Be At One, the Piper-backed bar chain, has always stood out from the pack, but with the number of operators diversifying into a fast-growing cocktail market, the strong fundamentals that have always set the business apart are in place to keep it ahead of the game. Mark Wingett talks to founders Steve Locke, Leigh Miller and Rhys Oldfield
“Why would you do food?” With the casual-dining sector creaking under the huge number of new food concepts chasing the same money, with supply outstripping demand, it is a fair question from Be At One co-founder Rhys Oldfield. Apart from a brief dalliance with hot dogs, Be At One has stuck to its wet-led credentials and has thrived in the eating-out market melee.
The company, formed in 1998, has been backed by Piper since 2012 and chaired by Mark Derry, it now operates bars in 14 cities across the UK, with 32 sites in total and sales set to top £36m in its current financial year. The group has generated a like-for-like sales increase of 9%-plus for the past five years and produced positive like-for-like sales since inception in 1998. Its dedication to operating specialist venues has certainly paid off. As all three founders (Steve Locke and Leigh Miller complete the trio with Oldfield) touch on, they and the wider business remain absolutely focused on, and dedicated to, the things that made their first site, Battersea Rise, successful in 1998. As Miller states: “Fantastic drinks, served quickly, in a great atmosphere, by highly trained people, who really know what they’re doing, and care about looking after you, and who want to make sure you have the best time.”
It’s the group’s points of difference and strong foundations that they believe will continue to set it apart, especially as operators further diversify into the cocktail market or those brands that have traditionally been placed in their peer group look to grow their food sales mix.
The offer and the models
According to research from CGA Peach, cocktails are now sold in about a quarter of the UK’s on-trade outlets with restaurants an increasingly popular destination to drink them. The survey found that more than half of cocktail drinkers would choose to order them at restaurants, similar to the level for bars, with pubs not far behind. A case in point is the fascia of the new Bill’s in Chelmsford, Essex, which highlights its coffee to cocktails offer.
You sense there is frustration from the trio that people, inside the industry, and consumers, tend to look at their fascia or hear their name and lump them in with the new era of high-street bars that do everything – draught beer, food, TV, vodka pants, tacos, sharers, coffee, etc.
Locke says: “As things have got tougher the answer [for those businesses] has usually been to diversify, and cocktails fall into that. People have moved sideways and not specialised. When others talk about diversifying, we talk about specialising. When markets get tougher, stick to what you know. For us that means better cocktails.” With everyone talking about premiumisation, it’s worth noting that the group has always offered a premium spirits range since day one.
These specialist cocktail venues are often imitated but are actually very few in number – Be At One being the only one of scale. This segment of the bar and restaurant market is typically populated by niche specialist players (such as Nightjar and Callooh Calley) and the high-end bars found in five-star London hotels (such as Dorchester and the Langham).
In terms of scale, Be At One is the clear UK market leader, and all three see no reason why the business can’t grow to well in excess of 100 sites in the UK eventually. With this expansion target in mind, Oldfield says that it has been the move outside the capital that has allowed the group to hone its business model.
The group has two models – Classic and Destination. Classic is its main model (for example, smaller sites like its original in Battersea) while Destination sites are usually larger units, such as those found in Manchester, Leeds or London’s Monument.
Sites mature in 12-18 months depending on location, with Classic sites taking £20,000-£25,000 a week and Destinations £35,000-plus. The company expects to open six to eight sites a year, predominantly Classic sites, with some Destinations. In terms of refurbishment, it works on a rolling five-year cycle. Here, it focuses on proactive spend to protect and preserve the premium look of venues, with typically £100,000 invested, in year five. Again one of its strengths is its relatively low capex requirements and the lack of competition for the sites it focuses on. As Oldfield puts it: “When you have 2,000sq ft spread over two floors with no extract that ticks the box for us, but not for many other people.”
Clubbing’s loss is Be At One’s gain
Be At One hopes to open a further site before the end of its current financial year next March, and is in legals on its first site in Scotland, thought to be in Edinburgh. It is also in talks to take a second site in Leeds, the first time it has opened another unit in a regional city. Locke says: “It is an old-school Battersea-size site. We have been there two years and think there is another area where there is the opportunity to open a smaller unit. We have the infrastructure and management there so are confident it will be a success without cannibalising the existing site. It will be a good test to see if we can do something similar elsewhere.”
Locke says that the group’s expansion in the regions is being underpinned by the continued closure of nightclubs across the UK. The majority of the company’s openings outside of London have come through closed nightclub sites. Figures produced last year by the Association of Licensed Multiple Retailers found that almost half of the UK’s nightclubs had shut their doors in just 10 years. In 2005, there were 3,144 clubs and this is now down to 1,733. Locke says: “The cultural move away from the traditional nightclub visit to a more intimate, experience-led night out has certainly provided us with greater opportunities for expansion, especially outside of the capital.”
It is to Be At One’s credit that it has been able to make the most of this opportunity. It knows this will only continue if the focus remains on developing and retaining the quality of bartenders it has so far produced. Locke says: “Everyone from the bar back to the CEO is focused on bartending. The business continues to be run by us, the founders, so the decisions are made through eyes of bartenders.” That stance is best highlighted by the group’s dedication to staff training, a key foundation of the business, that has placed it among the sector leaders in developing and retaining staff. All three at different times of the interview come back to this point – that the business is all about people. Locke says: “Recruitment, unique training and an ongoing programme of development is what we believe separates the group and is the platform for the entire Be At One experience – great drinks, great atmosphere, and warm, speedy service.”
Instilling staff confidence
The group spends £6,000-£7,000 per person over an intensive nine-week programme. Locke says: “In a way this also delivers on marketing, as this investment drives and improves customer experience and engagement. Visiting our sites in the north, one particularly telling thing in the ones that had been open a bit longer was the difference in the team. The bartenders had a bit more confidence about themselves and where they stood in the market and the guests were understanding that as well and differentiating them apart from the rest of the market. The belief of the bartenders ticks up when we start to get traction in the local market.”
Bartenders are recruited for personality, and the company is not afraid to hire “rebels” as “they help get the party started”.
Miller says: “Opening in Manchester was like day one in Battersea Rise 1998, no one knows us up there. It is starting again, educating the staff and the consumer, and we put the same amount of effort in. We work really hard to not fall into the trap of being seen as coming into a new market as know-it-alls. In Cardiff, we started employing people five months before we opened, training local people, taking them around the country, so that by opening night we had an established bar tending team all from Cardiff. Others will start employing staff one week before launch.”
Staff turnover currently stands at 70% – a low figure by industry standards but one that the group is determined to lower, with the aim to get it down to 50%.
Locke says: “A key focus for us is on employee retention moving forward – further developing training and appraisal processes. Whatever the impact of Brexit, we want to build a reputation as a good employer and leading licensed retailer – the employer of choice. The NLW isn’t a problem, because we pay our staff over that level anyway, you can’t invest c£6,000 in training someone and then pay them the minimum wage, you have to pay them accordingly. We work very hard to recruit the right people in the first place so people don’t leave after the training. When you start in that new job, you are not going to get the same support you would have here. Whatever the outcome of Brexit, it will be a level playing field for everyone, so when people know and come and see the level of training and commitment they get from us, we know we are ready to win that battle for staff.”
Miller adds: “For a lot of these guys this might be their first job, so if they do go somewhere else they might want you to make coffees, here you make cocktails. The guys that do come back appreciate what they have here and push harder.” Or as
Oldfield simply underlines the point “We are a bar company owned by bartenders.”
Focus remains the same
All three continue to live and breathe the business, with Miller out there in the bars, continually coaching and training, and Locke discussing the finer points of bartender posture. However, they have not been afraid to bring in others to add key skills – such as Andrew Stones (director of operations), Toby Rolph (finance director) and Graeme McDowell (HR director).
Of the trio’s relationship, Oldfield says: “We have always kept going in the one direction, while we may have the odd tête-à-tête now and again, we all know where the business needs to go.”
While the trio won’t be drawn, Piper is five years into its investment in the busi-ness and talk will inevitably turn to a possible exit for the private equity group. While no process has officially started, it is thought 2017 could see the business – believed to be valued at more than c£65m – review its options.
The business has developed massively over that five-year period but at heart re-mained the same, in terms of focus, values and guest experience. Locke says: “When we first set up, we were living and working together. We lived in Tooting and we would walk across Wandsworth Common in si-lence, spend the day working together and then walk back in silence. There were times in the beginning when it was hard work. We learnt that if there was a problem we needed to have it out in the open, talk about it.”
Those hard yards, long silences and heart to hearts have created a successful business on every level, one with a high-quality consumer offer, a compelling financial model and a strong employee brand.
