James Carroll sat down with Network Cafe owner, Oliver Cruise, to discuss the successes and challenges of his first eight months of trading.
“The future coffeeshop marketplace will continued to be dominated by brands, but independents will influence the direction of the sector,” according to the Allegra Project Cafe Ireland report 2015.
Walking into Network cafe on Aungier Street, one can see why independents will influence the direction of the market in the future, as it is a petite unit with a simple design and welcoming, knowledgeable staff.
The shop has been open for almost eight months and is owned by Oliver Cruise. The young Dubliner has been patiently building the brand of Network, and resisting calls to open another store until he gets his first project right.
“Initially I wanted to do an ice cream and coffee shop,” he laughs. “I always thought in kind of a suburban location, similar to Scrumdiddlys, with high end coffee but I would say it would have been very much a slow burner. Where we are now has got high footfall with the college [DIT].”
“I had a chat with myself to just focus on one thing and get it right, and to build from there. And that is what we have done with Network – initially focus on coffee and now we want to push the business with food. So that is the next phase for us.”
Until two weeks ago, they had been sourcing their sandwiches from Juniors Deli & Cafe, but now Network have started rolling out their own in-house sandwiches Monday to Friday and on top of that brunch is now being served at the weekends.
Allegra predicts that there will be 750 branded coffee outlets in Ireland by 2020 (there are currently over 500 outlets) so already the market is extremely competitive.
For independents and smaller chains, this is proving to be challenging times.
In 2014, Caffe Nero entered the Irish market and they plan to open eight to 10 stores every year for the next five years such is their rapid expansion plans.
The top three brands, Starbucks, Costa and Insomnia take 66% of the coffee market and 63% of the turnover. This does not include other convenience stores that now sell coffee, for example, Tim Hortons with Spar.
The market is only going to get smaller for start ups and independents, so is there anything that sets Network apart?
“We are very quality focused, every business claims to be, but we hired good staff. We have very passionate people working for us and that kind of shines through in our product and that’s where we want to bring the business,” said Oliver.
“We don’t want to compete too much on price but just to really focus on quality and then people will come to you. We are in a good location with a strong brand image, there isn’t anything that massively sets us apart, but we are not doing a massive gimmicky coffee – just doing really good quality products.”
Location is important no matter what kind of business a person sets up, so if you have a strong product and are surrounded by offices and college students, this gives a business a platform to have a consistent customer base and an opportunity to grow that base.
According to Allegra, 28% of consumers choose a coffee shop based on its location, but is it also important to have a quality or renowned barista in an independent coffee shop?
“Yes, definitely,” said Oliver. “You speak to people and they go, ‘I loved your barista’, but he is very passionate. It’s not just Daniel [Horbat], the whole team is brilliant here.
However, Danny was very much at the forefront of training everybody at the start, getting the team to a very good level and to be honest that was crucial, because we did not have that experience.”
Ireland seems to have an obsession with brands whether it be Starbucks, Insomnia and Costa in the coffee market. According to Allegra, Starbucks is the most recognised coffee brand in Ireland, followed by Costa, but our ‘obsession’ can be seen in many other food and beverage businesses and brands, not just in coffee.
“I don’t have any set targets or ‘x’ amount of stores to open, there is no big mission statement.
I asked Oliver about opening up another store soon but says he is taking everything one step at a time. “I don’t have any set targets or ‘x’ amount of stores to open, there is no big mission statement.”
“I’m just going to take it as it comes, but we do have goals. There is no set target in terms of the number of stores we want to open up or anything, and I think we should be very selective of where we open – it’s quite saturated out there, so you have to do it smart, do it wisely, and make sure the product you are offering is right”
“I would say 80 to 85% of our customers are regulars, we have repeat business everyday and that is what coffee shops are essentially, you’re not a cool new restaurant that people are here once a month, you are very much built on what is around you.
Consumer visit frequency is high and on the rise according to Allegra. They estimate that 71 percent of Irish people visit a coffee shop at least once a week, and 20 percent intend to visit more frequently over the next 12 months. So how does this apply to Network’s business model and customer base?
“I would say 80 to 85 percent of our customers are regulars. We have repeat business everyday and that is what coffee shops are essentially – you’re not a cool new restaurant that people are here once a month, you are very much built on what is around you,” said Oliver.
“The weekends are a bit different with the food offering and that, but Monday to Friday is certainly just your regulars and you work very hard to keep them happy because it is competitive around here. So you have to do all you can to keep the standard and service very high.”
As for the Irish taste buds in terms of coffee, cappuccino is the most popular drink, followed by americanos and then lattes, according to Allegra.
Is this reflected in Network’s business? “Not quite. Flat white is the most popular, followed by cappuccino and americano. The milky beverages are what the Irish people generally like, as it’s very easy to drink. The Irish palette in general is used to it, and it is evolving from there,” he said.
So after being open nearly eight months and becoming a leading independent coffee trader and connoisseur, is Oliver’s palette more Italian now?
“I like the milky coffee. I am still the stereotypical Irish coffee drinker,” he laughs.
Feature image by James Carroll