Exploring Coffee Lovers, Johannesburg South Africa

Posted by Patrick Gaincko | November 4, 2017
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DRINKS, SOUTH AFRICA

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What’s a Coffee Break in Africa, Casablanca Airport

Posted by Patrick Gaincko | June 26, 2017
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FOOD & DRINKS, MOROCCO, TRAVEL

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What’s an Influencer in Casablanca Morocco

Posted by Patrick Gaincko | August 13, 2016
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MOROCCO, WHAT MILLENNIALS WANT

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Where’s African Coffee Going: New Luxury, New Culture

Posted by Patrick Gaincko | July 30, 2016
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This is Starbucks Reserve Eastern DR Congo Lake Kivu. A premium coffee on sale in USA and Canada only, for a limited time. It is produced by a partnership between Starbucks and the Eastern Congo Initiative, a project linking 4500 small-holder farmers to the global marketplace. The Hollywood actor and director Ben Affleck who is a backer of the Initiative said: “This is not charity (…) this is good business”. Precisely.

Arabica coffees from Rwanda, Ethiopia, Tanzania and a handful of other African countries have seen their market value growing exponentially in recent years. They are now luxury products for which connoisseurs in Europe and America are ready to spend big, not only in terms of consumption but also in terms of premium merchandise and exclusive events. Additionally, mass consumers’ affinity for African coffees keeps on growing and has become a key driver of the robust health of the coffee industry. As a result, roasting and selling coffee entered this year’s Top 10 Ideas For Making Money according to various business press outlets.

But a number of analysts, among them participants to the 2016 World Coffee Conference, have lamented that premiumisation – the fact that African coffee becomes highly prized – creates yet another dependence of producers on exports and the subsequent volatility of international prices and demand. They have called for the development of coffee consumption at local level. The belief is that if African consumers drink more coffee and cultivate a strong coffee culture, producers will be enticed to produce more and better coffee.  A finding of my on-the-ground research is that a serious relationship between African consumers and coffee is exactly what’s happening.

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Java House, a coffee store chain created in 1999, prides itself for having “introduced coffee drinking and gourmet café culture to Kenya“. The company has now 34 stores in Kenya and 4 in Uganda and has generated a total revenue of $35 million in 2015. The annual sales grow rate is 30%.

 

From Casablanca and Nairobi to Johannesburg and Cairo, coffee drinking is on the rise and a coffee culture is gaining exposure and prominence (in Ethiopia, coffee drinking is already a well-established tradition). A most recent instance is the much publicized entry of the world’s largest coffee store chain Starbucks in South Africa in April. “The coffee market has been growing over the last five years and there’s been quite a big consumer education around premium specialised coffees” Carlo Gonzaga, the CEO of Taste, Starbucks’s partner in South Africa, told the Financial Times.

On the ground in Johannesburg, such establishments as Motherland Coffee and Doubleshot are thriving. At the Motherland store based in the upscale shopping district of Rosebank, there is sometimes not a single seat left. I find a special attention is being given to professionals on-the-go but I also find a strong community. Among many regulars, I met a fashion designer, an executive in the construction sector, various creatives; all use the store on a daily basis as a co-working space, a meeting room, even as a showroom (the fashion designer sometimes comes with samples of future collections). They all give the sense of space, the high quality of the espresso, the company’s longstanding dedication to African coffee as the reasons for their loyalty to the brand.

The coffee shop Doubleshot, located in the hot spot of Braamfontein, acts as another epicentre of the coffee culture. You can literally enjoy the aroma of the roasting coffee from outside the store as it pervades the air in the adjacent streets. Inside, coffee lovers find an array of incentives to embrace coffee as a ritual, an experience or a voyage, from the real roasting, blending, brewing of coffee beans to sitting at the bar counter offering a panoramic view on the action of Joburg’s inner city.

According to the coffee industry organization ICO, coffee drinking has also increased in countries such as Cameroon, the Ivory Coast, Kenya and Uganda. In Kenya, for example, consumption has jumped 46 per cent in the four years to 2014.

While the volumes remain relatively low in comparison to other continents, all industry stakeholders express no doubt that, as the middle class keeps on growing, there is a real, tangible coming of African coffee aficionados. The question is now whether they will find enough coffee to satisfy their expectations, both in quantity and quality.

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The Eastern Congo Initiative. Photo: Courtesy of Starbucks
ACROSS AFRICA, FOOD & DRINKS

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What’s the Coffee Culture in Johannesburg South Africa

Posted by Patrick Gaincko | June 25, 2016
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DRINKS, SOUTH AFRICA

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What’s the Coffee Culture in Casablanca, Morocco Mall

Posted by Patrick Gaincko | June 22, 2016
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DRINKS, MOROCCO

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Starbucks Enters South Africa: What’s In It For Consumers

Posted by Patrick Gaincko | June 13, 2016
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End February, Starbucks announced that it will open its first-ever store in Italy early 2017. In the birthplace of espresso and cappuccino, where coffee is at the intersection of culture, heritage and community; the news that an American retail chain would come and sell coffee had the potential to cause derision and criticisms. So Mr Schultz, the Chairman and CEO of Starbucks, travelled to Milan to bolster the announcement with some compelling context: “we are going to come here with great humility” he said.

Similarly, when mid 2015 Starbucks announced the 2016 opening of its first store in South Africa (and first-ever in sub-Saharan Africa), the news was put against the ongoing narrative about the shape of the South African economy – the shrinking growth, the weak rand,  the high unemployment. So Taste Holdings, Starbucks chosen partner in South Africa, not only repeatedly offered reassuring arguments report after report but also opened the first store in the trendy suburb of Rosebank, Johannesburg, with grand fanfare end April 2016.

Early press reviews have been relatively positive, with commentators stressing the long queues of coffee aficionados in front of the store despite chilly temperatures, the wide online circulation of customers’ enthusiastic impressions, the pride collectively shared among South Africans that yet another international brand entered the country, seeing a sign that it is still relevant on the global stage.

But at the same time a fair number of reviewers were perplex, bringing back the struggling SA economy argument and pointing out that consumers lining up en masse on day one doesn’t necessarily mean that success is guaranteed for Starbucks, particularly in a market considered well packed with coffee shops.

So what are the key success factors for Starbucks in South Africa?

  • The competition in the trendy neighbourhood of Rosebank, Johannesburg: here, a menu display at the coffee shop Vida e Caffé.

 

Price: various reviewers have noted that Starbucks prices are the highest in the Johannesburg market. 27 rand for a latte is still cheaper than prices elsewhere in the world, but it could prove problematic compared to what South Africans usually pay. At this price point, the obvious target is the upper-middle and affluent classes. But even with these targets, attracting them will not suffice. Starbucks will need to earn see their strong, sustained loyalty in the form of both a critical number of visits and critical level of spending.

Product: At most coffee shops across Johannesburg, there are latte’s, cappuccino’s, espresso’s, herbal tea’s, and a few other things. The menus are relatively conservative in terms of ingredients, flavours and recipes. Noticeably, specific consumer groups – students, young professionals  – have showed a great receptiveness to change in their preferences and attitudes towards coffee. There is subsequently a huge opportunity for Starbucks to win a sizeable market share if it can bring in the elements forming the pillars of its valued reputation: the variety of its product offering and the innovation in the flavours, recipes and labels.

Customer Experience: “Our brand equity is built on our customers’ experience and that depends on the quality of our people” Mr Schultz said to the New York Times in March. In South Africa, where poor customer service is notoriously rife, Starbucks has a serious chance to make a difference as it is expected that Taste be the recipient of a skills transfer and invest heavily in employee development programmes.

I enjoyed a latte at two different stores in Casablanca, the Morocco Mall on one hand, the Franklin Roosevelt Villa on the other: the latter – thanks to its emblematic location, its modernist design combining Moroccan identity and European influences, its luscious landscaping – seriously edged up my experience. Iconic store locations, generous rewards schemes, innovative payment solutions have proved to be game changers or competitive advantages for Starbucks in competitive markets. While it is too soon to say whether Taste will develop these initiatives in South Africa, for the company to carry out its ambitious rollout – opening twelve to fifteen Starbucks outlets in two years, it would need to leverage the diverse range of Starbucks customer experience management tactics.

 

In the trendy district of Rosebank, where Starbucks has opened one its Johannesburg stores, Motherland Coffee Company, a local coffee shop chain, is a well established rendez-vous for grab-and-go, business meetings and co-working sessions.
In the trendy district of Rosebank, where Starbucks has opened one of its two Johannesburg stores, Motherland Coffee Company, a local coffee shop chain, has established itself as a rendez-vous for business meetings and co-working sessions.
FOOD & DRINKS, SOUTH AFRICA, WHAT'S IN IT FOR CONSUMERS

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