Cup of Joe is recipe for global success

Imagine you are in a successful boy band for a number of years and when they part ways you enter a national TV music competition as a solo artist. You fall just short of the finals and your career is at a crossroads.

In the meantime, you have started working in a juice and coffee bar. One day you are working your shift and Universal Music’s head of A&R comes in to talk to you about a record deal. He gives you his card and tells you to ring him.

It sounds like a cheesy film plot, but this is exactly what happened to Johny Fraser, the UK managing director of the Copenhagen-born Joe & The Juice chain. He never made that call, deciding instead to try and make his mark in the food and beverage industry.

“It was a really exciting time in my life – it gives me goose bumps talking about it,” Fraser says in an accent that still betrays his Edinburgh roots, despite the fact he spent much of his early life in Tenerife. When his five-strong group, M4 (managed by Joe Jackson, late father of Michael Jackson), disbanded, Universal Music approached him about entering The Voice Germany. He moved there to give it a go.

He insists he has “not one regret” about the path he decided to follow. Like many artistes, Fraser had had a number of jobs in the service industry over the years as the flexibility complemented the vagaries of the music business. He had been a general manager of a Fitness First health club and also ran a bed and breakfast in Windsor. It was, he admits, out of desperation that he decided to give Joe  & the Juice a whirl in Hamburg. The fact that he didn’t speak German had made it hard for him to get any job while he was in the audition stages for The Voice, and when yet another company that wouldn’t employ him suggested he should go and try what he heard as ‘Jean’s Juice’, he was pretty dismissive: “I thought, ‘I don’t want to work at some old lady’s juice bar!’, so I left it a couple of weeks.

“I got desperate though, so suddenly it sounded good. I went along and it was Joe & the Juice and I really liked the high energy in there. I got on well with the country manager and I got the call offering me the job the same day.”

Fraser said he felt the same passion he had for his music for the then fledgling brand, inspired by its family feel and what he describes as the inclusive nature of the business – for example there are now three former bar managers working in the creative team and many senior team members started as juicers. It also appealed to the entertainer in him as staff are encouraged to treat the way they serve as something of a performance, which in turn attracts a lot of creative people to work at the company. Fraser’s passion led to hard work and results and six months later he became country manager – quickly learning German along the way.

At that point, just over five years ago, the company had 50 stores worldwide and its private owners, headed by founder and CEO Kasper Basse, had recently sold a majority stake in the business to Valedo Partners, the Swedish private equity firm, for an undisclosed sum. Now it has almost 300 in the US, Europe, Asia and Australia. Fraser’s UK territory currently comprises 41 stores (Denmark still has the biggest number, at 60), mostly in London but also including outlets in Manchester, Birmingham, Stanstead and Birmingham Airports and within a few John Lewis and Debenhams stores.

Joe & the Juice’s German sites grew from one to three under Fraser’s tenure and his ability to maximise profits was noticed by the then CFO Sebastian Vestergaard (now COO), who brought him to Norway temporarily to help the business there. It had grown quite rapidly, Fraser says, and was losing its community feel. Within one month, he made a big impact on KPIs, making cost savings equivalent to £24,000. He was then asked to move to head operations in the country. This was 2016 and there were 22 Norwegian stores – Fraser says it was a massive step: “I worked 24/7 because I had a bit of a chip on my shoulder to prove that I could really make an impact.”

Within 14 months, the chain grew to 33 sites in Norway, which really developed Fraser’s skills in putting infrastructure in place, particular in regards to training programmes. He says listening to, understanding and supporting people within the business is what has the biggest impact on financial KPIs and he greatly admires Richard Branson for having that mindset and managing to maintain and promote it despite the size of his business empire. To this day, many of Joe’s staff are hand-picked from the streets by scouts who look for individuals to fit its edgy brand profile (of course it helps if they are easy on the eye, too) and invite them to a ‘Meet Joe’ session where they are introduced to the brand to see if they may be interested in working there.

Fraser says training costs are significantly higher than in other similar businesses, but believes this has had a massive bearing on the brand’s success in the crowded coffee shop market (according to Branded Coffee Shops report in May, Joe’s was the fastest-growing coffee shop chain by turnover, rising by 35% to £21.7m in 2017), as much as if not more than its funky yet relaxing independent-feel interiors. Staff are constantly encouraged to interact with each other across the business too - they are invited to regular Saturday evening drinks at the company’s London training facility and take part in store-led running clubs and seven-a-side football matches.

Following Fraser’s spell in Norway, he was asked to come to London to head the then 29-strong UK business. Owner Valedo then sold a minority stake to General Atlantic, the US buyout firm, a process Fraser was involved in, having to present the Norwegian market to the buyers. He also benefitted from the sale personally, becoming a partner with the opportunity to invest in the business.

That undisclosed cash injection from that deal has helped the firm further its growth ambitions since and the global and UK operations have strengthened their senior management structure and central systems to enable the business to continue on that path for some time to come. In March, for instance the firm took on Sam Maloney, ex-CRBE Australia retailer representation head, as senior retail associate, to lead the charge for new sites in Europe.

During December, three new Joe & the Juice shops will open in London: in Old Brompton Road, Upper Street and High Street Kensington. All will be the result of the company’s new approach to design, successfully trialled at its Fulham Road store, which is more freestyle and colourful than in the past. Fraser is not fazed by this trio of close launches, having opened five stores in two and a half weeks last year when the now more robust company-wide infrastructure was not even in place.

Fraser says there are currently eight stores in the UK pipeline for 2019, all standalone and with London and the South West the key geographical focus, although he says he is also looking at Edinburgh and Glasgow and hints that another major UK airport may be on the cards. In the capital, Fraser says now the brand is better recognised, he sees a lot of potential for smaller outlets – ideally between 90 and 120 square metres - in residential neighbourhoods. This strategy has been reinforced by the success of bars in Fulham and Chiswick and made more achievable by the number of smaller operators struggling in such areas and so vacating sites.

Fraser says Joe UK’s “white space is roughly 70 stores in London and the South-West area,” but there is also still plenty of opportunity to increase profits within the existing business. The company is trialling different counter products to sell as well as constantly looking into general product development. He adds that it is also looking to make better use of technology to update its hand-written ordering methods and also to improve its loyalty scheme. A new app is in the user experience and interface design stage – details are still sketchy but it will be based on a gamified and tiered loyalty programme and will hopefully launch next year. Same store sales this year have continue to be strong in the meantime, up around 9% on 2017 (based on the 80% of the estate that has been open for more than 12 months).

In case Fraser doesn’t have enough to keep him busy in the UK, he has also just become regional director for France, where Joe’s presence is currently limited to two outlets at Nice Airport and one in the nearby Polygone Riviera shopping mall. Paris is the priority so the company can build brand presence in the country before considering further expansion there. He hopes that in the not too distant future he will be able to add French to the list of languages he is fluent in – English, German and Spanish. Fraser says he often ends up working with team members he has spent time with in other countries and that the flexible movement of people within the global business helps keep the community spirit flowing from the top down too.

The company is also expanding in its other existing territories, with company-owned stores (Iceland is the only place where there is a franchise partner but this model is not likely to be repeated). However, the UK is the market earmarked for most growth currently in terms of store numbers. The brand seems to have established a strong foothold for itself wherever it has ventured so far and to have done so without any great fanfare, something Fraser believes is down to the niche it has carved itself with its simple combination of juice, coffee and sandwiches and the entrepreneurial company culture which has gone down better, particularly in places like Germany, than those of the more rigid American brands.

There have been recent US press reports that Joe’s owners may be considering an IPO towards the end of 2019, which could value the firm at about $1.5bn. Fraser brushes this off but admits it is possible that this, among many other options, could be a future direction for the company. At that point, who knows which path he will take. For now though, he says working for Joe & the Juice is “magical.

“It may sound a cliché, but I am just enjoying the journey.”

 Mel Flaherty is a freelance journalist specialising in the hospitality sector