How wet-led pubs are battling the energy crisis

Philip Cutter, operator of the Gardeners Arms in Norwich, which is known locally as the Murderers, is an award-winning real ale and sports pub.

• The Morning Advertiser's Energy Focus in partnership with Heineken is looking at ways in which operators are battling the ongoing crisis. We launched the series last month and will continue to speak with licensees to provide advice and information on how businesses are mitigating rocketing prices.

The licensee reported trade was “relatively buoyant” currently as, like many operators, November and December is its most productive trading period.

Cutter said: “Trading here in Norwich city centre helps with shoppers. It has also got to be noted that we have the World Cup and the first 'proper' Christmas build in three years, due to the pandemic, and restrictions over the past few years.”

However, the ongoing rocketing costs of more than 250% has caused issues for the future of the business.

“Battle is the right phrase! Our energy prices have increased over 250% over the past year and look as if, when our deal is up for renewal in February 2023, prices will again rise,” Cutter added.

“It has become a substantial proportion of our monthly outgoings and certainly restricts confidence in any future investment into the business.

“January/February 2023 are traditionally the quietest time of year for us, following the busy festive period - consumer spending is always reduced, and we predict this will be greater this year - with the possibilities of a cold snap, nobody wants to come into a cold pub, so, the heating will need to be on! This is an added cost burden.”

With beer prices also having soared, Cutter revealed he has had to increase his prices but capped at 5% as a result of lower price options available at competing businesses in the area.

Keeping costs as low as possible has also had a knock-on impact on staff, retaining levels of staff to keep customer experience high.

He added: “We have tried to mitigate rising costs - staff levels are kept, as this allows in confidence in our customer service – I believe that being short staff, impacts on the customers experience and gives better service.

“As an owner, we continue to increase hours that we work weekly, to reduce outgoings, but at a reduced financial reward.

“Our drinks offer remains unaffected. We have raised prices by around 5%, but we do retain value for money offers for customers on a budget.”

The pub is renowned for its sporting offer with it having reached the final stages of the Great British Pub Awards numerous times.

Trade report

Maximise efficiencies in your cellar

Charlie Fryday, Heineken UK on-trade category and commercial strategy director, discusses cellar practices that can help you save energy and reduce costs.

“’Right-sizing’ the cellar for your bar and therefore the amount of stock ensures empty spaces aren’t being unnecessarily chilled. This can involve simply fitting a butchers-style curtain to physically reduce the area. Ensuring cellars are well insulated and cellar doors close behind you prevents overuse of cooling systems. Relocate any equipment which typically generate heat and make your cellar cooling work overtime to maintain 11° to 13°C.”

Alastair Tyson from Zero Carbon Forum explained in the SmartDispense™ Energy Well Spent Debate Series, “If the cellar temperature is too cold by 1^oC, that could be £1,300 a year being spent.”

Fryday continued: “It can be tempting to temporarily turn off the cellar cooling to save energy, particularly as outside temperatures drop. However, fluctuations can impact beer quality and cause issues like increased fobbing which result in higher wastage. Instead, keep track of and improve efficiency by installing a wall-mounted thermometer, regularly topping up cooling equipment with water, checking fans and condensers are free from dust and blockages, and keeping a planned schedule of maintenance to avoid costly breakdowns.

"There are also cellar solutions, such as SmartDispense™ CellarManager and new Remote Optimiser which monitor cellar temperature and coolant recirculation temperatures respectively. Similarly, for packaged drinks, low-cost fridge manager systems reduce energy usage by operating bottle coolers only when required. Energy savings are biggest in low throughput and closed periods, so tools like these can deliver significant returns on investment and peace of mind as they operate in the background without the need for manual intervention.”

Listen to more expert advice from the SmartDispense™ Energy Well Spent Summit and the SmartDispense™ Debate Series.

However, Cutter has aimed to ensure this stays the same as much as possible, in order to keep sports fans coming back.

He said: “Our sports offer remains largely unaffected – we have fewer screens on when there is less sport available, but the World Cup, has highlighted to us that big sports events continue to drive footfall – giving customers that reason to visit us.”

Fellow operator Pete Marshall, who runs the Kings Arms in Bexleyheath, Kent echoed Cutter’s comments on relatively good trade currently and has also seen huge hikes in his utility bills.

He said: “Trade has held strong, but I believe that’s because we haven't put huge increases on despite the costs, we've absorbed costs to keep pricing at a level guests don't see us as becoming a luxury.

“Our electricity from January (before the Government relief) jumps from £16,000 per year to £63,500, it's ridiculous.”

When it comes to what Marshall is doing to mitigate these costs, he has also been forced to pass the inflated prices onto guests to an extent.

He added: “We close the kitchen for a defined one-hour period and turn everything off, but I am reluctant to turn commercial equipment off over night as this causes maintenance issues.

“What can be done? We can't decrease the size of a pint or wine serve. We have always pushed for spirits sales in various ways, being a tied lease I have kept spirits prices pretty static when increasing beer prices to encourage people to take up the higher margin offer.

“We haven't changed our offer, we have simply had to increase prices, we haven't done this in full reflection of the costs as that would discourage guests from coming and we know they have less money themselves.”

The pub has a strong entertainment offer including live music, a weekly quiz and cinema nights on Sundays.

“I am reluctant to not do what we are committed to doing. The cost of entertainment has gone up! The artists need to earn more as well as their individual costs are higher, this is being put back onto us, but we wouldn't stop the entertainment as it's a huge part of who we are. We have just absorbed costs,” he added.

Similarly to Cutter, Marshall said he was reluctant to increase prices too much so he can ensure the offer remains affordable for guests.

“If you wanted a full summary of the current situation we are in, the costs have increased at astronomical scales, we have increased pricing, but not to reflect fully as that isn't sustainable for selling prices.

“We have absorbed much of the cost to sustain a busy vibrant pub as that’s important. I believe we need to maintain the consistency and offering we are famous for as if not, guests will stop visiting.

“It means staying committed to our entertainment and general offering, I don't want to compromise who and what we are, but in 2023 we will have to consider how we operate differently.”

Success compromised

He echoed Cutter’s comments on the impact the rising costs will have on the future for pubs, potentially reducing investment.

Marshall said: “The cost increases within the industry will impact investment into buildings, service and experience, all things that are key to the success of the industry and that is all going to be compromised.”

Multiple operator Chris Tulloch, managing director of Blind Tiger Inns, which has pubs predominantly in the north west, has changed the design of his cellars to help reduce energy, based on something he had incorporated previously.

He said: “We’ve built some walls in cellars, it's genius and old school. Where your cellar is trying cool the whole big area, If it actually only needs to cool a third of it, we’ve built a wall.

“I did it about 15 years ago first because there was a massive cellar and I thought it was ridiculous.

I thought why are we keeping all the wine and crisps and everything in this chill tower, it just needs to be the beer that is going to be used in the next four or five days. We have done that because the cellar cooler is a big usage in the wet-led pub.”

The operators also advised others on how to keep ensuring energy costs were kept as low as possible amid the rising prices.

The Gardener’s Arms’ Cutter said: “We turn on our glass machine, only once do we have three full trays of glasses to wash.

“During the week, we wash up by hand, rather than use the dish washer. Saving money on drinks slightly more tricky – If you aren't selling as much ale as before, see if your local brewers sell pins (4.5 gallons) instead of firkins.

“Before cleaning lines hook up an empty keg, to fully empty the line – quality products remain essential – not cleaning lines is a false economy!

“Speak to local brewers - they want your custom and may offer bulk deals with you (buy five get one free). Most of all, it's going to be a bumpy ride... buckle up! Good luck to all of those in this great hospitality trade of ours!.”

Outside of his drinks offer, Cutter also closes areas of the pub when not required and only opens additional areas, once other areas are full as well as using sensor lighting in the toilets and cellar.

Moreover, the Kings Arms’ Marshall looked to technology to reduce one cost and potentially offset the ongoing rocketing utility prices.

He said: “One example we are discussing is introducing QR codes just to bar tables to order to table.

“Something I don't fully believe in as it takes away from personal service, but I also appreciate this is a way of controlling a cost we can actually influence in some way (labour) but that takes away from who we are.

“There are many costs we can’t control and can't reflect the in the selling price.

“These are and will be difficult times ahead, our job is to maintain the pub as a place to be so hopefully when we come out the other side, we won't have lost guests as well as money!”