A synopsis of the September 2017 Licensed Vintners Association Conference
Dublin publicans attending a recent seminar hosted by the Licensed Vintners Association (LVA) had the opportunity to listen to a range of speakers regarding best work practices, ways to enhance the pub environment and the positive changes they can make within their business. Crowe Horwath partner Aiden Murphy, who was one of the speakers on the day, outlines some of the highlights from the conference below.
Food and pub dining
Food A key theme that resonated throughout the afternoon was the importance of food within the pub sector as a platform to grow turnover. The relaxed ambience and casual dining setting of a pub when combined with a quality food offering is seen as an area of growth. Travel writer, Pol O’Conghaile talked about food trends such as burgers, small bowls and the impact of social media on driving footfall to your premises.
The importance of having a food offering was echoed by Sean Muldoon and Jack McGarry of New York-based Irish bar The Dead Rabbit. They told their story of how commitment, creativity and talent enabled them to develop and run an award winning cocktail bar in New York City and while that is their focus, they would not be in business without offering a food menu. They also discussed the challenges and importance of social media, and commented that pubs need to manage this consistently and should consider it part of the resources required in a pub business.
Finding and nurturing bar staff
John Nugent of UK hospitality business Green and Fortune discussed his approach to creating a bar, restaurant and event catering company in London. As his business has evolved and the event management side developed, he identified the need for dedicated sales executives to promote and manage these events. In hiring these specialist staff, he has been able to grow this side of the business and achieve good guest satisfaction.
The importance of finding and nurturing good quality staff is a key requirement for the pub and bar sector worldwide. Investment in training along with finding motivated and enthusiastic staff was highlighted by Marina Bleahen of business coaching organisation Action Coach as a winning formula for growing turnover. Establishing minimum standards for staff in relation to food presentation and maintaining a clean and presentable customer area is imperative for the success of pubs. Staff appreciation and recognising the importance of their role in making the pub a relaxed and unthreatening environment is also vital.
Invest to grow turnover
All speakers highlighted the ongoing requirement for investment in the bar fit out, tableware, the appearance of staff and the attention to detail needed from management down. It is this level of investment and attention to detail that ensures a quality product offering and sustainable growth in turnover.
Premium coffee offering
Coffee was a topic among the speakers. Pol O’Conghaile recommended that pubs should consider serving a speciality, coffee such as Irish brand Ponaire, to appeal to discerning coffee-drinking customers. The Dead Rabbit’s signature Irish coffee is one of their best-selling drinks and the lengths they went to perfect the cocktail aligns closely with their brand values. John Nugent noted that certain London coffee houses are now becoming licensed premises allowing them to open later in the evening and serve food, which competes directly with the early evening trade of a pub.
Focus on higher margin product
Aiden Murphy of Crowe Horwath discussed the profit and loss of three types of Dublin pubs, highlighting the impact the revenue mix has on EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation).
In an economic environment where there is more disposable income, he suggested the opportunity to shift sales to drinks with higher margins. The table below is an illustration Aiden provided that, if achieved, would lead to an additional €50,000 profit for a Dublin pub where beverage turnover business is €1m.
Positive outlook for sector
The hotel, tourism and leisure (HTL) team at Crowe Horwath is seeing confidence return to the Dublin pub sector with pub owners positive about the next 5 years and the ability to grown turnover and profit. Aiden outlined that in the current market there are several businesses in expansion or refurbishment mode and his experience is there is support funding available from retail banks, asset finance companies and suppliers. However, to capture the upswing in consumer and business spending, investment is required in the form of refreshing, re-investing and expansion.
The initial step before investment is business planning. This means being analytical in terms of what return is expected and achievable in relation to the increased revenues and associated costs. It is important that pubs owners involve on site managers more in business planning ensuring that they understand both turnover and cost goals. Setting daily / weekly targets with individual team members can allow staff responsibility to achieve their part of the budget.
If you are a publican currently looking to expand Crowe Horwath can assist and advise on a range of operational, funding and tax matters. Contact a member of our HTL team to find out how we can help