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Out-of-home food and drink index makes brewer top dog with 193% growth
BrewDog, the dynamic Scottish brewer and bar operator, has taken the top spot in an index of the fastest-growing companies in the UK eating and drinking out market.
The 2013 Zolfo Cooper Profit Tracker, which charts the profit growth of the sector’s most successful privately owned operators, saw BrewDog beat rivals such as Drake & Morgan, Côte and Jamie’s Italian.
The Profit Tracker, produced in association with trade business journal M&C Report, is an annual list that highlights the top 50 companies with the fastest-growing profits within the sector over a three-year period.
Famed for its controversial marketing exploits and anti-establishment ethos, BrewDog has achieved profit growth on a compound basis (known as CAGR or compound annual growth rate) over the three-year period of 193.3% - impressive growth for a group that opened its 11th site earlier this year.
James Watt, co-founder of BrewDog, responded to the group’s placing in the Zolfo Cooper Profit Tracker in typical forthright fashion. He said: “BrewDog's growth is not a reflection of simple business performance, but of a seismic shift in perceptions of beer in the UK. Customers are increasingly discerning about the quality of the beer they drink and the type of establishments they drink them in.
“We set out to change the stereotype of beer in the UK and, while many lauded this effort, others laughed in our faces. They are not laughing now. The craft beer revolution is not a flash in the pan – it's a permanent change in consumer demand.”
Raoul Federman, finance director of Drake & Morgan – the London-based bar-restaurant chain that was second in the index - said: “It's fantastic that Drake & Morgan have taken this position in the UK's only profit tracker for the eating and drinking out market. We have an exceptional team who are passionate about the brand and committed to delivering growth and this is reflected in the performance in this index.”
The list again highlights that both established and fledgling groups across both food-led and wet-led categories have continued to prosper during the challenging economic climate. The appearance in the list of Nando’s, Pret A Manger and Caffè Nero also highlights that impressive profit growth is being delivered by larger companies, even with estates of 250 sites and above.
London-centric and regional-focused groups are equally represented, underlining a growing sense of stability returning to the wider market.
Paul Hemming, partner at Zolfo Cooper, said: “In an operator-led market, the Zolfo Cooper Profit Tracker provides clear evidence that there remains a plethora of high-quality businesses that are thriving, posting significant and sustainable profit growth. The delivery of such performances is all the more impressive given it is being achieved in the face of the current economic flux.
“With the benefit of another year’s data, it is increasingly clear that an index of companies by profit growth is a very effective and meaningful vehicle for identifying the sector’s outstanding companies. This year’s 50-strong index comprises many of the eating and drinking out market’s most admired companies, with some of the most talented management teams at their helm.”
The index, in its second year, defines profit as EBITDA (earnings before interest, tax, depreciation and amortisation), with director remuneration added back in. Growth in profit is measured over a three-year period, with an average rate of growth (CAGR) used for the overall comparison.
The full top 50 was published in the April issue of M&C Report. Further analysis and commentary can be found in the Zolfo Cooper Profit Tracker 2013 report, which can be accessed from here. The top 10 in the 2013 list were:
- Drake & Morgan
- Jamie’s Italian
- Bill’s Restaurants
- Pub People Company
- Novus Leisure
- Amber Taverns
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