Industry predictions for 2016

Tom Kerridge chef-patron the Hand & Flowers and the Coach​

I expect more in the way of pubs growing their own vegetables, and more pubs — with a better food offering — focusing on British produce.

Slow and steady growth is the way forward for the pub market, not a flash in the pan, fashion or fad thing.

Pete Brown, award winning beer writer, blogger & author​

After a slow January, notable only for a combined team of scientists from CERN, MIT and NASA discovering the true definition of craft beer, things hot up when the AB-Inbev/SABMiller deal finally goes through. The new combined entity decides to cut to the chase and announces its purchase of the entire continent of Europe, with Carlos Brito announcing himself as President. All beer apart from Stella Artois and Becks is immediately banned.

In a desperate move, BrewDog launches Equity for Punks X and raises $100 trillion for a hostile takeover. As President Brito is making his President’s Question Time debut in the House of Commons, James Watt and Martin Dickie drive a tank into the chamber and announce that the National Anthem will be replaced by the Sex Pistols’ God Save the Queen. The Daily Mail gets confused as to whether to launch a vicious smear campaign against BrewDog for being disrespectful and challenging authority, or Jeremy Corbyn for refusing to sing the punk anthem, and self-combusts.

Brito doesn’t go down without a fight and launches weapons of mass destruction inside parliament, but because they’ve been made with the cheapest ingredients possible, they don’t work properly. Chemical weapons hit the toilets, and from the green haze emerges the dishevelled figure of Greg Mulholland, wearing his underpants on over his suit. Realising the chemical soup has at last given him the superpowers he craves, Mulholland dispatches Brito before laying waste to the nation’s PubCos, reducing them to rubble with his laser eyes and thunderous voice. Anti-PubCo campaigners continue to blame Punch and Enterprise for pub closures anyway.

Against the backdrop of a declining beer market overall, cask ale volume rises by 0.3%.

Martin Hayes founder and managing director of The Craft Beer Co.​

I see craft beer continuing to trend upwards, both in terms of volume and quality. I expect the average consumer to become more savvy about such products and not except pale imitations — that applies to beer as much as it does operators pretending to sell ‘craft beer’.

Jake Bishop, owner-operations director, Loungers​

 Hot on the lips for 2016 will be:​

■ The national living wage impact and resulting price hikes

■ Vegan, gluten-free and intolerance menus taking off

■ The stagnation of ‘dude food’

■ The slow down of casual-dining openings

■ Continuation of health food focus

■ Chef shortages

Neil Gannon, marketing lead at There's A Beer For That​

2016 will see a continuation in the trend of beer and food matching, as it has now become the 'norm' for people going out to specifically want the beer and food pairing experience.

Consumers are now looking for inspiration and they want to be given some direction on what to use.

Pubs are now beginning to realise this and instead of just serving 'normal' drinks, they can now match them perfectly with food.

Consumers are also interested in finding out what ranges and styles of beers go with what kinds of food and are enjoying that as well. As a campaign, we have a source of knowledge and expertise for publican's to utilise to ensure they're recommending the best food and beer to go with any dish.

 We have our #BeerExplorer tool, via Twitter, that pubs can use to match dishes on the menu with many of the great beers they already have on offer. To support this, there has also been a growth in Micro-pubs, in that people are now wanting to go back to their roots and converse with each other by having good food and beer in friendly surroundings. This growth appears to have gained some momentum and highlights the importance of provenance, consumers want to know where their beer and food is coming from, as well as wanting quality over quantity.

Tim Page, chief executive, CAMRA​

Hopefully 2016 is going to be the year when producers, retailers and consumers unite to promote the responsible drinking of good beer in well-run outlets supported by their local communities.

CAMRA ended last year successfully convincing the Co-op Group of the need to consider the opinions of local communities when looking to open stores on pub sites and we're hopeful other retailers will follow their example. We also think less pubs will be seen as "soft" targets for developers this year, with fewer tenanted and lessee licensees having their freeholds sold out from under them.

Many more pubs will be registered as Assets of Community Value (ACVs) by their customers. We're expecting to see more than 3,000 listed by the end of 2016, with the result that local people will have a right to be consulted if pub owners wish to use their properties for another purpose. ACV listing forms just a small part of the pub protection process, and we expect to see the Government do more this year to ensure pubs - especially those run by tenanted licensees - have greater security for their businesses.

With the start of the Pub Loan Scheme due in the next few months, 2016 should be a year in which the ownership of pubs by local communities grows. Pub owners should have the opportunity to realise the value of their assets without having to deprive any community of its pub.

We predict that the pub industry will start to see the positive benefits of the Pubs Code and Adjudicator who will provide a route for the quick and objective resolution of disputes. We hope to see pub companies offering better deals to licensees to ensure that they remain in the tie

Good beer is, of course, fundamentally important.

This year should see the consolidation of a market returning to growth and real ale will continue to play an important part within the resurgence of interest in quality beers.

This year may see drinkers kick back against the "craft" pricing bubble. Real ale and quality beer is a premium product which deserves a premium price-tag, but the reckless marking up of anything with the merest whiff of "craft" hurts everyone in the market.

Brigid Simmonds, chief executive, British Beer & Pub Association (BBPA)​

While the economy is growing, competition for customers in the on-trade will remain intense. This is particularly so in the casual-dining sector, and I think we will see even more competition between pubs and other venues.

In pubs, we will see an ever-increasing focus on the food side of the business. Customers will continue to look for value, something that great pubs will always be well placed to exploit.

With this, there will be greater focus on training and skills, and how, as an industry, we can do what is needed to meet the increasing demand for more skilled pub chefs. This is not just a challenge, but a huge opportunity for us.

We will continue to see greater choice in the beer market, and continued interest in the provenance of both food and drink, including local beers. While we will see a little more money in customers’ pockets, the tax burden on beer and pubs will remain a key issue throughout the year as businesses strive to deliver value and generate growth.

For bigger companies, a key challenge will be the added pressure of the national living wage, business rates and over-regulation, including VAT. There will be no let-up in the pressure on Government to even out the burdens.

Jesse Dunford Wood, chef-owner of gastropub the Parlour in London’s Kensal Rise​

I predict more sharing food — people are opening up to the whole idea. I love it. Tasting menus are getting a bit tired and small plates is one thing, but sharing is another.

‘Commensality’ — the act of eating together — this is what it is all about.

The rise and rise of charcoal/wood-fired cooking will continue — barbecues, Green Eggs, real grills.

People are enjoying the flavour of real meat and fire.

Eclairs are going to be a big hit. There has even been a shop opening which only sells eclairs in town. http://www.maitrechoux.com/

‘Fancy’ chefs will continue to break into the pub sector, and dining in pubs will continue to evolve and progress. The growth in this area has been amazing during the past few years and it is only gaining momentum. There will also be more Michelin-starred pubs.

Kate Nicholls chief executive, Association of Licensed Multiple Retailers (ALMR) ​

The year has been one of consolidated recovery and a continued increase in consumer and business confidence. The eating and drinking-out market is undergoing a sustained period of growth, with casual-dining outlets driving an eating-out renaissance and premium and craft drinks thriving in pubs and bars. We expect the sector to continue to grow and create jobs, but this recovery may be at risk if legislative and financial pressures are not eased.

Payroll costs have been on the increase and the introduction of the apprenticeship levy and national living wage will both hit margins. Payroll costs currently account for more than half of operating costs in licensed hospitality businesses and one of the ALMR’s jobs in 2016 will be to push for a fairer deal for the sector.

We will continue to push for root-and-branch reform of the business rates system and we are hopeful the Government will make good on its pledge to bring about reform at next year’s Budget statement.

As we approach 2016, it is important to recognise the good work the sector is doing and the fantastic progressions we have seen recently. Our recent Autumn Conference and Study Tour highlighted some of the best new food concepts in London and the ALMR’s members continue to feed back the importance of their food offerings. The kind of innovative, fresh and tasty dishes we experienced set both tongues and taste buds wagging and this high street food renaissance shows no sign of stopping.

The next 12 months will throw up many of the same challenges and opportunities as the previous. Our job is to continue emphasising the positives and to make the case for this dynamic and varied industry.

Duncan Garrood CEO at Punch​

The introduction of the statutory code and the MRO (market rent-only option) clearly looms large across the whole of 2016. Everyone on all sides are waiting to see what it will finally look like and then only time will tell what it really means in practice for pubs in England and Wales.

What that means for us is that we will adapt and evolve our operation and we want to lead the way with that development. However, we also want a constructive dialogue with all sides of the landlord and tenant debate because we all want the same thing, which is a thriving UK pub industry.

The biggest opportunity for Punch in 2016 will be a focus on the consumer. The 21st-century pub customer spans three different generations, has high expectations and knows exactly what it wants. The big opportunity is to start giving it to them.

With the statutory code and MRO imminent, it would be easy to see that as all-consuming but the other big issue for pubs is the breadth and quality of the competition. A pub in 2016 will be competing against casual dining, entertainment, fast food and coffee shops before we even begin to think about other pubs. The British public loves pubs and will use them if they are providing great hospitality and consumer experiences. We, as a company and the sector in general, need to tackle that head-on to succeed.

Paul Dickinsonhead of food at Fuller’s​

We will continue to see farming food heroes. We have the finest seasonal ingredients available and must work with our suppliers/farmers to get the best produce to our kitchens and to customers.

There will also be a greater focus on chef development and attracting more chefs to the sector via a better career. This must include development in the workplace, competitive salaries, increasing chefs’ skills and knowledge, and to change the perception of the job to youngsters.

Consumers are likely to want more healthy eating options and that involves offering attractive and seasonal dishes, which are well balanced so they are not just carbs and meat. They want ‘honest food’ and that is more than just ‘traditional food’, which is well-cooked and fresh.

Daniel Mackernan, Association of Valuers of Licensed Property (AVLP)​

We are likely to see:​

■ Stagnation of pubco leasehold deals pending MRO (market rent-only option) clarification. A busy market after the settlement of the terms. A tied leasehold market where the introduction of the MRO will see prices rise and the creation of a two-tier market

■ Several large pubco portfolio transactions — Spirit/Greene King and Marston’s are examples of possible sales and leaseback deals

■ Mergers of several EIS-funded operators

■ Increases in both free-of-tie lease acquisitions and free-of-tie leasehold values in provinces. Large premiums in central London, but perhaps a slowdown in other regional cities that have seen unprecedented growth

■ Rents continue to rise on free-of-tie leases, especially in London, due to operator demand

■ Fewer full repairing and insuring leases and more short-term tenancies, and no more rental concessions from pubcos — the market moves full cycle back to pre-Beer Orders days of brewery-style tenancies, and outside of the Landlord & Tenant Act

■ More managed houses

■ A major pub company may acquire a brewery

■ A greater range of agreements on offer due to MRO — without rent review provisions — including rents adjusted by consumer/retail price indexes; turnover leases; base rents plus turnover top-ups

■ MRO legislation will be acknowledged as a failure and more damaging than the Beer Orders forcing the Government to look again at the legislation

■ Investment yields start to move upwards by the end of the year

■ Fewer investment transactions than in 2015. In London, deals will be in what were once considered fringe zone 1 and 2 locations

■ As the food-led, casual-dining sector grows, pubs look to differentiate by offering wider range of drinks including coffee and smaller pub operators looking to diversify estates by moving into new sectors such as fast casual and brewing

■ Well-run, privately owned freeholds attracting high prices not seen since the start of the last recession as a result of lack of stock with multiple operators seeking to acquire sites, pushing up prices

■ The UK economy continues to improve (steadily)

■ Fewer sales of pubs for alternative use without real prior consideration as owners start to understand the impact of asset of community value, which we will see numbers rise dramatically

■ Churn of unsustainable bottom-end pubs will continue, but this will be on a smaller scale than previously seen

■ Corporate profits may be reduced as a result of the national living wage

■ No surprise when draft rating revaluation numbers are published, showing large increases for the pub sector

Ed Bedington, editor, The Publican's Morning Advertiser

Regulation and statutory changes are more than likely to continue to dominate the agenda for a large part of 2016 and probably beyond. My hope would be that cool heads are maintained and work is done in partnership to limit the fallout and damage from the unintended consequences the changes will have, but time will tell. Certainly the Publican’s Morning Advertiser will continue to play a role in helping to facilitate that, and provide a neutral platform for trade debate and discussion.

Recruitment and training is something I’d like to see a focus on in 2016 as well - we need to all work together to improve the image of our sector and attract fresh talent on board. The impact of the New Living Wage is going to make some of that challenging for many operators out there, but rather than kick against it, we need to embrace that issue and look for ways to show our industry offers great career opportunities and isn’t just a stop-gap, minimum-wage time filler.

There are opportunities to cut red tape as well, and while the VAT campaigning appears to have gone off the rails, perhaps a more realistic campaign can be launched to enable the industry to score some wins on issues like business rates - perhaps we can offset some of those increased labour costs.

Again, all of these things require the trade to work together, to join resources and all pull in the same direction.

So perhaps we can make 2016 the year of partnership and push the sector forward, together, into a better place.