The path of breweries buying pubs and forging an estate of their own is a well-trodden and well-understood one. But in the south east, another producer has entered the on-trade world. Hush Heath Estate is perhaps not the first winery to own a pub, but is surely the only one to have an estate of four. And, talking to operations director Laurence Bowes, it is clear that the next stage of acquisition and growth is only just around the corner.
The pubs focus on individuality and balancing the casualness of a pub with premium overtones. Quality is ingrained in everything that the pubs do, from food and drink to the letting rooms to the investment in staff training to the overall décor. The paintings on the walls are originals – the wife of Hush Heath owner Richard Balfour-Lynn is a curator – worth thousands. Not many pubs can say that.
“I’ve only worked in premium and I feel natural in that environment,” says Bowes. “Everything we do we try to be premium in how we look at it. I will eat six different rib eye steaks from six different butchers, fried in six different ways before I find one that I am happy to give to my customers. And then price comes second after that. The test that I’ve used throughout my whole career is ‘would I take my mother there?’ If I can take my mother to one of my pubs then it’s ready.”
Bowes was brought into the company as operations director two years ago following stints at Young’s and Jamie’s. The estate is split – two in Kent near the vineyard, and two in London – all acquired within 18 months by Balfour-Lynn, the man who has previously launched brands like Malmaison and Hotel du Vin into the stratosphere. Bowes’ expertise as a group manager was needed by a winery that had understood that there is a significant difference in the skillsets required to run pubs compared to making wine. The first thing he did was to change the name to Hush Heath Estate, linking the pubs with the winery, bringing not only the pub estate together but the entire company.
“Hush Heath had amazing general managers, but no one who could bring them all together, so that was my remit,” he explains. “It’s one big family now and that’s how we like to operate. I’m down the vineyard every week, and they now come to the pubs more often. There’s a much better culture and synergy, and that makes more profit because everyone is working together and pulling in the same direction.”
That consolidation has involved introducing a more unified approach to training, communication and sourcing. All the sites are now supplied by the same vegetable supplier and the same fish supplier, as Bowes looks to use the economy of scale to find that 10% margin. In a world where prices are rising, Bowes is always looking to find ways to help that bottom line.
“Fish and chips is our biggest seller across the estate,” explains Bowes. “People love going to the pub for a good ale-battered fish and chips. And if I’m paying 10p more than I should or could be, then I’m losing 2 to 3% on the margin for my biggest seller. And that profit can either really hurt you or make you.”
However, Bowes also champions local links and individuality at each site, while still building the overall Hush Heath brand. He built his career at Young’s on uniqueness instead of brands, and that is borne out in the differing offers in each site. St Bart’s in Smithfield is a vast venue that hosts over 40 weddings a year; The Bull and The Hide is a City bar with seven letting rooms and a function room above. The Goudhurst Inn is located adjacent to the winery and is thus connected to tours and tastings, while The Tickled Trout is a destination country inn with rooms and strong local connections.
“What I’ve learned from working with Richard is he is a master of brand creation,” Bowes says. “He took Malmaison from a little hotel business into a national favourite. My learning has been creating these individual businesses, but building an overall brand as well.”
Bowes complements the individual offers with localised approaches to sourcing and communication. The London sites get their meat from Smithfield Market, while the other two use a Kentish butcher. To ensure that managers and head chefs are given room to experiment and diversify their offer further, Bowes gives them 5% of their shopping basket to fill with food from wherever they want.
“The eggs come from the chicken farm next door to The Tickled Trout,” he says. “There’s a smokery nearby which smokes trout for it too. It makes perfect sense, why would I ever stop that? There’s a pub we’re looking at purchasing and there’s a bakery next to it. You’d be mad not to buy that bread. It’s 5% of the shopping basket, so they can’t go crazy with it. I have an element of control over it, but it makes our pubs individual enterprises.”
Considering Hush Heath’s founder made his name with hotels, it is perhaps no surprise to see that the pubs have followed the accommodation route, with 18 rooms across the estate. Indeed the pub estate was born from a need to put guests to the winery up in suitably premium accommodation. Now three of the pubs enjoy a regularly returning clientele of business people, as well as a growing market of people treating themselves to a staycation in London or Kent.
“We’re a home from home,” he explains. “We have regulars who book three or four nights a week, every week in London. It’s getting almost residential, like their little pied-à-terre. It’s the same in Kent. We’ve got business travellers who are travelling around the country and they will stay with us every Tuesday night because we’re homely and we’ve got quality fittings.”
None of the pubs had accommodation when they were acquired, but Balfour-Lynn chose venues that had the potential to create that crucial third income stream. They won’t have 50-60 rooms like a hotel; instead they apply the boutique, individual approach that sees the downstairs perform so well, as each pub looks to make the most of this growing trend.
“I read the trade press a lot and it often seems that the only thing that’s going well is accommodation,” says Bowes. “It’s the next evolution of the pub. Go into any pub and you won’t find many people propping up the bar any more. The pub has changed and we have to change with it. So we look to attract people who are travelling, who want staycations, mini breaks, or other reasons to travel. There are a lot of retirees out there who are bored and want to do something. We need to be giving them a reason to come into town for the weekend.
“Having a little pub in the middle of the country just doesn’t do it anymore, so what else can you do? That’s the challenge. Build a tennis court and start a tennis club, maybe. You’ve got to be inventive, you’ve got to be doing something else to make your pub stand out in what is a highly competitive market.”
It would be wrong, surely, to talk to the owners of a pub estate and a winery without discussing wine? Bowes is keen that every drink in his venues exhibits the same credentials as his wines – high quality and locally made. Synergy is sought wherever possible – every cocktail has at least one ingredient from the vineyard, and the company is also making beer, cider and apple brandy. But he is keen not to overstress the winery’s influence on customers.
“I don’t want to ram our wine down people’s throats,” he says. “I learned a lot from Steve Gallagher at Young’s. We had brand standards for every pub, but only two of them were to do with Young’s beer – at least 50% Young’s on the pumps and a ram on the sign outside. So we make sure our wine is on the menus and that it’s marketed, but let’s not put a map of the estate on the wallpaper across one side of the room.”
Bowes spends plenty of time working on his wine lists, treading the line between high quality wines and what customers are willing to pay for them. At Jamie’s, every wine was available by the glass, but wastage can quickly become an issue. Choosing the house wine is always a contentious decision, while educating customers who simply want a glass of Rioja about the differences between two different variants, say, is a challenge.
“It’s a constant battle,” says Bowes. “It’s good fun, I can’t say I don’t like it, but choosing your wine list is tough. You can buy an amazing single estate New Zealand Sauvignon Blanc for £30, but you’d have to charge £100 to make that margin. There are not many punters who would accept a £100 bottle of that. But you could also get some easy drinking New Zealand Sauvignon Blanc for £7 and charge £20 and they think that’s brilliant.”
All the Hush Heath pubs focus on events, from the weddings held at St Bart’s to the business lunches in The Bull and The Hide to the winery tours and tastings at The Goudhurst Inn. Bowes sees events as critical and to that end, he asks his managers to find ways to create functions that will pack out the event spaces and showcase their venues to huge audiences. They have held events for birthdays, charity, Burns Night, Valentine’s Day and English Wine Week; they’ve held grape vs grain and grape vs apple pairing evenings, and much more besides, boosting revenue and building renown for themselves.
“For me, a venue with great function capabilities makes it,” he says. “You can never do without it after you’ve seen it once. I’m constantly pushing my team to be creative with their events. We’re very generous with the wine, but we’re creating memories and environments. And if people come to one of our events, they’ll tell their mates it was a great event. It will be in their minds when they’re next thinking of where to hold an event. We’re building that reputation up. We had 150 in The Goudhurst having an amazing dinner and an amazing time, and going away thinking that the capabilities of our pub are enormous.”
The estate has been consolidated, so is Bowes now looking for further expansion?
“I’m confident that we are going to continue to grow and that where I think the pub market is going,” he concludes. “I see premiumisation continuing to grow as a category – people spending more on better stuff. I don’t think Richard is ready to sit back yet. I see it when I talk to him. Getting to 12 sites is probably the next stage.”