In Australia, Gloria Jeans Coffees is the market leader, with more than 400 stores across the country

to its credit. Gloria Jeans Coffees has now arrived in South Africa. It is investing over R45 million in the local development and rollout of the brand over the next few years. South Africa has a huge emerging middle class consisting of people who are aspirational and well-travelled, who are accustomed to European cafe culture. This provides a huge opportunity to grow the existing market, says Steve Gersowsky, MD, Gloria Jeans Coffees, South Africa. The flagship store, based in the Fourways area of Johannesburg, has grown by between 35 and 40 per cent per month since it opened in February. With a range of new products and the launch of a new national promotional strategy, we envisage that our growth will be approximately 15 to 20 per cent above what we initially budgeted, says Gersowsky. He believes that brands cannot fool the customer when it comes to providing quality. Customers know the difference between a great and an average product and in todays oversaturated market it is quite simply not good enough to be good. You have to be great in order to capture the markets imagination. Word of mouth has boosted the brands entry into the local market but Gersowsky believes that the brands unique marketing strategy is what sets it apart. This is a dual system that focuses on national marketing as well as local store marketing. National marketing involves new product launches (to create an awareness of different product offerings), PR and new store openings. Local store marketing entails the implementation of different tactical programmes, like Frequent Sipper Cards, Whole Bean Club, Business of the Day and various other programmes that are run in-store. All launches and tactical programmes are supported in-store with various point of purchase elements, such as sampling campaigns, says Gersowsky. Agency Joe Public is handling the brands advertising, while Publicity Workshop has been tasked with national and local store marketing. The real opportunity is that all our stores are franchised so the franchisees have the opportunity to tap into the local market and work in their areas. They are also able to download all available online marketing collateral from the international website and to adapt to the market they are trading in, says Gersowsky. The store franchisees collaborate with the managing team to ensure that the different elements, including music, decor and furniture, are just right. Furthermore, all franchisees go through two months of intensive training at the brands coffee university (which is currently setting up branches in Johannesburg and Cape Town). However, this is only if they have successfully gone through the stringent selection process (which includes several interviews and personality profile tests). Store franchisees are also required to submit monthly audited reports that are subjected to full day analyses by operators. Mystery shopper reports and various store visits on behalf of management also go a long way to ensuring that Gloria Jeans Coffees only offers its customers the best. The food, store design, store ambience and product offerings need to be exceptional for this brand to stay afloat in todays saturated market. However, the real differentiation is implicit in the overall package and isnt tied to the coffee, food or design. It lies in the overall passion for what we do. How we go about looking after our guests with humility and love is the key principle that we would like to build the business on, says Gersowsky. The overarching store concept is flexible, given that it is modular: It can easily fit into either a concession in a department store, an Internet caf or a small space under a staircase in a shopping centre. It can even operate as a mobile unit that can cater for events or as a store front in a large shopping centre, says Gersowsky. The stores are all similar in design but each one has a unique feel almost anti-brand, says Gersowsky. As our roll-out is countrywide, it is vital that we are advised by our franchisees with regard to the nuances that characterise each region and that we adjust to suit that market, he says. The store environment is appealing, with a focus on design. Some of the stores are currently operating out of Wordsworth bookshops in Knysna and the V & A Waterfront, and all stores will soon be linked to a dedicated music channel designed specifically for the brand. Store personnel are enthusiastic and are encouraged to feel a sense of belonging. Gersowsky understands that they are responsible for creating the right vibe and driving consumer loyalty. Unlike other traditional coffee shop brands, we do not run a full scale restaurant. The interaction between the

guest and the brand takes place through the barista and the team leaders behind the service area, he says. Staff development and training is a top priority. Gersowsky maintains that the lack of skills development represents a challenge in the South African market. He acknowledges that one of his opportunities is to create a business in which the staff have an equal chance to do well, based not only on skills but also on the desire of each individual (as well as the team) to achieve success for the collective good. We aim to develop our people at the coal face. This will hopefully provide an opportunity to empower our staff and to create a brand that is owned by the hearts and minds of our people. For me this is more important than anything else if we are to differentiate ourselves, says Gersowsky. Another significant differentiator is the brands product offering (which is wider than that of niche coffee retailers). We import the top two per cent of the worlds finest 100 per cent Arabica beans, which are roasted by our own roasters in Sydney, Australia. We have 53 different varieties of beans that range from single origin beans, flavoured beans and blended beans to an extensive range of Fairtrade beans, all of which are also available in decaffeinated products. The brand does not only focus on hot branded drinks: it also has a wide variety of over-ice cold beverages, fruit based chillers and smoothie based drinks, says Gersowsky. The food offering includes a wide variety of fresh sandwiches, baguettes, wraps and salads, which are all prepared daily on site. Added to this, Gloria Jeans imports an exclusive range of confectionary from the UK, produced in some of Europes leading bakeries. These products are kept frozen and are then freshly baked in stores on a daily basis. Gloria Jeans even makes use of leftover products by offering them to local charities. Nothing is held back at the end of the day: it is given away to charity at the end of each shift, says Gersowsky. While the focus will always be on their gourmet coffees, Gloria Jeans understands that the consumers overall experience is important. Their exclusive food offerings promise to add a unique dimension to their customers coffee drinking experience. As the brand rolls out across South Africa over the next few months, it will be rely heavily on finding franchisees that share in the collective brand vision. We have created a detailed process that allows us to ensure that we attract the right people to our brand. The reality will always be that the future of the brand depends on the perception that guests have of it. The customers will vote with their feet, says Gersowsky. He believes that their aim is to create a culture of passion around offering the supreme cup of coffee with new and innovative latte art work produced by the finest baristas in South Africa. Gloria Jeans Coffees plan to open 16 new sites during this year, including, amongst others: Cavendish Connect; Tygervalley; Bayside; O.R. Thambo International Airport; Vincent Park in East London; Cedar Square in Johannesburg; Bridal and Co; Rivonia, as well as Loch Logan in Bloemfontein. What does the future hold for gourmet coffee brands? The future trends in coffee drinking will evolve toward drinking Fair-trade and organic coffee from roasters who embrace their responsibility to establish a sustainable and lasting relationship with the coffee farmers themselves. We will also see a strong growth in high quality chocolate based drinks, as well as a significant growth in single origin leaf tea drinking, says Gersowsky.

Gloria Jeans Coffees: the brand Core market demographics: females, 18-39 years, with a segment aged 25 to 30 years who are mature coffee drinkers Core strategy: premium coffee supported by quality supplements (decadent pastries and gourmet sandwiches)

Brand values: community involvement (the store is regarded as a place in which to meet or socialise, as well as a place of refreshment); great service, great ambience and decor; the customer is the centre of Gloria Jeans Coffees Brand history: In 1979 Ed and Gloria Jean Kvetko opened a small coffee shop near Chicago, Illinois, in the USA. Gloria Jean successfully introduced gourmet coffee to the US market, where gourmet came to mean good quality rather than high price. By 1986 Gloria Jeans was franchising to third parties. Over the next few years Gloria Jeans Coffees won several awards, including the title of American Entrepreneur Magazines #1 Gourmet Coffee Franchiser in America (for five consecutive years). In 1995 Nabi Saleh (an Aussie with several years of experience in coffee and tea) and Peter Irvine (a franchising and branding specialist) partnered to take the Gloria Jeans Coffee brand to Australia, where they acquired the Australian master franchise. In 1998 they franchised the first Australian store and during the next six years they opened 185 stores across Australia. It was not long before the pair (trading as Jireh International Pty Ltd) gained the international brand rights (which excludes trading in the USA and Puerto Rico). In 2006 Gloria Jeans Coffees was named the Australian Superbrand of the Year, the Best Retailer 2006, the best Franchiser 2006 and the best Franchisee 2006. Aside from gourmet coffees, Gloria Jeans also sells pastries that are imported from Europe and baked in-house. Their fully trained baristas are encouraged to develop their business skills. The brand supports three international charities worldwide, whilst the stores support local charities. Awards and accolades:

2006 International Franchiser of the Year, named by the Franchising and Licensing Association of Singapore (FLA) and the World Franchise Council Named 2006 Emerging Exporter in the Premiers NSW Exporter of the Year awards, held by the Australian Institute of Export Franchise Export Award of the Year 2006 at the PricewaterhouseCoopers Excellence in Franchising Awards American Express Supreme Reward for Best Retailer Bank of Queensland Best Franchise Awards Franchiser of the Year in the PricewaterhouseCoopers Excellence in Franchising Awards 2005.