Much of the protests about the involvement of Tesco in funding Harris + Hoole have proved a bit of a storm in a teacup to be honest but it’s interesting to consider the impact the coffee chain might have.
My initial reaction to the idea was not positive I have to admit. I probably had an over-naive view of independent artisan coffeeshops. I also had (and have) a huge dislike of Tesco because of how I feel about the effects of their singularly profit-driven approach on smaller retailers, community and local shopping, farming, customer care, and the seeming promotion to customers of mediocre aspirations to low quality, highly packaged products. Do you know how many farm are owned (or in hock to) supermarkets nowadays?
Why then would I consider Harris + Hoole could be a positive force in coffee then?
The complexity of investment and ethics
Tesco do not own Harris + Hoole. I have been assured by the Tolleys (who previously developed their own minor chain of indies Taylor Street which continues to thrive) that Tesco merely invested. They do not control operations. They are said to own far less than the 49% quoted in the media. The Tolleys have the say on coffee beans, equipment, staff training and recruitment. Although my faith in this has been tempered slightly by H + H opening directly adjacent to Tesco stores, this working relationship appears not to be affecting the provenance or quality of the coffee. Andrew Tolley reassured me that Tesco do not control Harris + Hoole but provide investment. Basically it’s as simple as this: Tesco have a non-controlling investment stake. The only spanner in the works would come if Tesco offered a zillion pounds to buy a controlling share – but they could do this with any coffee chain, surely?
Anyway, let’s take a step back. Let’s look at some of the expensive fit-outs of recently opened London coffeeshops. Where does the money come from? Even think of more modest coffeeshops. They still require investment. The money come from silent partners, individual investors, banks and financiers. Do you really know who owns your local indie coffeeshop? Who is checking on the ethics of these investors? Who knows, some might have ethics even less popular than Tesco. What about the rent the cafes might pay to a landlord? Perhaps a landlord who is exploiting land ownership in an ethically questionable way. Why are we singling Tesco out?
It could be more relevant to criticise Harris + Hoole for being registered in Ireland, a move companies often exploit to reduce tax. Corporation tax is 12% in Irelend and 23% in the UK. They claim this is to facilitate global expansion but haven’t clarified exactly why or how.
Direct Trade
Harris + Hoole are commited to using direst traded beans. This trading method is not perfect but is considered to be the most ethical for coffee producers, definitelty more so than certified Fair Trade or the open market. Union, who supply Harris + Hoole, have been at the forefront of the developemt of direct trade. Imagine the genius of persuading Tesco to invest in a product traded in a manner that is considered one of the fairest to farmers. If Harris + Hoole can develop to challenge the major chains, that will result in an increase in the proportion of coffee traded in this methos. Andrew Tolley has confirmed to me that Harris + Hoole will always use ethically produced direct trade coffee.
Who are they competing whith
So far Harris + Hoole have focussed almost exclusively on the suburbs of London, apart from a few central London openings. Those more central branches have surprised me, that didn’t seem their focus. When I visited their London Bridge cafe though it was clear who they were competing with however. They were already drawing custom from the nearby Costa and Starbucks. And this is where I believe they aim to challenge. The service is chain-like (in a positive sense) and the consistency and uniformity definitely adds to that impresssion. They even compete by serving the larger milk based drinks too.
Raising Customer Expectations of Coffee Quality
Just as the chains played a role in the 90s in preparing a coffee market for the indies, H +H can have a role to play in raising public expectations of coffee quality and provenance. While the coffee I have had there has been a little variable there is no doubt it is hugely superior to the other chains and better than many independents. When I have had a subpar drink in their cafe it has been replaced straighaway. The areas Harris + Hooole have chosen have little in terms of reliable, high quality independent coffee. Few would argue with me that standards of coffee in Bermondsey and Crouch Hill desperately needed to improve. I’m ignoring for the sake of argument a small hatch that opens in Bermondsey only an hour or two a day or a walk to the superb Elliots or Flat Cap in Borough Market.
Let the independent coffeeshops respond in their way. Either by producing a quality that H + H can’t match, a personal service, an individual identity or by finding a market niche. Too many who have complained have been serving inferior coffee. Let the indies in Ruislip, Uxbridge, Crouch End and North Finchley respond.
The Dream of the Tolleys
Imagine having a dream of taking a great product to a wide audience, many completely unfamiliar with the range of tastes and the quality that is possible with that project. Andrew, Laura and Nick Tolley have had great success with their Taylor St Baristas chain since 2006, launching the career of some great baristas, training many in the industry, spearheading quality coffee in the City and reaching far off Richmond and Brighton. Tesco’s money allows the Tolley’s to develop that dream further and wider.
Barista Training
Given Andrew’s experience in the London School of Coffee, it’s not surprising that I have hopes that the staff training H+H provide could help fill a shortage of quality baristas in London. I have met more than a few skilled and passionate baristas who started their careers in Starbucks, so why not Harris + Hoole. It’s true that many have detected a variable amount of product knowledge among H + H staff but there will be enough motivated people to help fill the shortage of quality baristas.
Subterfuge?
One criticism I have heard often is that Harris + Hoole pretend to be an independent when they are clearly not. It is true that a search of the Harris + Hoole website for the word ‘Tesco’ does not give any results but then which coffee company’s website does list their investors on their home page? The shops look like a chain to me and indeed the uniformity and consistency they aim for is exactly that of a chain. Harris + Hoole have made no secret of their investors from day one.
Thoughts
Over to you. What do you think? Leave a comment below.
Phil Wain 
I have no issues with it competing against independent coffee shops. They thrive around the likes of Costa, Starbucks etc. because they are different.
The thing is the long term goals. H&H will *not* be a small, few cafe businesses. They are being invested in by Tesco because they will want this to be a national brand. Another Starbucks. That’s the problem.
Their look is one of independence, but they will be anything but.
That does’t mean they’re evil. I will buy from Starbucks on occasion, McDonald’s too.I just don’t think H&H was that good – which is what you get when you’re creating a template for expansion rather than your own little store.
H&H can provide an alternative to Starbucks, and the rest of us will carry on using independent coffee places when we can. With so much choice, there’s no reason not to.
Yes, I think that’s perceptive. Expansion is clearly on the cards.They will become a large chain, hopefully continuing to provide a better standard of coffee and provenance than Nero, Costa and Starbucks. For those of us who drink at Independents we’ll probably experience them most when we’re in unfamiliar towns and suburbs but next time I’m in Southgate or Crouch End I’ll be glad they’re there.
Thanks for penning this Phil. Very interesting and nice to read such a balanced piece.
For full disclosure, I am one of the founders of a small chain of good quality food and coffee outlets in the City, and H+H have popped up a few doors down from us on London Wall. I challenge anyone running an independent business to not look for a reason to have a pop at the new local competition! However, I am trying to grow a business myself and I am also a lover of great coffee and H+H undoubtedly serve a better cup than the usual high street gang.
It is incorrect to have too much objection to their presence on the high street. We live in a free market, and the Tolleys have successfully found an innovative source of financing to help them grow a business.
However, there are a few question marks for me. I completely agree with your compliments on Taylor St. I think it is a great little chain (part of my inspiration to start a business was from seeing great independents like them flourish). But what is happening with it now? Why not take investment for an existing brand which is well-liked by its loyal customers with a ready-made platform for growth? Is there a reason why the founders did not want to take investment for this but rather create a new brand. I know this suggests something more “sinister” and that is my guess. I may be totally wide of the mark on this but I am guessing that H+H has a very clear strategy for growth, very much in conjunction with Tesco. This would certainly be corroborated by the Irish tax residence, something that small businesses such as my own don’t even think about as it takes a while to start showing a profit due to the cost of growing (for example, EAT did not pay corporation tax for the first 5 or so years as it was opening stores and not showing a profit (everything being rolled back into the business – and quite rightly so!)
And the other obvious question one has to ask is why are Tesco involved. Tesco reported a profit of c£2bn in their last financial year. Whitbread reported Costa profits of c.£90m for a similar period. For this investment to be even worth Tesco opening their eyes for, H+H must be looking at something in the realms of the 1600 UK Costa stores. As much as people like good quality products, I think there is a general objection to the homogenisation of the high street, and it seems like H+H are sadly set to be part of this. The only other reason for Tesco to be involved is to drive people into their giant UK stores, which have been the great big hope for the company over the past few years. Attempting to persuade customers to spend more time in Tesco stores by having an adjoining (or internal) H+H, not dissimilar to the stated reasons for their purchase of the Giraffe chain for c.£100m recently. This would certainly explain why the founders were keen to begin a new brand for this project.
In the final analysis, people that feel strongly about the ethics of businesses that take their money have a responsibility to find out for themselves who owns a business. It is normally fairly easy to get a rough idea of who owns a business. As for us, we will continue to do our thing and work hard to make sure our coffee and food tastes better, our service is spot on and our stores are great environments to come and grab something to eat or drink!
Once again, a very enjoyable piece
Good points Daniel. By the way, Daniel’s company Coco di Mama does make a very good cup of Climpsons coffee and they have been hugely popular for good reason where they have opened for their simple, fresh Italian food.
To me it seems clear Tesco’s motives are clearly for profit. It doesn’t necessarily have to boost spending in their stores. As an investor they do stand to make a lot of money if H +H are successful, though you rightly point out this would be peanuts compared to their annual turnover.
I was in the US when they launched a supermarket over there, Fresh and Easy, which seemed to misread the market and they quickly pulled out. It’s possible to see the investment into Giraffe, H + H, Euphorium? (not sure about that one) as purely investment but the appearance of Tesco Metros with H + H units built into the adjoining property does raise the question.
I found this blog post (even tho I know the author) after searching Twitter to try and find Harris and Hoole’s Twitter handle. This was the second post I noticed. The first was a tweet from @GemmaReidy:
“The new Harris + Hoole coffee shop in Guildford, not so ‘independent’ as it looks tinyurl.com/b6uwj98 It’s bludy Tesco, incognito!”
I found this comment interesting as this was my original impression of H&H even though I am a big fan of Taylor Street (I went off them for a while but the coffee, the service and, crucially, the consistency of both has improved greatly in the last year). I didn’t even intend to visit one as my anti-Tesco ethic piqued my coffee-curiosity.
I finally went into H&H Crouch End though and loved it. The coffee was good. The range of coffees was good. The food was good. The facilities were good. I had a piccolo, a flat white and both bulk brew filters and each was of the quality I would expect from Taylor St. Also I bought H&H coffee retail beans (a Union roast, I know) and the support from the staff in choosing these and making sure I got the freshest beans was better than the service I get in some “better known” coffee shops. At least here the barista’s treat you like a customer rather than someone they expect to form their fan base.
Good coffee, good staff. They have earned my business against the odds.
However, I am still anxious about Tesco money and nervous that H&H could prevent diversity of independents. Coffee Circus in Crouch End should have had it sewn up but they are, in my experience a disaster.
I’m sitting on the fence as to the merits but drinking at the bar for now.
I agree about Coffee Circus. They had a chance to sew the market up there but they’ve rarely risen to expectation. I do hope they now rise to greatness and provide the kind of quality and service a small local indie can!
Agree with that! Lost all there good staff and have never recovered! I think they have taken there eye of what is important! CUSTOMERS! They have decided to get involved with roasting coffee instead of serving the best coffee they can from roasters that have experience! Rant over! Great piece on h+h btw!
Daniel – good response! Look at the postive tho, I have now heard of your shop because of H&H and will be into sample your wares as soon as I can!
I particularly agree with the following statement(s) of yours
“As much as people like good quality products, I think there is a general objection to the homogenisation of the high street, and it seems like H+H are sadly set to be part of this. The only other reason for Tesco to be involved is to drive people into their giant UK stores, which have been the great big hope for the company over the past few years. Attempting to persuade customers to spend more time in Tesco stores by having an adjoining (or internal) H+H, not dissimilar to the stated reasons for their purchase of the Giraffe chain for c.£100m recently. This would certainly explain why the founders were keen to begin a new brand for this project. ”
I will watch and wait.
Thanks very much indeed Jamrock. I hope you enjoy (we are much better priced also – something that wasn’t touched on in this article at all)
“Direct Trade
Harris + Hoole are commited to using direst traded beans. ”
Is this a typo or a criticism?