Catching up with Brazil’s The Coffee

Left to right: The Coffee co-founders Carlos, Alexandre and Luis Fertonani | Photo credit: The Coffee

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Founded by brothers Carlos, Alexandre and Luis Fertonani, The Coffee opened its first store in Curitiba, Brazil, in 2018. Taking cues from the sleek, highly curated café experiences encountered during several inspirational trips to Japan, The Coffee gave many Brazilians their first taste of homegrown specialty coffee served in digital-first boutique stores.

Raising $450,000 investment in 2019, $4.5m in 2020, $6.8m in 2020 and a whopping $10m in 2023, The Coffee now operates in 18 countries, including more than 200 stores in Brazil and nearly 50 franchised outlets across Central America, the Middle East, East Asia and Europe. By 2028, The Coffee has set an ambitious goal to reach 1,500 stores outside Brazil.

The Coffee currently works with ten Brazilian coffee producers to supply its growing business, roasting around 15 tons of specialty coffee in its native market and a further ten tons in Portugal every year to fuel a growing international store portfolio.

Technology has been a crucial aspect of The Coffee’s proposition from the outset, and to this end, the business has developed its own digital ecosystem to provide seamless, fast and quality-focused service. Customers can order beverages on The Coffee’s in-house developed app that is fully integrated into POS, ERP, server tablets and the barista portal. The Coffee uses La Marzocco and Sanremo espresso machines.

How would you characterise the specialty coffee market in Brazil today and how did The Coffee capture the imagination of Brazilian coffee consumers?

The coffee market in Brazil is big, but most people still consume low-quality coffee. Much of the coffee consumed in Brazil is still served with sugar added, syrups, caramel or some sort of sweetener.

Having said that, a small but growing percentage of the market does have greater purchasing power and would like to try better coffee where it is available. When we entered the market in 2018, our purpose was to offer a high-quality coffee, but still we had a lot of options with flavour added. We think this was part of the successful strategy to attract a following in the market.

An iced Vanilla Latte, featuring The Coffee’s signature Japanese branding | Photo credit: The Coffee

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How did Japanese design and hospitality inspire your brand DNA and why do you think it resonated with Brazilian consumers?

We conceived the brand after a trip to Japan and we thought it would make sense to use the Japanese inspiration to create the concept. We were worried that we would be passed off as an inauthentic Japanese brand, but on the other hand, we love the culture and we wanted to bring a little piece of what we saw in Japan to Brazil’s coffee scene – especially the small, cosy shops, high-quality coffee and impeccable service that Japanese consumers are accustomed to. These are the key elements we wanted to bring into our concept.

Tell us more about your tech ecosystem and how it has evolved. What are the benefits across efficiency savings, staff training, and speed-of-service?

We have technology in our professional backgrounds, and this is the main reason why we brought tech into the development of the brand. We didn’t really know what kinds of technology would help the business, but tech is all about exploring an endless range of opportunities. The more you implement technology, the more efficiency you will achieve in your business. It can be quite expensive, but this is a long-term investment.

Increasingly, we will be able to monitor all store data across the globe while delivering greater personalisation. We will be able to understand their behaviour, and this will allow us to automatically preempt relevant offers to our customers.

For example, if our system identifies that a certain customer always places an order at 9am at a certain store, we will begin to send a push notification asking if they would like to repeat the order, without them having to open the app and place the order manually.

Why did The Coffee choose Spain for its first overseas market and what led the decision to open the company’s European roastery in Lisbon, Portugal?

We started our international expansion after an investment round completed in 2020. We chose Portugal, Spain and France, where we selected a few locations to open stores. But the hub would be Lisbon. The proximity of the culture and the language helps us to do business in Portugal. The first store happened to be in Spain because we were able to speed things up with that store, but the second store in Paris opened only a few months later.

A The Coffee store in Barcelona, Spain | Photo credit: The Coffee

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The Coffee has previously announced plans to open 1,500 international outlets by the end of 2028. Which markets does the company intend to focus on and why?

We are excited about our expansion in Europe, especially in France and Austria, where our stores are performing very well, and soon in the Netherlands, Germany and Switzerland. We are making a sizeable investment to expand in Europe as we see a great product market fit.

We see also very good potential in Mexico, which is a market run by a master franchisee. We have eight stores open and another 12 to be opened until the end of the year.
 

“The more you implement technology, the more efficiency you will achieve”

The Coffee is part of a new wave of coffee chains globally blending specialty coffee with speed of service and convenience. Is this approach is the future of coffee shops and why?

I believe there is room for a range of approaches – independent coffee shops, branded coffee chains, speed of service or higher dwell time stores.

The market is huge and it continues to grow. Generally, I think anyone serving quality coffee and food has a good chance of success.

The Coffee has started to open larger footprint stores in Brazil to cater to longer dwell times and a higher volume of food orders. What was behind this approach and what will the mix of sites internationally look like moving forward?

We think that coffee pairs very well with good food. Therefore, we will continue to invest in providing good quality food in our stores.

We have different store sizes for different locations and a range of menu items for each store type.

It is not our strategy to grow more and more food options, but we had to increase the options we offer.

Given the brand’s Tokyo influence, does The Coffee plan to open stores in Japan and other leading specialty coffee markets in Asia?

We will certainly open in Tokyo in the future. We are just waiting for the right moment. 
 

This article was first published in Issue 21 of 5THWAVE magazine.

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