Pub & Bar catches up with Martin Wolstencroft, co-founder and CEO of Arc Inspirations (pictured), on company performance, plans for the future and his three-brand cluster approach.
P&B: Hi Martin. For those who don’t know about Arc Inspirations, tell us a little bit about the business.
MW: We started in 1999. Arc Inspirations operates 18 bars in the north of England grouped into its core brands: Banyan Bar & Kitchen (largely food-based for all demographics), Manahatta (late night cocktails) and The Box (our sports-led operation). We see great opportunities in running wet-led, great bars that serve food, rather than being food-led. Over the last five years, there has been so much competition in casual dining and everyone is setting up small coffee and cake shops, so we’re focusing on being wet-led but still serving great food – that’s what we’re all about. Our venues are bars, not pubs.
A finance group once advised us that in order to grow, we needed to be food-led under one brand, but I disagreed and I’m glad we stuck to our guns of being wet-led and multi-branded.
P&B: If one of your brands is more successful than the others, would it not be tempting to roll that one out on its own?
MW: Clustering our brands in cities allows us to have regional experts in our team. One operations manager for a cluster allows them to fully understand that area, which is important because there are different nuances for different areas. We used to have one person per brand, but now we’re by the cluster. The brands are the same DNA vehicle, but with a different skin, so our sales and operations teams move customers between the three in one city. If we’re full up in one, we send people to one of the others. It’s good to share it around. We cross-promote and market the businesses all the time. We share customers across the day parts – in some areas you can set your watch to how people move from bar to bar.
Having these three brands also means we don’t have to exit the building if something isn’t going well – we can convert the brand, just like we did recently when we turned The Pit in Harrogate into a Manahatta. What’s more, teams can get bored with one menu, so they can move about the brands too in order to keep their work fresh.
P&B: How are you finding operating in the late-night market?
MW: Manahatta Deansgate will be our first £1m profit site, and that opened last year – it takes £50,000 every Saturday. To be honest, the Manahatta sites are converting a lot better. If it was just about financial investment, we’d just do those. But we support it with the other brands, because if you go into a city with one concept, an opportunity might arise for a different one in our portfolio. When it comes to being wet-led, there aren’t as many competitors for the late-night, wet-led consumer spend. The all-day dining competition is far greater. With the wet-led bar business, there are fewer, smaller independents out there. Over 20 years ago, a lot of the big pub groups had strong late-night bars, but now you just have Be At One, Slug & Lettuce and The Alchemist. Something like The Botanist is more of a restaurant.
P&B: Not many people are doing brand-led sports bars to a consistently high quality – do you think you’ve found a niche in The Box? Where do you get your inspiration from?
MW: We like to be innovative and try to improve on the norm. The Box is a standout brand that’s different. I went to some of the sports bars that have opened recently in London, and they’re not that good – the food was average. If you put a Box next to them, I think we’d be far better. Even though we have taken inspiration from other brands, we’ve put it together in a way that is right for this concept – we looked at the Honest Burgers’ chips; bubble waffles from places in London; the best pizza places like Pizza East. You need to keep learning, no matter the product, and take inspiration from the best. The person who stops learning has lost.
P&B: You obviously keep a keen eye on what other operators are doing then. Who do you currently admire within the on-trade?
MW: I’m a real admirer of Flight Club. In our space, they’re the people I respect the most at the moment. I think some of the people who I did admire have lost their way. I think The Alchemist might be stealing a bit of the march on The Botanist. It’s easy to admire busy places too – I went around Birmingham a few months ago and the busiest places were Las Iguanas, Slug & Lettuce and Be At One, all of which do two-for-one cocktails. They were up against businesses that had spent millions on their venues. It has always been against what I thought I should do, but everywhere is busy with people who want to go out, have fun and not be too serious. Two-for-one cocktails at Banyan have been unbelievably successful. Also, people want pictures of everything, so it has to be fast and it has to look good enough for Instagram.
P&B: So, Flight Club, Honest Burgers… does that mean that the north is still watching everything that is coming out of London?
MW: I would say London is behind us in a lot of areas. The ideas come from pop-ups and street food vendors, and then from different parts of the world. I tried introducing ramen four years ago, but that didn’t work. We did hanging kebabs 16 years ago! Now, it’s all about having a range, from healthy meals on the menus through to a great pie and chips. I think we’ve been ahead of the curve for a while – our power bowls were well ahead. If you’re a vegan who wants to eat healthily, you don’t want your food to be manufactured. I won’t be surprised if there’s a backlash to the plant-based burgers that are made artificially.
P&B: You started out in the trade when you were 20 years old, becoming Whitbread’s youngest manager at the age of 21. Does running pubs and bars still require the same fundamental skillsets?
MW: For our team back then, a customer would come in and ask for either a lager or a bitter. If you wanted gin, it was a gin. Gordon’s, maybe Plymouth if you were lucky. Back then it was easier. Now, the teams have to know 20 different gins, botanicals, all different tonics, know the menu inside out, allergens, vegan options – it is tough for a team member. There are a lot of people who just want a part-time job and it ends up being too much for them, so the money and effort we put into training is unbelievable. You need to recruit a fantastic team, train them well, motivate them and create a proper bar experience.
P&B: As Arc Inspirations grows, that recruitment and training will get harder still. How do you create company-wide values that everyone can identify with?
MW: No one does it better – that’s our main value. We try to do things better than anyone else – design, drinks, team, everything. We’re trying to be the best at every single day part.
Out of all of our team, 82% completed a recent engagement survey, delivering a 7.65 out of 10 satisfaction score when working here. That survey also allows us to find areas of improvement like sending rotas out in advance and making sure that no one does more than a 10-hour shift.
I also do vlogs! It came from a survey, where someone said they didn’t like that growth was meaning they didn’t know about what was happening with the company. I want everyone to hear things from myself and still have access to the culture and the soul of the business, so I send out vlogs. It improves communication and brings a name to a face for those who work for Arc. The vlog I did on mental health on Blue Monday, for example, resulted in us opening a private hotline for the team to talk to a counsellor.
P&B: So what does the future hold? Are you planning to sell up and sail off into the sunset?
MW: It would be great to take some money off the table, pay the house off and have security. When you do that, it makes you more risk averse, your shoulders relax more, and you can go out there and attack the market more aggressively.
We want to double profitability from £5m to £10m in three years by continuing to roll out multi-brand clusters in northern cities. We’re looking at Birmingham, Nottingham and Sheffield at the moment. We’ll open four or five sites a year, which could be three brands in each city.
To grow the business at that pace, we of course need investment. We’ve been running the business for 20 years now and every year we pump money back into it – we’re spending £1.3m for each new unit. Banks are harder to get money from, so we’re looking for a like-minded funder, who is passionate about the brands we have, the story we’re telling and the journey we’re on. We can double this business in the next four years, easy.