Founded by Richard Marsh in 1698, Shepherd Neame is Britain’s oldest brewer (according to Dun & Bradstreet’s list of the 50,000 largest UK companies, it’s Britain’s 19th oldest company of any kind).
It’s also a very successful family business. Shepherd Neame remains a private limited company with Jonathan Neame, the fifth generation of the family at the helm, as Chief Executive. His father, Bobby Neame, was chairman from 1971 to autumn 2005 and is now company president.
The brewer is based at Faversham in the heart of Kent’s hop country. Today, it is the only brewery of any size left in the county, the sole guardian of Kent’s famous brewing tradition.
The Neame family has been part of the local community for many years and has a strong commitment to the town and the county of Kent. This commitment is reflected in their business practice, through initiatives such as ‘Local Food from Local People’, where they teamed up with chef Phil Vickery whose roots are in Kent and became the first vertically integrated regional brewer to ensure its pub restaurants use locally-sourced ingredients. They also organise master-classes for their chefs where Phil helps them brush up their skills.
The family also has a genuine interest in history and is dedicated to safeguarding local and brewing heritage for future generations. The renovated visitor centre recently re-opened following £350,000 of investment in the attraction. It includes many classic vehicles on display and ledgers and records dating back to the 17th century.
Day to day involvement
The family is very much involved in the business. Eight members of the family (including those operating in a non-executive capacity) work at Shepherd Neame. Chief Executive Jonathan Neame is involved with all departments, including pubs, brewing, marketing and distribution. The brewery has always played a role in Jonathan’s life; as such he has experienced almost every area of the brewery; from the dray to the boardroom.
Prior to entering the family business Jonathan thought long and hard, and consulted a number of individuals, professional advisers, family members and friends.
He admits that it was not a decision that was taken lightly and maintains that “No-one should enter the family business until they are absolutely ready, want to join, have a clear career path already mapped out, and above all have the confidence in their own ability that they have what it takes to succeed.”
“After all, in a family business, when it is profitable and successful, you tend to not get many compliments, as the business was ‘obviously’ going to be successful, but when times are difficult it is the leader that is in the firing line.”
Jonathan graduated from Cambridge University and after time as a strategic management consultant, and qualifying as a barrister, decided that at the age of 26, he was ready to work for his father and take on the challenge.
The business has recently seen a transition from father to son at the helm. Robert Neame is now president of Shepherd Neame and is celebrating 50 years at the brewery this year. He has taken on an ambassadorial role of late, particularly working on promoting the lifeblood of the brewing industry, the hop. Jonathan Neame was appointed Chief Executive in 1999 and Robert became President in 2005, with a non-family member taking over as Chairman.
The company board is stable at the moment, but it is regularly reviewed. The last two years has seen important developments of corporate governance brought to the fore and although the company is not required to comply with all aspects of The Combined Code on Corporate Governance, the Board is committed to maintaining the highest standards within the company, appropriate to its size and nature.
And although Shepherd Neame is a family business, advancement within the company is based on merit alone. In the past, some people have had to learn the hard way that they will not necessarily achieve their ambitions and there is awareness that the ‘romantic’ notion of a family business will be seized upon by the press in the event of any boardroom disagreement. Thankfully, the board is agreed on the direction the company is taking and has seen profitable returns for many consecutive years.
Family strength
Passion and commitment are a great strength of family businesses. At companies like Shepherd Neame, stakeholders understand the family is involved for the long-term and are driven by their passion and determination to succeed. Employees can see the direct correlation between the family and the business, and appreciate the values that are so important to the business, so they know what is best for the business is the family’s primary concern. However, Jonathan is mindful that the business needs to be professionally run and is well aware of the need for good governance at all levels.
Some of the core characteristics central to their success are:
- An integrated brewing and pub business
- A commitment to quality and integrity
- A long term view of the business
- A commitment to Faversham and the wider community of Kent.
Innovation, tradition, investment, individuality and community spirit are the qualities that typify Britain’s oldest brewer. But traditions are important and even today, Bishops Finger, in accordance with its charter, is only brewed on a Friday, by a Head Brewer, and has to be tasted by one of the directors!
Staff have a greater buy-in with family firms as they are treated as individuals and enshrined with the company’s core values. Shepherd Neame is a social family, working in a social industry, so it’s important that people enjoy working there; certainly the low staff turnover suggests they do.
This approach extends outside the company too. Good relationships with people are at the centre of operations, and customers prefer the personal touch they receive with Shepherd Neame. The business is the family – it is not just a faceless multinational corporation.
In fact, as Jonathan explained, “one could argue that Shepherd Neame was at the fore when it comes to corporate social responsibility within the UK to help us create a sustainable business going forward. We look after our staff, have excellent share option and pension schemes that reward age and longevity of service, and have an excellent relationship with the community in Kent, from sourcing good quality, locally grown produce to supporting charitable courses and safeguarding the environment through investments such as the new, state of the art keg plant where every effort has been made to reduce noise and air pollution.”
In addition, “no brewer is doing more than Shepherd Neame to retain the local pub as a centre of community life, or to ensure that the unique character of British pubs endures into the next millennium.”
Being a family business, Shepherd Neame also has the independence to resist fads and trends which so easily seduce shareholders of public limited companies. For example, the company has not split its brewing and pubs business – instead it has developed into a well integrated model, the most successful in the sector and tries wherever possible to source local raw materials for the business, thereby supporting the community at large.
Jonathan feels he, his family, and Shepherd Neame are all in a very strong position going forwards. Joining the family business was exactly the right thing to do:
“I’ve absolutely no regrets. I entered Shepherd Neame after a lengthy consultation process with other family members after developing a successful career in London. Once I had built up expertise and confidence on my own terms, I was ready to commit my life to the family business. I have seen other people enter their family’s businesses without such deliberation and they have found it extremely challenging.”
“We are a family business and fiercely proud of. However, we are not a small operation and turned over £49 million in the half year ended December 2005 and firmly believe that like any business we need to focus on the future, invest where appropriate and innovate. We survive not because we are a family business but because this is a good business that is well managed. We are not complacent about the future and not too sentimental that we will not change things along the way. We have discussions about what we are doing and make plans accordingly - we are here for the long term and whilst the next generation are currently too young to say whether they will enter the business or not, Shepherd Neame is putting in place the necessary measures to remain as Britain’s speciality brewer for years to come.”
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