This year will play host to the next big step in Banwell House’s journey. Now in its seventh year, the Bath-based company has been looking for sites to boost its four-strong estate since 2013, but now growth is starting again. I met founder Toby Brett in his latest acquisition and first leasehold, The New Inn in the west of Bath, while another freehold purchase was in legals.
This growth is what Brett has been chasing since his last acquisition back in 2013, but the challenge has always been to find the right property from which he can extract the most capacity. He is hungry to purchase pubs, but doesn’t want to let that cloud his judgment. His aversion to risk surprised even him at first, but he saw little point purchasing properties where his style of operation wouldn’t work, searching in more densely populated areas where he can find staff and customers alike. He ‘shakes the tree’ in the surrounding area, finds demographic reports to ensure he has the model right for the local people, and uses a mantra that if three or more people tell him the same thing, he will take notice.
“It’s about saying ‘this is the disposable income of this area; this is what the customers will be happy to pay for; this is what we need to deliver to them’,” he explains. “It’s important to make sure that the pub fits in with the local culture. If you identify your biggest market in the area, aim for that. Don’t aim for the small niche market. Because you’re already restricting yourself for what you can do.”
While further expansion is on the cards – with Bristol a target – Brett is keen not to stretch too far. There are enough pubs and opportunities within three quarters of an hour of his house. Prior to setting out on his own in 2010, Brett worked with Greene King, looking after 50 pubs in the south west, and spent his life in a car driving from Cornwall to Worcester, Pembrokeshire to Reading, meeting with tenants to discuss their rents. He has no intentions of doing that again.
He is also wary of larger venues and city centres, where high rents and high rates place demands on the business that he would rather not shoulder. Instead, he looks at properties from which he can extract everything without a potential failure burying his business. With this in mind, he has been exploring the options of accommodation, with two of his sites already seeing rooms added.
“It’ll be a conversion, not a build,” he says. “We made a start on it when we did the refurbishments, putting in all the soil pipes and drainage, so the rooms are ready to go. The next step will be relatively easy to section it off.”
Innovation vs. quality
Brett’s appreciation for innovation is clear. The New Inn is already involved in the latest trend within the UK on-trade – deliveries – with Deliveroo. Pub & Bar spoke about deliveries in our last issue, and Brett sees the advantages inherent in this medium, and has embraced the added business it brings. As we talk, an order for 22 meals is about to get sent out, 22 meals that otherwise he wouldn’t have sold.
“You can’t turn that down,” he says. “They take out a 30% margin, which is a lot. But you’ve got to ask yourself: ‘Would I get that business if I didn’t do it? Am I losing business by doing it?’ And we’re not.”
However, the yardstick for anything new within his business is quality. He understands the growing appeal of local provenance, but is unwilling to sacrifice commerciality at its altar. While he looks for local suppliers, he will travel as far as it takes to reach the required product and standard. After all, customers still expect the best products on their plate and demand broccoli with their lunch, no matter the season. The explosion of craft breweries and gin distilleries in his local area is something that he is keen to champion, but only if the product is good enough. In his eyes, everything must justify its presence behind the bar and must be known intimately by staff.
“If I’m at a bar, I want a good quality product; I want the staff to take the risk out of it for me; I want my expectations to be managed before I order that pint,” he argues. “Otherwise I’m paying £5 to take a risk every time I buy a drink. Choice is a great thing, but there’s an argument that says just offer one option and make sure it’s the best you can find. I’m not brave enough to try it, but maybe someday someone will.”
This pursuit of quality means that he is not willing to venture into an arena unless he can provide a consistently excellent product. With specialist mixologists in city centre bars focused on cocktails, he has left that to them, sticking instead to beer, food and, increasingly, coffee. Every Banwell House pub opens at 10am to create that extra occasion, and Brett has educated himself about coffee in his search for a quality source.
As well as his own pubs, Brett has also involved himself in other projects. Community-owned pubs in the UK have saved many from destruction or change of use, but it is fair to say that many community committees have limited experience of the operational side of the trade. This is where Brett steps in, lending his expertise to the renovation, recruitment and day-to-day running of the business. Banwell House also brings its buying power, stock and financials into play. A few years ago, he helped to set up The Fleece in Hillesley over the course of nine months, and Brett is now working on what will be his fourth community pub, The Pack Horse, on the south side of Bath.
“It’s exciting times, getting all the designs sorted out, thinking about recruitment and how it’s going to work,” he says. “I think that community-owned projects are brilliant. I’ve always said that running a pub isn’t the hardest thing in the world, but so many people do it badly. So if you can share some of the mistakes that you’ve made along the way then that can help to turn the pub around.”
The renovation projects on community pubs run differently to his own pubs. Where the committees will spend more money to make sure that everything is done correctly, Brett’s approach is to do things on a shoestring. He bought and refurbished his first four pubs for under £1m by project managing everything himself. He brings in professionals to do the work, from designers to builders to electricians, just as he uses accountants to manage his invoices, but he does as much of the work as he can himself, a risk that he is willing to take.
“You can do it so much more cheaply if you’re brave enough to do it yourself,” he says. “It takes up a lot of time and effort from my end to get those things done during the refurb, but it saves so much more money – tens of thousands, if not hundreds of thousands. But there’s a risk. It may all go wrong and then you’re left with this crumbling building. But for some reason, it’s always worked for our pubs.”
After acquiring his first pub – The Duke of Cumberland – Brett avoided the challenge of growing from one venue to two, by growing to three instead. Once those two additions – The Three Horseshoes and The Rose and Crown – were settled, an opportunity came up in Bath, a city in which he had long wanted to operate, and he took it, turning the New West Hall into The Victoria. With these pubs, he played an active role, while giving managers and head chefs the freedom to come up with ideas and the support to help them realise them.
“When you have a few pubs, you’re closer to them the whole time so you have a few ideas that you try to push onto the managers to try to do,” he says. “But managers, chefs, everyone will buy into something if it’s their idea – it tends to work a lot better than anything else. We have acoustic nights at one pub because the manager is really passionate about it, so she promotes it well and it does well. We had a great Super Bowl night at another for the same reason.”
As Banwell House begins its latest growth spurt, this time funded through cashflow following the buyout of investors, Brett’s role within the company has changed. The infrastructure of the company will alter, getting the right people doing what they’re best at. He doesn’t like admin within his company, so he hires external people to do that, leaving his team to concentrate on the customer. After a recent review, he increased the pay of all senior staff and a recruitment role within the company is imminent.
“I’ve stepped back and pushed others forward,” he explains. “Once we’ve got all the pubs running, it will be time for another review, looking at everyone’s workload and how people fill their day. I want my managers to face my customers and make their experience the best in the world, not sit in an office piling through paperwork.”
Brett started in the industry at the age of 15 before working his way up through the hierarchy at Wadworth and then Greene King, and he is a firm advocate that the success of the business depends on senior positions being held by people who have worked their way up from the bottom. Every general manager joined Banwell House at a lower level, while many of his senior chefs have been with him almost from the start. The head chef at The Victoria started at Banwell as a part-time pot washer. This focus on promotion from within not only allows Brett to mould staff members within the values of the company, but also means that recruitment at the higher levels becomes a simpler process, as they are already within the company.
“When we want to hire someone, it’s really hard to get someone who’ll meet the standards of that ethos that we’ve got,” says Brett. “But we know that if we get someone at a low level we can nurture them. Progression can be quick in our company. If you can do the job, we’ll let you do the job. It’s not a case that you have to wait for a slot to come up. If we can buy pubs, we want that sous chef who’s been there for six months and done a great job to be the head chef at the new pub that we’ve opened.”
As a new chapter begins with Banwell House, Brett finds himself positive about the future. He has set himself no targets – acquisition or otherwise – for the company, although he would like to be buying a couple of pubs a year. Regardless, he will be relying on his knowledge of the industry and the area, tempering optimism with risk aversion, but taking the occasional plunge as well.
“The asset values are hopefully increasing,” he concludes. “If I can continue to buy pubs out of cashflow, we’re doing well. I don’t know what the end result or goal is, but as long as the pubs are growing and they’re keeping me interested, I’m really happy with that.”