What do Greene King’s joint ventures mean for tenanted pubs?

By Nicholas Robinson contact

- Last updated on GMT

Investment: money for tenants has increased
Investment: money for tenants has increased
Greene King will work with more pub industry stars on joint ventures after announcing the launch of a third site with celebrity chef Tom Kerridge this week, but managing director Clive Chesser vowed tenanted sites would not be forgotten.

The announced launch of Kerridge’s third pub, the Butcher's Tap, this November signalled the start of the pubco’s new joint venture scheme, which will see Greene King partner with specialists in the pub industry and other backers to open sites with a ‘point of difference’.

Greene King will throw investment into new business concepts with support from other backers and successful operators in the sector, to launch a series of concepts in the coming years, Chesser told The Morning Advertiser ​(MA​).

Kerridge’s latest pub is a three-way business deal with Greene King​ and Marlow butcher Andy Cook, which will focus on meat.

Another venture has already been lined up for launch next year, which Chesser told MA ​was “very different” to the Butcher’s Tap, but refused to give any further details.

Greene King will use its finances and estates, along with the expertise of other partners, to launch these new concepts, however, when asked what investment would be available for tenanted sites, Chesser said: “I have a really easy answer to that.

‘Investing more capital in our pubs’

“We’re investing more capital in our pubs than we have ever done before. We try to invest in every pub every five years on a pub-by-pub basis.”

He continued: “The investment we work on compared to some of our competitors, with the average investment level being between £40,000 and £50,000 for refurbishments and repositioning – we’re investing more than we ever had.”

Yet, Chesser was unable to disclose the figure ring-fenced for investment in the circa 900 tenanted pubs in the estate, but confirmed investment had increased.

Categorically, we have not earmarked a number of pubs [for the programme], we are just excited about some of our partners who want to work with us and we want to work with

– Clive Chesser, Greene King

The joint venture scheme, which had been pushed as a viable business option at the business’s internal strategy meeting three years ago, will make up a small percentage of operations in the future, he added.

“This [project] is intended to be optimistic partnerships with our really outstanding partners, who specialise in different areas of the market, where we believe that by pooling together our assets, capital and expertise, combined with their skill, we can create something that’s greater than the sum of its parts,” said Chesser.

“We will be announcing our second one, which will be a more niche area of pub retailing that we believe fits the direction of the modern British pub, soon.”

There are great benefits for Greene King in providing financial backing and business support to specialist operators, who had the potential to create “really special pubs that sit alongside the core businesses”, he added.

Greene King will all be different

Each of the new joint venture models launched by Greene King will all be different, but Chesser confirmed they would maintain a distinct pub feel.

None of the sites in the pubco’s estate had been earmarked as venues to become joint venture businesses.

“Categorically, we have not earmarked a number of pubs [for the programme], we are just excited about some of our partners who want to work with us and we want to work with,” said Chesser.

“This [programme] is not starting from a segmentation exercise, this is very much ‘let’s find the right partnership’.

“I would love to say how many joint ventures [we have planned], but we don’t have an answer,” he continued.

“We have planned the next one and talked to a number of partners about the next few."

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