The Great Coffee Revolution
Last year Savills World Research created the Flat White Index, scoring global tech cities on the availability, quality and cost of the microfoam-topped espresso. Dublin came second in the world – just behind Berlin. Yes us Irish seem to be in the midst of a sordid love affair with the dark stuff. 80% of us drink coffee daily, necking on average 2.3 cups a day.
Throughout Ireland, a string of corporate coffee houses are engaged in one of the most intense retail fights to secure the dominant position for their coffee brands. A never-ending stream of capital is flowing in from investors looking to claim their own piece of a sector that continues to grow, fuelled by innovation, passion and love.
All the statistics back this up. According to the latest stats, in 2014, 4,558 tonnes of coffee were consumed in Ireland, up from 4,242 in 2013 (that’s a 7.5pc increase). Since 2009, total volume sales have increased by 15pc – a huge jump that most FMCG markets would love to boast. Retail sales for 2015 were worth €90.7 million for all coffee types.
This trend can’t continue, can it?
Oh yes it can. More and more branded coffee franchises are scheduled to open. Irish-owned cafes like Insomnia and Butlers, as well as other international players like Costa and Caffè Nero, are all thriving in an increasingly crowded market. Big chains such as Starbucks and Costa proceed with their seemingly endless roll-out. There are now more than 30 Starbucks in Dublin. To put that into perspective - London has 207.
Insomnia is now the largest independent premium coffee retail chain here. It’s a 100pc Irish-owned company and grew from a single location in a Galway bookstore back in 1997 to an estate of 115-plus coffee shops across high-street locations and through partnerships with BWG in addition to other Irish retailers such as Eason’s, Meadows & Byrne, Heaton’s, and Maxol. In addition, the company has 255 plus self-service units in operation, in Ireland and Britain. In 2006, the decision was made to branch out into franchising, and this proved to be a successful step for the growth of the company, where the Insomnia franchise is now operating in more than 65 stores across Ireland and Britain.
Butlers is owned by the Sorensen family and headed by managing director Colm. It was founded in Dublin in 1932 by Marion Butler. The first Butlers cafe opened in 1998 in Dublin and it has expanded beyond Ireland in recent years through franchise agreements – its coffee shops popping up from Auckland to Abu Dhabi. There are also four outlets in Pakistan.
Smaller success stories
The Galway Roast opened a 46-seater cafe on London Street in Norwich in May, amid plans to expand in the British market through franchising. They also have plans to franchise the brand in the Irish market, where they owns three existing cafes in Tuam, Mullinar and Castlebar.
And Esquires Coffee - founded in Vancouver in 1993, now owned by New Zealand company Cooks Global Foods - is a brand without much recognition here yet. But it opened its first franchise outlet in Dublin city, on O'Connell Street, last March.
The indie sector
From New York to Hong Kong, there’s a new breed of coffee snob, who looks with disdain on “foamed-milk beverages” and aspires to being a connoisseur of Pure Coffee. And so while the chains rule the roost in Ireland, the independent coffee scene is burgeoning and having a positive effect on the coffee sector as a whole.
There is a distinct divide in the market between franchise outlets and smaller, independent coffee houses, such as 3FE in Dublin and Gulpd in Cork. These coffee shops are trying out new things that stem from trendsetting cities like Oslo, Stockholm, Toronto and Berlin. The celebrated 3FE cafe just added a water-tasting menu to its offerings, perhaps a harbinger of things to come. It’s these third-wave outlets that many believe to be the driving force in foodservice coffee sales, which have had a similar trajectory in Ireland to the craft-beer scene, cropping up everywhere.
Indie or franchise? Each has their place, it seems.
Check out our current coffee franchise opportunities here.