Peter Irvine, Co-founder, Gloria Jean’s Coffee, Sydney, Australia has had over 40 years’ experience in business at a high profile management level. Peter first started his professional career as a junior at DDB Needham, Sydney – which became the second largest advertising agency in Sydney and worked there for 33 years. In 1996 Peter branched out into franchising and in conjunction with his business partner established the Gloria Jean’s Coffees franchise in Australia. Since they opened their first coffee house in November 1996, Gloria Jean’s Coffees has grown to be the largest specialty coffee retailer and one of the fastest growing franchise organizations in Australia. Today there are over 400 Gloria Jean's stores and kiosks across Australia and over 800 coffee houses in 39 countries worldwide. In January 2005, Peter and his partner purchased the international Master Franchise brand and supply and roasting rights for all countries.
In a recent interview with Dr. Richard Goossen, Peter addressed the following questions
1 - What did you perceive to be the strengths of Gloria Jean’s Coffee?
Number one was the absolute quality of the product. It was premium coffee beans, roasted correctly, not allowed to be touched by any moisture and packaged well. We were absolutely committed to quality.
That leads to point two which is training. It is all well and good for us to know how to make these drinks, but you have to get franchisees and store managers and their staff to all be trained. We spent a lot of time and effort not only in the initial training but on on-going training.
A third strength was that it was a product that the market actually wanted, but didn't know they wanted it. It is like when I speak at retail functions and I get up and I start by saying that the customer is not always right. I get everyone's attention because they have been taught that the customer is always right and so I say, we have to learn to exceed their expectations and when you do that with a product you deliver and the way you connect with them and the cleanliness and all the things you do in your store. I often quote Ray Kroc, the guy who founded McDonald's. He talked about Q, S, C and V: quality, service and cleanliness and value. He says quality, service and cleanliness equal value and people see that and it changes the mindset of retail. What we say is that we had a product and through sampling and trial we got people to taste it and we constantly got good feedback and they would introduce friends to the product so it became quality, training and having a product that the market wanted, but didn't know they wanted it.
- What did you perceive to be the weaknesses (up to 3) of Gloria Jean’s Coffee?
The US model of Gloria Jean’s Coffee was flawed and we didn't know how flawed it was. Primarily they were a coffee/tea/merchandise gift store and not a specialty coffee store. They were selling a lot of pottery, tea pots and the stores were full of this stuff. Most stores had no food and so it was more of a gift store. As we started to meet franchisees in the US we discovered that their most successful month was December which is gift giving. If they don't make it then they are destroyed for the rest of the year. I said that that was a terrible model. We set about changing the model which would still reflect the brand and the quality but turned it into a specialty coffee outlet which focused on the drinks. That was the reason for the turn-around of the business.
The second thing was that there was limited people with expertise. There was no one we could find that actually understood the specialty coffee concept and making coffee correctly. We introduced latte art to Australia, created by the barista, which wasn't even recognized in Australia. People would laugh if you called yourself a barista. Now they pay good money and there are competitions and the latte art has gone to a new level. We introduced all of that to this country.
The third weakness was that we were undercapitalized when we started the company and so we couldn’t set it up property.
- What was your most satisfying accomplishment or event with Gloria Jean’s Coffee?
The opportunity to take a brand and grow it internationally. It started in the US and was in 15 countries but they were all struggling. They had one international guy and he wasn't allowed to fly! So when we came on the scene we were a big geographic country, but a very small population a long way from anything. We set about and succeeded. People started to approach us and now there are 40 countries from various parts of the world.
We were able to support ministries. For example, we were able to support 200 people with Compassion in a village in Brazil. Our master franchisees all funded children and so at one stage there were 450 children being funded in a village in Brazil. That gets me excited. We were also able to fund $100,000 fresh water machinery in Third World countries. There are an enormous amount of projects that have been funded.
Thirdly, I am always really satisfied when you build a brand from nothing when everyone tells you that it is going to work.
What was your most disappointing situation or event with Gloria Jean’s Coffee?
First, we made some terrible decisions.
Secondly, I think partnerships can be disappointing. I discovered that as you grow partnerships, there are some people where the power becomes very strong. The power that you have can be misused. I have seen that. It is also not God-honoring.