Rebalancing act

Sometimes someone comes into a business and their arrival triggers a marked change of culture and focus. The arrival of Isaac Sheps to Carlsberg's UK operation some 18 months ago had such an impact, says Chris Houlton, the brewer's sales and distribution director.

After flattening the management structure, a process which Houlton survived, Sheps wanted to focus on a broader approach towards Carlsberg's customers, whether they were on or off-trade.

"We don't differentiate between on and off-trade customers," explains Houlton. "Instead we see all our customers as simply needing high levels of service.

"Isaac's arrival meant we changed structures, reduced management and empowered people. And he demanded more accountability from various departments. As a result, volumes and profits have gone up."

Clearly defined goals

Houlton says the brewer has a number of clearly defined goals in its latest guise.

"We want a sustainable take-home business. We want to rebalance the business, 75 per cent of which is occupied with the on-trade," he says.

But Houlton is at pains to stress that this aspiration will not come at the expense of its involvement in the pub sector. He sees a number of ways in which the brewer can add value to the on-trade.

"Something like our 'We Deliver More' website is all about helping our on-trade customers get more out of their pub and get more out of their relationship with us," he adds. "We want our business and theirs to be sustainable beyond the traditional strategy of just flogging beer."

How so? In Houlton's mind there is the potential for Carlsberg to make use of its 350 truck-strong distribution capability to supply its pub customers with more than just barrels of beer.

"We have sales and distribution and we can be a one-stop shop, one point of contact for our customers. We want to do more than just drop the beer off at the pub," he says.

For example, Houlton explains the group wants to make use of the space above the rows of kegs that go out on a delivery lorry.

"We're currently experimenting with what else we can carry. It can extend the interest of our portfolio and cover all occasions for a customer. It's about offering more wholesale services," he says.

But at a time when the focus is on cutting costs, when other brewers are out-sourcing distribution, why do the precise opposite?

"We're more focused than our competition and we believe we bring things to the party that are not just transactional," says Houlton.

"We see ourselves as being in a partnership with our customers. We've got interesting brands, such as San Miguel, and with things like that you become an interesting proposition for your customers."

Shot in the arm

Sheps' arrival appears to have acted as a shot in the arm for the brewer, suggests Houlton. "There were parts of our business that we did extremely well, parts that we did well, and some areas where we didn't do well at all," he points out.

While he doesn't expand on which parts of the Carlsberg business were underperforming, Houlton says internally the group is more co-operative than before. "We work as a team where before we used to see different structures," he adds.

Recent contract wins - or in the case of Punch Taverns, renewals - are a sign that Carlsberg is sharpening its edge, although some have suggested that with deals like its supply to JD Wetherspoon pubs, price was the deal breaker. Houlton doesn't see it like that, naturally.

"They paid what we regard as a good price, but trust in a supplier and what we can offer is also a factor," he says. "Our technical services people got round all but two of Wetherspoon's 740-odd pubs in just four weeks."

And far from joining in with those doom merchants who predict the eventually terminal decline of beer sales, Houlton believes Carlsberg has lots to aim for.

"Why do people think the beer market will go on declining forever? There will be a plateau at some stage, and there are lots of fantastic opportunities out there. Volumes can be maintained. If you follow the best customers you won't go far wrong," he says.

Meanwhile, in about eight months' time and after what he describes merely as a "big" investment, Carlsberg UK will soon boast the brewer's second largest production facility after its St Petersburg plant. Money is being pumped into the brewer's Northampton facility, in part to compensate for the looming closure of its Leeds brewery site next year.

"We want a very efficient, modern, flexible brewing operation. And we want to help pubs get more people across the threshold," he adds. And who can argue with that?