William and the micro-brewer

As relationships in the pub world go, the connection between tenant and landlord has not been one of the rosiest lately. And as the number of community pubs going to the wall has mounted, it is the beer tie that has often been blamed for publicans’ woes.

It was with this in mind that Everards launched something of a revolution with the launch of Project William. By rescuing neglected pubs in partnership with local brewers, it offered a whole new way of approaching the pub tenancy and tie issues. Everards would take on responsibility for a pub, while a local brewer took up a protected tenancy agreement that—save for stocking one Everards beer on usual tie prices—gave it the freedom to sell whichever of their own and other beers they wished. The result, so the theory went, would be pubs run both by and for locals who knew their beer, with Everards a benevolent presence at their shoulder.

Project William started at The Greyhound, a pub off a busy road in Newcastle-under-Lyme in Staffordshire. At a time when pubcos were hovering up freeholds by the dozen, this was typical of the breed of pub on the margins that was still accessible to regional brewers like Everards. Having passed through the hands of Bass, Enterprise and Admiral, it had been closed for several years and virtually derelict when Everards picked it up in March 2007. Working with the Titanic Brewery, based in nearby Burslem, Everards identified a market and a formula that they thought could work here, and six months later—having spent more on a refurbishment than they did on the purchase—it reopened the pub.

Starting with trust
Three years on, Stephen Gould and Keith Bott, managing directors of Everards and Titanic respectively, are back at The Greyhound to reflect on the venture so far. The trust and respect they share is obvious and genuine. “What we have here goes way beyond a contractual commitment,” says Gould. “Trust is very, very important and efficient. If we and our partners have it then it beats a thousand emails or meetings—but if we don’t, then it will never work.”

Bott reciprocates, pointing out that the knowledge of a well-established brewery like Everards is a good fit for the entrepreneurial skills and local knowledge of firms like his. “Everards have helped us to become retailers as well as brewers,” he points out. “If there’s anything we’re not sure about, we know we only have to ask.”

Bott serves as president of the Society of Independent Brewers, and says Project William has caught the imagination of his colleagues. “Some have asked why a small local brewer would want to support a big regional one. But Everards are no longer seen as one of the big bad wolves, but as part of the team.”

The Greyhound has traded very successfully since reopening, and the secrets of success include total transparency, adds David Harrison, Everards’ operations director for tenanted trade. “You have to have that trust on both sides for it to work. Everything is run on a totally open book basis.” That extends to the accounts, to which Everards has full access. “That’s useful to me as they obviously know their way round a balance sheet so well,” says Bott.

Everards, Titanic and The Greyhound also swap support services and general day-to-day brewing and retail advice, adds Nick Arthur, brewing and sales operations director at Everards. “We’ve got a sharing of services that goes way beyond the usual landlord-tenant relationship.”

Ale revives the drinking pub
Since this pub threw open its doors, Project William—taking its name from brewery founder William Everard—has delivered 21 pubs with 12 different breweries. A long list of awards from local CAMRA and other groups is testament to the success of the initiative—a good news story in a period that has brought the bombshells of a recession and the smoking ban.

But lest Project William be seen as a fairy tale, Gould admits that not all the pub re-openings have run smoothly. And Everards’ motivations are not, of course, totally altruistic, and the project provides it with an investment portfolio that expands its network beyond its Leicestershire heartlands.

“It can sound like apple pie in a stormy world—but we really do try to work together whether a pub is over or under performing,” Gould promises. “We’re very clear that we’re not just fairweather friends.” He adds that Everards has learned plenty from its small brewery partners—about the elasticity of ale prices, innovation in brewing and the potential for creativity in pub design, for instance.

He and Bott are also in firm agreement that the surging interest in real ale is sustaining the market for no-nonsense drinking pubs. “There’s been such a lot of bad press about wet-led pubs, and the nondescript ones are on a hiding to nothing. But those that are innovative and think about their local market can thrive.” The Greyhound takes just a few hundred pounds a week in food sales, but ale more than makes up for that, says Bott. “Wet-led pubs still have a place at the heart of communities.”

A model for the future
So will operating models like Project William catch on? Word of mouth is certainly spreading in the brewing community, and there is evidence that other pub operators taking notes of some aspects of the initiative for their own tenancy agreements.

For its part, Gould says that so long as Everards can continue to identify talented and committed partners, then Project William will go on rejuvenating pubs and communities, operating on a bespoke basis and with agreements and operations tailored to local markets. He sees some parallels with the franchise model, and says he has learnt from companies like McDonald’s who work with local operators for the long-term. “Some of the principles are similar—we’re both going into a marketplace with the confidence that we can make a brand and location work together.” And he sees no reason why the model cannot work in other sectors—among cider producers, for instance, or even butchers and bakers.

But Gould also warns other tenants that it is the approach rather than contract that is the key to the relationship. “If other brewers think the success of Project William lies in the agreement then they’ve missed the mark. It’s the after-sales care and the trust that are absolutely critical.”