Caffé Nero is the largest independent coffee brand in Europe, including 36 stores in New England.
Gerry Ford is Chairman and Group Chief Executive of The Caffe Nero Group. The Group owns and manages four brands and 1100 stores across 11 countries with 9,000+ employees. Caffe Nero was a start-up in 1997 and was later listed on the London Stock Exchange (LSE) in 2001-2007. In 2005, Dr. Ford was named the UK’s Entrepreneur of the Year by the Financial Times and The London Stock Exchange. In 2007, he took Caffe Nero private and today remains the company’s majority shareholder. Dr. Ford has a BA from Stanford University, an MBA from INSEAD, and a Ph.D. from Oxford University. He sits on the boards of several consumer goods businesses throughout Europe and the USA. He is a frequent speaker internationally on Entrepreneurship and how to develop a leading consumer brand.
Jake Leonti: What adaptations has Caffé Nero made to the supply chain during the pandemic, and what implications has it meant for your business?
Gerry Ford: we have had to switch our primary distributor because they were unable to deliver with the same frequency and were forced to raise prices. We managed to consolidate our distribution with minimal disruption. However, this was a painful experience. It wasn’t the distributor’s fault, as they are under wage inflation and staff shortages. It has meant we have had to consolidate our product range and live with less frequent deliveries for the time being. It has not changed our offering too much but certainly has meant a lot of work behind the scenes to adjust.
JL: what are you doing about staff shortages, and how are you encouraging staff to come to work and stay?
GF: We are facing staff shortages all around the world. There is the combination of employees going off work during the depths of the pandemic and not coming back, and then pay inflation has been extensive everywhere. Nonetheless, relative to most other hospitality businesses, we have faired well. Many of our employees have stayed with us throughout the pandemic, wages have been increased, and we have started to look at other practices such as retention bonuses. In our organization, employees have the ability to move up fairly rapidly, and that is helpful. We believe in internal promotion, so a barista can move to an assistant store manager within six months if they work at it. They can even move to a store manager within 12-18 months if they are committed and good. Further, we are coming out of this crisis ready to grow again, opening stores and moving forward with our Coffee at Home products. So there will be more opportunities in the days ahead for employees.
JL: what do you see happening next in the industry in 2022?
GF: During the pandemic, there was a movement toward convenience and coffee products consumed at home. Again, this occurred to various degrees around the world. If and when the pandemic subsidies, I don’t see this trend going away. People will still visit coffee houses, but they will also consume at home more often. More people are working from home, and more customers have started ordering coffee products online. Technology emphasizing convenience, from a click of a button getting the customer home delivery to having their product ready in-store, will continue to grow. Coffee at home products will be more available and accessible than ever before with more choice. Amazon or others delivering coffee products to your house will increase. I think there will also be a bit of a flight to quality. With more product accessibility will come a desire to have higher quality products as long as they are not too expensive.