With 50 years in brewing and a hand in everything from the Firkin pubs to the West Berkshire Brewery, David Bruce is one of the UK pub trade’s most dynamic operators. Claire Dodd pops by to find out his plans for the City Pub Co
David Bruce cheerfully waves me off at Thatcham train station, with a bag full of beer books in which he’s thoughtfully written personal dedications: The Craft Beer Revolution by Steve Hindy and Brew Britannia by Jessica Boak and Roy Bailey.
It’s no surprise that he gets a substantial mention in both.
A self-professed control freak (his words, not mine), and crazy entrepreneur, the so-called Monty Python of the British microbrewing movement has a career in pubs and brewing that spans 50 years.
He’s had a hand in or been the driving force behind some of the industry’s most recognisable brands. Having found his way into brewing ‘by accident’, he went on to brew for Courage and Theakstons, before founding the pioneering Firkin Brewery pub chain in the 1980s. Moving on to develop the Slug and Lettuce concept, he has also invested in start-ups ranging from Brooklyn Brewery in New York, to The Elysian Brewing Co in Seattle, and FrogPubs in Paris.
But in 2000 he co-founded one of his biggest successes, The Capital Pub Company, with business partner Clive Watson (former finance director of Regent Inns). Now, the duo is the driving force behind The City Pub Company. And they have some ambitious plans, not to mention the bold plans Bruce has for another of his latest projects, the West Berkshire Brewery (WBB). It’s these projects I’m here to discuss. But more
on them later.
My day starts with Bruce driving me through the winding lanes and neat villages of Berkshire, where he lives. Or ‘The Wind in the Willows land’ as he calls it. ‘I’m a bit like Mr Toad,’ he muses. ‘I soon get bored and restless.’
That much is obvious in the way he talks. It’s a mile a minute.
From witnessing the start of the beer boom in the US, to having to use a luggage trolley as a zimmer frame at Denver airport the day after judging at the Great American Beer Festival; whether wearing a Kermit the Frog costume at a microbrewing conference (he’d just opened the Frog & Firkin pub) or getting pissed in a tepee in the Colorado mountains and being unable to find the exit, Bruce has some good yarns.
It’s no wonder then that in Boak and Bailey’s update of their book, a year after publishing, they refer to him as having once again failed to retire. This, he admits, is the fervent energy of the entrepreneur. It’s something he’s always had, though not necessarily always known what to do with.
‘I always say that entrepreneurs are basically people that are unemployable,’ says Bruce. ‘They’re dangerous creatures.’ After telling Michael Theakston to get lost because he wouldn’t let him buy shares in the brewery, Bruce pursued a couple of other jobs in the industry, quitting those too because they were making him miserable, before hitting upon the idea for the Firkin pubs.
‘I was a driven man once I said I was going to start my own brewery. I wouldn’t let anything stop me. I had no money and everyone was telling me not to do it. I was like a maniac, but then entrepreneurs are,’ he says.
Entrepreneurs are basically people that are unemployable. We’re dangerous creatures
The Firkin concept was simple. In the early 80s, when pubs were all red carpets, red lampshades, fruit machines, and in Bruce’s words ‘really shit, terrible beer’, he was going to do the opposite. Borrowing money against his house, and brewers he said he’d stock, he bought the freeholds or free-of-tie leases of pubs that had failed multiple times, were sometimes derelict, and were going cheap.
With simple, stripped-back decoration, uncomplicated but good food, and quality beers brewed on site, they were a hit with drinkers almost immediately. At the time, there were only a few brewpubs left. Bruce built the company – the first branded brewpub chain in the UK – to a dozen sites, and then sold up for £6.6m in 1988, just before his 40th birthday, setting up charity The Bruce Foundation with the proceeds. It provides canal boat and motorhome holidays for the disabled.
‘If it all went wrong,’ he says, ‘we’d saved only £500 which was for a one-way ticket to Australia to start a new life. The top brewing and leisure analyst in the City of London said this had no chance of succeeding, [to] abandon it immediately. Anyway, we ignored him. Then everybody said: “You were really lucky with the first one; don’t ever do a second one.” So we ignored them too.
‘I’d failed to go to uni, been rejected by Theakstons, and had lots of hang ups and baggage. To get out with that much cash proved everybody wrong. So there were lots of two fingers flying around when I sold it.’
His other great success, The Capital Pub Company, followed a similar against-the-grain concept. Back in 2000, when branded high street outlets were the thing, Bruce joined with now long-time business partner Watson to create an estate of non-branded, off-the-high-street pubs. Again, they had no money. But again, the concept worked spectacularly.
They raised £15m through the tax-efficient Enterprise Investment Scheme (EIS) in the first year – the scheme’s upper limit – and then another £15m. Eventually they bought 35 freehold pubs, thwarted a hostile takeover attempt by Fuller’s for £54m in June 2011, and sold a month later in the midst of the economic downturn to Greene King for £93m.
‘It was ridiculous. We sold when the market was in turmoil. Without exception, we always provide an exit to our shareholders. That’s key. People invest in us because they know eventually, they will get their money out. But Clive and I were having too much fun.’
Which is why, at a time when many would be purchasing their second home in the Caribbean and ordering endless Piña Coladas in the sun, the duo almost immediately started again, building what is now the City Pub Company.
Since the launch of Capital Pubs, the HMRC has reduced the limit a company could raise under EIS to just £5m a year – so in 2011 they created two companies, City Pub Company East, and City Pub Company West. The concept was that having done London, and feeling like the market there was saturated by other pub companies, they would invest in cathedral cities or university towns throughout southern England instead.
The first pub was in Bath, and there are now 22 sites, spread between Oxford, Cambridge, Norwich, London, Brighton, Stratford-upon-Avon and soon Cheltenham. Un-tied and unbranded, the onus is on each pub’s manager to decide what’s best for their local market. The Phene in Chelsea is a City pub. Bought for £3m, City has tripled its turnover to around £70,000 a week, or £3.5m annually in sales.
‘Annualised sales within two years of starting are £25m a year already, in a start-up company, which is an even better story than Capital was at the same stage. That became worth £93m. We think this will be worth even more,’ he says.
Having kept raising money, East and West are now maxed out in terms of the funding they’re allowed to collect in total under EIS, at around £14m in each venture. And this is where they duo’s latest moves get very interesting. You might call it their most ambitious plan yet.
Setting a deadline of April 2015, they decided to create five new companies under the City Pub Company mantle. The plan was simple: to raise £25m (£5m for each) a year of investment through EIS over the next three years to fund the new pub companies, and garner a further £25m through debt leverage, creating what Bruce calls a ‘war chest’ of £100m with which to go out buying pubs.
Except it didn’t happen quite like that. Having raised just £11m, they set up only three companies. Instead, they are looking to Convertible Preference shares to raise another £7.5m per company. But why? What’s the end game?
‘Oh, to build it up and flog it again by 2020,’ says Bruce. ‘Fatten the goose. That’s what we do. We take other people’s failures, do ‘em out. Make them better, run them better and reward the staff on the way as they all know we’re going to sell out. It’s not a secret.’
Now the race is on to get purchasing sites. Changes to EIS rules means that anything raised after October can’t be spent on existing businesses, which means pubs. But Bruce is also looking to purchase sites for his other big venture.
The West Berkshire Brewery (WBB), founded in 1995 by Dave and Helen Maggs, is undergoing something of a renaissance. The pair invited Bruce on board two years ago. Since then he has raised £1.23m of funds by selling shares to customers and locals, and led a partial buyout of the founders.
The brewery is now looking to raise £4 million under EIS to build a brand-new brewery and bottling plant on the premises of a former dairy next door to its current site. Expecting a flurry of interest in EIS before the rules change, WBB will move to crowd-funding after October if it still needs funds.
But alongside multi award-winning but slightly old-school brews such as Good Old Boy, Mister Chubb’s, Dr Hexter’s Healer and Maggs’ Magnificent Mild, something new and radically different is afoot. The brewery has spawned a new hip, craft brand which will launch this autumn under the name of Renegade.
When Bruce took on the running of the brewery he inherited a young, enthusiastic team of brewers keen to make their own mark. The Renegade line will launch with their creations: West Coast Pale Ale, India Session Ale and Craft Lager. There are plans to purchase pubs in London too (because pubs are where the money is, says Bruce), but although they’ll stock the full WBB range, they’ll be unbranded too.
‘The team was pretty much here, all I have done is say yes to all their ideas rather than no,’ says Bruce. ‘Our core beers are great beers, but we thought: “Let’s come up with something that is keg, cool but craft with a whole new image.” Imagine going into some cool bar in Camden and saying “Do you want Good Old Boy in a keg?” They’d tell you to fuck off. If I was a cynic, which I am, I’d say, “Oh, that’s just West Berkshire Brewery trying to be cool.”’
Which it might be. But their beers are solid, the branding aimed squarely at a younger target market. Bruce has the same plans for WBB of a 2020 sell-off. Until then though, he and his team are scouring the country for new sites.
Meanwhile, undaunted by the Kermit the Frog incident at that microbrew gathering 20 years ago, Bruce’s love of dressing up continues unabated. He’s promised to don Lederhosen for the brewery’s upcoming Octoberfest…