Big league ambitions: Moorhouse's David Grant profiled

27 June, 2014

Like the local football team, Burnley brewer Moorhouse’s wants to be in the Premier League. But while the Lancashire town’s footballers defied all the odds to achieve their goal last season, brewery boss David Grant admits: “We’re not quite there yet.”

If and when it does hit the big league, it will be the culmination of a long haul for a company that began life as a soft drink manufacturer in 1870 and — like most teams that survive in football’s top division — if it manages to join the likes of Marston’s, Greene King and Fuller’s at ale’s top table, major investment will have played a big part.

Three years ago, Moorhouse’s was rebuilt from the bottom up on its original site at a cost of £4.2 million, the culmination of a six-year plan. Where an organically evolved mish-mash of terraced houses and warehouse blocks once stood, there is now a shiny aluminium and glass construction with both a bigger footprint and significantly enhanced capacity.

IN DEMAND

The opening was a significant milestone, but perhaps the defining moment came back in 2000 when Moorhouse’s Black Cat mild was a surprise winner of Camra’s Champion Beer of Britain. It put the brewery on the map but presented a dilemma. Demand for its beers, and Black Cat in particular, went through the roof, but the brewery just wasn’t set up to cope with the surge in demand.

Some might simply hive off a chunk of production in the short term, anticipating a trough to follow the peak, even if it risks diluting the product’s authenticity and alienating the geekiest consumers who have just come on board.

Instead, Moorhouse’s took the long-term view of such good fortune, to mine the seam of goodwill that had been laid down and to expand production and sales nationally, using a firm distribution base in local pubs as the foundation. Sales grew solidly in subsequent years but it was only with the rebuild that Moorhouse’s was able to take things to the next level.

Turnover hit £4.5 million in 2013, a third up on the pre-redevelopment figure, and production was up by a similar proportion to not far short of 600,000 barrels annually.

Impressive stuff, but Grant says the figures don’t match his Premier League ambitions. “It’s quite good,” he says, “especially as those four years have been when we’re coming out of a recession, but it’s not quite as good as I’d envisaged. We’re about a year behind where we should be.”

Like many successful football managers, Grant has had the good luck to work for a supportive owner/chairman in the form of Bill Parkinson. “Fortunately we’ve got an owner with very deep pockets,” he says.

He’s also put to good work the money saved under the progressive beer duty system, introduced in the year Grant joined Moorhouse’s, and under which breweries producing less than 60,000 hl a year qualify for duty relief on a sliding scale.

The smaller micros can save up to 50% and many happily choose to stay small to reap the benefits. Both they and the system have been criticised for failing to encourage what the scheme was originally set up for. Rather than put the duty saving back into the brewery, the extra margin is often used as a tool to undercut rivals.

“It was designed to help brewers to grow by investing,” Grant says. “It wasn’t designed to bring in 400 new brewers who won’t brew over 50 barrels a week.

“They might have a couple of nines [9-gallon barrels] left at the end of the week which they are willing to sell at any price to bring some cash in.

“We’ve saved £120,000 a year on duty and we’re reinvesting it in the brewery and jobs. We have done what progressive beer duty was designed to do.

“It’s not about favouring this group or that group but about the long-term sustainability of our industry.”

Deals with pubcos and on- trade distributors in London have seen Moorhouse’s kick on in pubs and now Grant — who joined the company in 2002 and became its general manager two years later — is hoping to start eating into rivals’ off-trade shares after several appointments to beef up its sales team.

Though brands like Blond Witch and Pride of Pendle have been a feature of many specialist independent beer shops’ lists for several years, Moorhouse’s has begun to build distribution in the multiples. It’s in Booths, Asda, Tesco, B&M Stores and Morrisons locally, and elements of its Halloween-friendly portfolio — inspired by the area’s connection with the 17th-century Pendle witch trials — got national listings in some multiples last autumn.

SALES BOOST

Independent distribution through Parfetts cash and carries and national coverage in Booker helped it boost take-home sales by 55% last year to break the 500,000-case barrier.

“Take-home is a very specialist business and for a long time for the life of me I couldn’t get in front of Asda or Tesco,” says Grant. “We’ve now taken on a dedicated off-trade specialist working across the portfolio to build that side of the business.”

Grant insists that ramping up its supermarket business won’t see the company dropping its pants on prices any more than it has done in the on-trade, where he insists free-trade customers are as hard-nosed, or more so, than the big pubcos in negotiations.

“We either compete and reduce our margin or we walk away from those customers,” says Grant, “and that’s what we have to do on some occasions. We’re not in the game of knocking out beer at £40, £45 or £50 a barrel all the time. We have a wholesale price [of more than double those figures] and people either pay it or they don’t. We’re here to build brands so we can be around for a long time.”

But it’s not just a case of knocking the stuff out and getting reps to sweet talk customers. There’s a big focus on the integrity of the beer in a partnership scheme with local farmers for the long-term production of the brewery’s Maris Otter barley, for example. Grant also has his eye on exports, and last year saw Moorhouse’s sell its first beer in China, joining the US, Canada, Vietnam and Russia as destinations for the Lancashire brews.

“I’m always looking to do better,” says Grant. “If you stand still you go backwards.”

THE FUTURE: BIG IDEAS

While Moorhouse’s is focused on the nitty-gritty of building business through pubs and shops, it’s also looking for other ways to add to the bottom line.

The new brewery has a function suite to host meetings and weddings and Grant has tentative plans to add an off-trade angle to its retail business which already includes six pubs.

Though he’s keen to emphasise that it’s an idea that’s some way off and subject to change along the way, Grant talks about the idea of “a city pub-cum-cask ale and wine shop”.

He adds: “There’s nothing really like that. It might have the ability to do 40 beers a week.

“You can fit something out for £30,000 and it might only have a lifespan of three years but if you only turn over £5,000-6,000 a week it could mean a decent profit. I might be completely wrong but it wouldn’t cost a great deal to do that.”

More certain of coming to fruition is Moorhouse’s entry into the whisky barrel-aged beer market with a special release to mark its 150th anniversary in 2015.

The ale will be aged for six months in a stash of Islay whisky barrels Moorhouse’s has been amassing in a quiet corner of the brewery.

“The idea will be to do an exclusive 7% abv beer for Booths,” says Grant. “A proportion will be blended with Black Cat to bring it down to 4.6% abv to make the celebratory Black Cat Reserve.

“We’re getting the barrels from the Fisherman’s Retreat at Ramsbottom. It’s a restaurant and whisky shop which ships barrels of whisky down from Scotland to sell in the shop as its own bottlings.”




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