extend the relevance of their offer to other parts of the day. At the same time, we could see a renaissance in drinking out as pubs prove their enduring resilience by remaining the best place to socialise with family and friends.

There could be further industry consolidation with private equity renewing interest in picking up pubs again after a few years of focusing on casual dining. Finally, depending on the outcome of the next election, expect more ‘help’ from the Government in the form of legislation and bureaucracy!

Paul Flaum, managing director for restaurants, Whitbread​

The landscape for our industry won’t change, it will still be tough for the consumer and although wages might start to rise, and there will be slightly less unemployment, it will still be tough out there. The geographical bias around London means it rapidly outpaces the rest of the UK. However, eating out has become habitual. People don’t want to give it up. In fact, they want more of it and it’s important for all ages, and families in particular. Brands will become stronger and where poorer independents will struggle, greater independents will flourish.

The choice is getting bigger as brands grow, but the focus still has to be on great service, great value and great food, and our strength in our brands is moving us forward. We converted 41 Beefeaters last year and this will increase to two a week this year. Delivering the customer experience becomes more important with the growth of social media and the focus has to be on operations — delivering decent customer service, great food and good value is critical as exposure increases. We know how important it is to talk to our customers, to grow customer loyalty using a wider variety of communications and to reward those who visit us most frequently with fantastic loyalty schemes that will keep our guests coming back for more.

We’re focusing on food and beverage development, investing in chefs and in great training — our guest scores have moved forward dramatically as a result. With unemployment on the decrease, the recruitment and training of team members becomes even more important along with ‘serving up great memories’.

Jonathan Neame, chief executive, Shepherd Neame​

Economic conditions for eating out should remain benign, with low interest and energy costs. This should continue to drive investment and innovation in retail and new product development, and accelerate recovery trends in the sector, namely eating out, accommodation and craft and premium world beers.

The general election will dampen spirits, however, because an unstable political platform is the most likely outcome. And then, of course, there’s the weather... thankfully the Rugby World Cup will cheer us all up as England win!

James Staughton, managing director, St Austell Brewery​

With the possibility of people enjoying slightly higher disposable incomes, pubs have the opportunity to build on their positive image at the heart of communities by continuing to develop new and innovative food and drink offers.

The use of social media to market pubs, to the 18-25 age profile in particular, will become increasingly important. This is very relevant when considering the ever-increasing competition to pubs from the proliferation of new concepts opening in many towns and cities across the country. Competition for the leisure pound is relentless!

Andrew Stones, operations director, Be At One​

The industry will see continued growth in the cocktail market with more venues focusing on an experience-led environment. There will be a trend towards more lower ABV drinks that are made with natural ingredients such as kale, basil and beetroot.

There will also be more experimentation with spirits, which will see a growth in the likes of tequila and mezcal. Increased Government legislation and additional costs that come with site acquisition will effect growth — although the regions are now catching up to London in terms of site value. Innovation-wise, we will continue to see the move towards a cashless economy with digital and mobile payment options being more readily available because customers are more connected.

Christian Townsley, co-founder and owner, North Bar​

It’s such an interesting time for the hospitality industry. It’s brilliant for consumers but a challenge for operators. Social media is a great leveller in reaching an audience, competition is stronger than ever and margins are decreasing while operating costs are going up. Big chains such as Wetherspoon continue to jump on the bandwagon and flex their purchase power with an expanding range of ‘craft’ beers at supermarket prices.

The rest of the industry will have to work harder to maintain a good share of the market. Operators that come out on top will be those with a solid business plan, specialist knowledge and well-trained staff. The ‘craft’ brewery-owned pub group sector will see growing numbers seeking to establish vertical integration to grow their brands.

Andreas Fält, ambassador, the US Brewers Association​

I anticipate growth in different beer styles such as sour/wild beers as well as heavier styles such as barley wine and barrel-aged beer. Vintage beers, that can be laid down like wine, are on the rise and interest in session pale ales and IPAs will continue to grow. Cans will grow for sure. They are lighter, UV protected, easier to recycle and chill down quicker.

More pubs and bars are stocking cans as today’s drinker recognises a quality product and greatly improved image. The new and heritage hop varieties that give American craft beer its big, bold flavours will continue to feature heavily as will matching beer with food, in line with consumer interest and incremental opportunities available to publicans.

Finally, there’s a new trend towards brewing American beers in Europe — Stone Brewing will set a precedent if their Berlin brewery is a success and we may then see more American brewers looking at the European option.”

Stephen Gould, managing director, Everards Brewery​

Politically, we’re in for an interesting year. Aside from the general election, there is the ongoing assessment of tenant and pubco relations, where we’re still some way off a final resolution. The Government continues to face a big challenge in reducing the national debt, so I predict there’ll be further spending cuts, which means the recovery will remain fragile.

In more challenging economic times, the pub market tends to polarise. Good pubs become stronger, while average pubs can go the other way. Despite this, I think pubs overall will continue to be resilient.

It’s an industry investing in both property and people — and I’m optimistic these trends will continue. Finally, don’t rule out another beer duty cut. The past two cuts were very welcome, but let’s not forget they came off the back of 42% duty growth in the previous five years.

Simon Emeny, chief executive, Fuller, Smith & Turner​

Fuller’s has had a great 2014 and I hope this trend continues into 2015. The pub industry has had too much unwanted attention during the past few years — and sometimes it feels as though certain parties have forgotten what the pub is really all about.

There are some amazing licensees running fantastic pubs up and down the UK, and if we can all get back to providing first-class hospitality in a warm and welcoming environment, 2015 should be a good year for the great British pub and a good year for pub customers across the country.

Simon Townsend, chief executive officer, Enterprise Inns​

Key priorities for 2015 are to continue to provide our publicans with high levels of service, advice and support, and to attract talented newcomers to our industry. We are committed to building great British pubs in partnership with publicans for the benefit of the local communities they serve.

We are delighted that to complement our existing operators, we are attracting a ‘new breed’ of publican, inspired by the stories of celebrity chefs like Tom Kerridge, who recently opened his second pub, the Coach, in Marlow, Bucks, as well as other Enterprise licensees, such as Susie Clarke and Joel Czopor from the Grafton in Kentish Town, north London, overall winners of the Great British Pub of the Year 2014.

We will not be distracted by the prospect of more regulation, and we will remain committed to harnessing the entrepreneurial spirit that is at the heart of all great pubs, supporting our partners to run successful businesses for the benefit of customers. Although the rules of engagement may change, pub-owning companies like ours will continue to help drive the industry forward by attracting talented publicans, investing where it is sensible to do so and providing the highest-quality business support.