This page is - The Full Story : The Allegra Symposium,. Rome, November 2010

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The story:

The latest Allegra European Coffee Symposium was held in Rome at the beginning of November.

The two most significant aspects of the debate were, again, the creative arguments put forward from the independent side of the coffee-bar trade, and a new but interesting set of talks addressing the considerations of serving the travelling consumer.

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As is usual in these events, Jeffrey Young of Allegra presented his latest findings on the state and size of several parts of the trade, and his opinions on forthcoming 'megatrends' (Allegra doesn't just have 'trends' like anyone else!)    An overview of the findings has been published by Allegra and can be found here; click on the cover for the PDF.

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As is also usual at  these things, Allegra handed out some awards:  Starbucks was named the best branded coffee shop chain in France, and McCafe the equivalent in Germany/Austria, Illy's Espressamente in Italy, and Costa in the UK. Pret a MKanger was named to best food-to-go concept, and Kaffeine of London the best independent coffee shop.  Lavazza was the best industry supplier in Europe.

The Nespresso capsule was named the 'most innovative product', although it has now been around for some time, over the Lavazza equivalent, and also over the Bunn Trifecta brewer, which caused something of a stir in recent months. In the 'most ethical company' section, Starbucks was preferred to the other nominees, Lavazza and Union Hand-Roasted.

Individuals who were recognised with awards were - Gerry Ford of Caffe Nero, Gretel Weiss of Foodservice Europe, international barista champion Tim Wendelboe, Reinhold Scharf of Austria's Coffee Shop Company, and Gino Amasanti, roaster for Costa.

Working the modern cafe trade

- the independents show the way again, and three companies suggest how they work on the travelling consumer.

November 2010

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There are always some things you can be certain of at an Allegra symposium – most notably, that at least one speaker from one of the industry’s very biggest names will be absolutely awful, and that several speakers will pad out their presentations with video presentations, all of which offer exactly the same meaningful and atmospheric shots of customers in coffee bars and espresso shots dripping into cups.

One of the big problems of major companies invited to speak a coffee summits is that they spend too much time telling us how wonderful they are. However, something you can also rely on is that a couple of speakers will pop up as the stars of the event, and often they will generally come from the independent side of the trade, or the small-chain sector. 

The stars came out early in Rome, with the second and third speakers giving the most food for thought.

   Kaspar Basse

We had been warned to expect something unusual from Kaspar Basse, who runs the Joe and the Juice chain in Denmark, Sweden, and most recently, London.   Those who were in the front rows will have identified the tattoo which runs right up his forearm – it’s the company logo.  When he played the now-obligatory company video, it was clear that his staff are of the same ilk – they are tee-shirted, hatted, tattooed, and generally boogie around their stores the accompaniment of loud music.  Yes, it’s that kind of place.

What was entirely unexpected was that Kaspar proceeded to lead his audience entirely up the garden path with his presentation on ‘innovation’.  The question of the ‘next generation of cafes’ has been much spoken of in the coffee trade, and Kaspar cleverly wrong-footed his audience from his first words.

“The idea of the ‘next generation’ café is never going to happen,” he said firmly.  “It will never happen from the big players for three reasons – the corner sites are gone, and after the financial crisis, nobody will have the budget left. And the big players will say that they already do a super job of ‘creating preference’ and that people love their coffee.

“So the ‘new generation’ of cafes is a hypothetical situation. It would have to be something that doesn’t exist.”

But nevertheless, he asked, what would the new generation be?

“A hypothetical new player could focus on health.  Maybe it could be new idea about design - all the existing players position seats at the windows, so the customers can enjoy coffee and croissant and watch the street.

“What if someone were to turn it all inwards, so the customers could focus on what’s happening in the store?  Perhaps we could have cubicles to encourage a little more dynamism and intimacy?  What if we pumped up the music? We could make an everyday ‘club’, without the booze and the drugs and the bouncers and the trouble?”

What, he asked, if the staff could actually be seen making healthy fruit drinks right in front of the customers, clearly using and blending real fresh fruit, and juggling with the ingredients like cocktail barmen?

This, he remarked, brought the question of ambience to the fore, even over such considerations as food and drink.

“It’s not all about the coffee,” said Kaspar, deliberately attacking one over-used trade cliché. “It’s not about the sandwich. It’s not about the juice!”

It is, he explained, about ambience.

“As a very early principle, I decided not to offer anything pre-made. We have seven sandwiches and a menu of juices, and we make them all in front of the customer. It is very demanding, but it motivates the guys behind the bar.”

Larger players would probably say that this could not offer speed in high footfall sites. It can, said Kasper – and anyway, there may be a misconception about how long customers will wait.

“I see juice offered elsewhere – but the same concept of speed and efficiency doesn’t seem to exist elsewhere. There’s also a big difference between ‘real’ waiting time and ‘perceived’ waiting time. When people perceive action, in seeing how their drink and sandwich is being made for them, then that actually gives us a little more time to prepare it.

“This interaction and the ambience is more important than any product. This is what brings people back six times a week instead of once a month!”

All this comes at a cost, he acknowledged – typically, a heavy investment on training. As a result, he expects that the biggest players would simply not consider going down such a route.

“Of course, all this would involve too much trouble, too much training time, and too high salary levels. So of course… the next generation of cafes won’t happen!”

His point, of course, is that it already does happen – the situations he described were how Joe and the Juice works, and so the idea of a ’next generation’ of cafes is an illusion.  For Kaspar, everybody else’s ‘next generation’ amounts to what he is already doing.

  Tim Wendelboe

The other star independent was Tim Wendelboe.  No tattoos, and a far more laid-back approach, but equally revolutionary in his own way.  The course to innovation, he told the symposium, comes in having the nerve to question what you are used to doing, and the way you are used to doing it.  He is a former world barista champion – but that wasn’t the biggest step in his career.

“My defining moment was coming second in the world barista championship!” he told a surprised audience.

“That’s when I realised that I had to change. That’s when I had to admit to myself that I didn’t know everything. I realised that my coffee can always get better… and that I can always learn from other companies. It doesn’t matter what their subject is, you can always find inspiration from other companies.

“The biggest mistake I ever made was thinking about myself. I was standing behind my bar thinking my business was ‘all about me’.

“So I tried to visit all the best coffee shops, to ask: ‘what are you doing?’  You must ask of other companies, why are they doing what they are? Then ask yourself - what if you do it differently?”

There are examples, he said, of big coffee brands who have done well by taking advice.

“One company which has done it is La Marzocco, when they created the Strada espresso machine.  It means ‘the street’, and they created it from a group of people from the street who decided what they wanted an espresso machine to be. It is a machine the baristas wanted.

“This showed that even a big espresso machine company can admit, they are not perfect, and there is something they can learn from others!” 

However, said Wendelboe, being willing to learn from others does not simply mean that you must always copy successful players. It means that you must be willing to consider the various different ways of running a business, to help you reach a decision on your own direction – and then, when you have decided, in sticking to it.

This, he says, will make you stand out in the eyes of the consumer.

“A lot of people tell me that I must do what the consumer wants… and I disagree. The customer does not know what they want, so you should stop listening to your customers all the time.

“For the customer, the perfect experience is not in giving them what they want. What I do is tell the customer what they want. I tell them what is the best coffee. I tell them that there is coffee which tastes better.”

It is fairly common to hear of coffee-shop owners who refuse to serve a customer who asks for something the barista thinks ‘not right’ – this, in the Wendelboe theory, is missing the big business point.

“If they tell me they want an Americano, I don’t just send them away. I explain what we do, I explain how we make our coffees, and why I hope they will like it the way I will offer it to them… and ninety per cent of the time, we’re right.  I try to show the customer a different experience.”

This takes a certain amount of courage, acknowledged Wendelboe, and also a very different attitude to staff training – your barista has to be extremely confident about what he offers, and also talented enough to be able to interact properly with the customer.

“Your staff must be able to define your style, and to tell the customer what that is, to show what is different about you.

“If your customer knows what your standards are, they are impressed if you decide not to  serve them a coffee because you don’t think you have made it well enough… they’re impressed if you say you’ll make them another one.

”This is the way to keep a customer for life.”

Although intended to be speaking on the same subjectof 'innovation', the MD of Costa, John Derkach, echoed Kaspar basse in his sentiments about ambience in a café, and repeated points he has made before – notably, that a big chain can learn from its smaller rivals.

“By contrast with the global giants, we are still comparatively small – what does distinguish us is a fierce sense of competitivity.”

This was a remarkable understatement, considering the promotional fights that Costa has had with Starbucks recently; however, Costa’s point of sale material is known to be effective, and the recent introduction of flat white, our first real new coffee drink in thirty years, has reached  five per cent of sales within a year.

“What is the key to success? The quality of the environment in which the customers experience your product is vital – we won’t have wi-fi, because we want people to enjoy the atmosphere” (actually, some of the Costa franchisees did try it).”

There is, John Derkach appeared to concede, a difference between the staff attitude of the chains and the independents, even though his training programme is a comprehensive one.

“We have the best people of any coffee chain – we have 17 training schools, and all our staff contribute to the Costa Foundation. We have just introduced the new role of ‘barista maestro’ – we have 17.000 baristas and effectively, every one enters our own barista contest. 

“We cannot compete with the independents – but we can make our staff aspire to achieve that standard, and that is a point of difference for us.”

In one of the day’s most entertaining questions from the audience, someone asked why Costa still retains its massive soup-bowl cup size for coffees.

“I wish we didn’t,” responded Derkach with quite typical candour. “But the customers want it, and it makes up 15 per cent of our sales.

“But from a personal point of view - I don’t like it.” 

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A specific theme in one of the symposium sessions addressed the question of the customer on the move.  Every air or rail terminal now has a choice of hot-beverage services, and virtually every rail station, however small, seems to have an espresso kiosk.

But what does the beverage industry know about these people? Surprisingly, several of the main players are using the same techniques to analyse commuter behaviour, including secret filming.

Ezio Balarini of Autogrill delivered the expected video presentation, although with an entertaining aspect – at one point, when the video commentator intoned ‘people are always on the move…’, what the screen was actually showing was a traffic jam!

In an echo of what Kaspar Basse had said, Autogrill observed that surroundings and ambience had become more importance than simply offering good coffee.

“The move is towards atmosphere, and less about product alone. Customers do not come just because you have a lot of products.

“The travelling public is turning older, more digital, more hybrid, and also more Asian.  The modern traveller is a hybrid  in that he takes a budget airline, but stays in a luxury hotel. We also see more conscious reward by the traveller of high performance, and more conscious punishing of bad performance.

“Also, brand awareness does not by itself turn into sales. There is a paradox about brands in travel sites - the top brands are very important for developing business at travel sites, but this means all sites look the same, and the landlords don’t like that. 

“Look at terminal five in London – this has been turned into a walk-through ‘shopping experience’ (it has also been described as ‘a shopping mall masquerading as an air terminal!’) 

“So, we now have to adapt and modify brands.”

They have to be adapted to suit the type of person who now travels, and to suit how that person acts in a travel terminal.

“The name of the game in the future will be – managing the time of the travelling consumer."

  Richard Barclay

It was notable that a great deal of general agreement came from Richard Barclay of the SSP group, among other things the operator which took the Caffe Ritazza brand from zero to £100m in six years.

“The purchasing of food is the most popular type of shopping at an airport. If they are pressed for time, shopping for food is the last thing to be sacrificed – probably because the airlines are now giving less away on the plane.

“There is a lot of stress involved – we can see that by the number of visits each traveller makes to the information board. The greatest stress point is travelling to the airport, and there are stress points at check-in and security - however, security is actually now more efficient than ever, and so customers are actually spending more time airside. 

“There, the stress level reduces, and here comes the greatest propensity to buy.  Once they’re in the lounge, they’re in ‘safe space’, and this is a critical area for us. In some airports, we now operate the lounges and ‘safe space’.”

Having agreed with Autogrill on the matter of managing the traveller’s time, SSP also agreed in the tricky question of the importance of brand.

“Our focus, on air and rail, is to be the food travel experts by providing a portfolio of brands for any location – we operate from coffee to caviar, and we have formed a deep understanding of the travelling consumer. We do find that international brands are important – but so are local brands.

“We can see that people like to arrive at a location and see ‘something local’. So, at Malaga airport, we have Starbucks and Ritazza, but we also have Café & The, which is a local brand.”

Although travellers are generally in the mood to buy, said Richard Barclay, a trend worth noticing is that business travellers are not so carefree with their pending as they used to be.

“In the last three years, over 60 per cent of travellers have said they are more aware of price than they were before – and that includes more business travellers who are far more aware of what appears on their credit card!”

And the question of value for money is what has recently been occupying the thoughts of Mike Absalom, the foodservice manager for BP, which includes Wild Bean Café, and Petit Bistro.

A big lesson, he has discovered, is that the road traveller is amenable to the concept of meal-deals – but only if they are well-judged and well-displayed.

“Technically, we don’t need to find customers, because we’ve got them coming in to the forecourts.   What we do need is to get them in and out quickly, or we’ll have frustrated drivers in queues at the pumps.”

Although drivers are in amenable to selling messages, said Absalom, they are not always at their most mentally receptive.

“They are in a zombie state when they enter a forecourt – most of them can’t even remember their pump number. So we have to approach them knowing that they’re in that state.

“We did videos of our customers (as did SSP) to see what they looked at, and what they touched. We realised from this that we had to make the way round our stores easier… we had actually been putting up too much point of sale material.

“So we do not complicate our offer – coffee is latte, cappuccino, espresso and Americano. We put coffee into our meal deals, and we saw amazing uplifts.”

The secret of meal deals, he explained, is in not trying to make them too clever.

“We see that core products, joined together, drives take-up - we increased the price of the large coffee and muffin deal from £2.50 to £2.69, and sales went up!

“The key to meal deals is – the customers know what they want, and they know what they will move on. So, don’t use products which are not already best-sellers to prop up your deals, because it doesn’t work.

“We did a really great artisan sandwich and drink in the Netherlands at E4.50, and it didn’t work. We changed it for a simpler deal at two euros, for a drink and a snack - sales went through the roof.”

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The best and most uptodate coverage of news in the coffee-house market is presented by Coffee House magazine of the UK.   To subscribe to the magazine, click here.  To subscribe to the free newsfeed, click here.  To apply for the very well-regarded email news updates and newsflashes, email the editor here.