Northern lights

In the first of a two-part series,Tony Halstead reports onbrewers in the north of England. This week he talks to Hydes about Boddington's and finds out how Thwaites has made profits soar. Next week the focus is on Robinson's and Moorhouse's

Super-star Thwaites

Daniel Thwaites is the nation's seventh-biggest brewer, with volumes running at more than 300,000 barrels per year.

But the Lancashire-based company is seemingly not that interested in league tables and almost shrugs its shoulders at the suggestion it is now bordering on super-regional status.

Yet this once-traditional regional independent is becoming an increasingly big league player, thanks to new charismatic beer and lager brands and expansion into new pubs away from its traditional Blackburn and Lancashire heartland.

Once upon a time it was just Thwaites Bitter and Mild and a tied estate dominated by street-end Rovers Return-style pubs.

Today, Thwaites may still be family-owned, but its £148m-a-year turnover figure reflects how the company has spread its wings in fairly dramatic fashion in recent times, with the adoption of an almost cosmopolitan ring to its business.

The emergence of one of the most modern canning centres in Europe and creation of an impressive chain of four-star hotels across the UK are two relatively new and important strands of Thwaites' business.

But beer is Thwaites' main claim to fame and over the past five years three dynamic new brands have helped the company bolster both its tied and free-trade business.

Deals involving sole-supply rights for German premium beer Warsteiner and a brewing contract for another German product, Kaltenberg, have given what sales director Brian Jenkins describes as a major point of difference over rival brewers.

The launch, three years ago, of a premium cask ale, Lancaster Bomber, which saw sales increase by 45% last year, completes an enticing trio of brands, and has given Thwaites a new cutting edge in the free-trade market, which has traditionally been dominated by the national brewers.

But the star of the Thwaites show is a beer that un-ashamedly digs into the company's roots and tradition to underpin its success.

Thwaites Smooth, the "Northern Smoothie", is one of the fastest-growing independent nitrokeg brands in the country and is outselling national competitors in large areas of the north-west.

Backed by a high-profile advertising and marketing campaign, Thwaites Smooth, has helped the company scoop a hatful of free-trade accounts in the region, including a large number of golf, cricket, rugby and other sports clubs.

Smooth production is now running at 36,000 barrels plus per year and ranks as one of the company's most successful brand creations of modern times.

But despite the success of this nitrokeg product, Jenkins is keen to stress that Thwaites is notdeserting real ale.

"We are still passionate about cask, in fact last year we saw growth in this sector for the first time, and total volumes are continuing to increase," he points out.

Key to the brewery's strategy is an innovative sponsorship and brand-support policy, which sees Thwaites flying the flag at Lancashire County Cricket Club's Old Trafford ground and a string of local Championship and League One soccer clubs.

"Cricket fans went through 500 barrels during the Old Trafford Test Match last summer, which was not only good for our sales but the sponsorship at the ground also helped keep our name in the public eye at a major sporting event," Jenkins says.

"Sponsorship is all well and good however, but it's the nuts and bolts of how you do business that is still important.

"We still do things in the time-honoured way. Our sales reps actually go out at night to visit our accounts and keep a personal handle on things, and I think our customers appreciate that.

"Our sales team are experienced peopleand many of them have been in the trade a long time. You cannot buy that sort of experience."

Jenkins adds: "Thwaites now brews or controls brands in every sector of the beer market and that has given our business a tremendous lever to win new free-trade business."

Thwaites' ultra-modern canning line packages beer and lager for a diverse range of customers. Contract brewing and packaging business has provided the Star Brewery with substantial extra throughput to add to its core brand brewing operations.

If there is an official demarcation line separating super regionals from the rest, then Thwaites cannot be far off the finishing tape.

Spreading its wings

Thwaites operates a 400-strong tied pub estate, based predominantly in the north-west, but now expanding into Yorkshire, Staffordshire and the Midlands.

A total of 335 are tenanted houses, but the managed estate, which now numbers 65, is growing fast.

Retail director Paul Howarth, right, believes the personal relationship the company enjoys with its tenants is one of the main reasons the estate is a flourishing one.

"We trade on traditional tenancy terms and like to think we offer an agreement that gives our licensees plenty of opportunity to run successful businesses.

"I think the support we give them across the business is important if we are going to attract the right sort of people.

"We want to promote a partnership attitude and currently we are offering practical help to assist them in capitalising on catering potential and wine sales development.

"Recruitment is also high on our agenda and we are now looking at things like low-cost entry agreements to give newcomers the right start to their careers.

"Tenants are getting a good all-round package and we have been recruiting quite a number of licensees from national companies on the strength of it."

Growth in the popularity of wine has meant Thwaites has now appointed a dedicated wine development manager to help tenants build wine sales in their pubs.

Howarth says wine is now a strong feature in some of the company's pubs, which previously have traditionally been beer-dominated.

"Wine selling in the on-trade is far removedfrom restaurants and brasseries and we want to make sure our pubs get the right advice and support," he says.

Thwaites' own wine merchants, James Pickup & Son, was founded in 1790, and still trades as a subsidiary operation.

The Thwaites managed houses range from high-street young-persons venues to traditional food-led pubs, which have enjoyed a strong performance over the past year.

And food is, without doubt, an increasingly important sector across the estate, with sales enjoying dramatic growth.

In fact, in the last four years, sales have increased from £800,000 per year to just in excess of £4m.

Hydes rolls out the barrels

Beer production is on the up at Hydes' Moss Side Brewery in Manchester. This month sees the start of a major brewing contract that will enable family-owned Hydes to hit the 100,000-barrel volume mark when it takes on cask-beer production of Boddington's.

The deal to take on Boddington's ­ following the closure of Interbrew's nearby Strangeways Brewery ­ is a quantum leap for a small independent brewer but one that will enable Hydes to begin 2005 with a bang. It's further confirmation of a trend that has seen the company expand its contract and free-trade brewing over recent years, to supplement bread-and-butter business provided by its 80-strong tied-pub estate.

While Hydes' tied estate may have grown in both size and quality in recent years, it's the free trade that has kept the brewery mash tuns busy.

Supply to the big pub companies and free-trade markets is on the march, thanks to Hydes' highly-successful premium cask ale, Jekyll's Gold, while a number of significant contract-brewing deals have also combined to bolster barrelage returns.

But the Boddington's deal has enabled Hydes to hit its three-year target to break the six-figure barrelage mark way ahead of schedule. "Its obviously an important deal for Hydes," says managing director Chris Hopkins, who became the first no