How to brew up a successful coffee business

If you want to succeed in the coffee business it helps to have been in the game for almost 130 years.

Algerian Coffee Stores in the heart of London's Soho has been trading out of the same shop since 1887 and in terms of word-of-mouth reputation, it has one of the strongest in the city.

"We don't really have to do advertising campaigns," explains Marisa Crocetta, 36, one of the directors at the business that has been in her family since 1948.

"You build up a reputation and being an old shop you appear in tourist guides, and of course everyone visits Soho and that's how they find you."

While Algerian Coffee Stores obeys the first golden rule of setting up a coffee business - find a great location - it has also nailed down the second essential ingredient; keeping the regulars coming back.

This it does by offering one of the best takeaway cups of coffee in London. And at just £1.20 ($1.80) for a cappuccino it's one of the cheapest, too.

Growing demand

"Our main business is in the bags of coffee beans, that's why our prices are so cheap for the takeaway coffee," Marisa explains.

Marisa's family have run Algerian Coffee Stores in central London for three generations

The shop sells around 80 different types of coffee it sources from London-based brokers with beans that come from coffee-growing regions across the globe, including Ethiopia, Colombia and Queensland, Australia.

However, its most popular coffee is the espresso blend it produces in-house, a mixture of Brazilian and African beans. "We go through about half a ton of that a week," says Marisa.

Algerian Coffee Stores gets its names from its first owner, a Mr Hassan who was Algerian, though Algeria itself doesn't produce coffee, and the store has made a solid living for the Crocetta family over three generations - but recently it has been riding the coffee wave.

There were 18,832 coffee shop outlets in the UK with a turnover of £7.2bn in 2015, according to the Allegra World Coffee Portal, and the sector outperformed the entire retail sector with sales growth of 10.7%.

'Never a quiet period'

"Over the past 10 years it's really taken off," says Marisa, adding that online sales are now a growing part of the business.

"It used to be a case of come the summer months you were twiddling your thumbs because there was hardly anyone around. But now it's consistently busy throughout the year.

Coffee shops turned over £7.2bn last year in the UK

"It goes from busy, to chaos to mayhem and then back down to busy again. There's never a quiet period now."

The 10 staff in the tiny shop may have to fight for space, especially with its mail order business conducted straight from the shop counter, but Marisa says the shop is such an institution it would be foolhardy to move despite rising cost of rent in central London.

"The thing about the shop is that it's old and you can't buy that," she says. "I suppose you could start up somewhere else but the shop is the essence of the business.

"It's what everyone comes to see. Everything is falling down and wobbly - or patched up."

Time-consuming

For relative newcomers such as Gavin Fernback, 31, who has run The Fields Beneath by Kentish Town West railway station for just three years, the secret to running a successful coffee shop is finding good staff.

Good staff can turn a good business into a great one, says Gavin Fernback

Even though he had worked as a barista three years prior to taking the plunge and running his own shop, nothing prepared him for how time-consuming certain small details could become.

"I still made so many mistakes at the beginning," he says. "I remember looking at other places, for instance at the way they had to keep re-writing price tags because they got dirty.

"I remember thinking, 'I'll never do it that way'. But it's a bit like having children I suppose. You judge other parents before you have your own kids and then make all the same mistakes yourself."

Training plan

"It's taken us two and a half years to get a training plan for our staff - that covers everything from how to make a good coffee to how to add salt to our dishwasher.

"If people are calling you all the time to ask you stupid questions - which aren't really stupid it's simply that you haven't shown them how to do them properly - it takes up a lot of your time.

"But you can't rush this type of thing."

While making a good cup of coffee with the best ingredients is the bedrock of the café business, good staff, he says, can turn a good business into a great one.

"There's a roastery called Square Mile in London which has done a lot to drive quality in London and they were asked what brings people back to a coffee shop and they said on average it is 40% coffee quality and 60% service.

If the coffee isn't right, customers will "soon see through that," says Starbucks Rhys Iley

"If the staff are friendly and recommend bands and ask how customers' kids are, that will drive custom more than the best coffee ever served by a stone-cold face."

Big-name competition

Large chains such as Starbucks and Costa may have a high profile, but their brands still only represent less than half the number of coffee outlets in the UK.

While Starbucks has made its name on replicating the independent coffee house experience, providing a home-away-from-home space where customers feel they can pass time, Starbucks vice president Rhys Iley says there's no getting around quality when it comes to selling coffee.

"The first thing is that you have to be really passionate about the quality of the beverages that you produce for the customers. We invest in the coffee farms so we source the best, roast the best, and then serve the best.

"If the product isn't perfect and isn't to the highest standards then people will soon see through that."

Brands such as Starbucks and Costa still account for less than half the number of coffee outlets in the UK

Criticism that the chains are squeezing out independent operators in an increasingly competitive market, he says, are misplaced.

'Don't accept mediocrity'

"Every statistic we see shows that the coffee market in the UK is growing every year, more and more people come into that and I think that's healthy," Mr Iley says.

"I relish competition because I think ultimately the customer benefits and everyone has to raise their game."

And what advice would he give those trying muscle in on the UK's increasingly vibrant coffee scene?

"Be curious about what's happening in the coffee world, be curious about the people you want to employ, be curious about the customers and learn from them.

"In anything you do be excellent, don't accept mediocrity and surround yourself with great people."