In my world

14 August, 2009
David Powell, Master of the Worshipful Company of Bakers and global director innovation/bakery, Rich Products
Page 18 

I often wonder about the differences between success and failure. We are all aware that businesses in every sector are struggling in the current economic climate; some get to the point where they cannot carry on and, sadly, are forced to go into administration.

The recent, well-publicised events at Coffee Republic are a good case in point. (At this point I should mention that my former business supplied them from 1998, and I purchased a few shares so I would receive copies of their accounts.)

Over the years, Coffee Republic has rapidly expanded, acquired businesses - for example, Good Bean - contracted and finally moved towards a franchise-based operation, increasing its estate again. My 10,000 shares purchased at 8p had been diluted to 166, worth 20p each at the time of their administration. I purchased 800 shares at 40p in Caffè Nero at the same time. When it went private a couple of years ago, shareholders received 250p per share. Caffè Nero has continued to expand and, more importantly, make a good profit.

A visit to both chains will show great superficial similarity; they both serve similar-sounding drinks and comparable ranges of sandwiches, paninis and muffins and so on. The difference in their performance is not just down to timing; Coffee Republic was into variably performing franchises and some very high rents. Even now, I am watching some great coffee shops not only opening, but thriving; examples include London coffee shops Flat White (www.flat-white.co.uk) and Sacred (www.sacredcafe.co.uk). Many of the successes in this area now have very strong Antipodean roots. Indeed, the current hot spot for coffee shops is New Zealand - in particular, Wellington.

I can think of examples in other bakery-related sectors. Paul has been an enormous national success story, expanding rapidly, but they sell freshly baked bread (albeit from part-baked frozen), cakes and pastries, plus a range of filled baguettes and drinks - does this sound familiar? Le Pain Quotidien (www.lepainquotidien.com) has a similar range, although more geared to sit down.

Ottolenghi (www.ottolenghi.co.uk), my current favourite London bakery/deli, is going from strength to strength. I defy anyone to visit one of their shops and not feel inspired to purchase. I loved my lunch yesterday, the strawberry-peach and pistachio tart as dessert. I only eat their muesli for breakfast and will deliver their cakes to mum today - via the gym!

If you get the chance, please visit some of the places I have mentioned and ask yourself: 'What are they doing right/wrong?' and, more importantly, 'What can I do with my business to make sure I remain one of the successes?'





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