Franchising in Australia, Part One - The Caffeine Buzz
July 28, 2011
In a recent trip to the Australian cities of Melbourne and Sydney, the Australians’ obsession with coffee was widely apparent.
For those who automatically think of beers and a “Barbie” as the epitome of Australian food culture, perhaps it’s time to see a different side. Driving through Sydney’s inner city during the early morning, you don’t smell car fumes but coffee fumes from all the coffee houses dotted around the Australian metropolis.
Australians are famously proud of their coffee culture, and are even accused of being coffee snobs. In fact, the Aussie coffee fickleness got so bad that McDonald’s have had to retrain their baristas and now have a campaign running “Love your coffee or we’ll replace it” – ad below.
One of the fastest growing coffee franchises in Australia is home grown brand – Pie Face. These kiosks were dotted all over Melbourne and Sydney and according to their franchise site (http://www.franchisepieface.com.au/), the brand seem set on developing gradually across Australia and perhaps New Zealand. Serving an array of tasty pastry treats – pies are a quintessential snack for Australians, Pie Face also offer a selection of “wake me up” coffee strengths with fun names:
“Still Asleep” (Decaf) – for those who never wake up
“Tingle My Toes” (mild soft blend – my choice!) – a gradual rise for those non-morning people
“Open my eyes” (strong soft blend) – your normal cup of yummy, creamy java
“Start my heart” (mild hard blend) – for the decisive, go-getter out there
“Kick my arse” (strong hard blend) – a jolt for freaks and over-achievers
Also within the marketplace, Gloria Jean’s coffee which since 2009 is now 100% Australian owned is hugely popular in Australia and outlets appear around every corner. Their understanding of the value Australians attach to coffee is exemplified in the advert below which might explain their success. Also, as pointed out in the ABC article linked to below, Gloria’s also took a slower route to expanding across Australia and allowed the marketplace to discover their stores rather than rolling out an invasive and pushy ad campaign which seems to irk the Australian coffee lovers who, it seems, don’t like to be told how to drink coffee!
Famously, Starbucks the global coffee brand failed to nail it when they launched in Australia in 2000 and a few short years later in 2008 had to close down 65 of their 85 stores. Speaking on the closures, Founder Howard Schultz commented that there were "no other international markets that need to be addressed in this manner." Australian Advertising Creative Director John Mescall writing for ABC (http://www.abc.net.au/unleashed/32188.html), attributed the closures to an over confident and hasty expansion by Starbuck’s into the Australian market, preventing the coffee brand from developing organically, allowing Australians to “discover” the brand rather than the brand’s ethos being forced onto the market. The market also rejects fancy coffee names favored by Starbuck’s and the beverages come into either regular or large, something Starbuck’s chose not to adopt.
That’s the thing with brands – both franchises and licensing systems like Starbucks, expanding internationally, they need to be able to adapt to market differences in order to succeed. This is something McDonald’s has done well, with a few bumps along the road as highlighted by my few blogger Donny on his trip to India. I’ll look at McDonald’s and other QSR franchises in my next blog post on franchising in Australia.