Potts has been with Living Ventures since 2004, but was part of a management buyout of The Alchemist brand with the company and Palatine Private Equity (PPE) in 2015, becoming its managing director later that same year. After getting acquainted with the nature of The Alchemist – a collection of city centre venues with a heavy focus on cocktails and food – his role has been to keep the business on track and involving people, but also to facilitate the company’s growing acquisition imperatives.
Since Potts took over The Alchemist, the company has stepped up its expansion process, with PPE’s backing. When Potts joined, the company had three sites and was refurbishing another one, with the aim of opening one site a year. With this new backing, they are now doing four or five, with the ambition to have at least one site in every major city. Liverpool and Birmingham are the latest openings, joining two sites in Manchester, two in Leeds, one in London and one in Alderley Edge, Cheshire. When I speak to Potts, he has been pounding the pavements in Nottingham and Sheffield, getting a feel for the places before he starts looking for sites.
Once a site has been selected, then work begins on building The Alchemist brand into that space. While Potts has avoided a cookie cutter approach, there are ‘distinct features’ that will always sit with an Alchemist and design is a cornerstone of the company. Sizeable sites with high ceilings are sought; a bar is installed centre stage for that theatrical offering; art deco stylings abound throughout; the metallic focus – gold, copper and bronze – echo the venue’s name; while the lighting also receives a lot of attention, as Potts seeks to create a warm and welcoming venue.
“A very significant chunk of time goes into site selection,” he says. “Acquiring the property, the design and the process, the build, the layout – that takes about 30 weeks. A significant role was played by our late chairman Tim Bacon who passed away this year. He leaned heavily on the design side of things. One piece of fortune for me was having the whole of last year to sit by him and feel that design drive come from him. So I’ve been able to protect that legacy of his work going forward.”
As a part of Living Ventures, The Alchemist retains services from that parent company, such as HR, payroll, sales and marketing, as well as an acquisitions manager who works across the portfolio. However, Potts hopes that these people will eventually come into The Alchemist payroll, as the company continues to grow and looks to become separate from Living Ventures.
“We’ve gone from three and a half sites to eight by the end of the year,” says Potts. “That’s more than double. It will be the same again next year. We’ll continue the work we did last year, which is to buy out again and go to a new backer, and at that point we’ll be wholly carved from Living Ventures and exist as our own entity.”
While the design of each site is tailored to the specifications of that particular building, the offering at The Alchemist remains the same. Managers and staff are sent menus and cocktail lists from head office, with recipes, explanations, even images of what the finished product should look like. New bartenders spend four days in a back bar support role before a two-week training programme. High quality employees are tested and taken into new sites to train teams.
“We have a very system-led business that allows us to keep that offering consistent,” says Potts. “We’re trying to make sure that we hold true to that culture and ethos that exists in the company. We want to reward the people who are embracing that and they’ll pass that knowledge on.”
The growth of the estate and of management has also offered opportunities for existing staff to progress, to put their own stamp on the business. The site in London is already a stretch from the brand’s northern heartlands and, with Bristol, Oxford and Southampton targets, a southern-based operations team will be needed to protect the integrity of the product, bringing more chances. He highlights Liverpool general manager Brendan Darcy who was a bartender four years ago, before becoming assistant manager in Manchester, then acting general manager at the newly opened London site, and who is already knocking on the door for more opportunities.
“There are examples like that right the way through the company,” says Potts. “We haven’t had to look too far outside the walls of the business for anyone in the operations team. We’ve recruited a few external people, but we brought them in six months before they were needed in the business so they were immersed in the culture and quality of the operations. There’s a real commitment to people coming into the business. Ultimately they’re its heart and if we shortcut that process we can very quickly fall down.”
For Potts, the idea of standing still is anathema in such a competitive market. The cocktail list is updated several times a year, while a menu development seminar in September brings seasonality to the table. Drinks guru Felix Cross sources ideas for development and innovation from staff and managers – the people with the most interaction with customers and their ears closest to the ground. These ideas and trends are then identified, tested and perfected at head office before being sent back down the hierarchy into the wider business. Local development competitions, supplier-backed initiatives and incentives also add to the drinks creation process.
“We haven’t reinvented the wheel in terms of what we’ve done; we’re selling food and drink at the end of the day,” says Potts. “But it’s the way in which we do that, and our commitment to the development of people, of food and cocktail menus, and the way that we go about service really. A lot of time is spent trend spotting but it’s also about listening to what the guest is saying.”
With a philosophy founded around finding out what the customer wants and giving it to them, The Alchemist offering has adapted what it offers and how it offers it to suit changing customer expectations. The desire to be entertained has seen theatricality brought to cocktail service, while the number of cocktail masterclasses has grown with demand to 10-12 a week. As well as cocktails, food forms a cornerstone of the business, with breakfast served seven days a week in most sites. A casual dining option at lunchtime caters for busy office workers and shoppers, while the evening sees more traditional three-course dinners. Late Lab sees people have more relaxed evenings by allowing them to book tables from 10pm where they can sit and be served. In Birmingham, an entire downstairs bar space will be run like this, creating a ‘speakeasy’ feel and allowing for more interaction between bartender and customer. Potts has even been looking beyond his sites for sales.
“We’re looking at a couple of retail sidelines where we’ll be able to pre-package and take that offering outside of our own four walls to our guests to make in their own home,” he explains. “We’re going to introduce that for Christmas. The other thing is we have a job where we go out into people’s businesses to do lunch takeovers in the office or cater for weddings or for exposés. There’s lots of opportunity for that.”
Potts sees his staff as the best conduit from the bar to the customer, but a lot of work also goes into the construction of his menus. In keeping with the alchemical theme, cocktails are arranged in a periodic table, providing a broad tableau that offers a drink for everyone, whether that’s catering for the burgeoning gin growth or the revival of bourbon, and positions them in an easily understandable format.
“You want to be aware of trends like that without getting taken over by it,” says Potts. “There will be something else coming along. I’m not going to say what the next trend is going to be, but I think that interaction is probably just as important really. I think that the connection to the customer is probably the thing that we need to properly get our heads round and find the next trend that way.”
The ‘social media space’ is seen by Potts as a key component of customer engagement and the fastest way to connect with customers, whether that’s booking before or feedback after an event. Each site has a business development manager whose function is to promote and evolve the business, with social media proving vastly important. Keeping pace with this world is key, and so The Alchemist is now trying to drive content instead of waiting for things to happen – it’s posting pictures of cocktails and dishes, and videos of masterclasses and launches.
“We’re always very watchful of digital evolution, probably more so than we are of cocktail and dining trends. It’s the pace with which that moves forward. Staying relevant in that digital market is going to be a big challenge for us in the next couple of years.”
The suburban setting
All but one of The Alchemist sites are in city centres – fast-paced, trend-setting places with large populations of workers, locals, shoppers and tourists. However, Potts knows that as the estate grows beyond 20 sites, he is going to start running out of city centres, and he will have to start looking at smaller towns and suburbs, which will require a more laid back version of The Alchemist brand. That’s where the venue in Alderley Edge comes in. An affluent suburb of Manchester, it is an area that Potts knows well and represents an opportunity to experiment.
“I think it will be more geared around leisurely lunches and traditional weekend drinking,” he explains. “Fridays and Saturdays will be key for venues in those locations, and a good lunch and breakfast offer throughout the week will keep things ticking along. It will still look and feel like an Alchemist – we’ll be selling the same food and drink. We just need to be more considered about the style of service and make sure that people really feel it as a community third place – a modern version of a village pub.”
If it proves to be a success, then Potts has outlined places like Solihull, Edgbaston, West Bridgford in Nottingham, and Ecclesall Road in Sheffield as potential areas for expanding this more suburban option. Beyond England, consideration is underway in Cardiff and Edinburgh, while Potts is also looking at central Europe and the east coast of America, although that’s an awfully long way off at the moment. For the moment, acquisitions are on the table, but at the same time, Potts never wants to ignore his existing sites nor the needs and expectations of his customers.
“Brand roll-outs, developments and site acquisitions are key, but I think that you’ve got to make sure that you’re taking time to protect that trading in the existing estate as much as what’s coming up and what’s new,” concludes Potts. “It’s a balancing act but it’s the most important principle we have, without question. It’s about listening to guests. We’ve worked hard on our DNA and who we are and what we’re trying to achieve. Then everything else is about looking after the people within the business.”