PORK SCHNITTIES HAVE LANDED AT LAUNDY HOTELS.
GET SOME PORK ON YOUR FORK THIS
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SHOWCASE
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A full-day program of presentations and panels from leading operators and industry experts who will provide practical business advice, introduce new commercial ideas and offer plenty of inspiration
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Mixed Category: More than just a passing fad, this category offers a wide range of appeal for publicans.
Sports Bar: The Sporting Globe Richmond gets an upgrade, with the renovation featuring technological advancements.
REGULARS
News: What’s happening in pubs across Australia.
Design & Build: Nokturnl’s Stories turns a quiet Perth CBD precinct into a pumping new spot.
Tales from the Top: For family-owned pubs, succession planning should happen sooner rather than later.
Editor’s Note
IT’S AN interesting time for the pub market.
Everyone is certainly feeling the effects of dampened consumer spend, yet countless reports and data sets have found that of all hospitality outfits, pubs are feeling the least impact, as they become the overtly preferred on-premise venue for a night out. This is due to a combination of being regarded as the best value for money while still remaining more elevated and providing more entertainment, or something ‘extra’, as compared to cafes and fast food outlets. This is not to say that some pubs aren’t doing it tough, but it gives hope that most venues will see through this tough economic period and emerge out the other side in a fairly strong position comparatively.
Operators are looking to do everything they can to maintain healthy trade, and the Pub Leaders Summit will have some incredible ideas discussed by publicans and industry stakeholders. It will also visit some exciting venues and showcase some incredible products, services and talent. There will be plenty of inspiration shared that could translate into something that will help your business, so we hope to see you there.
Cheers!
Vanessa Cavasinni, Editor E: vcavasinni@intermedia.com.au
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In the news
WHAT’S HAPPENING IN PUBS ACROSS AUSTRALIA
MA Redcape Hotel Fund (Redcape) has announced the sale of three Sydney pubs, totalling $136m, as part of its portfolio management strategy to enhance Fund earnings and returns for investors.
The three assets are the Kings Head Tavern in Hurstville, the Eastwood Hotel and the Australian Hotel & Brewery in Rouse Hill.
Chris Unger, managing director of Redcape, stated: “The Fund continues to see pleasing operating performance across the portfolio, with sustained customer visitation and well managed costs. The Fund has delivered growing distributions across the year and these divestments put us in a strong position to selectively acquire venues that will compliment that strategy.”
Both the Australian Hotel & Brewery and the Eastwood Hotel were sold to Sonnel Hospitality, the recently rebranded hospitality arm of the Nelson Meers Group, whose portfolio includes the New Victoria Tavern in Wetherill Park and the Belmore Hotel.
The acquisition of the two hotels builds on momentum created by the unveiling of the group’s renovated Guildford Hotel in May, complete with an expansive bistro, sports bar, colourful beer garden and a dedicated kids play area.
The Kings Head Tavern has been sold to Melbourne-based family-owned group Francis Venues. The family-owned pub group portfolio includes Kealba Hotel and The Dingley Hotel.
“As a family, this marks our first acquisition outside of our home state, and we are thrilled to venture into the flourishing Sydney market,” stated managing director Tom Francis.
The sales of the three pubs were guided by HTL Property directors Andrew Jolliffe and Dan Dragicevich on behalf of Redcape.
“Collectively, these three hotels represent a diverse mix of business styles, from very large format suburban in the form of the simply huge Australian Brewery in Sydney’s burgeoning North West corridor, to high street mature suburb community focus points in the form of both the Kings Head and Eastwood hotels,” commented Dragicevich.
“However individually, all three accurately reflect the key fundamentals exhibited by AAA grade hospitality indexed commercial property holdings, and accordingly continue to be highly sought after investment vehicles.”
Portfolio composition
The sales come off the back of Redcape’s leasehold acquisition of the Criterion Hotel in Sydney’s CBD in April off Gallagher Hotels. Within the same deal, Redcape sold the Crescent Hotel in Fairfield to Gallagher Hotels in an asset swap valued at $70m.
Redcape has suggested that these exchanges have helped rebalance the Fund’s portfolio and deliver stronger returns for investors. The Fund also announced a distribution of 2.30 cents per unit for the June 2024 quarter, a 15 percent increase from the previous quarter.
“Our strong performance reflects the qualities of the pub sector and our proactive management approach,” said Unger.
“Looking ahead, we anticipate further earnings growth supported by our capital expenditure initiatives and continued operating performance and our target distribution for the September quarter remains at 2.30 cents per unit, with our strategies aimed at returning to 10 cents per unit per annum and beyond in the near term.”
Redcape sells trio of pubs for $136m
Victoria-based Francis Venues has made its first foray into Sydney with Kings Head Tavern
Eastwood Hotel was one of two pubs acquired by Sonnel Hospitality
Highclere Hospitality Co. sells Captain Cook Hotel
Highclere Hospitality Co. has successfully sold the Captain Cook Hotel, located in Sydney’s inner-south, with Kent Walker’s Lesday Hotel Group as the new owners.
Since Highclere purchased the venue in 2020, the group has invested significantly into elevating the Captain Cook Hotel and attracting a more diverse clientele.
Highclere Hospitality Co. founder Warren Livingstone said:
“We stopped the topless barmaids which were a staple for many years. That put a few people off, but as a result we attracted a different clientele, including females and families. The change wasn’t easy, and we had 18 months of push back, but it was the right decision.”
The sale was overseen by HTL Property directors,
Dan Dragicevich and Andrew Jolliffe.
“When I was approached by Dan at HTL I hadn’t thought of selling, but we showed it to two buyers and it didn’t take long.
Kent Walker was very easy to deal with, a true gentleman, and Dan was patient while I got my head around selling. This is the first pub I have sold so I was tortured for a while, but it was a good result for everyone,” Livingstone added.
“I am definitely sad to see it go. It’s a great pub, in a great area with great locals. It’s a proper pub. By far the best in Botany.”
The Captain Cook Hotel joins Lesday Hotel Group’s 10-strong portfolio across Sydney and Wollongong, boasting a high foot traffic position on Botany Road with late-night trading, 30 gaming machine entitlements, 11 motel rooms and a beer garden.
Dragicevich says the area in which the hotel is located has strong growth potential.
“The Captain Cook exhibits all the fundamentals of a sustainable pub business model which, when coupled with the Bayside LGA development story, go a long way to ensuring sustainably prosperous earnings growth.”
Tipple Time Hospitality makes debut with East Village Sydney
The leasehold of a high-profile hotel in Sydney’s eastern suburbs, East Village, has been exchanged between Locky Paech of Goodtime Hospitality and a newly formed syndicate.
Situated on the corner of Liverpool and Palmer Streets in Darlinghurst, Paech operated the East Village for the last eight years following a significant renovation.
With Paech undertaking a career shift, the leasehold interest has changed hands to Tipple Time Hospitality, which is spearheaded by Brian Sarkis, current licensee of ArtHouse Sydney; Matthew Orr, current licensee of Great Northern in Newcastle; and Ben McBeath.
Commenting on the purchase, Sarkis said: “Ben, Mat and I, as Tipple Time Hospitality, are excited to refresh an already brilliant establishment. It has the best rooftop view in Sydney, and we can’t wait to hit the ground running.”
The pub comprises a ground floor public bar with footpath seating, a first floor commercial kitchen and manager’s office, second floor ‘Athletic Club’, and finally, one of Sydney’s most renowned rooftop terraces with skyline views.
Speaking about continued curiosity in leasehold hotels, JLL Hotels & Hospitality Group senior vice president Kate MacDonald said: “In the current interest rate environment, investing in a long-term lease appears to be of increasing appeal. The team at JLL continues to field enquiries from astute hoteliers looking to diversify and boost cash flows within their portfolios.”
East Village Hotel’s rooftop boast some of the best views of Sydney
Anglers Tavern re-opens after post-flood closure
After 21 months of closure following the 2022 Victorian floods, Maribyrnong is welcoming the return of local pub Anglers Tavern on 18 July.
During the closure, flood damage was repaired, and the Australian Venue Co (AVC) pub was refreshed to include new spaces for the local community to enjoy.
Venue manager Christian Mendez says the venue refresh ensures that Anglers Tavern can continue to serve the local Maribyrnong community.
“The floods caused damage to the entire ground floor of the venue affecting the furniture and furnishings throughout. Since then, we’ve invested in the restoration and revitalisation of the entire pub, bringing it back as a hub for the entire community to enjoy for years to come.
“Anglers has been part of the community for decades and our locals are really important to us so they were kept front of mind throughout the entire process and now that we’re opening, you can almost feel the buzz in the air,” he said.
The refreshed bistro area is a comfortable, family friendly space with a colour palette of warm wood and blue tones, reflecting the boating history of the riverside area.
Guests can look out onto the Maribyrnong River from the outdoor beer garden, which has been furnished with astro turf, market umbrellas, and picnic tables. For sports fans, the Sports Bar features supersized screens airing major sporting matches.
Children will enjoy the new Kids Quarters, a dedicated space with an outdoor playground, interactive scrabble wall, iPad station, bikes and trikes, giant noughts and crosses, and a kids’ reading room.
Upstairs, level one has had a complete overhaul to create a purpose-built functions space. The flexible events area is fitted with divider doors, creating one large space or two separate rooms. With two separate bars, an AV system, and a kitchen, the
In addition, Anglers Tavern has revamped its menu, offering a range of share plates, pizzas and pub classics. Signature dishes will still be available, such as the Anglers Seafood Tower, which includes salt and pepper squid, baked green lip mussels, natural oysters, chilled tiger prawns, blue swimmer crab, beer battered fish, chips and salad. At the end of the meal, the dessert menu also features a giant soft-serve wall for guests to choose from.
Anglers Tavern celebrated its reopening with a Locals Launch Weekend from 2-4 August, including an AFL handball competition with former Carlton legend and dual premiership captain, Stephen “Sticks” Kernahan.
A lineup of ongoing weekly events has also been organised, such as live acoustic music on Sundays, a weekly trivia night on Wednesdays, and regular kids’ activities.
Mendez is confident that the local community will be pleased with the Anglers Tavern’s renovation.
“The new light, bright and modernised feel has something for everyone, and we’re really excited to be able to welcome everyone back to it.”
space caters to a wide range of events needs.
The Maribyrnong pub has been closed
The entire pub has been restored and revitalised
Sydney chef and restaurateur Hamish Ingham has joined Solotel as group executive chef, as the hospitality operator seeks to strengthen its senior food and beverage team.
With over 33 years of industry experience, Ingham’s recent ventures include Redbird Chinese in Redfern and Tequila Daisy in Barangaroo, both of which he owned.
Embarking on a new chapter, Ingham said: “I was incredibly lucky to be mentored by legends like Kylie Kwong and Damien Pignolet early in my career and that has instilled in me a love for mentoring chefs.
“Running my own restaurants took up so much of my time and so I’m really looking forward to being able to do more of that in this group executive chef role with Solotel.”
Ingham developed a love of Chinese cuisine in one of his first head chef roles at Surry Hills restaurant Billy Kwong and went on to open modern Asian diner Bar H with his partner Rebecca Lines, where he won the Josephine Pignolet Young Chef of the Year Award.
After the success of Bar H, the pair launched The Woods Restaurant & Grain Bar and Banskii Vermouth Bar & Bistro, which later became Tequila Daisy.
Now, Ingham is focused on giving back to a new generation of chefs, and Joshua Hillary, Solotel’s group food and beverage director, is confident that having him within the company will help to elevate the group’s kitchen talent.
“We have a fantastic culture around mentoring and people development at Solotel. Hamish has worked alongside some of this country’s culinary greats and is committed to sharing his knowledge and passion amongst the existing team,” added Hillary.
“Having someone of Hamish’s calibre in the executive chef role will ensure that we continue to attract the right talent for existing and new roles as they come to market.”
Ingham’s appointment aims to drive a sharp new focus on Solotel’s food offering, including venues like the Kings Cross Hotel, The Clock and The Abercrombie.
“Having a casual meal in a pub is a
fundamental part of Australian culture and I’d be a fool to mess too much with the classics. That said, the little things – different ways of plating, better olive oil, really great dressings and salads – can often make a classic, incredible, and that’s where I see my restaurant experience coming into play,” said Ingham.
Hillary added: “Hamish brings with him over 30 years’ experience and a produce-first approach to the offering across the portfolio, helping us to ensure that our venues are known for our commitment to food.
“As a team we have an unwavering focus on our guests, and Hamish’s appointment helps us sharpen that focus.”
Rounding out the senior food and beverage team at Solotel, led by Hillary, Ingham joins Master of Wine Annette Lacey as group beverage manager, group beverage manager Reece Griffiths, group chef Aaron Fallins and group guest experience manager Matthew Stewart.
Above: Hamish Ingham (right), with F&B Director Joshua Hillary
Solotel taps Hamish Ingham as group executive chef
Laundy Hotels puts pork schnitty on the menu for World Schnitzel Day
In partnership with Australian Pork, which has launched its latest ‘Get Some Pork on Your Fork’ campaign, Laundy Hotels has a pork schnitzel special on their menus across the group for the month of September.
THE LATEST campaign from Australian Pork introduces the Spaniard Ramón Jamón addressing common barriers to pork by simply asking Australians “Por qué?” (English translation: why?).
It’s a good question to consider in pub kitchens, when thinking about protein consumption across the country. Pork is the second-most eaten protein in Australia*, and on around two out of three menus in foodservice**. Fried meat, such as schnitzels, were in the top five foodservice meals in Australia in 2023**.
Across the world it is widely known that authentic schnitzel in many European countries is made with pork. So, as Ramon asks, “Por que?” or “why?” isn’t that the case in Australia.
“Pork currently sits on around 2 out of 3 menus across the whole menu as it is incredibly versatile, and is the second most consumed protein in Australia. Venues can gain great margin from dishes that utilise pork, and pork provides customers with a value proposition for their hip pocket and waistline, without compromising on quality of meal.” says Lylle Balzer-Blackstock, public relations, Australian Pork Limited.
This campaign – and the partnership with Laundy Hotels – coincides with World
Schnitzel Day and Father’s Day, which is a big event day to capitalise on for pubs.
“We are using the activation to promote Father’s Day across 30 of our venues which will continue for the month of September. We have created four cracking schnitty dishes to be a part of this cross promotion – this shows how much faith we have in offering pork products on our menus. Father’s Day is just as big as Mother’s Day. This will be a very popular offering/ promotion,” explained Jamie Gannon, group executive chef for Laundy Hotels.
Gannon said it was an easy decision to partner with Australian Pork on this campaign, as it reflects the Australian appetite and consumption.
“We pride ourselves on providing our customers with the best pub classics possible. To us, getting the simple things right is a priority in our pubs and communities. When the opportunity presented itself to work with Australian Pork and hero the pork schnitty, the decision was an easy one to make. It’s also important in the current climate to be versatile and flexible with your offerings. This is just another example of how we can be a point of difference.”
As pub menus continue to innovate and evolve, hitting the right mix of staple
dishes with a point of difference is a big win in attracting diners to your pub. A pork schnitzel ticks all of those boxes.
“Pubs have evolved so much over the last few years, with an increased focus on food, while still maintaining that broad audience appeal for all Aussies. We are seeing a lot of innovation in the pub menu, especially when it comes to the use of pork across dishes, and it is exciting to work with Laundy Hotels and Group Executive Chef Jamie Gannon who are leaders in this space, have a natural affinity for pork and can see the benefit it can provide customers and venues alike,” states Balzer-Blackstock.
For Gannon, pork is a personal favourite.
“I personally have a soft spot for Australian pork. Pork ticks a lot of boxes and it’s cost effective and doesn’t fluctuate in price like other proteins… easy to cook and bloody delicious!”
Life’s tastier for your customers when you get some pork on your menu. Visit a Laundy hotel this September to enjoy a pork schnitty.
https://www.laundy.com.au/
*ABARES 2024, Agricultural Commodities: March Quarter 2024
**APL Commissions Thrive Insights to provide Out-OfHome Reports
Hitting the hot topics
At a time of intense pressures within the broader hospitality landscape, the 2024 Pub Leaders Summit, brought to you by McCAIN and Australian Hotelier, will cover all the topics that publicans are focused on right now.
THE PUB Leaders Summit returns to Sydney in 2024, taking over the Waterview in Bicentennial Park, Sydney Olympic Park, on 9-10 September. The program features several components, all designed to bring inspiration to your venue, optimize operations through the use of new products and services, and create networking opportunities with your peers for a more cohesive and united industry.
THE STUDY TOUR
Kicking off the event is the half-day Study Tour on Monday 9 September. The Study Tour will visit three innovative and exciting pub concepts across Sydney, including the award-winning Log Cabin by Laundy Hotels in Penrith. The Study Tour group will also get an exclusive walk-through of the much-anticipated Oran Park Hotel by Momento Hospitality before the venue opens later in the month. At the time of publication, the third and final venue on the Study Tour had not been announced. Only available to a small number of Pub Leaders Summit pub operator attendees, the Study Tour offers not only an intimate networking opportunity, the site visits guided by the operators are set to be very inspirational.
THE CONFERENCE AND SHOWCASE
The inspiration gets kicked into high gear the next day at the full-day Pub Leaders Summit conference and showcase, as the program tackles topics that are front of mind for operators right now.
Topics tackled will include changes in significant revenue streams, including food, beverage and entertainment. The ever-evolving marketing landscape will also be tackled by experts on what hospitality marketing best practice looks like currently – and what it might look like in the future.
With a number of economic factors placing real pressure on venue profit margins, two sessions will look at profitability and adapting to difficult economic landscape.
In a panel session entitled ‘Adaptive and Viable Business Models’, Odd Culture Group CEO James Thorpe; National AHA CEO Stephen Ferguson; Hunt Hospitality MD Stephen Hunt; and Ben McDonald, MD of gold sponsor JLL Hotels & Hospitality, will discuss how pub venues are having to re-think and reconfigure their operations to counter-act changes in consumer spending and behaviour.
“From a pandemic to a cost-of-living crisis, unfortunately the need to diversify
and ‘pivot’ to protect your business isn’t going away any time soon. Staying true to what inspired you to become a hospitality business owner in the first place, while protecting your revenue from the ebbs and flows of the market is really the essence of what I would say hospitality management has become about in this hostile market,” stated Thorpe.
Within the same topic, Alistair Jarvis, managing director of gold sponsor Profitability Partners, will present on how operators can make their venues profitable, and the levers to pull to do so.
Some hugely respected operators will be bringing their insights to the program as well, including Craig Shearer of Kickon Group; Bianca Dawson of Australian Venue Co; Joshua Hillary of Solotel; and Jamie Gannon of Laundy Hotels.
Smaller, dynamic operators such as Jodie Tiernan, director of the award-winning Public House Albury will be bringing their perspectives and insights to the program as well. Also brining a unique perspective is Alex Derrick, director of the Rose and Crown Hotel in Souhtbank, Brisbane. Prior to opening the pub earlier this year, Derrick had spent the last twenty years leading massive pub groups in the UK
– an experience which he will discuss at the Summit.
The Summit will also include a showcase of the latest products and services that will assist your venues, including the new Pickers range by Principal Partner McCain, a variety of savoury snacks that will create an incremental food occasion that compliments drinks-led visits, as well as the latest beverages from Platinum Sponsor Coca-Cola Europacific Partners, who are also hosting the Networking Drinks session at the end of the conference.
THE FUTURE LEADERS SCHOLARSHIP
Another pressing topic at the Pub Leaders Summit will be the need to identify and nurture the talent that will make up the next generation of leaders within the
industry. Not only will a panel of operators discuss how they are fostering that talent, but we will also be fostering some of that talent in the room.
At the end of the conference portion of the Pub Leaders Summit, we will introduce the finalists in the inaugural Australian Hotelier Future Leaders Scholarship, as well as announce the winner. In partnership with our partners Allara Global and Carlton & United Breweries, the winner and finalists will share in $18,000 worth of prizes.
There is plenty to get excited about at the Pub Leaders Summit this year, and multiple ways to experience the collective knowledge of the industry to the benefit of your venues. We hope to see you there.
PROGRAM AND TICKETS
Check out the detailed Pub Leaders Summit program and grab your tickets by scanning the QR code or visiting www.publeaders.com.au.
Is your business prepared for a cyber hack?
Another pressing topic that will be covered at the Summit is cybersecurity. Many pub businesses house and utilise a lot of patron data, and ensuring that the data is kept secure is front of mind – particularly in light of some high-profile leaks.
Alex Hoffmann, executive director of CyberCX, will make a presentation entitled ‘Cyber Security in Hospitality – Top 5 Threats and Top 5 Actions.’
“Cyber security incidents are impacting business from small to large around Australia, and the hospitality industry is not immune,” stated Hoffmann.
“Earlier this year, we saw the impact of a third-party breach on Clubs NSW that became front-page news. Doing the basics right can go a long way to protecting businesses and minimising the chances of cyber events occurring in the first place, or making sure companies can get back on their feet quickly if they experience one.”
Specialising in crisis management after a digital hack, Lauren Clancy at Porter Novelli argues a cyber security breach is now more likely a case of when not if. Having worked with many clients across various industries in the aftermath of a cyber attack, Clancy will discuss how publicans can prepare a response if the worst should happen, minimising risks to reputation, as well as keeping customers engaged.
“Imagine you suddenly can’t access your systems on a Saturday night when your pub is packed with patrons. Or, you lose the personal information of hundreds of customers who had booked private functions at your venue. Are you prepared to respond to situations like these?” Clancy asked.
You can expect a lot of useful advice from this section of the program.
Speaking at the Pub Leaders Summit
The Log Cabin, Penrith will be one of the stops on the Study Tour
James Thorpe
Craig Shearer
Jodie Tiernan
Jamie Gannon
Stephen Ferguson
Ben McDonald
Amid economic challenges, Molly Nicholas explores the buoyancy of the pub market as acquisitions and renovations capture interest across the country.
Pub investment pathways
CHARACTERISED BY fluctuating inflation rates, the rising cost of living and a dip in discretionary spending, the current economic climate has created a complex environment for hoteliers.
Over the last 12 months, the pub market has felt the effects of economic downturn, with reduced consumer spending causing certain areas of trade to contract and cost pressures squeezing profit margins.
Market intelligence suggests that hoteliers are experiencing revenue slowdown, but Ben McDonald, head of pubs, investment sales at JLL Hotels and Hospitality Group, says some departments are still tracking positively.
“[Slowdown] is being seen primarily through food and beverage revenue channels, with accommodation, gaming and wagering and liquor retail in general showing positive year-on-year revenue performance,” he explains.
For some, investing in stronger operational measures, a diversified offering and refurbishments has helped maintain stable trading patterns.
Speaking about the group’s portfolio, which includes pubs in South Australia and New South Wales, Harvest Hotels managing director Chris Cornforth says: “For us, revenues have remained
resilient and similar to what we’ve recorded in previous years; particularly at our pubs that have been recently renovated, which are outperforming our expectations.”
Do pubs remain an attractive purchase?
Not only have economic pressures created a challenging environment for operators, they have also impacted the market for real estate, shaping acquisition strategies, capital expenditure programs and renovation efforts.
Sharing some insight about the buoyancy of the investment cycle, McDonald says: “The resilience of the sector and cashflow performance of pubs more broadly is still drawing investor interest which has been highlighted by the recent run of transactions across the country.”
In some instances, economic instability can create a buyers’ market for real estate, and investors with capital to deploy have made strong acquisitions at favourable rates, with the potential for significant returns.
Among a multitude of successful transactions this year across the national pub sector, JLL Hotels &
Bradys Railway Hotel Albury underwent a major redevelopment in 2021
Hospitality Group handled a recordsetting $70m deal in April.
The transaction included the sale of the leasehold of the Criterion Hotel, Sydney and the freehold of the Crescent Hotel, Fairfield, in an exchange between Gallagher Hotels and Redcape, marking JLL’s largest pub deal of the year.
While evolving market conditions might attract new market entrants, McDonald says the majority of buyers are still generational hoteliers and high-profile hotel groups seeking to consolidate their portfolios.
“It’s going to be tough for new entrants to break into the industry at this stage of the cycle unless they are well capitalised and have a known operating partner with a track record of success,” he added.
Key investment traits
In Melbourne, Only Hospitality exercised favourable purchasing conditions in its recent acquisition of The Beehive in Hawthorn, the third pub in its 30-strong hospitality portfolio.
Inheriting his father’s interest in pubs, Only Hospitality director Julien Moussi, has had an affinity for The Beehive for many years, and while the timing felt right, the major attraction was the current demographic.
“I grew up in Hawthorn East and have an intimate understanding of that location. Whilst it’s a very hectic corner, it’s the amount of passing traffic and proximity to a very affluent area,” he stated.
The group doesn’t plan to stop there, having recently acquired South Yarra nightclub Rah Bar, which it will reposition as a pub. Moussi also told Australian Hotelier about his intentions to purchase a fifth pub in Belgrave at the foot of the Dandenong Ranges.
As the group expands its hotel footprint in Victoria, Moussi says foot traffic and local affluency are
influential over purchasing decisions.
“We look at the density per square kilometre. The density of hospitality venues, but also the owner-occupier versus renter percentage that suburb has. If you have a high amount of renters, in this environment where the cost of living is so high, that’s half of your disposable income, and it’s something we’re mindful of.
“Really, it’s a balance of everything, and that density factor is really important, you want to have a strong population of people in that area.”
From an investment perspective, Cornforth agrees that region is a primary focus. When looking for potential pubs, he says: “We spend a lot of time strategically reviewing and selecting locations not only for their population growth but other economic drivers including large infrastructure spending, growing or stable tourism, and multiple industries operating.
“A lot of the time it’s the region that helps us attract interest in investments, and these tailwinds are helping offset any downturns.
“When we’ve got comfort around the location, we look for a pub that has a reasonable underlying business
We spend a lot of time strategically reviewing and selecting locations not only for their population growth but other economic drivers including large infrastructure spending, growing or stable tourism, and multiple industries operating.
Chris
The Crescent Hotel in Fairfield, western Sydney, was part of a $70m pub asset swap handled by JLL
Cornforth, Harvest Hotels
The new kids play area and beer garden at The William Farrer Hotel Wagga Wagga
and customer base but has been underinvested –there has to be a value-add story.
“We then undertake an extensive process to project whether or not our operating systems, tactics and capital works will enhance the pub and create an experience for more customers to enjoy, therefore increasing revenue and value of the businesses and asset,” he added.
Another important consideration for any investor is the yields associated with an investment. While there has been some softening of yields throughout 2023 and 2024 to date, compared to record highs in 2021-2022, this valuation metric underpins the hotel industry.
“[Yields] are more important now than they have been for a long time, considering the fiscal tightening of our domestic banking sector which supports the vast majority of hoteliers and hotel groups throughout the country,” said McDonald.
Regional differences
While some investment trends exist on a national level, there are also regional nuances that impact the pub landscape. From urban centres to rural areas, publicans will encounter different opportunities and challenges.
From a regional standpoint, McDonald says the strongest performing trade comes from locations underpinned by strong growth narratives.
“New land releases in the outer rings of capital cities and government investment in large scale infrastructure projects is fuelling job creation and therefore population growth which is boosting revenue performance for pubs in these locations.”
McDonald explains that there are some clear green shoots in state-specific growth corridors, noting especially strong performance for greenfield hotel developments in southwest Sydney.
“We are also seeing the benefits for cities such as Brisbane where net internal domestic migration is the highest of any city in Australia.
“Where we are seeing trade soften the most is in locations where economic conditions including cost-of-living pressures are hitting the hardest from a discretionary spending point of view,” he added.
After many years successfully trading in New South Wales, Harvest Hotels made its first foray outside of the state in 2022, acquiring two suburban pubs, The Aussie Inn in Hackham and the Brahma Lodge Hotel northeast of Adelaide.
Under a fund dedicated to large format pubs in the outer suburbs of Adelaide, the group’s South Australian portfolio now comprises four pubs, including The Crown Inn in Old Reynella and Blue Gums Hotel in Fairview Park.
Speaking about the expansion into Adelaide, Cornforth explains that the group applied the same acquisition strategy that has proven successful in New South Wales.
“We looked for areas where there were strong tailwinds to grow a large-format pub, and we found that suburban areas of Adelaide ticked this box.
“While slightly different to New South Wales in that we didn’t go regionally, this was because there just wasn’t the population or growth we look for, but overall, we were confident we could execute our acquisition strategy well here.
“There were other attractive aspects for South Australia, such as its regulatory landscape which is more settled following a large community consultation process they went through back in 2020,” he added.
Renovations and reinvestment
While there is still plenty of engagement in the investment market, the opportunity to reinvest in
A key tool in the delivery of a diversification strategy is the inclusion of multi-use spaces, which allow operators to maximise revenue per square metre.
Luis Nheu, BSPN
Tony Pantano and Julien Moussi
SOLD Crescent Hotel, Fairfield NSW
SOLD Unicorn Hotel, Paddington NSW
SOLD Cornerstone Hotel, Port Melbourne VIC
SOLD Hotel Collingwood, Collingwood VIC
SOLD Ocean View Hotel, Kilcunda VIC
SOLD
Blue Dolphin Holiday Resort, Yamba QLD
Overlander Hotel, Mt Isa QLD SOLD Bribie Island Caravan Park, Woorim QLD
existing venues is proving attractive for some operators, with many hoteliers seeing return on capital.
Successful hospitality ventures are underpinned by a deep understanding of the local market and population, and design elements should also resonate with this audience.
Luis Nheu, partner of architecture and design firm BSPN, has observed the evolution of pubs to cater to a broader demographic with a diversified offering.
“A key tool in the delivery of a diversification strategy is the inclusion of multi-use spaces, which allow operators to maximise revenue per square metre. There’s also a growing interest in creating family-friendly environments,” he said.
One such example is the Dingley Hotel in Melbourne’s southeast, designed by BSPN to incorporate a family-friendly bistro, alfresco area, sports bar and a high-end gaming area.
Ultimately, the goal for any pub renovation should be to deliver operational efficiency while also creating a space that people will enjoy returning to time and time again. According to Nheu, this can be achieved by prioritising elements that encourage social interaction.
“We always aim to seed conversation points into the design to engage patrons. We set the right mood and ambiance, utilising elements such as zoning, lighting, furniture selection, flooring and styling to achieve this,” he says.
Other considerations include everything from comfortable and versatile seating options that accommodate different group sizes and occasions, to signature design concepts.
“Strategic use of colour and texture influence patrons’ moods.
Coupled with unique design elements, a memorable atmosphere can be created, strengthening banding and enhancing the venue’s overall appeal,” added Nheu.
For Harvest Hotels, the redevelopment of The Woy Woy Hotel has been in the pipeline for a long time, and with the group experiencing similar returns on renovation projects as it is new investments, the project is now underway.
“The return on capital we are getting from reinvesting in our own pubs is attractive, and that’s evident from the number of projects we’re currently carrying out,” says Cornforth.
“The whole [Woy Woy Hotel] redevelopment is centred around adding more space and offerings for more customer segments to come and enjoy, while maintaining the existing local and loyal customer base the old pub has.”
Having undertaken substantial research into demographics and growth projections of the area, Cornforth feels that diversifying the Woy Woy Hotel’s offering will not only create strong return on investment, but an asset for more of the community to enjoy.
“The final design of the pub is great and we’re confident that once done it will become a destination pub for the Central Coast and a pub that locals of the Peninsula will be proud of,” he added.
Although the industry is experiencing challenging market dynamics, pubs continue to shape Australia’s social fabric, and as such, the wave of refurbishments and acquisitions continue.
While the outlook for the pub market promises exciting possibilities, those who understand the trends and regional nuances influencing investment are carving out lasting success.
Dingley Hotel’s new high-end gaming area
BSPN’s strategic use of colour and texture at Maggie May, Newstead
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In the mix
More than just a passing fad, mixed drinks offer a wide range of appeal for on-premise operators.
By Caoimhe HanrahanLawrence.
BENEFITING FROM a recent explosion of new products entering the market, and demonstrating multiple avenues for growth, the mixed drinks category has clear potential as part of a venue’s core beverage offering.
For David Chun, venue manager at the Darling Pavilion in Sydney’s CBD, the category has distinct benefits for both consumers and operators.
“Low ABV levels, easy to drink flavours and taste consistency are big appeals for consumers. From an operator perspective, fast service is the biggest appeal, and branding also helps,” he said.
In addition, the category is expected to continue its growth trajectory over coming years. While the IWSR estimates that global alcohol volume growth will slow to one per cent from 2022 to 2027, the global RTD market is expected to reach US$40b by 2027, representing a 12 per cent growth margin over the same period.
Identifying the appeal
The mixed drinks category is perceived as both approachable and exciting for younger adult consumers, as Reid Sexton, group head of external communications at Asahi Beverages, told Australian Hotelier
“While Gen Z are looking for something
sessionable and easy drinking, they are also looking for products which reflect their sense of adventure and spontaneity,” he said.
Many mixed drinks also appeal to a unisex audience, as Olivia Waters, Matso’s brand manager for Good Drinks Australia, has noted with Matso’s Vodka Lemon Lime Crush.
“With 66 per cent of Matso’s Ginger Beer consumed by females, the Matso’s brand has strong unisex appeal, with particularly strong appeal among women, making it a more universal choice,” she said.
Andrew Culph, venue manager at Bli Bli Hotel on the Sunshine Coast in Queensland, also sees a rise in mixed drinks sales in the late afternoon and early evening.
“Pre-dinner is the biggest mixed drinks occasion, between 4pm and 6pm. It’s also our happy hour, which is 15 per cent off for members. Our sports bar also ranges between tap beer and mixed drinks for the majority of consumption,” he said.
Likewise, Lisa Lemon, manager at Perth’s The Gate Bar and Bistro, sees an increased uptake of mixed drinks on the weekends.
“When people are coming in for a regular day out, or a few casual drinks with friends, I’ll hear them at the bar umming and aahing about what
Low ABV levels, easy to drink flavours and taste consistency are big appeals for consumers. From an operator perspective, fast service is the biggest appeal, and branding also helps. David Chun, venue manager, Darling Pavilion
they want to drink, and they will get Matso’s Vodka Lemon Lime Crush. It’s approachable and easy to start with while they’re deciding on another drink, but nine times out of 10, they will stick with the Matso’s,” she said.
Additionally, Chun said that the Darling Pavilion particularly promotes mixed drinks during events, where quick service is of high importance.
“On special event days we usually promote mixed drinks if we are after speed of service or limited to ABV restrictions. We have various cans that we use on our event days, but usually our seltzers and ciders are a daily product sale.”
Taste sensation
Flavour is a major appeal for mixed drinks consumers, with lemon and citrus flavours currently dominating the market. New products in this space are being well-received.
“Matso’s Vodka Lemon Lime Crush has only just launched on tap, but it’s already exceeding expectations, reaching its three-month sales target within the first few weeks of launch. As always, Matso’s set out to find the perfect balance of flavour and refreshment, with this original take on a much-loved classic,” Waters said.
The mixed drinks segment is expanding, with producers exploring new flavour options to keep the category interesting.
“Flavour innovation in spirits has been overwhelmingly evident, and while it’s engaged the next gen customers by overcoming taste barriers, it’s also given core customers a reason to stay engaged,” Sexton said.
Mixed drinks offer an alternative to traditional beverage categories
Darling Pavilion promotes mixed drinks during events for speed of service
The mixed drinks category is popular among younger
In addition, the ‘better for you’ trend and a maturing consumer base are leading drinkers to seek out products with natural ingredients, according to Waters.
“Consumers are increasingly prioritising naturalness and authenticity in their drink choices, seeking beverages made with real ingredients and fewer artificial additives.”
Draught or can?
The mixed drinks category is split between draught and pack, with both serve options presenting distinct benefits for the on-premise environment.
Offering mixed drinks on tap gives the product immediate exposure to consumers. Lemon has found that draught mixed drinks don’t require much promotion at The Gate.
“It’s not something we’ve had to push very hard. When we started offering Matso’s Vodka Lemon Lime Crush, we did an initial launch where people came down to do a bar shout, but we’re quite fortunate with where the product is positioned. We have it in an optimum spot out in our garden bar, which is the main bar. We are selling high just from its position,” she said.
However, the popularity of this growing segment is not fully reflected in tap share.
“RTDs are the fastest growing segment in alcohol, yet the tap bank isn’t yet reflecting the sheer size and appeal of this segment,” Waters said.
When it comes to RTDs in pack, the category is very well represented. According to Quantum’s latest 2022 data, 10 of the top 15 fastest growing new products in glass bottles were flavoured products, evidencing the strong presence of flavour-forward RTDs in this serve style.
Lemon has found label design to be particularly important in selling RTDs in pack.
“With RTDs in cans, if you see someone walking around the venue and drinking one, you will know that we serve them, and they sell quite well in the evenings and on the weekends,” she said.
Sexton added that packaged mixed drinks are particularly appealing to venues with limited tap space.
“While we are seeing more and more nonbeer products make their way into draught, not all venues have the capability to serve tap products. Even in those that do, there are a finite number of taps.”
RTDs are the fastest growing segment in alcohol, yet the tap bank isn’t yet reflecting the sheer size and appeal of this segment.
Olivia
Waters, Matso’s brand manager, Good Drinks Australia
Mixed drinks are most popular during the early afternoon at Bli Bli Hotel
A
Vodka Citrus RTDs make up 49% of all Vodka RTDs growing at 250% - one of the fastest growing segments in liquor!*
Matso’s is one of the only RTD brands to have 2 iconic spiritual homes (Broome & Sunshine Coast), driving local provenance and depth of consumer engagement.
Matso’s is a premium brand (the most premium Ginger Beer of scale in Australia*), allowing you to charge a premium. *Source:
Matso’s has strong unisex appeal and will bring new drinkers to the category (66% of current Matso’s drinkers are females**), in a way which can complement the male skew of Hard Rated and -196.***
A personal touch
Personalisation is a key trend across the liquor industry, with consumers looking for offerings they can customise to their tastes.
At Bli Bli Hotel, Culph has been using garnishes to give mixed drinks an individual touch, as well as offering a premium feel.
“In the world of mixed drinks, garnishes have become much more important: things like lemons, limes, and oranges. There’s a lot of places dehydrating them now for garnishes to get really consistent flavour and price year in and year out,” he said.
“It’s being driven both by the consumer and the producer. For producers, suggested garnishes are a way to differentiate their product, and as consumers, it offers customisation. Whether they want their drink with cucumber or a grapefruit slice, it creates a unique experience for the individual.”
Simple serves
A third option beyond draught and packaged mixed drinks is simple cocktails of a single spirit and a mixer. The wide number of serve options and economy of space are two key appeals of Vodka Cruiser’s new Flavours range.
“Our new Vodka Cruiser Flavours range provides customers with an option that requires no draught infrastructure but opens up endless serve possibilities: from basic mixers to cocktails and even a classic rocks serve, bartenders have the freedom to remix the product however they like,” Sexton said.
This style of drink is particularly popular among older drinkers, as Culph has noticed at Bli Bli Hotel.
“The vast majority of our mixed drinks come from the well, and most drink dark spirits short and long spirits tall. That’s probably due to our demographic, which skews older, into that 50-plus age range. They are a little more set in their ways and won’t often reach for something that’s pre-mixed in a bottle.”
A rising star
A positive sign for the health of the mixed drink category is its seasonal stability, with consumers continuing to engage with the category year-round.
“If it’s their main preference, consumers will drink those non-beer beverages throughout the year,” Lemon said.
In fact, Lemon is considering adding another mixed drink to the draught offering at The Gate to provide more options within the category.
“Mixed drinks are becoming a trend, and we have considered if there is room on our banks to grab another product of a similar nature. Every other category that we have is covered well, but Matso’s is the only product of its nature that we have on our tap banks,” she said.
For Chun, established brands entering the mixed drink market is another indicator of the category’s success.
“We can see that cocktails and long drinks from well-known brands are trying to capture the RTD cocktail market via leveraging the brand equity and loyalty of their existing brands,” he said.
Waters sees potential in Australian brands entering the market, especially with light spirits products.
“Australian propositions are driving majority growth in the Light RTD segment, particularly when they have spiritual homes which can demonstrate authenticity,” she said.
Amid softening consumer demand for traditional categories such as beer and wine, the continued popularity of mixed drinks is a promising avenue for boosting beverage performance in the on-premise.
Garnishes offer personalisation and a premium feel
At The Gate Bar and Bistro, mixed drinks are popular on weekends and with groups
Richmond’s sporting oasis returns
Melbourne welcomes the reopening of The Sporting Globe Richmond, following a large-scale renovation.
THE SPORTING Globe Richmond has undergone an extensive $3 million renovation, updating the popular inner-city Melbourne venue with stateof-the-art sports-viewing facilities and unique entertainment offerings.
Even before the renovation, the venue was known for AFL street parties, Super Bowl events, NBA Finals Watch parties, and hosting a variety of sports stars, and its return has been longawaited. Now, The Sporting Globe Richmond boasts 60 high-definition screens and cuttingedge sports broadcasting technology to enhance the viewing experience.
James Sinclair, CEO of Signature Hospitality Group, said that The Sporting Globe Richmond raises the bar for sports bar.
“Richmond holds a special place in the heart of Australia’s sporting culture, transforming our venue into the flagship sports bar is truly special to us. Our third-ever location, now among 21 venues nationally, offers a unique experience that sets
a new standard for sports bars in Australia and re-establishes The Sporting Globe Richmond as Richmond’s home of sport,” he said.
Among the variety of ways to enjoy sports are the stadium-style mega-screen, offering an immersive viewing experience, and premium booth seating with the proprietary Booth TV for individual channel selection, web browsing, and gaming.
Reopening only three days before the start of the Paris Olympics, The Sporting Globe Richmond hit the ground running with a busy calendar of sports screening events. In addition, the venue has a number of sporting experiences planned, allowing guests to meet the athletes they come to The Sporting Globe the watch.
As well as a bar-raising sports-viewing experience, The Sporting Globe Richmond offers sports fans the opportunity to take part in the action, with Game On Darts. A fresh take on the classic pub game, Game On Darts provides an arcade-style experience, enhancing traditional
darts skills with interactive gameplay and automatic scoring. The Sporting Globe Richmond features one darts lane downstairs, and another three lanes upstairs. Guests can choose from eight different games, including the classic 301 and 501, as well as new favourites Killer, Battlefields, and Lives.
Another entertainment offering is the Heat Check Challenge, which challenges participants to answer questions and eat increasingly spicy wings. Guests can cool down after the challenge with a drink from one of the 15 taps throughout the venue.
With a fully retractable roof, the upstairs space is an expansive, all-weather area with capacity for up to 300 patrons, and is equally suited to everyday enjoyment and large-scale private functions. Downstairs, guests can see the underground copper Carlton Draught tanks, looking down from a glass viewing platform. Celebrating 165 years of brewing history, the unique installation blends the building’s heritage with its modern renovation.
The new rooftop space
There are four Game On Darts lanes throughout the venue
A striking new landmark
Perth’s Yagan Square precinct has undergone a huge transformation, with Nokturnl revealing a five-floor drinking and dining destination.
LOCATED IN the heart of Perth’s CBD, the Yagan Square precinct first opened in 2018, housing an elevated food court named Market Hall. Despite a $100m investment by the Western Australian Government, the closed-in design and onset of Covid caused many vendors to close shop.
In late 2021, the Government ran a tender process to reinvigorate Yagan Square, and although Nokturnl hadn’t been looking for a new location, the hospitality group won.
Almost three years later, a complete overhaul has turned the site into a five-
floor hospitality destination, revitalising the precinct and inviting more foot traffic.
While Stories is Nokturnl’s first leasehold operation, the tender proposed several changes that would allow the group to transform the space significantly.
Nokturnl co-founder and director Ross Drennan says: “Our proposal was to use a significant bit of the outdoor space, and to have permission to basically bash a big hole in the building to open it up more, because people can too easily walk past this place.”
As development progressed, concerned about an existing rooftop playground
plagued with antisocial behavior, the group proposed to build two additional levels, and later began exploring other vacant tenancies lining the building.
“As much as we’d already taken on more than we could chew, we didn’t like the fact that there was vacancy around us and uncertainty of what may move in there,” added Drennan.
“One of the problems with Market Hall was the 15 different businesses competing with each other, whereas we could create different restaurants offering different cuisine, rather than a multitude of the same offering.”
Two additional levels were added by Nokturnl
Stories Rooftop has been a hugely popular space within the venue
About a month out we became nervous because we had gone all in here, but as a crazy publican you tend to have these gut feelings. Most people in the industry take massive risks opening anything, and we’ve been very lucky.
Ross Drennan, Nokturnl
Building a hospitality haven
Covering over 4000 sqm with a capacity of 5000 across internal and external areas, Stories is Nokturnl’s most ambitious project to date, comprising nine bars and three restaurants.
“It went from being something we thought we could put a couple of million dollars into, mainly letting the landlord’s contribution pay for it, into something we put over $10m of our own money into,” says Drennan.
“It was a difficult build, building above trainlines. There were massive engineering issues we had to overcome, with special foundations to transfer load away from train tunnels.
“If you wanted to add a big tree upstairs, you had to lose weight elsewhere, so you didn’t have too much weight on the train tunnels. We learned a lot while doing this.”
For design and construction, Nokturnl partnered with MJA Studio and Builden Construction, which it has used for its projects prior.
“All our projects have been built very fast because we’ve had a cost-plus agreement with no architects involved in the build, so decisions can be made quickly. I think we get good bang for our buck by doing it like that,” says Drennan.
Split between three spaces, Stories houses Front
Yard, Pourhouse and Rooftop. Ideal for families and larger groups, Front Yard boasts the CBD’s largest beer garden, while Pourhouse is the public bar offer of the venue, featuring hidden speakeasy bar Fat Controller.
Drennan says: “Front Yard was the crux of us getting into the whole thing, it was the outdoor space. We’re in the middle of the CBD, so having such a large outdoor beer garden is quite unique, land is such a premium in the CBD.
“We also put a small playground there, which is only one of two in the CBD, and allows us to cater to families.”
The Pourhouse is Stories’ indoor space, offering protection from the weather, a large tap bank and live music, all of which cater to a mature demographic.
The Rooftop, covering the top two floors, has become Stories’ party hub, with 360-degree skyline views, vibrant cocktails and DJs playing into the early hours.
“The first level is appealing to the 25-45 age group. On the top floor, we have a big dance floor and balcony area which attracts 18- to 24-yearolds. It’s probably better than our existing places, how it has split those crowds, and each of those areas is at capacity on the weekend,” says Drennan.
A diversified offering
Much like Nokturnl’s other venues, food and beverage and entertainment make up a significant part of the offering.
Live music has always had its place in hospitality venues, and with many of Perth’s well-established live music venues closing in recent years, Nokturnl hopes to revitalise this.
Sitting directly opposite the new Edith Cowan University, which will house the Western Australian Academy of Performing Arts (WAAPA), Nokturnl hopes to showcase local talent.
While the operator has fully funded the infrastructure, it hopes to attract a grant that will support local musicians to play and make entertainment sustainable long term.
“We saw a great opportunity to collaborate with the University and WAAPA, and give those students the opportunity to come and play in a public performance area, as well as building on that live music scene in the city again,” Drennan stated.
Separate to the former Market Hall space are three restaurants in the external grounds of Stories: Alba, a modern Italian restaurant; Karla, an Asian restaurant with dishes cooked over flams and coal; and Ugly
Baby, a casual Middle Eastern restaurant.
Joining Karla from the Lucas Group in Melbourne, Thai-born head chef Ben Pienprasop and exec chef Sundoo Kim focus on fresh, locally sourced produce and native Australian ingredients.
“We always knew Karla was going to be great. We’ve got an amazing husband and wife head chef team, who were on one of the opening teams at Chin Chin back in the day. They’re very talented, and every dish they put in front of us was just great,” says Drennan.
Situated in one of the failed former restaurant shells, Alba underwent a significant transformation, downsizing the large central bar to increase capacity.
“To make sure we had a good offering, we searched over in the East again to find a great chef. We came across a restaurant in Sydney called Matteo Downton and secured the former head chef, and started to get excited about Italian, which we hadn’t done before.
“He’s very passionate, he’s making handmade pasta and trialling new dishes every week, letting guests try different things.”
Nokturnl intended Ugly Baby to be a completely different concept to its other
dining destinations, adopting the term “fun dining” as a contrast to its high-end experiences.
“It’s a fun atmosphere, casual, high energy, a little bit tongue in cheek. Calling it Ugly Baby – I guess Yagan Square started off being our ugly baby and we had to turn it around.”
Each of the restaurants has been incredibly popular, reaching full capacity every weekend, with a similar triumph seen across the other venue components.
Smack bang in the middle of the city, the site is well located as far as public transport and footfall go, and this is reflected in the number of patrons pouring through the doors.
“About a month out we became nervous because we had gone all in here, but as a crazy publican you tend to have these gut feelings. Most people in the industry take massive risks opening anything, and we’ve been very lucky.”
While there is room for improvement for trade early in the week, Drennan says weekends are pumping.
“It’s probably the biggest pub by quite a margin in Western Australia, with just over 300 staff now; we must be getting 15,000 to 20,000 people through each week.”
Pourhouse includes a live music stage
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Keeping it in the family?
What happens to a family-owned pub can vary depending on what everyone’s aims and intentions are. Regardless, Sam Bacigalupo from Pitcher Partners argues that succession planning should happen sooner rather than later.
WHEN IT comes to taking over the family pub or restaurant, it’s all about which levers to pull. Is the next generation keen to be in the backroom, taking charge of the operation and pulling the levers to lift profitability and increase efficiency? Or, are they happy to just pull the levers on the kegs and leave the running of the business to someone else?
Maybe they are satisfied with retaining ownership without being involved at all, or perhaps they have other plans for their investment and want out of the pub business altogether.
So many options – yet the worst thing for your legacy is doing nothing.
Building a business takes a long time but failure is painfully fast – it’s estimated that seven out of 10 family businesses fail during the transition from one generation to another. It’s usually because succession planning has been neglected or poorly managed.
Discussion and planning are ignored or postponed until a death or a serious illness, a disaster or other life event. That potentially leaves a vacuum and confusion, which inevitably leads to a conflict.
So how do you minimise the risk of failure?
Family business transitions start with wants and needs
Each case is unique but it does start with the owners. If it’s a mum and dad operation, mum and dad need to articulate what they want from it – it’s your investment after all.
Do you envision the kids or grandkids taking over while funding your retirement? It’s vital to talk to them well before it comes to handing it over, and make sure it’s what they want.
Are you looking to cash out and sell the business, or restructure your growing empire with some outside expertise? Keep the discussions open with the family anyway, particularly if one or more had designs on taking it over.
When everyone is roughly pointed in the right direction, the
next step is to bring in good advisers. These might be lawyers and accountants, or other independent parties who can get everyone on one page.
If the family plans to exit, or is transitioning from a family enterprise to a corporate structure, this step might include the next managing director or major shareholder.
Don’t forget the wants too. Business owners have worked a long time to create or grow the business, and it’s time to celebrate the financial rewards, whether that is funding retirement or embarking on a new project.
Give succession planning the respect it deserves
You’ve built an asset over time, and deciding the next stage of this asset’s lifecycle is not a five-minute process.
Think about changes and life events that might happen beyond the horizon – marriages and divorces, family members seeking to buy in or get out of the business, external suitors.
Ruling from the grave is an option but your asset can also be protected with the right structure in place, with agreements covering the necessary actions and how value will be assessed.
Owners can be hesitant about planning exit strategies for many reasons.
They don’t want to be seen delivering favourable treatment to one family member over another, or they don’t want to think about life after the pub.
Sometimes things are going well – why would I want to think about how I’m getting out when the profits are flowing?
But when things are going well, that’s the best time to start thinking about succession planning, not in the middle of a disaster or facing grief.
Start talking about post-pub life while you have a wide range of levers to pull.
Sam Bacigalupo Partner Pitcher Partners Newcastle and Hunter
