Customers in 23 countries across Europe are now served in a total of 13,826 coffee chain outlets with turnover topping E15 billion. And the UK is seen as the flagship of this burgeoning market.
The impressive figures were revealed in Allegra Strategies’ Project 12 Cafe Europe report presented by managing director Jeffrey Young at the fifth annual Coffee Symposium in Amsterdam.
When the influential market analysts began research, there were around 500 outlets in the UK and Europe coffee chain sector. The numbers have now risen tenfold and are forecast to reach 15,900 by 2015 with the current 4.4% growth increasing to 4.8%.
The coffee culture march across Europe continues unabated headed by Whitbread’s UK coffee chain Costa Coffee with 1623 units and McCafe in Germany (1583) followed here by other progressive chains led by Starbucks and Caffe Nero.
“Our survey has taken us on a journey to discover the trends in major cities across Europe and shows that despite difficult and challenging economic times, there are opportunities,” said Young.
He encouraged the 350 top level industry executives attending the Symposium to “work together through the coming year to ensure the future success of the industry”.
The UK has 83 branded coffee houses per capita, way above any other European country, offering “something special” – the reason why Britain is so dominant in this chain sector.
“The coffee culture here is progressing well in the dire economic landscape while other countries, such as Spain and Italy, have not fared so well.
“Entrepreneurship is absolutely vital with a critical level of management being the driver of growth in UK chains. Many have expanded rapidly from small beginnings.
“With thousands of potential new sites across Europe boosted when the recession eases, maybe in two or three years’ time, there are huge opportunities.”
And there are already optimistic signs with Allegra’s research showing 38% of those interviewed believing trade would improve although others felt it might be a little early for such forecasts and could see no change.
With growth sustainability in the sector affected by the squeeze on household budgets, 48% said they wanted quality; 44% were attracted by location; 37% by service; 26% value for money; and 24% by outlet atmosphere.
These statistics must be considered by UK operators, who, Young felt could also learn from their counterparts across Europe, citing “fresh and passionate” feelings now brought to the casual coffee sector, by those in Sweden, France, German and Norway.
Meanwhile back at home in London, Harris & Hoole, a new generation of coffee shops “bringing an artisan approach and quality to the high street” – the brainchild of Nick, Andrew and Laura Tolley – has caught Tesco’s business eye.
Seeing the pride the family company took in serving every cup, the supermarket giant said: “We want to work with you.” Around 20 sites have launched in a few months.
East London-based Prufrock winner of the European Best Independent Coffee Shop title was also cited as “one to watch” – see the Award results.
Business has been boosted by a greater emphasis on training skilled and passionate staff to convey to customers every aspect of coffee culture from the soil and the bean to roasting and the cup on the table.
The effects of technology and the social media revolution were also said to be “staggering” when it comes to what can now be sourced by consumers.
Finally in his project report, Young felt that industry stakeholders should be creating forward-thinking messages on such issues as the taxes being paid.
And to quieten a movement by those seeking to “demonise the trade”, thought should be given to spending more time to consider what can be done to support customers.
“Coffee by its nature is from the third world, and with complex issues arising, the industry must be seen to be giving back.”
Subhead] Improvement tips
Symposium delegates heard useful advice and information on how to improve their businesses from an impressive line-up of industry leaders from across Europe.
Guido Bernardinelli boss of La Marzocco the equipment manufacturer based in Florence, Italy, spoke about the “exceptional loyalty” of his employees helping his company to expand and sell their quality machines to customers world-wide.
His video highlighted the workers’ attention to detail. “We give our customers real value as a small enterprise which could be difficult for larger conglomerates. We head the market in terms of innovation, often followed by others, giving value from the factory floor to end users.”
Stefan Tewes and his wife Kathin founded Coffee Fellows with one outlet in Munich in 1999 and are now forecasting an estate of 120 by 2016 to become the second largest operator of its kind in Germany.
Their stores now average E350,000 turnover with the food/beverage ratio of 30/70 and an average spend of E5 per customer. “We want to differentiate our offering from competitors with a policy of low margins and only using traditional Italian espresso machines.”
Nicolas Steisal co-founder of Belgian-based EXKi – named from ‘exquisite’ – launched in the early Millennium, now operates 64 outlets in five countries that saw E63 million sales in 2011.
“Our brand equity depends on image awareness and quality management where investment must be made. We have a variety of dishes, with a focus on fresh vegetables, prepared by renowned chefs, in a cosy atmosphere and led by good coffee.”
Liz Muller director of global concept design for Starbucks highlighted two challenging openings, a basement site in Amsterdam and one in Mumbai where locals helped craft the “exceptional and impressive” decor.
“We are creating spaces where people want to react. Five years ago we had a policy change to try to touch base more with our customers in their locality. Now stores across the world use sustainable resources. We have to show up and behave better when it comes to everything – from coffee beans to venues.”
Paul Bringmann, founder of La Place outlined its success from the first restaurant in Ultrecht in 1987 to nowadays when 35 million visitors are served annually in 218 sites including V&D department stores, motorway stations, shopping malls and airports.
“Running restaurants means permanent innovation. Green goals are always top of our list, serving fresh produce with 98% free from unnatural additives. We serve more cappuccinos than fresh brew coffee.”
Matts Johansson, a former chef is the founder of da Matteo, a speciality coffee company with a roaster – the second biggest in Sweden - sourdough bakery and six coffee bars.
“We have taste strategies majoring on raw materials and hand crafting. We don’t have interior designers but choose back street sites that people like to discover - those where the majors would not be interested.”