Big Interview

Greene King's Rooney Anand: "People running their own pub businesses have to be pretty hard-nosed"

By Ed Bedington

- Last updated on GMT

Related tags: Greene king, Bury st edmunds, Rooney anand

Greene King's Rooney Anand: "People running their own pub businesses have to be pretty hard-nosed"
Greene King might be off the beaten track in the sleepy Suffolk town of Bury St Edmunds, but that has not stopped it from making waves throughout the wider UK market.

All eyes have been turned onto this somewhat publicity shy operator since it announced it was making a play to buy rival operation Spirit, a move which would transform both businesses and a fair swathe of the wider pub sector, with the newly merged businesses now accounting for more than 42,000 staff, and over 3,000 pubs.

Greene King is something of an anomaly in the trade - a family style brewer which is in actual fact a PLC business - but while its traditional cousins have stuck to their family roots, Greene King has moved beyond being a regional powerhouse and embraced the opportunity to step onto the national stage through an acquisitive strategy which has seen it gobble up rivals over the year. The acquisition of Spirit, its largest to date, cements its position as a major player.

The architect behind the growth of the company in recent years has been Rooney Anand.

No stranger to the corporate world of acquisitions, mergers and consolidation, Anand started his career in the FMCG sector, stepping onto the ladder with a junior management role with what was then United Biscuits.

History

Having worked his way through the world of confectionary and cakes, latterly with Sara Lee, Anand made the shift into the pub sector in 2001, taking on the role of managing director of Greene King’s brewing division, before taking on the top job in 2005.

Despite spending the last 14 years in the trade, he still feels like a new arrival. “It’s such a wonderful industry and so many people in it have worked there most of their careers. I’ve been in the trade for 14 years, but it’s like reverse dog years, I’ve just finished two years.”

Turning his back on the opportunity to work internationally following the sale of Sara Lee, (“I had fairly clear signals from my wife that she didn’t want to be an expat wife”) Rooney embraced the move to Suffolk and also the opportunity to work within the PLC environment.

“It wasn’t the most obvious choice,” he said, “but I came to Bury St Edmonds and met the board. This was a PLC and that was part of the attraction, my first PLC role.”

Structure

Despite that more corporate structure, the company hasn’t lost the sense of its roots, he insists: “While it had a really outstanding track record of delivering value and highly regarded in the city, it still felt like a family company.

“I always smile when people talk about GK as big company as I never feel like I’m working for a big company and I’m passionate about trying to maintain this small-company entrepreneurial family ethos that I felt when I joined.”

That ethos and emphasis on people is something Anand is keen to focus on, not to mention a strong grounding between the guys at the top. “It’s something we talk about a lot, how many levels there are between top management and the people running a pub - how connected we are to the real world, where the money is made or lost out there in the field.”

He’s keen to run a very egalitarian operation, one where opportunity is open to all.

Big team

“We now have 42,000 colleagues. You can take the view that it’s your single biggest item of variable cost, or one of your biggest sources of value. I and my team very much take the latter view.”

He says that it’s vital for companies in the hospitality sector to not only recruit the most talented people, retain them and develop them, but also to instill a belief that they can rise from the “shop floor all the way to my job”.

It’s not something, he says candidly, that really exists in the sector at the moment. However, he looks to other sectors for inspiration: “It is something that great British retailers have been good at doing, and that’s one of the things I would be seeking to emulate. An investment in people to give people at the sharp end of the business, where the money is made or lost, a belief that they are running and driving a business and can go all the way through the management ranks.”

That is certainly reflected in the level of support that Greene King is giving to the apprenticeship scheme, and that has paid off for the business, with the company being listed as one of the top 50 apprenticeship employers in the UK.

Passion

Passion plays a big part in that staff motivation, and moving from cakes and snacks to beer was something of an eye opener, Anand says. “Prior to joining Greene King, I worked on so many food categories, chocolates, salty snacks and latterly cakes, all of which are nice things to eat, indulgent and great fun. I thought I really liked them and was very passionate about them, until I joined a brewery and pub company!

“Took me a long time to learn I was passionate about the company and the career, but not about the product. Whereas beer and pubs, as a customer, was something of high interest, and it’s one of the reasons I’ve enjoyed working with the industry so much.

“Everyone has an opinion on the pub, and the greatest thing is that you’re looking at a set of account, you’re reading that information, but your mental image behind that is something that you connect with as a customer, and it makes the experience richer.”

However, while that passion helps fuel the industry, he stresses the need to remain objective.

Judgement

“I see it as a strength that it engenders so much loyalty, passion and commitment, but one of challenges is recognising how that can affect your judgement. I’ve tried to find ways to get close but stand back.”

He says the suggestion that you need to be hard-nosed in a PLC is overplayed, but people in all walks of business need to be tough: “People running their own businesses in this industry have to be pretty hard-nosed as well. They have to have more of a velvet exterior, but they have to be pretty steely to survive particularly if you think about the challenges in last ten years.”

And it’s those challenges which have shaped the industry to where it is today he says, pointing to the recent recession, which while it hit the pub sector earliest, and perhaps hardest, there have been positives within there.

Technology

He says the changes that have been wrought in consumer behaviour since that recession has created a whole new world of consumer behaviour, with technology aligning to create a completely new beast - the savvy shopper, turning them into professional buyers almost.

“A marketing man’s job is bloody hard now,” he says.  “The level of promiscuity, the loyalty levels are at lowest of all time, it’s quite scary.

“However the great news is, if you’re ready to compete on right platform and in the right way, you can take anyones business - the customer will give you a chance and try you. If it’s good, they’ll come again and tell others.

“It’s an opportunity and a threat. If you’re too romantic about industry and too subjective about your business and assume what you’ve always been doing will work, then it’s probably a threat.

“If you’re passionate but objective, and constantly seeking to improve and refresh and rejuvenate your offer and bring your staff with you, then it’s very exciting time to be in our industry.”

And exciting times for Greene King, as it seeks to bed in its latest acquisition, and Anand stresses they are taking a cautious approach. “I’ve always sought to bring a business together by combining having a plan but constantly adapting, refining and checking it with the people who know the business best, which are the people who run it and built it and made it the success that it is.”

Brands

Since this interview, Greene King has subsequently announced plans to halve the number of brands, from 20 to 10, within the combined businesses, something market watchers had been predicting. Its identified five growth brands between the two, Hungry Horse, Flaming Grill, Farmhouse Inns, Chef & Brewer and Metropolitan.

He says they’ve been deliberately dispassionate when it comes to looking at the brands: “One always thinks one’s children are better, so to make sure we don’t fall into that trap, we’ve used outsiders to help us and done a lot of research and analysis, diagnostic work with customers and teams.”

He says the driving force behind the Spirit acquisition wasn’t just about size and scale: “It isn’t just about being bigger, what we’re hoping to do is to get better by combining the best of both businesses, the brands, the pubs, the people and the ways of working.”

It’s not just about saving costs either, he stresses: “Cost synergies are very important, we understand our obligations to the shareholders, but we won’t be suffocated by that obligation and miss the opportunity to do some things that will build a much more exciting future for the combined business by investing in our brands, our pubs and our people.”

Spirit

Those synergies, and Greene King’s healthy balance sheet will also be brought to bear on the Spirit estate, says Anand. “We’ll be able to invest that capital expenditure into those pubs to bring the true potential of those assets up where we think they should be.”

And despite announcing plans to reduce its tenanted and leased operations, Anand still believes in a future for that model. “It’s definitely going to survive, it’s the oldest model and most resilient part of the market. The issue around that model is that two people are trying to make a return out of one pub.

“In buoyant conditions, there was enough for everyone, but even post recession, there’s a strong future for certain pubs run by really talented and great licensees. But you need both to be in play, a great licensee in  a pub that isn’t long term sustainable won’t be viable, and a great pub that isn’t being run as well as it could be will have more security, but put it with great licensee, everyone does well.”

So it’s interesting times for Greene King, and the once reticent company now finds itself centre stage and the focus on industry attention. But like any good business, it’s adapting and evolving and if Anand maintains the focus on people, the business looks set to go from strength to strength.

On Minimum Pricing

“I think that whilst I know it isn’t necessarily a popular thing to talk about within this industry, and increasingly the industry becomes more known for being focused on food, we must never forget that large part of our raison detre is giving people pleasure through the sale of alcohol.

"The reason I think it should still be on our agenda is that if the industry looks after itself, then the heavy hand of regulators has less of a role.

"If the industry ignores the likelihood, because it’s such a high profile industry then the media, the politicians or lobbyists will seek to paint a picture where we’re not in control of our destiny then it could be done for us.

"My view has always been we should be proactive.

"Government feels it’s addressed tobacco, and while there are issues topically about sugar and obesity, alcohol concern will always be on the health agenda, if not that of the government, but certainly of the media.

"Part of the argument that I’ve “enjoyed” has been based around things like the “nanny state, or the “lack of evidence” of an issue, and also that this represents the thin end of the wedge of government interference.

"That ignores completely the point that the supermarkets and off licence sectors have fundamentally affected the biggest shift in the way people use the pub by incentivising customers to drink at home and drink far more in shorter space of time, because it's become so cheap, than you would ever have done in a pub.

"I feel industry should still engage in that dialogue.”

On the changing face of the pub market:

“Much has been made of how many pubs are closed down and while that is sad to see a business close or see a pub in community and village no longer operate, I think back to the Midlands as a boy and how many post offices there were, how many corner shops and garage forecourts. Gosh you have to drive a long way to fill your car up now.

“As so many other ways of spending your money to eat and drink out of home have developed in last 25-30 years, perhaps that’s just a natural rebalancing of demand and supply, painful though that is.

“I can remember when at the height of it, the figures published were claiming 50 pubs a week were closing, media would alight on it, saying how dreadful it was, and indeed it was, those were dark days.

“But what struck me was people would be interviewed on the streets and they’d say ‘it’s terrible and the government must do something about these nasty pub cos’.

“And I remember seeing one interview when the sixty four thousand dollar question came up, ‘when was the last time you went to the wagon and horses?’ and the interviewee said ‘that’s not the point’, well, actually it is the point.

“When Woolworths was going to the wall, people were saying ‘it’s terrible it’s an institution’, but when asked when did you last go they say ‘that’s not the point, I would love to know that it’s still there’ and people talk about the pub in the same way - if you want it to be vibrant you need to support it.

“I was invited to go to a pub not far from me, a few years ago. A group of villagers clubbed together to purchase and install a manager and it’s a fantastic pub. If villagers want to do that, and it’s not a labour of love, it’s a well thought through business proposition with the right backing and the right plan then I think it’s fantastic.

“But through all that sentence, is the undercurrent of economics, sound business must prevail. “Pubs are not charities they’re not public service institutions, even though they provide a public service. They’re not set up to be. They must be viable businesses.”

My Favourite Pub

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“I love the Rock that’s around the corner from my house in Cambridge. Before the team changed it a few years ago, it was a place that my wife and I weren’t comfortable going to certainly with the children. It was run for a select group of customers where the music was very loud.

"But now you see people in that pub coming together of all denomination. You see older people going in there for a glass of wine or cup of coffee during the day, you see mums going in there with kids - it’s not a gastropub, it’s not cool hip or funky, it’s timeless, it’s classic, it’s for everyone.”

Related topics: Greene King

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