The third annual Allegra CEO Forum took place on October 12 at the Metropolitan Pavilion in New York City. The prestigious event welcomed leaders from across the global coffee industry to explore the theme of ‘The 5th Wave, a new era of global coffee leadership’, and examine what this will mean for the future of the industry.
Cliff Burrows, Group President of Siren Retail at Starbucks, opened proceedings with a stirring keynote presentation demonstrating how Starbucks uses its scale for good. Burrows spoke of how the company engages consumers by elevating its in-store experience, be that in the form of new technologies, improved convenience or the expansion of the immersive roastery and ultra-premium Reserve concept. Burrows also discussed how Starbucks uses its scale to provide opportunity programs for its partners (employees) and the company’s commitment to building a sustainable and vibrant coffee community around the world.
Jeffrey Young, CEO of Allegra Group, presented highlights from Project Café2018 USA, Allegra’s definitive study on the US coffee shop market, and introduced the audience to the ‘The 5th Wave – The Business of Coffee’ citing it as an exciting new era in the development of the global coffee industry. Young contended that the future of the industry is being shaped by high quality brands adopting a more advanced set of business practices to deliver boutique concepts at scale. Young stressed that adapting to these changing market dynamics is a business imperative.
Engaging the audience with the bold question – ‘is the barista dead?’ – Heather Perry, VP and Director of Training at Klatch Coffee, took to the stage to debate how advancements in technology are changing the role of the barista. Perry stated that in this new world of super automation, coffee shops no longer require a barista to make quality coffee. However, the role of the barista is evolving into that of a hospitality professional and the barista needs to be utilized to create brand loyalty and an authentic experience for the customer.
Scaling higher quality across the business
When questioning how a business can truly scale specialty coffee, Amber Jacobsen, Director of Toby’s Estate USA, also discussed the importance of the coffee shop workforce. Jacobsen shared her conviction in operating as a human-led business and pushing the boundaries of in-house education programs to boost employee commitment and productivity.
Jonathan Rubinstein, Founder and President of Joe Coffee, gave a fascinating overview of how he has been able to successfully scale his boutique concept. Rubinstein highlighted the key factors for achieving this was the use of smart business partnerships, respect for the trading neighbourhood and sourcing hospitality-targeted investment backing from industry veteran Danny Meyer and Union Square Hospitality Group.
The morning session closed with a panel featuring Perry, Jacobsen and Rubinstein to discuss what successful leadership looks like for a 5th wave brand. The panel addressed the challenges that arise when scaling quality across the business, the importance of adapting to the changing consumer behaviors, and debated whether ‘The 5th Wave’ is an achievable ambition.
Mike Gilbert, Chief Executive of International at Retail Food Group, opened the afternoon session with some candid insights into RFG’s strategy for global expansion. Gilbert cited the company’s network platform as the key tool for accelerated licensing, tapping into local expertise, and reducing expansion risk.
Celebrated global coffee analyst, Maja Wallengren gave an eye-opening presentation on the increasing issues surrounding coffee supply, asking simply ‘is there enough coffee to feed demand?’ Wallengren introduced the goals of an ambitious global plan for sponsoring industrialisation in coffee producing countries in order to help eradicate poverty and build a long-term sustainable supply chain.
Yoshinori Uda, CEO and President of Ogawa Coffee USA, the US arm of the renowned Japanese roaster and retailer, gave an educational presentation on the current coffee consumption trends in the Japanese market. Yoshinori echoed Wallengren’s concerns over the amount of coffee supply relative to demand and spoke of the importance of continued innovation to create the foundations necessary for the next generation of coffee.
Nick Tolley, Co-founder of Taylor St. Baristas, shared his global insights on the impact of the growth in specialty coffee on non-coffee led businesses. Tolley discussed how the convergence of an increasing market of coffee connoisseurs and the ability to scale boutique cafés, has put specialty coffee on the radar for non-coffee led brands to be used as a proxy for quality. Tolley argued that the next generation and the future of specialty coffee actually lies outside the specialty café industry.
The day closed with a lively panel discussion around the key sustainability issues facing the coffee industry at the moment. Maja Wallengren was joined on stage by Kamal Bengougam of Eversys, Neil Whittall of Huhtamaki and Truth Coffee founder, David Donde. The panel debated the growing importance of direct trade, customer concerns with environmental issues within coffee and how the industry is responding to these pressures.
The audience left with valuable insights and a rich understanding of how The 5th Wave will shape the future of the global coffee shop market and how the industry must respond to these rapidly changing market dynamics.