Smell the coffee

Green campaigners in Oxford are trying to stop the increase in coffee shop chains, saying they are pushing independent retailers out of places like Cowley Road, Headington and Summertown and creating clone towns', all with the same outlets.

But consumers are still queuing up to pay for their shot of caffeine, despite the fact that some streets seem to have a coffee shop every 20 yards.

The rampant growth of the coffee market in the UK has surprised many who saw it as a temporary fad, and five years ago there was talk of saturation.

But since then the value of cups bought in coffee chains has doubled, fuelling a market worth an estimated £1.2bn.

Analysts Allegra Strategies predict the number of coffee shops in the UK could rise from 3,000 to 5,000 within ten years, with small towns most likely to be targeted.

Starbucks claims on its website that Londoners are never more than five minutes away from one of its stores. Oxford, which was the home of the first purpose-built coffee house in Europe - which opened in 1650 on the site of the Grand Cafe in High Street - must be a close rival to the capital. The city now has has at least 40 coffee bars, including the world leader Starbucks, as well as Costa and Caffe Nero.

So do we need more coffee shops in Oxfordshire? One person who believes we do is Andrew Bowen, who, with his wife Claire, has just bought the master franchise' for Coffee Republic.

While Starbucks is indeed a conventional chain, owned by its US parent, its rival Costa - owned by Whitbread - is now bigger than its rival, thanks to franchising, an expansion method now being used by Coffee Republic.

Coffee Republic has had a chequered history. Its founders, Bobby and Sahar Hashemi, wrote a business book called Anyone Can Do It: Building Coffee Republic From Our Kitchen Table, about their experiences building up the company into the UK's first coffee shop chain.

However, by 2001 the big US chains had arrived. The competition meant the company nearly collapsed after over-expanding during the dotcom downturn, and it suffered large losses. The controversy continued last year when Bobby was ousted in a shareholder revolt.

Now under a new management team led by chief executive Steven Bartlett, Coffee Republic has a new strategy to tap into the growing market, aiming to open more than 100 bars with its new deli' brand over the next six to 12 months.

The idea won the Media Today Business Achievement Awards for Best Investment 2007.

Mr Bowen said: "We are not like Costa, Caffe Nero, or Starbucks. We are rolling out the deli concept, where we make everything on site, like Pret A Manger or Subway.

"It's more than just cake - it is proper food."

He added: "It's quite early days in the regeneration but you only have to see how the deli bars work. There's a new team at the top, developing new drinks and helping to rebrand the bars."

A former manager of Tesco's superstore in Abingdon, Mr Bowen ended up developing stores in Central Europe. Fed up with corporate life, he decided he wanted to set up his own business.

His wife, a midwife, has had a crash course in admin and runs the payroll and invoices. Having won the master franchise contract and taken over the Maidenhead and Oxford outlets, they are now looking for people to take on franchises in the Oxfordshire, Windsor and Maidenhead area.

He said: "I don't think there is a typical person we are looking for. They must want to run their own business and work for themselves.

"It could be someone from the fast food industry or someone who works for Costa or Starbucks. It's a nice environment, ideal for someone who has done the corporate game and wants something different - someone with passion for customers."

There is one snag - you need £200,000, although Mr Bowen says banks will lend up to three quarters of this. Unlike Costa, Coffee Republic allows people to take on just one coffee bar, rather than half a dozen.

He is philosophical about the campaigns against coffee chains and clone towns'.

"I think Starbucks is a target because it's global - it's always going to be a target if someone wants to make a point.

"I think it comes with the territory of becoming bigger. The difference is that Coffee Republic is smaller and it's British. We are trying to do something a little bit different."

He is unwilling to be drawn on possible sites in Oxfordshire.

"Franchisees sometimes come to us with an existing site - perhaps they already run a restaurant or coffee bar. Some have premises that they already own, or they suggest a site.

"Alternatively, we can help them with a site."

He added: "The market is due to grow 50 per cent in five years. There's going to be a fair amount of consolidation in the coffee bar market.

"I think more and more people are demanding better quality coffee. People use them as meeting places, offices. I think they are taking over from the pub."

So does he think it has reached saturation point?

"I think you need to work that out for yourself - try and find one without a queue in it. There is opportunity, and demand is growing. When a coffee bar is owned by the people who run it, there is a difference in the standard of service. It's easy to see, because people care."

Mr Bowen will be running open evenings for potential franchisees on Tuesday, October 2.

Contact: Andrew Bowen, 07736 950673, www.coffeerepublic.co.uk