Business Opinion with Andrew Pring
Adnams' eco ethos captures zeitgeist
Whisper it quietly but some of Britain's independent family brewers view heritage as a double-edged sword. It's fine to make play of the traditional ways, to emphasise the unchanging nature of brewing as a kind of bulwark against harsh, materialistic, modern ways. But it can look stuffy, reactionary, and not very interesting to those who like their beers and pubs to be a tad more contemporary.
Adnams is one Independent Family Brewers of Britain member - there are perhaps a few others - which is setting out its stall very firmly in the 21st century. The 650-year-old brewer is trying to connect with consumers in a different way. It wants to appeal to their instinctive leanings towards local sourcing and environmental awareness. These two issues are on the cusp of the modern zeitgeist, and progressive retailers everywhere are keen to demonstrate sympathy with them.
But Adnams' interest is far deeper than that of some of the corporate Johnny-come-latelys currently jumping on the environmental bandwagon. Both the current chairman and his predecessor, Jonathan Adnams and Simon Loftus, have long been involved in these issues. And Adnams has recently been reaping the benefit of its far-sightedness as award after award has been bestowed upon the company for its commitment to dealing with the inconvenient truths of environmental pollution. Most notable of the brewer's achievements is the new and elegant eco-friendly distribution centre just outside Southwold, which on its day of opening this year made national TV and radio headlines.
Running in parallel, a £4m modernisation of the brewery has incorporated energy-recovery devices into the systems. New lightweight bottles are further evidence of its green credentials. Throw in consciously local food-sourcing opportunities for its 74 pubs and two hotels, and you have the near-perfect blueprint for a progressive family brewer.
The company is hopeful this ethos will appeal to pub entrepreneurs, who may see ways to leverage the Adnams brand in parts of its almost totally East Anglian estate. Managing director Andy Wood is keen to build on the six leases to date. "We're moving towards something that is far more than a relationship enshrined in property law," he puts it dryly, the terminology perhaps influenced by the 100,000-word doctoral thesis he is putting the finishing touches to, on tenants' relationships with their management. Opening up the estate to other brewers' beers is another modernising touch. Guest beers are available, as are Bitburger beers; now local micro-brewers are to be offered listings too. And Adnams has just unveiled an interesting tie-up with Meantime Brewing, which will see some of the Greenwich brewer's products on sale exclusively in the Adnams estate. And then there is Spindrift, the beer it produced at the promptings of Punch for upmarket, non-ale bars and restaurants, which it calls an English speciality beer.
Some critics feel the pricing of around £3.80 works against it. But Wood and his marketing director Steve Curzon are adamant "the consumer is starting to get it" and point to the near-200 listings which they believe "completely smash the myth that English beer needs to be sold cheaply."
Whatever their views on Spindrift, all would agree that putting value back into the market is vital in light of the way the beer market is still tanking. Wood accepts it's "bloody tough" and is "bearish" about the rest of the year. He also admits Adnams is very aware of the stake that merchant bank, and Young's nemesis, Guinness Peat has established in the past few years. Holding 5.4% of Adnams equity and 9% of the B shares but just 2.5% of the voting rights, Guinness Peat is something of a spectre hovering over Southwold. Woods and his finance director Stephen Pugh go to London at least once a year to hold civilised talks. Adnams has strengthened its board recently by bringing in Steve Sharp, marketing director at M&S, as a non-executive. And its last results showed operating profits up 11.8% to £4.1m, on sales of £46m.
But everyone is aware that any evidence of a failing strategy and falling dividends could see a near-repeat of the battle of Southwold 1672, when the Dutch fleet gave the English a bloody nose just offshore of the brewery. Another reason, of course, to focus more on the present than the past.
