Java House

DECEMBER 2019 www.littlegatepublishing.com

A CUP OF AFRICA

JAVA HOUSE INSPIRED BY YOUR SUCCESS

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Coffee culture is a phenomenon the world over. America, Europe, Australia, the Middle East this culture is popular from nation to nation, and Kenya is no different. To celebrate its 20-year anniversary, we spoke with Paul Smith, the CEO of Java House, about how the top East African company has helped to shape the market and the face of coffee in Kenya.

Written by Alice Instone-Brewer

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hilst coffee culture as we know it feels as though it’s been taking shape for the past few decades, the social tradition of gathering in coffeehouses can actually be traced back to Turkey in the 14th century. In the 17th and 18th centuries in Europe, coffeehouses were associated with intellectualism and the gathering of artists, and they hold a similar connotation now, forming popular spots for people to gather for social and business reasons alike, or to sit with a laptop working on that article or novel.

Java House was created when its founders, Kevin Ashley and Jon Wag, couldn’t find a social space to relax and drink coffee in like this in Kenya. The gourmet coffee culture hadn’t yet become a widespread phenomenon in the country; you could buy the beverage, but that emphasis on specialist preparation and accompanying social space wasn’t there. To answer this need, the first Java House was opened in August 1999, in Adam’s Arcade, Nairobi, followed by a handful of others over the next few years. The company’s aim was to introduce and spread this culture through the country. After five years in business, it was taken over by a private equity firm, which led to a far more rapid expansion for Java. This period

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of time also saw Java open its sibling brands, Planet Yoghurt, a healthy frozen yoghurt store, and 360 Degrees Pizza, a casual dining restaurant.

As for Java House itself, the venue evolved over time from exclusively serving coffee to instead being a coffee-led casual dining experience, and a heavy emphasis is placed on the venue and the experience of visiting it. It may sound surprising, but the drinks are not the primary reason that people attend a coffee venue. As Paul shared with us, market research tends to come back with the quality of coffee ranking third or fourth amongst people’s reasons to choose a particular venue, with the leading factors instead being its atmosphere, its location and its customer service. “People like to come in, they like to sit down, they like to talk and have a nice environment to meet in.

Java became the place to hang out with friends, and as a result of that, Java has grown.” Java House has also introduced kiosks and express

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stores, to increase their diversity through the market, but it is their meeting spaces that set them apart and introduced the coffee house trend in Kenya in the way it exists today.

Java isn’t losing sight of where it all began, though. Whilst the drinks themselves aren’t the leading factor behind people’s choice, that doesn’t mean Java has neglected them. Being able to trust in the quality of the coffee is still important to customers, and a matter of pride for Java. “In all of the coffees we make, we only sell to our customers Kenyan AA, which we carefully roast ourselves: it’s quite a bold coffee, and is probably one of the best coffees in the world. Two of the world’s leading coffee chains use it in their blends” Having worked with and tasted many coffees Paul stands by Java’s. Kenyan AA is an arabica coffee (as are all coffees that Java sells in its store.) For those that don’t know, arabica coffee is the superior species of coffee bean when it comes to flavor. The alternative, Robusta coffee, grows throughout the year and is easier to cultivate, but has a less complex flavor, whereas Arabica grows in more specific conditions, essentially in higher altitudes and only yields at certain times of year. For these reasons, Robusta coffee is generally a cheaper option, whereas Arabica is a sought-out mark of quality.

Combining an attractive ambiance, casual dining and high-level, specialist coffee, it’s no wonder that Java House has been a success.

Roughly three years ago, the brand expanded beyond Kenya to Uganda and Rwanda markets that are both growing - and its status in Kenya is secure. “I’d say Java is the most well-known African brand in Nairobi. We serve 20,000 customers a day, and they’re very loyal customers.” Currently, Java House employs two and a half thousand people, with close to 80 stores between the three countries it operates in.

East Africa’s economy is slow at the moment, but, whilst many markets seem to be on the downswing, East Africa is slowly on the upswing.

For this reason, Paul is extremely enthusiastic about the region as a place to grow – even with the challenging business conditions. “The

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opportunity here is absolutely amazing – some of it is just disguised as an insolvable problem.

You just have to understand how it works.” In fact, the market is healthy enough that Java House is starting to see competition: “There’s competition creeping in that is home-grown, and we’re starting to see global brands as well.

The food scene in Kenya and Nairobi is growing, as is the coffee-led scene.”

Regardless of competition, Java is keeping current and staying ahead. As it celebrates its 20-year anniversary, the company has reexamined its operations and undertaken a whole slate of changes, both customer-facing and behind the scenes. “We’ve spent a lot of time in the past two years remodeling ourselves and getting further fit for purpose, built around the great brand foundation we already have.”

This examination has happened under Paul, who assumed the role of CEO two years ago, and who saw great untapped potential in many areas of the already successful brand. His aim

has been to get every aspect of the company ready for growth, from its processes to its image. “We have a huge expansion strategy and clarity on where we’re going to go.”

One of the biggest changes has been to Java House’s look. “We’ve been working with a design company in Singapore called Optimotto. They’re very good at looking at what a company stands, and designing for the future. They looked at our customers and what they wanted, so that we could future-proof the designs and environments for the business. In summary we have planned our present, from the future”, said Paul.

“Our old colours were very dull, but Africa is full of colours and curves, so it makes sense to put that into our spaces. Our new look is a lot more colourful and African. The uniforms have changed to be more vibrant, and the menu itself changed to be more colourful and we’ve completely revamped our website.”

The changes aren’t only aesthetic, either. Java

A CUP OF AFRICA

House has also improved its menu to give it greater range, whilst keeping the prices as level as possible and the portions as big, the way the African market likes them. These changes were all tested out as a new model branch in the Junction Mall in Nairobi, and they’ve been well received.

Other celebrations of the anniversary have involved commemorative merchandise that’s available at Java House stores, and surprise offers such as selling all coffees for 20 cents for a day. However, the major announcements involve the launching of a new brand, and even the construction of a new factory. Last month, the company launched Kukito, a QSR brand that Paul described as “African and homegrown”. This newest brand has had such a good reception that it has already received nearimmediate franchising offers.

Then, behind the scenes, there’s the factory. The Java Group already owned and operated a commissary that produced much

of the food they sell in store, but due to their planned expansion, this factory is set to be relocated, with a larger and more streamlined operation built to replace it. The footprint will expand from 4000 m² to 6,500m², with newly improved food safety standards, and the build is predicted to be ready by summer 2020.

Java House aims to have reached 200 stores in the next five years, and it needs to grow its factory to support this expansion. However, the company is also growing the b2b side of its business, and needs to support this as well.

“We are now exporting coffee to China, the Middle East, and we’re about to start exporting coffee into the UK. That factory is going to be a stand-alone factory; it will always be a key supplier to Java and other brands, but it should end up where it pays for itself. We have named it Foodscape” In terms of stores, Java House’s expansion is not only in its three current markets, but also potentially in Nigeria and Ethiopia. As for its

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b2b business, it predicts that over the next five years, it should grow from accounting for 0.1% of Java House’s revenue to approximately 4%.

Of course, to support this growth, the company is also growing its body of staff. An amazing testament to its company culture, the turnover of said staff is extremely low, especially for a company in the food service arena. “Our staff turnover is about 10%. In the food and beverages service industry across the world, it averages at 55%, so that’s some loyal people there and some great talent.”

Paul was born in the UK, but he has lived all over the world, and still, he speaks passionately about Kenya and its quality of people. “The culture of Kenya is amazing. One of the things I came over here to do was to get this business world class, but the people of Kenya are already world class. They work harder than any place I’ve ever been, they have a commercialism about them, they’re energetic, they want to learn, they want to grow. It takes years to get that right in a lot of places, and we have it in spades here.” Paul seeks to reward

this enthusiasm by encouraging his employees to develop as much as possible. A key part of this, for him, is supporting female employees who show a talent for management, and 65% of his store management team are female. In this, and across the board, the company seeks to encourage and empower its people: “Give people an opportunity to grow, and as long as they see that you’re going to be fair, honest and act with integrity, they’ll work and grow with you.”

From its great people to its store designs and ambiance, to its coffee, and even the operations behind the scenes, Java House was a strong entity that has only become stronger. Paul believes firmly in its legacy: “Java, in the 20 years it’s been here, has put coffee and coffee culture on the map in East Africa.” Moving forwards, the company aims to continue building upon this legacy, and continuing to lead the way in the coffee house experience, far into the future.

Java will move from being a great business to becoming a legendary business.

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