Dubai: Sitting in a local mall's new Café Nero with his iPhone for company, Dr Gerry Ford looks rather like any other coffee house customer. Except that he is, in fact, the owner of the entire chain.
The 1997 UK-based start-up is now Britain's largest independent coffee house brand, valued at around £250 million (Dh917.5 million). After buying five retail sites in London 12 years ago, Café Nero now has over 400 company-owned stores.
Ford has a degree from Stanford University, a masters from INSEAD, France, and a PhD from Oxford. He was voted the UK's entrepreneur of the year in 2005 by the London Stock Exchange and the Financial Times.
Unlike the Roman emperor with whom his chain shares its name, Ford has certainly not ‘fiddled while Rome burned'.
Over the past seven months, Ford's coffee shop chain has entered the Gulf Cooperation Council market with five new stores in the UAE, and 50 more planned across the region over the next five years.
Despite branded coffee houses lining highways and malls around Dubai, Ford is confident that his chain can repeat its UK performance in competing with the global leaders.
Confident
"The UK market, and particularly the London market, is as crowded if not more crowded than this one. It's been going on for a longer time, and we've been number one in that market for eight years in a row — all the main brands that are here are there," Ford says.
By number one Ford refers to the company's approval by those who voted for their favourite brew in the UK. An independent survey of 5,000 coffee drinkers around the country each year has seen Ford's offerings on top for the best part of a decade.
"We will have to work towards establishing brand awareness, but that's exactly what we did in the early days," he adds.
That brand, Ford says, is premium coffee focusing on Italian coffee house culture. The feel of European cultures with Al Fresco seating and the temptation to linger, however, is not something huge malls can easily reproduce, he admits.
"It's more difficult to create that ambience and that perception than it is in high streets in the UK," Ford says. "You need to work a little harder at it. If you're saying, ‘can you do it?', I would say I think it's more challenging but yes I think you can."
Financial crisis
The fortune of coffee house chains around the world has been watched closely during the global financial crisis.
Starbucks suffered a well-documented drop in US sales of five per cent in 2008, with sales in Canada and the UK also suffering. In the company's 2008 annual report, it said lower customer traffic was directly related to the recession.
Ford did not comment specifically on Starbucks, but said some of the American brands fell victim to the falling sales of their more pricey, gimmicky products, which appealed to consumers hardest hit by the global downturn.
"I think with more American offerings from some of the brands a slightly more youthful and fickle reason for going in where they got the pinch on disposable income," he said.
"They pulled back — more of the youthful market that were buying specialty drinks that were not traditional coffee drinks."
From May 2008 to May 2009 Café Nero's sales grew 10 per cent, Ford says, and profit increased by five per cent.
Affordable option
He believes the recession helped most branded coffee houses because the drink was not seen as luxury. "You weren't going to a restaurant," he said. "People traded down — people traded from restaurants down into us, because we were less expensive than other places."
Despite the success, Ford isn't a proponent of uncontrolled expansion. In 2001, Café Nero joined the London Stock Exchange but in 2007 he led a management buyout. He says he enjoys the lack of pressure to pursue short term gains.
"There is more of a flexibility to have the long term solid business strategy to you business," Ford says.
"I'm not saying public companies can't do it, I just think that they get pushed and pulled in a variety of ways that make it more difficult. And you don't have to worry about satisfying something or somebody in order for them to perceive you as having a good business. You know intrinsically that if you make these moves it is the right move for you."
