Bewley's Cafés and the crisis in the world coffee market

by peter Tue Nov 16, 2004 19:07

The closure of Bewleys is directly related to the price of land.

by CoffeeObserver Thu Nov 11, 2004 01:20

In 1986, Bewley’s cafés and the wider company could have disappeared if it was not for the far sighted intervention of the Campbells who took a serious risk in rescuing the business.

It is also worth noting that much of the media and public commentary around the then 1986 crisis, while full of nostalgia, was critical of Bewley’s cafés, stipulating the need for ‘change’ both in the management, format and food offering of these cafés.

It was the personal and business goodwill of the Campbells which led to the survival of the cafés for a further eighteen years and, as importantly, to the development of a modern and successful Bewley’s tea and coffee business at home and abroad. In my view, this is ‘expertise’ at work.

In purchasing the cafés in 1986, the new owners also cleared the business of all of its extensive liabilities.

The Campbells saved the generous employee pension fund and in subsequent years topped it up to the tune of over EUR 1 million so that pensioners could have increases.

They paid the creditors and gave the employees their first pay rise in several years, bringing the business onto a financially sound footing. This included the clearance of all tax arrears outstanding at the time.

In the late 1990’s they also gifted staff with shares and recently, they purchased these back at a considerable premium. These actions are representative of a conscientious and socially responsible approach.

At major expense the Harry Clarke Windows have been preserved, renovated and protected over the years. They remain in pristine condition and are intended to remain a part of Dublin public life into the future, at an alternative location. These windows are currently placed against interior light boxes and are fully demountable.

The open fires, the mahoganies, woodwork and furnishings throughout the buildings have all been maintained over the years.

Bewley’s has also further enhanced its traditional role as a major promoter of national charitable, artistic and social causes, including support for the Irish Hospice Foundation and Ireland’s Biggest Coffee Morning, now in its eleventh year, and the Bewley’s Café Theatre in Grafton Street.

Bewley’s has openly admitted that not everything has been done correctly in respect of the operational management of the cafés and/or the décor. They acknowledge that the cafés were in major need of a refit to meet contemporary needs and standards. But then, on occasion, they have also received severe criticism when even the wallpaper has been changed.

The major operational costs of these large premises, on the fifth most expensive street in the world, make them impossible to run profitably in today’s economic climate. This is particularly apparent when you compare the scale of losses involved against the fact that the cafés contribute only 5% to overall group turnover.

Since 1986, more money has gone into the Bewley’s Café division than it has been capable of generating. This was only made possible by the successful development and growth of other business activities. Cumulative losses from these two cafés exceed EUR 4 million.

Ironically, the company has supported coffee industry developments throughout Ireland to the extent that the majority of ALL ground coffee consumed in Ireland is provided by Bewley's - even though you might be buying your cappuccino or latte from a differently branded coffee house.

Bewley's is also a major promoter of Fairtrade and the Ethical Trading Initiative. The company practices ethical procurement in all of its operations.

As for Starbucks, Bewley's competes successfully with Starbucks thoughout the United States, so do please look beyond the obvious hype about their arrival into Ireland. They will find the market here deeply competitive as do all other participants.

Bewley’s was originally established as a coffee and tea importation, wholesale and retail business in the early 1800s, gradually evolving into café operations. To an extent, this development involves the company going back to the roots of its success.

The company has grown significantly and it will continue to pursue growth through its strengths in the provision of speciality beverages to the foodservice, hospitality and retail markets.

As one chapter closes on the Bewley’s story, others will open. The Bewley’s name, tradition and ethos will be preserved and it will remain synonymous with the company as it continues into the future.

The current stewards of the business are committed to the Bewley’s legacy. It is that, and the support of wonderfully loyal customers over many years, which will ensure that Bewley’s continues into the future.

Finally, don't let anyone criticise the staff. They are exceptional in every respect and dignified in the face of the adverse circumstances they now find themselves in. Thankfully, many will be redeployed and many others will find new employment through outplacement initiatives by Bewley's.

There are as many opinions about these two cafés as there are people in Ireland. The company will not contradict anyone's views as such, but it does at least seek objectivity from all commentators.

Enjoy your coffee!

by Des Derwin Sun Oct 31, 2004 13:35

Municipilise Bewleys!

by Tony Sun Oct 31, 2004 01:12

Interesting piece Michael though the emphasis on the global coffee market, per se, is something of a tangent to the demise of a what is after all, a subsidiary to the otherwise, successfull Campbell Catering business worldwide.

A point aside, is the piece from the Irish Times today that reveals at least two thirds of the staff are now, foreign nationals.

You may also be interested in hearing the views of one customer in todays Irish Independent:

QUOTE - "Some customers yesterday felt that the great institution had, indeed, lost its way in recent years. Too many foreign staff had led to a change in the atmosphere, said one."

Personally I blame the obvious lack of direction, paucity of investment, non-existent viable and distinctive growth stategies, only AFTER noting the overall shabby and poor presentation of the Bewleys cafes, and the subsequently degraded product for sale.

I am but one former customer.

However, I suspect that anyone interested in providing any discretionary service, whether it be serving a coffee or running a country - ignores their customers and pretends their concerns do not exist, at their own risk

by coffee snob Sat Oct 30, 2004 14:42

riddance to Bewleys.maybe we will get some company in here that serves decent coffee.Not that overpriced overboiled muck that bewleys claimed was coffee.

by pc Fri Oct 29, 2004 20:56

noticed a sign on the canteen in DCU the otherday...

"This canteen proudly serves Starbucks Coffee, the only place in Ireland to do so"

dcu ain't no ucd?

by toneore Fri Oct 29, 2004 20:49 toneore at eircom dot net

I think the real story about Bewley's is why it is closing and 234 people are losing their jobs, not Fair Trade Coffee.

Whatever about the past contribution to Dublin's social life, Bewley's lost all it's character and cachet when Campbells took it over. It's been crap since the late 1980's with little more to offer Dublin than Cafe En Seine on Dawson Street. It was also massively expensive to go there - a rip-off by Campbells.

I think this closing is a sham, based on the fact that Starbucks will open in Dublin soon - and Starbucks will really KILL Bewleys in the market place.

by Mike Fri Oct 29, 2004 13:37

To get a better understanding of the issues around fair trade coffee (true fair trade vrs somehwat fairere trade) you could go to one of the 100% fair trade (and true fair trade) sites. Since it's in this neck of the woods (and where we get ours) you could look at the literature at deansbeans.com >

The problem (what the others say) is that a coffee roaster needs access to a wide range of coffees to do the blends, coffees from all over the world. So they can't offer 100% fair trade coffee, especially not real fair trade, because how to make direct contact with the growers cooperatives. >

by teadrinker Fri Oct 29, 2004 12:20

RTE story link