Brewery brings cheer with major expansion

Sep 26 2008 by Chris Knox, The Journal

PUB chain Camerons expects its sales to rocket after more than doubling its brewing capacity and expanding its tenanted estate.

The firm is currently laying concrete at its site in Hartlepool to prepare for the installation of eight new brewing vessels, which will allow it to produce 800,000 barrels of beer each year, up from 375,000 at present.

The vessels, which cost £4m and will go into operation in November, will help to support a new agreement with brewing giant Scottish and Newcastle (S&N), which will see Camerons supply it with lager brands Kronenbourg and Foster’s and bitter John Smith’s until 2019. The firm, which previously only brewed Kronenbourg for S&N, now believes sales at its contract brewing business will grow from £50m to £70m by next year and it is hoping to sign deals with other drinks companies in the near future as a result of its larger facilities. It was last year’s deal with Coors, which bought Cameron’s wholesale supply business for over £30m, which has allowed the Hartlepool firm to invest so heavily in its brewing activities.

It also intends to use a large proportion of the cash to extend its tenanted pub estates, which has grown from 55 sites to 66 since the deal.

However, the firm did say that it was doubtful that it would hit its previous target of 200 tenanted pubs by next year due to current market conditions and was focusing on acquisitions which offered additional facilities, such as the recently purchased Angel Inn in Thirsk, North Yorkshire, which includes a 12-bed hotel. It now expects its tenanted estate to grow to 80 by next year, with annual revenues rising from £9m to £12m. Camerons spokesman Yousef Doubooni said: “It is definitely about quality rather quantity at the moment. Everyone knows that there are parts of the pub industry that are suffering due to current market conditions.

“That’s why we are targeting sites that attract a wider range of customers. The success and growth of the contract brewing side of the business also means we are better supported than a lot of pub companies.”

The firm, which employs 85 staff, also recently launched its own managed pub estate, which will see profits go directly back to Camerons, as opposed to the franchise model of its tenanted estate. It hopes to more than double its managed estate to 20 sites by next year and grow its sales from £6m to £13 during the same period. It also plans to roll out newly created gastro-pub chain Aspire throughout the North East, with six of its managed sites currently operating under the brand.

Christopher Soley, director and general manager, said: “Despite the situation with the financial downturn in the world economy and with a recession looming in the UK, we are pleased to say that Camerons Brewery is in a strong financial position.

“Gaining the long-term brewing contract with S&N coupled with the sale of our wholesale business to Coors Brewers has given us the financial resources to upgrade our brewing facilities in Hartlepool and invest in expanding our retail pub estate.

“These developments have secured jobs within the brewery and as the business grows will create further employment opportunities for people within the North East.”