Investment in new pub restaurants and the disposal of smaller wet-led pubs have transformed Marston’s pub business over the last three years. There have also been changes in the way that it specifies kitchen equipment. FEJ discovers how its specifiers are leaving no stone unturned in the quest to find equipment that delivers the durability and efficiency it desires across its estate.
Food has become the staple diet of many a pub operator over the last few years, with the majority of chains coming to view it as the simplest way to pull in punters, drive customer loyalty and boost profits. Get the formula right and the rewards are massive; get it wrong and it could damage the business.
Marston’s is one company that has recognised the importance of developing a quality foodservice offering and over the last 18 months it has outlined plans to launch dozens of new sites that all have a firm emphasis on food.
Recent financial reports even hail the chain’s “transformational growth” in food sales to over 30 million meals each year, while some of the 1,600-strong group’s pubs can now boast a food sales mix that is close to 60%.
It is an impressive story, but one which may never have evolved to the extent it has had it not been for a major rethink in kitchen specification that is today shaping the way in which its catering facilities operate. Two years ago, the company sanctioned a major overhaul of its current kitchen design spec and the results in the time since have been spectacular.
We had to satisfy ourselves that the measurements were all correct to justify the ongoing investment and to do it properly you can’t rule out crawling around the floor taking gas metre reads with stopwatch
Colin Mackenzie, head of corporate services procurement at Marston’s, oversaw the introduction of the new strategy and admits that it marked a major shift from its previous design. The biggest changes can be found in two of the most significant areas of any commercial kitchen: the refrigeration and the cook line.
With refrigeration consuming the majority of power supplied to the kitchen, the chain took a long, hard look at its set-up and the amount of suppliers it was using. “We were purchasing from three different manufacturers: two for fridges and freezers, the other for coldrooms,” explains Mackenzie. “Of the two suppliers for fridges and freezers, one was efficient but lacked robustness, with high annual maintenance bills for repairs and a short lifespan; the other was well-built but very inefficient.”
As a result, Marston’s switched to Foster for refrigeration, which offered it a more durable product with a much longer lifespan and “phenomenal” efficiency due to the use of highly efficient hydrocarbon refrigerants and a number of inbuilt green features.
“On coldrooms we opted to move to Foster, which provided us with thicker wall insulation and ultra low energy condenser and evaporator units with EC fan motors,” he says.
On the cook line, meanwhile, it moved away from several manufacturers in favour of making Lincat and its Opus 700 range as the sole supplier. Mackenzie says the performance of one particular item of equipment reinforced its belief that it was making the right decision. “The stand-out point on the cook line was the Opus 700 fryer, which is a very energy efficient piece of equipment that produces less exhaust gas heat in the kitchen and faster recovery times.
Added to that was an option for automatic filtration of oil which, when combined with energy savings, provided payback in nine months. None of these changes resulted in a cost saving on the purchase price — quite the opposite in fact. For example, the fryers we specify now cost over three times more than the previous unit, but the key to it is total life cost,” he says.
Mackenzie is part of a wider team that oversees kitchen specification and is quick to pay tribute to energy manager Chris White, head of kitchen, and people development, Jane Breddy, and group facilities manager, Andy Kershaw, for the important roles they have to play in the new strategy. All have rolled up their sleeves and pitched in to make sure the decisions they have taken are based on detailed facts and figures.
We remain on track to open at least 20 new-build pubs this year and have in place a carefully-selected site pipeline in key regional locations for 2016 and beyond”
“We did have to satisfy ourselves that the measurements were all correct to justify the ongoing investment and to do it properly you can’t rule out crawling around the floor taking gas metre reads with stopwatch in hand as we did in our test kitchen!”
With Marston’s new-build programme representing the majority of its capital investment annually, having a standard specification and template in place is ensuring that the chain’s foodservice offering continues to go from strength to strength. The company has evolved its strategy to capitalise upon other opportunities for expansion where it sees attractive returns potential, but new-build, food-led pubs remain the core growth driver.
Food for thought
Marston’s ‘Destination’ pub collection comprises sites where the food sales mix is high and the primary reason for a consumer visit is to dine. The performance of new openings is strong, with revenue ahead of its £26,000 per week targets and returns continuing to exceed the company’s goal of 16.5%.
Profit per pub grows to £100,000
Marston’s capital expenditure reached £142m last year, including £68m on the construction of 25 pub-restaurants. It expects that capital expenditure will be around £140m in 2016, including around £70m for the construction of at least 20 new pub-restaurants, two Revere bars and five lodges. During the past year it generated £70m of cash from the sale of 117 pubs and other assets.
Ralph Findlay, CEO of Marston’s, says that with the three-year transformation of its pub portfolio towards an optimised estate now largely complete, the company has high hopes for what the future holds. “We approach 2016 with our business successfully positioned at the forefront of industry trends with high quality, well-invested pub assets which are fit for the future,” he says. “Looking forward, we remain on track to open at least 20 new-build pubs this year and have in place a carefully-selected site pipeline in key regional locations for 2016 and beyond.”
In the last two years, Marston’s has reduced the size of its pub estate from 2,050 pubs to a core 1,600 pubs, which now substantially completes its disposal programme. Importantly for the chain, average profit per pub, a good indicator of pub quality, has increased to around £100,000, an improvement of 40% since 2012. Underlying pre-tax profits at the chain increased 10% to £91.5m on sales up 7% to £845m.
Around 78% of profits from Marston’s pubs are now generated by managed or franchise-style pubs in which it has direct control over the retail offer, ensuring that it is better positioned to deliver consistent service, standards and value across the estate. It expects this proportion to increase as it builds more pubs and converts remaining tenanted pubs to franchise-style agreements.
New kitchen concept complements pub grub
With the foodservice sector seeing an unprecedented level of new outlet expansion and competition, pub chains are recognising the need to conceive a quality food offer that has broad appeal to all age groups and demographics. In its latest annual report, Marston’s said that traditional pub favourites, such as fish and chips, will always be staple classics on its menus, but it acknowledged the importance of developing and evolving its food offers and introducing new tastes and flavours.
In 2015 it continued the roll-out of its ‘Pizza Kitchen’ concept, which now operates in more than 40 pubs, and introduced burrito bars. The company says its new “betterburger and pizza” concept in Revere has also proved extremely popular, with “very encouraging” initial trading. It expects to maintain this pace of food development for the foreseeable future.