Pride with No Prejudice

Anthony Fuller had no choice but to join the family brewing business, but he has led it to the top. Charlotte Hey meets a man who takes quiet pride in his company’s achievements and who has always kept his ale real

Anthony Fuller CBE openly admits that, despite his short stint in the army, he had no choice about the career path that lay ahead of him. “My father was the senior Fuller of the Fuller family, and for many generations we had the tradition that the second son would come into the family business,” he explains. “It’s not like today. I never questioned what my father said. Being the second son I knew
from very early on I was destined to come here.”

Softly but impeccably spoken, Fuller could be judged at first meeting as perhaps being from another era. A quick scan of his CV might even confirm this assumption, boasting such accolades as master of the Brewers Livery Company and president of the Shire Horse Society. He readily acknowledges his upbringing as being “very Victorian” and his career as traditional in the context of family expectation.

But the success of Fuller, Smith & Turner since he took over as MD in 1978, and subsequently as chairman in 1982, shows that he is very much a man of his time. He knows how to read the market and take advantage of the opportunities it presents. It is not for nothing that London Pride is now the UK’s number-one premium cask-conditioned ale.

Fuller is quick to highlight, however, that much of the company’s success in recent years has been due to the hiring of expertise from outside the family. Although natural family successors are already in place to take over from Fuller upon his retirement, he is of the firm belief that without the financial, marketing and commercial expertise brought in over the last 10 years, Fuller, Smith & Turner would not be in the position it is today.

However, the success of the company has not always been guaranteed, as Fuller reveals. “Back in the early 1970s, we were running out of money fast and were seriously considering selling the site for re-development. We got a scheme together, plus the planning permission to sell the property off, but the 1973-74 slump happened and the bottom fell out of the market.” So the planned deal to sell off fell through.

Luckily for Fuller, Smith & Turner, however, a new sect of sandal-wearing, bearded beer aficionados founded an organisation that would prove to be a turning point for the company within a year of the planned sell-off collapsing. CAMRA (The Campaign for Real Ale) started in the London area, and at that time had only two independent London cask-conditioned ale brewers from which to choose. “The CAMRA supporters sought out our beer and, as a result, we saw our pubs start to do double the amount of business as the Watney’s pub over the road, such was the demand,” says Fuller. “It was a very exciting time, with sales rising by 30% in the first year and then by another 30% the following. Before we knew it we were in profit and bulging at the seams.”

Fuller makes the boom in sales sound like a very fortunate accident. But the CAMRA buffs would not have been beating a path to his company’s pub doors if the beer had not been so good.

“When I joined the company in 1963 our beer was really nothing to get excited about,” he explains modestly. “I remember going out with one of our area managers for a day very early on in my career, and I was served a glass of our beer that was really quite disgusting – poorly kept and sludgy. I went to send it back and the area manager took me aside saying that we couldn’t upset the licensee. Compare that to now when everything we do is about quality and consistency of product, and you can see how much the industry has changed.

“Gradually we improved the quality of the beer, and this was greatly helped when we invested heavily in improving the Brew House in the early 1980s.” He continues, “Historically our beer was sold only to our own pubs, but if anyone else wanted it we would sell it to them. However, as time went on we became much more professional, starting to market and advertise the beer, and it’s really gone on from there. There was a time when only 5% of our business went to free trade, now that figure is much higher.”

But as the company started to invest more in quality and better marketing during the 1980s, real ale sales started to ease off, so Fuller, Smith & Turner took the decision to start brewing their own lager as ale sales slipped away. “The advent of the monopolies enquiry in the late 1980s and the Beer Order in 1990 meant that pubs could bring in their own guest ales,” says Fuller. “Everyone started talking about real ale again, and we were off. Sales started to increase and we entered another period of growth.”

He makes it sound like the success of the family company under his period in the top job is purely a matter of being in the right place at the right time. But Fuller, Smith & Turner’s performance and profit levels prove otherwise. Turnover between 2004 and 2005 increased by 5.1%; Fullers Inns turnover since 2001 has increased by around £10 million, and production in thousands of barrels has grown from 252.7 in the same year to 275.1 at the end of 2005. And all of this in a category that is currently stagnant.

With such good performance, a buy-out must have been on the cards at some stage? “We have managed to keep our family shareholders happy throughout the period of growth. If they can see the assets increasing, the dividend going up, there shouldn’t be any problems. If they can see the profits going up steadily, which is perfectly achievable with good management, then there will be no risk of disaffection. Our share structure is such that two-thirds of the total share is in family hands. I mean, they would sell out if they thought that things were not right. It’s up to those of us working here to make sure that that does not happen,” he says.

Expansion of the portfolio is much closer to reality with Fuller, Smith & Turner’s purchase of George Gale & Co Ltd family brewers, in Hampshire, at the end of last year for £91.8m. This is in line with the company’s strategy to increase the pub estate and is an ideal fit, adding 111 tenanted and managed pubs in the south and southeast of the UK.

“Around 75% of our profit comes from this aspect of the business, so unlike some of our competitors we divide out the beer profit from the retail side allocating the costs as they should be. Our biggest asset is our freehold pubs, so you could describe us as a property company that trades in its properties,” says Fuller. “By acquiring Gales, we are developing our spread outside London nicely with a brewer whose company structure has many similarities with our own.”

Are more acquisitions planned? “If the opportunity arises to acquire a business which represents a similarly good fit as Gales has, then yes. Being a family company, we have the advantage of not having to chase our tails around the City for funding. We are making decisions for two generations hence. If the price isn’t right for the kind of return we would expect then we can afford to be patient.”

This only proves the point that, although Anthony Fuller may be modest about the achievements of the company under his direction, he has used his acumen to take advantage of opportunities at the right time.

Traditional, modest and unassuming Fuller might be, but he’s undoubtedly managed to bring dynamism to his category. He might not have had a choice in the matter, but he’s certainly made the most of the challenge.

Anthony Fuller’s CV

1959-62 – short service commission in Life Guards

1963-64 – management trainee
1964-70 – property director
1967 – appointed director
1970-1978 – property director
1974-1978 – wine director
1976-1982 – chairman FST Managed Pub Company
1978-1982 – managing director
1990 – awarded CBE
1982-present – chairman

Positive Results

Fuller’s Inns turnover £m
2005 101.4
2004   97.0
2003   97.0
2002   94.4
2001   92.6

Sales split, total beer barrels
Free on-trade    53.1%
Pubs & hotels   20.5%
Tenanted inns  10.9%
Take-home        11%
Exports               4.5%

db March 2006