The pint-sized drinks business setting the bar high

Ahead of the launch of Footprint’s new drinks section in January, chief executive Stephen Glancey explains why C&C Group remains an industry outsider despite this year’s acquisition spree. By Nick Hughes.

One can only assume Stephen Glancey is being modest when he describes C&C Group as a "small, local" business. With net revenue totalling over half a billion euros, leading brands Magners, Tennent’s and Bulmers in its stable, and a growing portfolio of super-premium and craft beers and ciders, C&C hardly counts as a plucky start-up. On the contrary, the purchases this year of Matthew Clark and Bibendum have transformed the Dublin-based company into one of the leading drinks distributors in the UK.

Yet there is more than a grain of truth in chief executive Glancey’s characterisation of C&C as an outsider looking into an industry dominated by multinational giants. Take its stance on minimum unit pricing (MUP) for alcohol, which came into force in Scotland in May this year. While many major producers and their representative bodies fought tirelessly against the policy, C&C has been supportive from the start. The reason, Glancey explains, is straightforward. “Back in 2010 the SNP won an election with [MUP] in their manifesto. The Tennent’s business is the longest continuous business in Glasgow [since 1885] so it was in our interests to support what the people of Scotland wanted."

Beyond reflecting the voice of its local community, Glancey says that MUP, which imposes a minimum price of 50p a unit on alcoholic drink sales, "seemed a perfectly reasonable thing for the Scottish government to be doing" in its efforts to tackle alcohol-related ill health. "What it's supposed to do is to impact the really cheap alcohol that was being discounted mainly by the supermarkets and affecting people’s health – so the high-strength ciders and high-percentage beers," Glancey explains.

Even though the ABV of its mainstream Tennent’s lager is a relatively low 4%, the price of Scotland’s number one beer by sales has moved from about 60p a can to £1 – "so it’s had a profound impact", says Glancey. But despite C&C predicting a 10% drop in volumes, sales have yet to be affected, something Glancey says is in part due to the hot summer and the World Cup. But there is another dynamic at play: "What it has probably done is that the people price competing in the grocery channel with poorer products have suffered more," he says. "The market's gone to the brand leader and to premium and all the things [the government] wanted to diminish have been wiped out quite a lot."

Some critics claim the policy discriminates against larger formats. The Herald has reported that retail sales of three-litre bottles of Frosty Jack’s, a white cider, have been strongly hit by MUP, dropping from 240 bottles a day to 24. But Glancey says he has “no complaints" about its design and is supportive of MUP being implemented in the Republic of Ireland and Northern Ireland. The proof, he says, will be in whether it really reduces harmful alcohol consumption in the longer term (a sunset clause means that the legislation lapses after five years if it has not achieved what was intended).

C&C’s outsider credentials have been further strengthened by its decision to leave the Portman Group, the industry body set up to promote responsible practice among businesses selling alcoholic drinks. “The reason we left is we thought it had become a way of bullying smaller producers," says Glancey, bluntly. “It had become too political so instead of investing in the Portman Group we just put our money into local communities because actually, as a small or medium-sized company, you don’t have any real influence when you’re up against huge big multinationals. You can have much more impact by doing things locally."

Glancey highlights a number of C&C-led initiatives which benefit the communities it serves. It produces a pink cider every year to support breast cancer charities, runs schemes in inner-city Dublin to help get people into work, and hosts a training academy at its Wellpark brewery in Glasgow which trains students in hospitality, including those from disadvantaged backgrounds via a partnership with the Springboard charity.

Where the environment is concerned, Glancey says the sustainability agenda is critical because of the business’s reliance on natural, home-grown produce. C&C buys 80% of Ireland’s apples that are not of sufficiently high cosmetic standard to be sold through retail. It also takes a significant proportion of Scotland’s winter barley to brew Tennent’s and other beers at Wellpark.

Security of supply is vital, which is why Glancey says C&C has deliberately fostered long-term relationships with growers. The average length of a contract with an apple grower is 17 years, which accounts for the fact it can take seven years for a tree to produce fruit. Scottish malt suppliers, meanwhile, are given two- to three-year contracts, which Glancey says sets C&C apart from the “big guys" who are trying to “squeeze every penny" from producers.

Water and energy are the key inputs into C&C’s manufacturing operation. For every hectolitre of beer produced, about 2.8 hectolitres of water are used. Glancey says this is “pretty standard" compared with an industry benchmark of about four, although he notes blithely that because brewing facilities are based in Scotland water scarcity is “not much of a problem".

Water is also the main source of waste produced by the manufacturing plants, of which C&C has three: Clonmel, Dublin; Wellpark, Glasgow; and Middlebury, Vermont – the latter a cidery that produces Woodchuck, sold throughout the central and western US. C&C is currently completing a £4.5m investment in Wellpark in a water treatment facility that will take all the wastewater from the brewery, clean it up and make it reusable, bringing it in line with a system that already operates in Clonmel.

In Vermont, meanwhile, C&C is involved in an initiative known locally as “cow power" whereby it pays a premium on the electricity it uses which goes towards helping dairy farmers install methane digesters that turn manure into power.

The main waste output from the beer brewing process is spent grains, which are resold to farmers for cattle feed. The pomace produced from cider apples, meanwhile, is sold for chicken feed.

Emissions from lorries are another key environmental indicator. Glancey admits that the business runs no electric vehicles at present but acknowledges that the switch is “inevitable" at some point. C&C’s current focus is on reducing diesel emissions from its vehicles, in part by ensuring that lorries carrying products over from Ireland don’t return empty once they have delivered to mainland UK customers.

Plastic is not a major issue for C&C, which primarily uses glass and tin in its drinks products, although Glancey says it is looking at ways to replace the plastic that holds packs of beer together.  And he is supportive of moving towards a circular system that eliminates plastic waste and has returnability of used materials built into it.

Questions about recycling and reuse are set to become even more important for C&C after the decision this year to rescue the UK’s number one independent drinks distributor, Matthew Clark, and wine supplier, Bibendum, from administration, which at a stroke made C&C a leading player in UK drinks distribution having already been the distributor for AB InBev’s beer portfolio in Ireland and Scotland.

It’s for this reason Glancey says C&C, which is sponsoring the inaugural Footprint Drinks Sustainability Awards under the Matthew Clark brand, will be thinking hard about the drinks supply chain and the role it can play in reducing its impact. “The big international brewers are the ones that will write the agenda but in terms of the markets we operate in we will do as much as we can."

Glancey is adept at deflecting attention from C&C’s size, but there’s no denying the “small, local business" has become a major operator in its own right. And with its history of taking bold, contrarian positions, the hope is that it can help lead a new wave of progress in drinks-sector sustainability.

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