Raising Cains

They call Cains brewery in Liverpool "the terracotta palace" and the striking redbrick buildings stand as testimony to Victorian pride and pomp. They are a living testimony too: against all the odds, Cains has survived and is the last remaining major brewery left in the 2008 European Capital of Culture.

The future of Cains was thrown into doubt at the start of the decade and in 2002 it was saved only by the passion and commitment of Ajmail and Sudarghara Dusanj. Sikhs, born in Kent to immigrant parents, they are the first Asians to run a commercial brewery in Britain. Their origins forge a powerful link to Robert Cain, founder of the company, who was an immigrant from Cork in Ireland.

Like Cain, the Dusanj brothers are prepared to work seven days a week to build and sustain their business. They have turned the company round in the six years they have owned it. Production has been boosted and in 2007 the brothers stunned the industry by turning their tiny pub estate of six into one numbering 100 when they bought the ailing Honeycombe Leisure group.

Our vision is to become Britain's favourite beer company," Sudarghara says. "We will buy more pubs but beer is central to everything we do. We want Cains to be to Liverpool what Guinness is to Dublin."

It's an exciting vision and one that didn't seem possible a few years ago. Cain's fortunes waxed and waned in the 20th century. Robert Cain bought a brewery in Stanhope Street, Liverpool, in 1858 and in 1887 set about rebuilding it in the flamboyant style that survives today.

He turned the brewery into one of the top 50 companies in Britain. But when he retired as Lord Brocket to his large estate in Hertfordshire, the brewery merged with Walkers brewery in Warrington and production moved to the Cheshire town.

Stanhope Street was bought by the Higson family, who successfully ran the brewery until the 1980s, when it was bought by Boddingtons, the large Manchester-based regional. Boddingtons in turn was bought by the national Whitbread group, which promptly closed Higson's, an act of vandalism that outraged the whole of Merseyside.

The company was bought by the Danish Brewery Group, best known for its Faxe lager. The group installed a modern, flexible brewhouse capable of producing lager as well as ale. Its business plan was based on selling canned, discounted lager to supermarkets but it quickly found that the large national brewers could play the discount game better than the Danes. The brewery was put up for sale and the Dusanj brothers came riding to the rescue.

They had no experience of brewing. They had run a small chain of fish and chip shops with their family in Kent and then bought the soft drinks firm Gardner-Shaw in the Black Country, which gave them access to pubs. When they visited the Liverpool brewery, with its attractive, modern and flexible brewhouse, they were convinced it had the potential for success.

Six years later, the company is unrecognisable. There is a palpable air of enthusiasm as you tour the brewery and offices.

The Cain's name was immediately restored when the brothers took over and the cask beers - Mild, Bitter, FA and 2008, plus a host of monthly seasonals - are the bedrock of the business. They use the facilities bequeathed by the Danes to produce own-label beers for several supermarkets while beer is also packaged for a large number of national and regional brewers. Canned beer production has grown from 24 million to 120 million cans a year.

And lager has been added to the portfolio. Cain's Finest Lager (5%) is one of those rarities, a good British lager that is stored - the German word is lager - for 90 days to produce a smooth, complex beer with, by lager standards, a good hoppy, dry and bitter character.

A strong lager in the Bavarian style known as Bock (4.5%) has won plaudits, and is stocked by the Wetherspoons pub chain. Several major pub chains, including Punch, take Cain's beers. The number of seasonal beers has grown from four to 12. The most popular seasonal is Raisin Beer (5%), which won a Tesco award and, with its rich flavour of raisins balanced by malt and hops, has reached out to a new audience of beer drinkers, women in particular. Sales of the seasonal beers doubled in 2007 as drinkers eagerly accepted the choice on offer.

The priorities in the brewery have been transformed following the acquisition of Honeycombe Leisure last year.

"Before the pub deal, 82% of our production was own-label," Ajmail says. "Now it's down to a third. Pubs account for 61% of production. We're giving consumers choice over global brands."

A new head brewer, Martyn Weeks, has joined Cains to not only mastermind production but also to ensure a quality pint in every pub. He is vastly experienced, with stints with most national brewers as well as Boddingtons. He is enthusiastic about working for a brewery that has both a future and a vision for the beer and pub markets.

Annual beer production is now running at more than 200,000 barrels. The brewhouse has a capacity of 300,000 barrels and the Dusanj brothers face the enviable problem of having to increase capacity within a few years.

"Cains Bitter is our biggest brand," Sudarghara says, "worth 75,000 barrels a year. But our lager sales are growing fast and we want to increase that to 75,000 barrels as well."

Honeycombe cost Cains 2.1 million. The deal was financed by the Bank of Scotland and the Dusanj brothers are full of praise for Alastair Donald and Ashley Suter from the Liverpool branch of the bank, who had the vision as well as the cash to see the potential in building a substantial pub estate.

"Our father says 'a good banker is a like a good teacher - you never forget them'," Sudarghara points out.

The pubs give Cains a presence in an area that stretches from Carlisle to mid-Wales, across the Pennines into Leeds and down as far as Stoke. A further 5 million has been borrowed to allow the pubs to be overhauled and refurbished. The brothers point to the work they have carried out at the Market Tavern in Glossop -- "a dingy pub that's had a big facelift. It's bright with good food now." The brothers are never fazed by a challenge. From a standing start in 2002, they have learned to brew beer, run a large brewery, win many brewing contracts, and run a small estate of pubs in Liverpool.

But now they have moved from the equivalent of the football Championship to the lower level of the Premier League. They showed me one of their pubs, the Swan in Tarporley, to underscore the new nature of their business. Tarporley is serious money country and the vast, rambling, historic Georgian coaching inn is a long way removed from a Liverpool boozer.

They assured me the Swan is just one of several upmarket inns in the company. The food side doesn't worry them - they have, after all, run successful fish and chip shops and know how to source raw materials. But they know they are now in a business where things can go seriously wrong - several pub chains are in deep trouble - and they have recruited to their board Roy Morrice from Rathbones, fund managers with strong City of London contacts, and Francis Patton, the immensely experienced and respected former director of Punch Taverns.

The pub estate may have expanded but the Dusanj brothers are proud to stress their Liverpool roots. All the pubs will be branded Cains and will be decked out with art work donated by the Liverpool branch of the Tate Gallery.

A lot of cash has gone into rescuing and building Cains. Do the brothers ever wake at two in the morning, sweating over all the money they have borrowed, I asked?

"We let the banks do the worrying," Sudarghara laughs. Sleep tight.

Cains Beer Company PLC Stanhope Street Liverpool L8 5XJ Tel: 0151 - 709 8734 Fax: 0151 - 708 8395 Email: info@cains.co.uk