Two Heads Beer Co. is one of the UK's largest independent craft beer retailers, trading as two award winning brands: The Beer Boutique and We Brought Beer. With 6 stores and revenue of almost £1 million, Two Heads Beer is now raising money to fund the expansion of the group with 4 new stores planned. We spoke to CEO James Hickson about the company's plans.
As stated in your pitch, the way people drink beer is changing, how do you plan to be at the forefront of this change?
One of the big changes in people’s drinking habits is that they are drinking less but better, a trend that plays into our strengths of selling top quality beers from the best breweries from across the globe. We have always sought out the best beers available to us here in the UK, but we’re looking forward to upping our game with the new investment by starting our long-awaited import programme; bringing even more exciting beers from overseas to our customers here in the UK.
In addition, more consumers than ever are drinking at home as opposed to in traditional pubs and bars, and we are well placed to capitalise on this. Gone are the days of buying slabs of boring industrial lager, the modern consumer wants choice and our shops provide that with over 800 different beers across them.
For the beer lovers that do want to meet friends for a few pints or grab a quick half on the way home from work, our stores are the perfect places as all have a license to serve on the premise and of course, customers have a huge selection of different beers from which to choose. Customers tell us they like drinking with us because of the selection, but also the more chilled atmosphere than you get in a pub, and the friendly staff who can chat beer ‘til the cows come home! When they want to learn a bit more about beer, customers can come to our myriad of events, from specialist beer classes, to meet the brewers and food & beer pairings.
How does your previous experience as Head of Retail Acquisitions for BrewDog help with the day to day running of Two Heads Beer?
Working at BrewDog, and reporting directly to the founder James Watt, was an eye-opening experience. The pace at which they move is awe-inspiring and the sheer ambition is what makes them a really special company. From a practical point of view, I learned a huge amount about how to find the best sites on the market, got a clear understanding of all aspects of leasing & licensing and built up a large number of contacts who are useful when building a bricks and mortar business (from property agents to contractors to lawyers). From a personal perspective, I saw first hand some of the key characteristics it takes to build a great brand and company culture, and the importance of having a mission, which I’ve tried to bring to Two Heads Beer.
You have two brands - how did this come about and how do they differ from each other?
We currently trade as two brands: We Brought Beer and The Beer Boutique. There are many reasons why we decided to get together, some more tangible than others. Immediate benefits included better pricing through bulk purchasing, a stronger management team, more heads to bounce ideas around, better credit terms with banks and card processing companies, ability to negotiate better rent deals on new sites due to size, improved financial stability and frankly, a bit more cash in the bank!
Another key aspect here though was that both Jon and I realised that the bottle shop landscape is getting more and more competitive and is only going to get more so in the coming years. Being a single owner operator is an ok place to be if it's a lifestyle business, and being big (10 stores plus) is a good place to be because you have economies of scale and some stability. Being at 3 stores, as we both were, is a tough place to be. You have increased costs associated with running multiple stores but you’re not big enough to really reap the benefits.
The answer was therefore to either grow bigger or get smaller again. Both of us have always had ambitions to grow and we knew and liked each other's stores - unpretentious, and in this for the right reasons: a passion for beer and a desire to take great beer to as many people as possible. A merger therefore made sense for both WBB & TBB and has been successful in its first 6 months.
‘Craft beer is booming right now’ - how do you plan on growing in this competitive market?
There are undoubtedly more competitors coming into our marketplace, including other independents, online retailers and the big supermarkets who are finally waking up to the importance of craft beer within their alcohol sections. But we, of course, think we have the edge, for a few reasons.
One of the key ones is the fact that we have two well established and respected brands that have cemented themselves at the centre of the industry. Breweries want to work with us to launch their hottest new beers and customers look to our stores as the go-to places for the best beers on the planet. Whilst craft beer is booming, it is still in its infancy and there is so much further to go. The vast majority of the population haven’t yet discovered how great beer can be, which excites us because that’s a huge potential market to go after, even if we only capture a tiny percentage of it.
We keep our fingers on the pulse of what’s happening both within and outside of our industry in order to keep delighting our customers on every visit. We’ve got some great ideas for ways to make the experience of shopping with us even more interesting too, from vending machines to an interactive app to more experiential events. We believe this should help us stay ahead of the competition and keep us at the forefront of the beer and retail revolution.
Can you tell us a bit more about the new sites which you plan to open?
We’re looking to open at least 2 sites per year over the next 4 years to build on what we’ve already developed. In terms of the locations, we’re targeting key London villages, similar to Balham or Putney (where we already have stores), as well as commuter towns outside of London.
We are open to a range of different sizes, indeed our smallest store is just 3m2 - although our optimum size is about 700 sq ft. We tend to target parts of towns where there are other great independent businesses of all sorts, from cafes to butchers to wine shops even. But we’re also looking at alternative options such as concessions and travel hubs where we feel our concept would work well and fulfil a real customer need.
Find out more by visiting the Two Heads Beer Co. pitch page here.
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