by Malcolm Curtis
Swisster.ch | August 24, 2010 | 08:12
The biggest seller of certified coffee in Europe is moving its headquarters to Geneva, where it plans to direct expansion targeted particularly in the UK, Spain and France. Per Harkjaer, the CEO of United Coffee, tells Swisster about the move and why the company sees opportunities in the part of market not dominated by multinationals such as Nestlé and Kraft.
One of the biggest “independent” coffee companies in Europe may be small next to Nestlé, but it is hoping to capture an untapped market for high-quality java that such giants are not catering to.
United Coffee on Monday announced plans to move its headquarters to Geneva, at the other end of the lake from the executive offices of the world’s largest food firm in Vevey.
The company, with roots going back to the early 19th century, considers itself independent because it is not a conglomerate like Nestlé, or such American multinationals as Kraft and Sara Lee, Per Harkjaer, United’s CEO, told Swisster. Those three food companies control about 50 percent of the European demand for coffee but the “rest of the market is not consolidated,” which is where United hopes to be able to expand its sales, Harkjaer said.
The company decided to move its headquarters, previously divided between Den Bosch, in the Netherlands, and Sursee, in canton Lucerne, for reasons unrelated to Geneva’s tax rates, he said. “First of all it was to create a sense of location in the centre of Europe,” Harkjaer said. “Second, Switzerland is the centre of coffee trading in the world, not just in Geneva but in places like Zug.”
The company is employing 25 people in offices at 58, Avenue Louis-Casai, including its senior management team and experts in finance and trading, purchasing, supply chain, engineering and product development. United cited access to a “well-qualified, multilingual workforce” as an additional reason for relocating to Geneva.
Formerly known as Drie Mollen Holding, United Coffee was founded as a family firm with Dutch roots going back to 1818. It is now backed by CapVest, a British “mid-market private equity fund.”
With 900 employees across Europe, the company by its own reckoning roasts more than 50,000 tonnes of coffee beans annually and buys one percent of the world’s coffee exports. United did not disclose financial figures.
One of the company’s specialties is coffee certified as fair trade or organic. This accounts for 10 percent of the global market but for United, the biggest seller of certified coffee in Europe, it amounts to 25-30 percent of its business, Harkjaer said. And it is a growing part of the market, as consumers become more aware of where coffee is sourced, he indicated.
Certified coffee, single portion servings and “high quality coffee” represent the areas of greatest potential in the market, Harkjaer said. He credited American chain Starbucks for opening up demand for premium coffee and changing the “consumer dynamic”.
“I think people are willing to pay more for quality when it comes to coffee.” United provides private-label coffee to Coop in Switzerland and to other European supermarket chains such as Carrefour, Mercadona, Tesco and Waitrose.
Swiss consumers may recognize its Giger Café, Merkur Kaffee, Schweizerische Kaffeeröstereien and Rosca Caffè brands. In another line of business, it offers what Harkjaer calls a “total coffee solution” for restaurants, cafes and hotels.
“We provide the coffee, the machines, the cups, the sugar and the milk,” he said. In addition to independent cafes and restaurants, it supplies such chains as McDonald’s, Subway and Compass Group.
A growing part of its market is for single coffee servings in a capsule, although not of the kind that work with Nespresso machines. United has no plans to follow in the footsteps of Jean-Paul Gaillard, the former CEO of the Nestlé subsidiary, who now heads the Fribourg-based Ethical Coffee Company, which is selling Nespresso-type capsules.
Nestlé has begun legal action against Ethical Coffee in France, alleging that it is abusing its Nespresso patent. Harkjaer contends the Nespresso capsules are indeed protected by the patent.
“That’s our belief and that’s what our legal advice tells us,” he said. “Nespresso is very successful but there are other single portion coffee systems.”
United uses the Senseo system, which is backed by Sara Lee and Philips, which produces compatible machines. Catering exclusively to customers in Europe, it is particularly targeting Britain, France and Spain, where it sees opportunities for expansion.
The UK is traditionally a tea and instant coffee market but consumer demand for quality coffee is rising, Harkjaer said. In Spain, hundreds of small suppliers distribute coffee and Harkjaer believes there will be opportunities through consolidation.
In France, the second biggest coffee market in Europe after Germany, “most of the suppliers are in bad shape financially so we have an opportunity to drive that market.”