The business of mixology: The rise of The Alchemist
Over the last decade, there has been an increased focus by food & drink, leisure, and retail brands to branch out of their current formats and become more ‘experiential’.
Offering a unique experience is exactly what The Alchemist does for its customers. This distinctive chain has built a reputation for its theatrical service and award-winning food and cocktails.
Founded in the Greater Manchester region in 2009 by Jeremy Roberts, the firm now operates 20 properties in 12 major cities in the UK and has almost 1,000 staff members.
Playing on the traditional definition of alchemy – the chain utilises a science theme, delivered with theatrical performances by its staff – creating a unique experience.
But what have been the keys to their success? What separates them from the competition? And what challenges have they faced? BLM investigates.
Secrets to success
Over the last three years, the company has experienced year-on-year growth of 45%, and last year reported a turnover of £41m.
However, the company’s growth was kickstarted in March 2015, when Palatine – a Manchester-based private equity group – took a majority stake in The Alchemist.
Simon Potts, Managing Director at The Alchemist comments: “Palatine backed our ambitious management team to develop the concept of bringing unique cocktails mixed with theatre into a national brand.
“At the time of the investment, we had four venues. Today we operate 20 sites, with a strong pipeline in the UK and plans to take the brand overseas. Since Palatine’s involvement with the company, sales have climbed from £11m to £50m.”
But, how did they achieve this success? Especially considering the current plight of the bar and restaurant industry.
Potts continued: “The growth has been measured and managed. We operate in a very fickle consumer-facing sector that is littered with ailing brands who have grown too fast and too far. We’ve had the benefit of seeing other operators’ mistakes, so have tried to smooth the way where we can.
“From day one of the investment, we have been sure to map the estate growth to operational capacity and solid central infrastructure. We’ve built award-winning finance, marketing and HR teams – all high functioning in the support or amplification of our ‘main thing’; the venues.”
That focus on not just having staff numbers, but creating leaders and innovators within the industry, has shown that with the right mix of quality, experience and staff, it is possible to rise above the challenges facing the sector and establish a successful brand.
Potts explains: “We have an energetic and engaging senior team who have become well regarded in the wider sector, regularly contributing thought leadership, delivering presentations and taking part in panel discussions in a broad, multifaceted industry.”
Augmenting the industry
Creating something unique is often a pathway to creating a successful brand, often including the introduction of technology in an interesting and original way – which is exactly what The Alchemist sought to achieve.
Once again playing on the alchemy and science theme, customers can use augmented reality to interact with their cocktails. For example, they also offer molecular mixology classes to those who wish to create their own drink.
These have been the keys to success, as Potts explains: “We work with huge amounts of data and have become quite skilled at deploying it to drive success.
“This approach works right the way across all disciplines in the business; informing site acquisition, ensuring a high degree of customer feedback, creating strong engagement across all social channels and developing a clear platform for employee attraction, onboarding and retention.
“We believe we have a fairly unique operating style. The design heavy proposition makes us attractive to landlords and customers alike, and our connected, collaborative approach to the community around us at each site ensures we aren’t perceived as just another high street restaurant.”
However, the customers’ expectation, as a result of the company’s success, has led to further challenges.
Potts comments: “Our biggest barrier to entry is the quality and knowledge of our front-line teams, the bartenders, servers and chefs who are delivering theatre, served every service, every day, every week. In a well-publicised challenging sector to recruit and retain staff, our turnover figures are almost half the industry average.
“Quite apart from the cost saving, the positive upside of this is the quality of experience for the final user. We train relentlessly to deliver on those metrics, the perpetual development of our people sits at the very core of our business – and growing at the rate we are means that we can meet the demand for internal career progression and pathways.”
What are the current and future trends in the industry?
The wider food and drink sector is experiencing extreme disruption, with new age trends and a wider range of choice available more than ever before in human history.
So, how do companies within this sector look to adapt to these changes?
Potts explains: “The food and drink sector is awash with trends, it’s the ultimate FMCG industry. From veganism, to ‘low and no’ – you have to be hyper aware of the market and its needs and wants.
“For us, the trick is to fold these trends into your main product – you can’t shift your whole offer to suit a fleeting moment in time. That said, you have to be clear about how you reflect those options.
“The vegan in the group of eight is always going to be the loudest voice in a group deciding where to eat.
“Looking ahead, we are excited about the idea of continuing to grow. We have chartered a course that will see us add another four to five locations annually, in fast-developing metropolitan cities around the country and London.
“We have been running a deep-lying project to take the brand overseas and look forward to the evolution for that plan over the next 12 months. We are targeting our first international venue in late 2021.”