The Inevitability of Chains

Brewdog’s string of bars, The Craft Beer Com­pa­ny and the Pivo­var empire are all expand­ing at a rate of knots. Every day, it seems, brings a launch par­ty or details of a future open­ing. And every time a new bar opens, it seems to fill up, so why wouldn’t they keep open­ing more?

Decent beer pubs’ (diplo­mat­ic turn of phrase…) have often been part of, or turned into, chains. There was CAMRA Invest­ments, in 1975; and, in 1979, the Goose and Firkin brew­pub was such a huge suc­cess that David Bruce would have been daft not to open anoth­er, and then anoth­er, until, in 1995, there were more than forty Firkins around the coun­try. Even JD Wether­spoon began life as a sin­gle pub in North Lon­don, also in 1979, mak­ing it to sev­en pubs by 1983 – grow­ing at about the same rate as the ‘craft beer’ chains we’ve men­tioned above.

Is it always bad news when a pub becomes a chain? We’re opti­mists and believe it is pos­si­ble for a small chain to retain what­ev­er mag­ic it was that made the ‘seed pub’ suc­cess­ful. Often, how­ev­er, it is the per­son­al­i­ty of one per­son (or per­haps a cou­ple of peo­ple) that makes a busi­ness what it is, and that can eas­i­ly be spread too thin­ly.

And, with chains, the temp­ta­tion to com­pro­mise seems inevitable. CAMRA Invest­ments was cut loose and became ‘Mid­sum­mer Inns’, under the lead­er­ship of for­mer CAMRA chair­man Chris Hutt; in 1981, he came under attack for dis­re­gard­ing CAMRA’s ideals when the pubs in the chain began to sell lager and keg bit­ter, and intro­duced fruit machines and juke box­es. Sound­ing rather like those he had laid into in his book The Death of the Eng­lish Pub in 1973, Hutt defend­ed this deci­sion on the grounds of ‘cus­tomer choice’ – it was what the pun­ters want­ed, he argued.

Then there is an even big­ger temp­ta­tion: why not sell the whole bun­dle off, per­haps to Whit­bread or Mitchells and But­lers, and take a well-earned ear­ly retire­ment? How long does the ‘decent beer’ last under new own­er­ship? In what pecu­liar ways is the ‘brand extend­ed’?

There’s anoth­er risk, too, as David Bruce dis­cov­ered when Whit­bread launched their own ‘fake Firkin’ brew­pubs in the ear­ly eight­ies: chains are easy to imi­tate, at least super­fi­cial­ly. Did any­one else notice the spate of ‘gourmet burg­er’ chains that sprang up in Lon­don c.2005, often with worse burg­ers, chips and beer, but at the same price?

16 thoughts on “The Inevitability of Chains”

  1. The prob­lem with chains is that what­ev­er the prin­ci­ple, peo­ple are always pre­pared to take the mon­ey and run. There isn’t much high mind­ed­ness about when some­one waves the dosh.

    Of course, you could also argue that the man­aged estates of brew­eries are chains. I would.

    1. Cer­tain­ly hard to tell St Austell’s man­aged pubs apart from Wether­spoons at first glance: same chairs, same tables, same car­pets, same menu… per­fect­ly fine, but not any­thing to get excit­ed about.

  2. There’s more of this about than I’d realised. Think­ing about my locals, you’ve got

    1 x Spoons
    1 x Enter­prise Inns
    3 x solo free house
    2 x ‘chain’ (two bars, each of which has two ‘sis­ter’ bars)
    1 x tied (bar with two ‘sis­ter’ bars, tied to a brew­ery)

    Beer Orders innit. Chains are the new estates. I think Mar­ble (for it is they) are quite unusu­al among the new­er brew­eries in hav­ing as many as three bars.

    1. That’s about right, which is fine as long as you haven’t made ‘no com­pro­mise’ the cor­ner­stone of your brand…

  3. phil – you either live in rare area and are damned lucky or mis­count­ed. thats a v high % of solo free hous­es. sad­ly most pubs ive loved and thought of as inde­pen­dants turned out to be oth­er. com­pa­nys like enter­prise can basi­cal­ly be viewed as a fran­shise deal and as a chain just lack­ing any uni­fy­ing char­ac­toris­tics (or is enter­pris­es ‘theme’ that they have a stressed land­lord liv­ing in pover­ty 🙁 ) . id love to get on my high horse about chains – sweet jesus we used to moan about firkins! but so few indies to cham­pi­on small chains i guess need cel­e­brat­ing. mar­ket town tav­erns and york brewery’s chains = my cur­rent favs. see­ing some chains out there i have hor­ri­ble fear in 20 years we will look back with real fond­ness on wether­spoons.

    1. One of the three is owned by the “Hoi Pol­loi Pub Co”. That sounds a bit chain-ish, but I haven’t been able to find out any more about them – except that they were incor­po­rat­ed a few months before buy­ing the pub in ques­tion, so pre­sum­ably it was their first. The oth­er two seem to be gen­uine one-bar out­fits.

      Not that it mat­ters great­ly – I’m sure they’d expand by tak­ing on oth­er bars if it seemed like a good idea. (One of the small chains I men­tioned was a one-bar out­fit a few years ago.) If you’re run­ning a pub or a bar these days, you’re run­ning a busi­ness – it doesn’t mean you’re plan­ning to raise a fam­i­ly over the shop and grow old behind the bar. But per­haps it nev­er did, except in (some) ten­an­cies – where some­body else was run­ning the busi­ness and mak­ing the mon­ey.

      I think the key point is that economies of scale make a mul­ti-pub­/bar set­up a good idea, and these days this is more like­ly to hap­pen in the form of a chain of bars rather than a tied estate of pubs. Why that should be – why the new­er brew­eries aren’t build­ing estates of their own – is anoth­er ques­tion. I think the brew­ers’ reac­tion to the end­ing of the Beer Orders smashed the old sys­tem so bad­ly it couldn’t be rebuilt.

  4. You missed out Antic.

    I think the answer to this is eco­nom­ics. It is expen­sive to upgrade a pub and cel­lar to the stan­dard need­ed to keep a wide range of beers well.

    Let’s hope that the suc­cess of the chains you cite in rais­ing the beer qual­i­ty inspires inde­pen­dents to emu­late rather than crowd­ing them out.

    1. Re: Antic, that occured to us after we’d post­ed, and pos­si­bly indi­cates how suc­cess­ful they’ve been in not act­ing or look­ing like a chain.

      1. I was going to men­tion Antic too as they real­ly do seem to be grow­ing at a rate of knots. I don’t quite agree they don’t look like a chain – all that weird junk they put on the walls, and the dis­tressed look, start to get a bit for­mu­la­ic in some of their pubs, but oth­er ele­ments of con­sis­ten­cy, like inter­est­ing beers and clear­ly knowl­edge­able, friend­ly, viva­cious and moti­vat­ed staff, are more wel­come. My con­cern is that they are start­ing to look rather ripe for the pluck­ing from a big­ger chain or brew­ery, although I talked to one of their direc­tors who assured me this is cer­tain­ly not the inten­tion.

        The oth­er beer-friend­ly expand­ing mini chain you could men­tion is the Draft House, which opened its fifth branch in Fitzrovia last month.

        1. I guess the ‘uni­for­mi­ties’ start to become obvi­ous after you’ve been to a few – we only real­ly know the Red Lion in Ley­ton­stone. No con­sis­tent nam­ing pol­i­cy (like the Taps) or logo/brand graph­ics (like the Craft Beer Com­pa­ny), though.

  5. I don’t nec­es­sar­i­ly think chains are inevitable, I just think there’s a bit of a gap in the mar­ket at the moment, as evi­denced by the instant suc­cess of a lot of news bars sell­ing a cer­tain type of beer. The super­nor­mal prof­its made by the likes of brew­dog are sup­posed to be a sig­ni­fi­er for oth­er com­pa­nies to move into the craft beer mar­ket and tap into some of this demand. At the moment the com­pa­nies most switched on to this oppor­tu­ni­ty and in the best posi­tion to exploit it are the exist­ing ones eg brew­dogs and the var­i­ous Taps. Even­tu­al­ly the mar­ket will be sat­u­rat­ed, com­pe­ti­tion with­in cities will kick in, prices will come down, prof­its will come down and the sit­u­a­tion will sta­bilise some­what.

  6. Let the pub com­pa­ny class­es trem­ble at a drinkers rev­o­lu­tion. The pro­le­tar­i­ans have noth­ing to lose but their chains. They have a world to win. Drinkers of all coun­tries, unite!

  7. The Firkins only real­ly expand­ed after Allied Domecq acquired the chain – and David Bruce admit­ted when he sold the con­cern – to Mid­sum­mer Leisure, iron­i­cal­ly – in 1988 that his lia­bil­i­ties at that time, around £2m, equalled or exceed­ed the mon­ey he made on the sale. It’s a very rare entre­pre­neur indeed (step for­ward T Mar­tin) that can grow a con­cern from a start-up to a giant, and in the pubs/restaurants/hospitality busi­ness there are a fair num­ber of suc­cess­ful “ser­i­al entre­pre­neurs”, of whom David Bruce is one, who like to grow chains up to 40 or 50 out­lets and then, because at that point prob­lems of scale start to kick in, sell up to a larg­er organ­i­sa­tion that has the man­age­ment infra­struc­ture to expand the chain fur­ther.

    So it’s not just for the big cheque that peo­ple sell up: it’s because a dif­fer­ent type of man­age­ment is required to run a medi­um to large organ­i­sa­tion com­pared to a small to medi­um one, and entre­pre­neurs often find either (1) they’re not enjoy­ing run­ning their now larg­er com­pa­ny and/or (2) they’re not good at it because they don’t have the required skills to run some­thing big­ger.

    1. I used to work for a finan­cial ser­vices com­pa­ny which expand­ed enor­mous­ly and then sold up. There was a rumour after the sale that they’d been expand­ing too far and too fast, going broke by going for rev­enue. Appar­ent­ly, when the new own­ers got a prop­er look at the books they realised they’d paid huge amounts of mon­ey for some­thing that was bare­ly a going con­cern.

      Or so the sto­ry went – I’ve no idea if it was true.

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