While many family brewers have either been absorbed into bigger groups or looked outside for the next generation of leadership, Wiltshire-based Arkell’s is still very much a family affair. Finn Scott-Delany talks to chairman James Arkell about heritage, the changing face of the pub sector and the importance of old-fashioned hospitality
Founded more than 170 years ago to cater for thirsty workers in the railway heartland of Swindon, Arkell’s has evolved through six generations of family ownership.
While chairman James Arkell has spearheaded a push into accommodation and recently acquired the company’s first restaurant, head brewer Alexander Arkell has diversified into products with a craft edge.
But, one area in which there is no desire for change is the focus on Arkell’s being a family business. James Arkell says: “It helps to have family members around, people like it, the employers feel more secure if there’s a son rather than an American coming to run the place. We invest in the future.”
The most recent diversification has been into rooms, a move Arkell suggests happened almost by accident, and which has seen the business accumulate more than 500 rooms across its estate.
Accommodation may well be capital intensive – some £3.6m was invested in the pub estate last year alone – but it is all part of a long-term view, Arkell says, as well as adding value wherever possible. “It’s terrifying what we invested last year. It’s far too much,” he says. “We don’t seem to be stopping either. We do get enthusiastic about these things.
“If you’re a listed company in the UK, you’re expected to buy this, sell that and sack your chairman, it’s so fizzy and livewire. We don’t have that sort of pressure. We still need to make money but we can take a much longer view.”
Same train of thought
Though some of the rooms were acquired alongside market town hotels, the additional channel is safeguarding the future of the pubs, Arkells says.
“If you’re a pub, you’ve got to add a footprint or it won’t survive, whether that’s food, rooms or caravans. It’s the profitability; you can’t survive on drink alone. The whole thing has got to be more integral. We like to do a bit of everything.”
The history of Arkell’s is inexorably tied to the growth of Swindon, which ballooned in size during the building of the Great Western Railway, and thrived as a working town after Brunel’s locomotive works shut down.
Arkell says the brewery is “lucky” to be based in a town which survived de-industrialisation – though he says the Arkell family work ethic has played its part.
“Why are we still here? We earn a living. We need to come and work. None of us live in grand palaces. We’ve always lived here and worked here, and we love it. It’s our ethos.”
Despite the competition it brings, Arkell is enthusiastic about the resurgence of interest in beer – even if it does not translate to greater sales. His son Alexander has been leading the charge into modernity with a range of contemporary kegged styles, a trend for bolder flavours Arkell senior welcomes and attributes to a more sophisticated consumer.
“It’s wonderful that a love for beer has come back”, he says. “We may not like having 1,500 competitors making beer – they’re a pain – but it has created terrific interest. The public is more critical about everything these days. Our customers demand better beer, they want more choice. It’s not increasing in quantity, but it’s satisfying a more discerning customer.
“It’s a different world,” he adds. “People used to have a pint or two on the way home from work to clear their throat. But no one sweats any more. People look at screens all day. Our customers aren’t drinking pints and pints any more.”
Intervention unnecessary
While the company is significantly below the threshold to be personally affected by the pubs code, Arkell has strident views on the Government’s approach to regulation.
“Most politicians fail to realise the collateral damage they do when they interfere,” he says. “The model that Punch and Enterprise ran worked for a while and people were very happy. But it wasn’t working in the latter years, and a few disgruntled people banged the drum. But those companies moved radically from their pervious MO. Unfortunately, the Government made changes that were too late. What it produced is a political thing and unnecessary because those models have had their day.”
In the aftermath of the smoking ban and generally tough trading climate post-2007, there was some consolidation of the estate, with about 10% of what was once more than 100 pubs sold to concentrate on larger, profitable sites. “If you don’t make any money as a licensee, you’re a miserable sod. You need to get paid. Some of these pubs just didn’t make a living, life moved on.”
Portfolio diversity
Again it’s the diversity of its portfolio, which ranges from wet-led working men’s pubs in Swindon, to Cotswolds gastopubs, to market town lodges, which Arkell feels is key. The operator currently has 93 pubs/hotels, of which c10% are managed houses.
“It’s the cross-section that is so nice”, he says. “It’s about maintaining balance and not having all your eggs in one basket.
“I’ve always said I’d rather have a basket of eggs, where you can break one or two, than three large swan eggs, where if you break one, a third of your business is gone.”
That’s not to say Arkell sees his business as plain sailing – though he does repeatedly refer to it as tremendous fun.
“It’s still a roller-coaster”, he says. “It’s very competitive out there. The nationals are investing in quality rooms. The craft brewers are nibbling away. There’s always pressures at every end of our business. You can never sleep easy.”
Is he concerned about falling levels of alcohol consumption, particularly among the young? “We’re in hospitality, what we’re offering is somewhere to go that’s got a nice welcome. I’d like everyone to drink beer but if they’re drinking soft drinks that’s fine – as long as they’re in the pub.
“We produce great beers in this country, so why do you go to one pub over another? It’s for the place and the hospitality, the pretty barmaid or the great landlord.”
With the recent acquisitions of Rudi’s, a restaurant and bar in Swindon town centre – a first for the family brewer – Arkell is positive about taking on opportunities when they arise, alongside continuing to invest in the estate and rooms, and churning underperforming houses.
