pRoFILES
Growing a Coffee Chain Bernard Chiew
Vice President of Operations
Costa Coffee
Bernard Chiew, whose job includes overseeing everything from rental of
China
property, to cold chain supply to consumer satisfaction, talks about what defines
Costa in China’s growing coffee market.
You helped Costa Coffee enter China in 20XX. What Where does Costa bring its coffee in from?
was the hardest part about breaking into the Chinese coffee All of the coffee needed for the 25 countries that Costa is in is
shop market? roasted in Lambath London. Every week, China alone serves over
It undoubtedly had to do with understanding our consumer. This 50,000 cups of coffee. To supply our global stores, the Costa Roast-
goes with entering any market as a foreign company, but the culture ery must put out over 15,000kg of roast coffee beans. This is enough
here is so different from any other market that we know – even the coffee to serve 2.5 million cups everyday!
Middle East was easier to figure out.
What is more difficult; shipping coffee to China from Lambath
What are the alterations made on Costa’s China menu? or delivering food everyday to all the stores?
We haven’t changed much with the drinks; our guests are actually Shipping the coffee overseas is easier because the process is rou-
looking for strength and bitterness of coffee. However, our food tine and has less volatile variables. However, I will say that shipping
was changed several times. The portions here are smaller and we’ve within China has gotten far better in the last few years. One of the
majorly cut the sugar content compared to our shops in Europe. best things I’ve seen in the supply chain is a lot of younger compa-
This was actually a very important move. When we first launched, nies coming in and really pushing competition and BP’s. It started
we used a sweetness level similar to Europe. Our guests came back out as all mom and pop carriers, but eventually investment power
and told us our products were too sugary. We find our consumers grew. Initially CEVA’s came in and started in a very small warehouse
here are very health conscious and the interpretation of health to and now two years later we work with them and they deliver what we
them means things that are less sweet and involve some sort of fruit expects out of a UK 3PL –the speed of change is amazing. Also, two
topping.We also changed the concept of our food. In the United years ago, the costs of logistics were around 20% more expensive.
Kingdom, where we originate, our food is all about having a home-
made look and taste. Consumers in China don’t want down-to-earth How does Costa Coffee differentiate itself from other big name
home-cooking, they want food with a “professional finish” – in other coffee brands (that remain nameless)?
words, it has got to be gourmet. If you look at our shops, we’ve created a very distinctive, warm
environment that makes you feel like you’re coming home – A lot
Where is Costa brand food made? of people use our place to get out of the office or to have meet-
Right now, Costa coffee shops are only located in two general re- ings. We’ve also changed our seating to include more sofas and soft
gions: Beijing and Shanghai. We have two joint venture factories, one chairs – so people lounge longer. By the nature of these surround-
to serve each local region, located right out- ings, Costa is all about calm and really enjoy-
side of Beijing and Shanghai. This means that ing a coffee moment. Therefore, if you look
we deliver fresh from each factory every day. at our customers, we tend to draw an older,
One of the
more mature crowd, aged 25yrs. Our cus-
Doesn’t this make your supply chain
best things
tomers tend to be more mature, affluent and
more complicated? of the professional working class. This is in
Our consumers want freshness, which al-
I've seen is a
comparison to a younger, louder 18-25 year
ways is complicated. In small countries like old demographic which consists of a lot of
the UK, it’s normal to have daily deliveries lot of young students.
from one facility, but China is so incredibly
big this method is a challenge – if we were to
companies
How often do you visit your stores to
service all stores from one place, we’d have
coming in to
check up on them?

to freeze products. Manufacturing locally lets I don’t “check on” shops, but I do go in to
us serve better quality food. However, having help and support them – although I generally

China and
two food manufacturers is also tricky when try to keep invisible to the coffee shop be-
we want to change recipes or add new food really pushing cause I don’t like them to think they’re being

because we still have to meet the guest’s ex- watched. I visit stores on average 3-4 days a
pectations that they will get pretty much the
competition
week. I have all my meetings in Costa coffee,

same food in any of our 52 shops in the Bei- and I spend time here just hanging out – I ob-
jing or Shanghai areas. viously have huge attachment to this brand.
www.chainaonline.com JANUARY/FEBRUARY 2010 25
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