Too many café owners are stuck in short-term thinking, with no vision – and that is one reason why so many coffee businesses are going bust, and why some of the best baristas in the country are working for very low wages.
This challenging suggestion has come from James Hoffmann, the UK’s first world champion barista, in two recent talks given to different parts of the international coffee trade.
In these speeches, he charged our trade with choosing to remain stuck in a rut, even though the model of the currently-fashionable independent coffee bar is just asking for the operators to go bust. He also went on to question whether it is short-term thinking on the part of employers and café owners which results in the lack of any clear career path for baristas.
Speaking to the Speciality Coffee Association of America symposium, James addressed the topic of ‘re-envisioning’ the retail experience of coffee bars. He took as his analogy the classic burger experience – ordering the burger, waiting around and hoping you will hear your order called, trying to balance finding a seat with waiting for the burger, clearing the table so you can put your food down on it, or failing and having to opt for eating it while walking.
“I hope I don’t have to explain the analogy…!” James told his audience. He went on, these burger bars are actually doing more interesting things with their value offers than we are in the coffee-bar trade. Why on earth should this be?
“It is because we have some nasty habits in our industry,” he suggested. “When people strike out and do things differently, we see it as a criticism, and we reject ideas that are not universally applicable.”
As an example, he showed the American audience the now-famous London example of Gwilym Davies’ espresso bar menu, which does not even mention the words cappuccino or latte. It shows simply ‘espresso’ and a price, or ‘espresso with milk’ in various measures.
“Some people think this is cool, but many more people say ‘idiotic idea, couldn’t do it in my café’,” observed James Hoffmann. “This attitude is a terrible thing – it is what keeps us in a homogeneous samey place and holds us down. It’s short-term thinking. In any other serious culinary category, different experiences and different value propositions are made available – we cannot claim to have that yet. We are stuck where we are.”
How can we work differently? We have, Hoffmann suggested, picked the wrong ‘constants’, in that we have assumed the wrong business models must always be followed. As a result, he suggested, too many cafes are going under, even the ones who are following what is currently fashionable business practice in coffee.
“Most quality-focussed cafes are not making money and are not sustainably profitable,” he stated firmly. “At the end of the year, after everything they’ve put into it, the question is ‘was it worth it?’ And the answer is – ‘no’. We see huge turnover of businesses for this very reason – people have worked themselves into the ground for nothing.
“And this is because independents have decided to compete in the existing marketplace. They have to decided to be ‘all about coffee’ because they’re ‘passionate about coffee’, without really thinking of the impact.”
In practice, he argued, a specialist café can only survive as ‘all about coffee’ if it attracts a vast footfall – and it is generalist cafes which attract footfall, not specialist ones.
Here lie other inexplicable things which the trade regards as set-in-stone business standards, he added – typically, the idea that a successful coffee business relies on building up a large base of regular everyday customers.
“We say ‘I must have the same people every day’, and we will dismiss new ideas if they mean ‘my customer won’t come and see me every day’. But what does this say about our product category? If you had a friend who ate only Burger King every day, would you not stage an intervention and show him there’s more to eat in the world? The better a restaurant gets, the less it is used by the same people – you may go to the world’s top restaurant only once in your lifetime.
“And yet, we cannot embrace the concept that, if coffee is such an interesting thing, the customer might wish to experience different places!
“So, our service and environment have played second fiddle to our concentration on the product. And if we need 500 people coming through a day, what kind of service and product is going to be possible? With this kind of thinking, we have set ourselves up to fail.
“We need to create and foster diversity. Not to get rid of quick-service coffee, but to create a diverse coffee marketplace in which everybody can benefit.”
Speaking at the Nordic Barista Cup in Copenhagen, on the subject of ‘how to make coffee a viable career’, James Hoffmann touched on very much the same danger of short-term thinking on the part of coffee bar owners.
In this presentation, he offered a graph which shows baristas being paid less than virtually any occupation – his figures suggest an average of around £15,000, sometimes for people who are among the best in the world at what they do. His proposition is that the reason that café-bars cannot pay baristas decent wages, or set up any plan of a detailed career path for them, is because of the same kind of blinkered thinking.
“This makes baristas angry. If we presume that staff costs are 25-30 per cent of turnover, and if there’s not enough money in the pot to pay your people well, then you either aren’t selling enough coffee, or your coffee is too cheap.”
This, said Hoffmann, is the café-owner’s problem, nobody else’s, and it is a matter which is handled badly. Remember, he said, the café owner sets the prices – and yet, a lot of people open café businesses and simply set their charges in relation to their competitors, or in relation to Starbucks… this is a doomed strategy, because Starbucks, for reasons of scale, works on a totally different cost model.
“So,” said Hoffmann, “the prices we charge for the coffee we are putting out do not correlate to the effort we’re putting in. However, I have yet to see an example of a coffee shop putting its prices up, being transparent about why, telling the customers ‘we’d like to be around to still be giving you this great service next year!’, and having customers walk away.”
There is a huge opportunity for more imaginative vision on the part of café owners, said Hoffmann. There must be greater appreciation of operational realities, and greater appreciation of the treatment of staff.
“Job satisfaction comes from being part of a strong vision,” said Hoffmann. “Vision is the item we don’t make enough of in this business, and we don’t talk about. Cafes rarely have it, beyond hoping to survive next year.
“But there is huge room for better vision around the idea of a cafe’s place in the community.”
Links to both of these talks are available from www.jimseven.com