expansion plans revealed in the press
expansion plans revealed in the press
expansion plans revealed in the press
200 new coffee shops
200 new coffee shops
Budget coffee chain easyCoffee is set for a huge expansion, with plans to open a further 200 £1 coffee shops around the UK. The café chain was founded earlier this year by easyJet tycoon Sir Stelios Haji-Ioannou and entrepreneur Nathan Lowry when first launched in London and then Southend-on-Sea in Essex.
However, following huge interest from affiliate and franchise investors, the airline-owned chain is set for a UK expansion of over 200 more branches as it hits back at the expensive drinks offered by the high street leaders. The exact locations of these new stores won’t be confirmed until the new year when partner agreements have been signed off but they will be dotted around major cities across the UK, with “regular high street and travel hub locations”.
Mr Lowry said: “The gap in the market is in pricing. The coffee is great. We use the same machines that all the big guys use, all our staff are highly trained up to barista level.”
“We genuinely feel that people are paying too much for their coffee in the UK,” he added.
The next phase of easyCoffee shops are due to open in locations around the South East including Croydon, Slough, Uxbridge, Wembley, High Wycombe and Brighton. Brand Director Nick Paterson-Jones added that customers will be able to grab on-the-go hot drinks for just £1 a cup and a complementary range of fresh snack because the company “wants to continue to provide genuine value for money”.
Tricks of the Restaurant Trade
Tricks of the Restaurant Trade
Simon Rimmer the host of Tricks of The Restaurant Trade interviews the co-founder of easyCoffee, Nathan Lowry, at our training shop in Covent Garden. He wants to explore how easyCoffee can sell Lavazza Coffee for only one pound per cup!
Tricks of The Restaurant Trade >>>
Channel 4 at 8 pm Monday 14 November.
Southend is OPEN!
Southend is OPEN!
We are delighted to announce the launch of our first coffee shop outside of Central London. You will find easyCoffee Southend-on-Sea on the high street at 115 High Street Southend SS1 1LQ. Please feel free to drop in for your local easyCoffee experience by the sea.
In a few weeks we will have some information to share with you regarding the first phase franchisee roll out. The momentum is gathering, our disruption to the coffee market is gaining pace.
Be part of it.
Sir Stelios' visit
Sir Stelios' visit
easyJet founder Sir Stelios Haji-Ioannou was at hand today to give the official welcome to the newest member of the "easy" family. easyCoffee, the brainchild of entrepreneur Nathan Lowry and colleagues, has now opened two outlets in London's Covent Garden and Leicester Square – with plenty more lined up as soon as properties can be leased.
Customers find the £1 cup to be excellent value particularly when taken along side one of easyCoffee's many "meal deals." Plans are in hand to launch a range of vending machines for offices, shops, stations and airports.
We love Lavazza
We love Lavazza
The story behind Lavazza, now Italy’s best-selling coffee brand, began in 1895 when Guiseppe’s great grandfather Luigi, “a peasant”, found himself down on his luck after two years of bad harvests.
The enterprising young man managed to turn his luck around, borrowing 50 lira – the equivalent of a few pounds today – and moving to nearby Turin, where he became a shop assistant. The next 20 minutes, a romp of a tale about how Luigi managed to eventually set himself up as the boss of a grocery shop in downtown Turin, has nothing to do with coffee, however.
“Ah, but he had a laboratory at the back of the shop and was doing night classes in chemistry,” Lavazza says. Guiseppe, 51, is the fourth generation of the Lavazza family to head up the company.
He is wearing an immaculately cut grey suit and a blue shirt, but has opted for an embroidered collar, which makes him look a little bit like a corporate cowboy. He shakes hands four times, and offers two kisses to boot.
In Monaco representing Italy in the World Entrepreneur of Year awards, Lavazza is up against entrepreneurs from 50 other countries, including UK entry Richard Steeves, the boss of sterilisation giant Synergy. It emerges that a knack for mixing lotions and potions are what made his ancestor a great coffee entrepreneur.
“He got interested in coffee in about 1910 and began blending different coffees,” Lavazza reveals. “He introduced the concept of blended coffee and that made him stand out from competitors, who were just selling it straight from Brazil.”
Each successive generation has contributed to building the €1.4bn-turnover company that Lavazza is today. This early innovation helped establish Lavazza as one of the biggest coffee companies in Italy and later the world. The scientifically minded Luigi worked out how to replicate blends in order to ensure repeat custom.
Then, when the first automatic roasting machine was invented in the early 1920s, he bought one of the first to roll off the line. Until the Second World War, Luigi was still very much in the grocery business with coffee as a lucrative sideline, but afterwards, his two sons decided to make it their sole focus. Each successive generation has contributed to building the €1.4bn-turnover company that Lavazza is today.
Luigi’s sons, Mario and Giuseppe – or Beppe – first began packaging the coffee in branded Lavazza boxes in the Fifties. Previously, coffee was just a commodity, and shoppers would take scoops from unmarked sacks in their local shops. But the pair were inspired by the food donations from the US after the war, and decided to make Lavazza a brand, not just a supplier. This was essential to their plans to export internationally.
Under his leadership the company has become fiercely acquisitive, snapping up Carte Noire, the biggest coffee brand in France – “It has 20pc market share there” – and Denmark’s Merrild over the past year. More deals are afoot, as the company is looking to pick up more prominent international brands, and to become market leader in at least four markets over the next year.
“We have €1bn to spend on the development of the company,” he says. Territories on the hitlist are the US, UK, Germany, Canada, Australia, and “places in eastern Europe”. China is off the table. “The coffee tastes inChina are the issue,” says Lavazza. “They don’t like bitterness and want sweet things.”
We are not worried – Starbucks is welcome in Italy. We are not in competition. It’s a completely different proposition to us
Lavazza is looking outwards at the same time as rivals are challenging his dominance in Italy. Starbucks will open its first coffee shop there next year, but Lavazza is dismissive. “We are not worried – Starbucks is welcome in Italy,” he says. “We are not in competition. It’s a completely different proposition to us.” Lavazza is not, after all, in the coffee shop business.
A tentative foray into franchised outlets under the Expression brand fizzled out back in 2013, and the family has no intention of trying again. “We do partner with certain brands in exceptional circumstances,” says Lavazza, referring to the partnership with Eataly, the Italian food business.
He’s also signed a deal with Sir Stelios Haji-Ioannou to provide coffee for the easyJet founder’s easyCoffee chain of new cafes, which has opened its first branches in West London. The UK is a major focus for the Lavazza brand over the next year, where there’s ample opportunity for selling into offices, cafes and vending machines.
The company generated £50m in revenue from Britain last year and that will rise to £60m this year. Lavazza says that sales growth over the past five years has been “spectacular” in the UK. “We’ve always had double-digit growth,” he claims.
The coffee giant is expecting its latest product – an instant coffee called Prontissimo – to help drive up sales. One in five Britons still drinks instant coffee more than once a day, according to Mintel – well above the rate elsewhere in Europe. Nevertheless, instant coffee is an unusual tack for such a traditional company. “Listen to me, it was screened by the family,” Lavazza says.
“This is no ordinary instant. The family has final say over whether to launch a product. The board has final say over the business plan, but we do the tasting, and I can say we are very proud of Prontissimo.” It is already served on flights from London to Rome by Alitalia, he adds. “The crew recently told me it was beautiful.”
The threat of Brexit is a worry, however. “If the UK leaves the EU, it could create possible danger,” he says. “It’s a big risk and I don’t like risk.” The coffee business is already beset with challenges. Commodity prices are volatile and there’s no way to predict how the weather will affect future harvests.
“Raw materials can impact profit and loss by up to 30pc,” Lavazza says. The company almost went out of business in the 1970s when the worst frost in recorded history killed off most of Brazil’s coffee plants. It took six years and some very favourable terms from the Brazilian coffee farmers for the firm to return to the black. Could it happen again? “If I could see the future, I’d have another kind of job,” he says.
The ongoing economic instability in the eurozone is also a threat to growth plans, but Lavazza is sanguine. “We are very familiar with Italian crises… There’s always been a crisis.” The current issues with Italian banks are causing domestic customers to cut back on expensive goods – another reason to build up overseas sales as quickly as possible. “We want 70pc of revenues to come from international sales,” he says.
“We want to stay an Italian company but to diminish risk.” Amid consolidation elsewhere in the industry, there is the sense that Lavazza is fighting for its future. The brand already serves 20bn cups of coffee a year, but Giuseppe’s ambitions are many times that number.
“It is no longer sufficient just to be present internationally,” he says. “You need to be relevant. If you can’t do it on your own, then you need to buy someone who can.”
by Rebecca Burn-Callander
UK-based budget airline carrier EasyJet is getting into the coffee retail game, with an initial marketing campaign that stresses low costs and £1 coffee and espresso drinks through the EasyCoffee brand.
“Just when we feared we were reaching peak hipster coffee, with coldpress and cortados usurping cappuccinos and a £4 latte the norm, along comes Sir Stelios to tear up the rule book,” the airline company said of its new coffee venture in an announcement late last week, referencing EasyJet founder Stelios Haji-Ioannou. “Just as EasyJet changed the face of air travel when it launched in 1995, bringing low-cost, no frills air travel to the people, now the company is set to do the same to the coffee market.”
The EasyCoffee brand made a quiet debut several weeks ago with the opening of a café bursting with EasyJet’s signature orange color motif at the Earls Court station in Central London. The company says it plans to open as many as 30 more EasyCoffee shops over the next two to three years, while it is currently seeking franchisees. EasyCoffee’s wholesale partner for the venture is Italian coffee giant Lavazza.
The first EasyCoffee location at the Earls Court tube station.
The company is borrowing from its own business model in the airline passenger air industry — a similar no-frills model was first popularized by Southwest Airlines in the United States — for its coffee operation.
“So you’re lured in by the promise of cheap coffee, then two minutes later you’ve accidentally bought a croissant (£1.10), a banana (50p) and a bottle of water (£1) too,” the company said openly of its revenue-generation approach. “Sound familiar? It’s the business model that has worked so well for EasyJet and has since been taken to the extreme by other low-cost airlines.”
For the venture, EasyJet has partnered with Peoples Coffee, a business operated by Nathan Lowry that has licensed the “easy” brand usage. “With coffee shop prices currently averaging £3 a cup, it is clear consumers have been taken for a ride,” Lowry said in the company’s announcement. “Although wholesale coffee prices have been falling recently, consumers have seen no benefit. EasyCoffee plans to make top quality beverages available to everyone at affordable prices.”
Similarly, Stelios likened the coffee industry to the airline industry, suggesting players in both have been involved in gouging prices of roasted, brewed coffee drinks “for no good reason.”
“I think this industry is another example of allowing prices to carry on rising without good reason,” he said. “Three pounds is a lot of money for a paper cup of espresso.”
Just when we feared we were reaching peak hipster coffee, with coldpress and cortados usurping cappuccinos and a £4 latte the norm, along comes Sir Stelios to tear up the rule book. Just as easyJet changed the face of air travel when it launched in 1995, bringing low-cost, no frills air travel to the people, now the company is set to do the same to the coffee market.
Yes, easyJet is making coffee shops.
Commuters stepping off the train at Earls Court over the last couple of weeks will have been confronted by the sight of that familiar branding – the unmistakeable orange circle, the idiosyncratic use of lower case ‘e’ followed by an upper case mid-word.
People, easyCoffee had arrived.
So many easy Options… The price of the low-cost coffee? A very affordable £1. And that’s the same, whether you order an espresso, a double macchiato or a cappuccino.
So far, so cheap.
The small bar, run by three baristas with gleaming new machines and Lavazza coffee, sells food too. While it’s not exactly extortionate, the food prices are more aligned with the prices their rivals charge. A pastry – croissant or a chocolate twist – costs from £1.10 to £1.50. Sandwiches (cheese and tomato, chicken and avocado, egg mayo etc) go from £1.85 to £2.99, and there are soup and sandwich deals for £3.
So you’re lured in by the promise of cheap coffee, then two minutes later you’ve accidentally bought a croissant (£1.10), a banana (50p) and a bottle of water (£1) too.
Sound familiar? It’s the business model that has worked so well for easyJet and has since been taken to the extreme by other low-cost airlines: attractive bargain bucket fares supplemented by high food prices, excess baggage charges, fines for printing of boarding passes (now illegal, but thanks for that, Ryanair) etc etc.
The simple menu and price points are reminiscent of beleaguered Benjy’s, the erstwhile sandwich chain beloved of students and builders that was big in the 90s, not so big in the Noughties. Heinz tomato soup in big polystyrene cups, egg muffins that were better than McDs, giant cups of nuclear-heated tea that never went cold – and all for under £1.
easyCoffee though has the added benefit of having an expert marketing machine behind it, with two decades of experience in muscling in on the market by undercutting literally everyone in it.
The business is actually a partnership between easyJet founder Sir Stelios Haji-Ioannou and Nathan Lowry, the director of Peoples Coffee, who has licensed the easy brand name.
‘With coffee shop prices currently averaging £3 a cup, it is clear consumers have been taken for a ride,’ Lowry said. ‘Although wholesale coffee prices have been falling recently consumers have seen no benefit. easyCoffee plans to make top quality beverages available to everyone at affordable prices.’
Sir Stelios added that the coffee industry had been allowed to elevate prices with ‘no good reason’ and that he was ‘delighted’ to be able to bring London ‘something very simple but yet so difficult to find: a great cup of Italian espresso coffee for just a pound. I think this industry is another example of allowing prices to carry on rising without good reason,’ he said. ‘Three pounds is a lot of money for a paper cup of espresso.’ Amen to that.
easyCoffee plan to roll out a chain of 30 easyCoffee shops over the next 24 to 36 months in stations and on the High Street. Talking optimistically, the coffee shops should pose little threat to the top quality, independent coffee shops whose customers visit them for specialist coffee.
But it looks like Starbucks, Costa et al may have met their match.
Normally, when a commodity becomes more plentiful it also gets cheaper. But the proliferation of coffee shops in our town centres seems to have bucked that trend up to now, with a simple cup of coffee costing upwards of £2. It can be twice that, in the more ‘artisan’ outlets.
But easyJet, who wiped out much of the cost from air travel are now set to do the same with the world’s most energising hot beverage. The first easyCoffee outlet has already opened at Earls Court underground station in London.
It offers a range of soft drinks and hot and cold snacks including freshly made sandwiches, as well as the expected range of premium coffees. Cappuccinos, espressos and lattes are all priced at a competitive £1 a cup.
easyCoffee has been set up by Nathan Lowry, who has licensed the easyJet brand for his own operation, Peoples Coffee. It gives them the kind of instant brand recognition they’ll need to compete with the major coffee chains that dominate Britain’s high streets.
Peoples Coffee hopes to open a chain of 30 easyCoffee outlets across the country within the next 24 to 36 months, all with the no-frills approach and bold orange branding that has already made easyJet a household name.
easyJet founder Sir Stelios Haji-Ioannou said; “I am delighted that we are going into business with another young, ambitious entrepreneur like Nathan, in order to bring London something very simple but yet so difficult to find: a great cup of Italian espresso coffee for just a pound. I think this industry is another example of allowing prices to carry on rising without good reason. Three pounds is a lot of money for a paper cup of espresso. The strength and name recognition of the ‘easy’ brand will encourage consumers to try it for themselves when in Earls Court.”
It’s worth noting that, just as easyJet offers a no-frills basic service for very affordable rates, but adds on costs for extras such as baggage, so with easyCoffee you can have a coffee of your choice for a pound, but if you fancy a sandwich or a cake to go with it you can expect to pay more.
easyGroup, the brand licensing company owned by Sir Stelios Haji-Ioannou has approved the opening of easyCoffee, a chain of discount coffee shops offering premium ground coffee at just £1 a cup.
The first easyCoffee outlet has already opened on the Earls Court underground station forecourt (London SW5), offering a range of soft drinks, hot and cold snacks including freshly made sandwiches as well as cappuccinos, espressos and lattes at just £1 a cup. easyCoffee is the trading name of Peoples Coffee, whose director Nathan Lowry has licensed the brand name from the easyJet founder.
Peoples Coffee hopes to open a chain of 30 easyCoffee outlets within the next 24-36 months – all offering great value and quality coffee from Italian specialist Lavazza. The company has a team with background in finance and hospitality.
“With coffee shop prices currently averaging £3 a cup, it is clear consumers have been taken for a ride. Although wholesale coffee prices have been falling recently consumers have seen no benefit. easyCoffee plans to make top quality beverages available to everyone at affordable prices.”
Sir Stelios said:
“I am delighted that we are going into business with another young, ambitious entrepreneur like Nathan, in order to bring London something very simple but yet so difficult to find: a great cup of Italian espresso coffee for just a pound. I think this industry is another example of allowing prices to carry on rising wihout good reason. Three pounds is a lot of money for a paper cup of espresso. The strength and name recognition of the “easy” brand will encourage consumers to try it for themselves when in Earls Court.”
NOTES TO EDITORS:
Food and drink analysts Allegra have valued the UK retail coffee shop market at approximately £8bn, with annual growth of around 10%. There are currently 20,000 stores operating nationwide.
Nathan Lowry: Peoples Coffee
Richard Shackleton: Communications Director to Sir Stelios Haji-Ioannou