Sarah
So Scott, you’ve, welcome to the podcast today. You’ve described yourself as a change agent, a people leader and someone who’s obsessed with operational excellence. And I wonder that that seems like it might all be coming together right now for you because there’s a lot of change and innovation at the coffee club. And we’ll obviously unpack that in this conversation, but what do you think is the overarching distinction that marks the coffee club from its competitors?

Scott Meneilly
Well I’d say there’s a few things. Firstly, we are the longest standing Australian owned cafe chain and with that one of the greatest things that holds us in, I guess, as being completely different to the other cafe chains is that we are a full service cafe with full kitchen. When you look at our competitive set, people would put us in that area of franchised coffee. So, you know, we are franchised cafes. So, you we’ve got the full kitchen. So that’s probably the first thing, you know, that stands us apart. Secondly, would probably be our size with, you know, 400 stores globally. So I think that puts us in really, really good stead as well.

And the other thing is that we are really seeing ourselves, especially moving forward, as this brand that combines the best of chain reliability with the appeal of independent cafes and all of the goodness that comes with what we’re familiar with with the independent cafe chains or cafes.

Sarah
So I mean, that’s a really interesting point because I think for many years that the cookie cutter, as it’s been described, form of franchising was what everyone expected. And then we had that rise of all the independents and the barista driven coffee shops. And that’s had a real influence, hasn’t it? So it is interesting to kind of be able to tread that path. It was to be a tricky path to tread, I would imagine.

Scott Meneilly
Yes. Well, it is a really interesting one, but that’s where we see, you know, the vast majority of our competition comes from independence. So and the strength that we have is that, you know, we are in multiple places where your independence or your local independent, there’s generally one of those. So when you’re going to a new area and if you’re, for example, based in Melbourne and you go to your local independent

coffee shop and then tomorrow you’re in a different state. Well, where are you going to go? Who are you going to trust? And that’s where we see that we’ve got this distinct advantage that, you know, we can provide, you know, quality, experience, but, know, great, great coffee, you know, great, highly skilled baristas, great food, great reliability, a lot of trust. So we have this advantage over the independence, but we have to make sure that we’re taking the cues.

from the independent cafe market. where the independents have their greatness is because of their passion that comes through, their team, their passion for coffee, their passion for creating great looking food, great tasting food. And then also in bespoke independent looking locations. So if we can take all of those cues and roll that into our system, then it becomes a highly desirable place to go.

Sarah
So while we’re on that kind of topic, how do you do that and kind of roll that out across 400 plus stores? mean, you you’ve got an exciting, some exciting developments, now will obviously be a great time to kind of share those with us in terms of, you know, the new look. How do you specify what has to be standard and what can be localized or customized accordingly?

Scott Meneilly
Yeah, we have, we’ve categorised it into three different areas. And for us, we have our classic stores. now classic stores would really be in high volume location. So where you would see us in, in shopping centres. So that, that would be our classic store. Now with that, even though they are classic and we need to make sure that, you know, you are going to get something familiar at each location. We want to ensure that classic stores still have some independence. So they’re going to be independent within a framework. And what I mean by that is, yes, they’re all going to have a very similar look, but they’re going to have different colour schemes, different furnitures and fittings. In terms of the products, there will be favorite products that will be standard on every menu throughout all of the classics. However, you will find that the products will then be tailored also to that area. anything that’s sitting in the fresh food cabinet, you know, will be really specific to that area. So that’s in the classics.

We then have a different category, which, you know, we are calling the community stores. And with the community stores, they’re more in street site locations. And what’s critical to fit into that community is to make sure that you are sympathetic to that environment. So, you know, as a great example to that, we recently redid a store in Coolangatta. And with Coolangatta, we’re opposite the beach. It’s very much a beachside, bayside area. So you want to have that beachy feel to it. So we’ve incorporated that through the images, the colors, the textiles, the finishes in that store. So you have to fit into that environment. So it doesn’t feel like it’s jarring to the environment. In fact, it’s got to add to that environment or be harmonious within that environment.

That’s that range. And then we have the collection stores and the idea behind the collection is to really use them as brand building opportunities. So in super high volume areas or, you know, very inspirational areas. that might be CBDs. might be, you know, iconic buildings. It might be airports where we actually create a completely independent bespoke looking store that excites you about the possibility of coffee club. And you would be, if you’re very familiar with the coffee club brand, you would want to say, there is no way that is a coffee club. Are you serious? I’m going to check that out. So, and this is just about creating that intrigue so that you can unlock a little bit more about who The Coffee Club is. And because we’ve been around for 35 years and we have had this cookie cutter type approach, we want to, we want to really excite people with the possibilities of what we could be, but also who we are so that people give us that opportunity again.

Sarah
So you’ve, on that point of kind of who you are, mean, I just wonder if you could expand a little bit on that because you’ve had the same sort of tagline for quite a long time, which really, I guess, kind of cements the message you were trying to get across. Has that changed? Is there a sense that your customer is now a different customer or they’re just, you can appeal to everyone. How are you kind of focusing on that?

Scott Meneilly
So, and I guess there’s two parts to that question. One was about tagline and then one was about customer group. So in terms of the tagline, we’re probably less focused on that tagline at this point in time and more focused on generating a new customer group and a new audience. We’ve had incredibly loyal products to our brand and I still get out in stores and meeting people that have been coming to us for 30 years, which is fantastic. And then of course, we’ve got the new audience that we either are attracting or we need to attract more of. And that’s really where our focus is. So we never want to lose our loyal customers, but we want to create that environment where the loyal customers are still happy to come, but the sites are exciting enough for the new customers to to join us. So, you know, our focus really is about, you know, invigorating the space and, you know, introducing a new customer group, you know, into the network.

Sarah
How important is coffee in all that? mean, it’s in the name, but obviously the brand’s gone beyond that so much more, as you say. It’s Cafe, it’s full kitchen, you’ve got everything there, full service. Where does it sit now as a product?

Scott Meneilly
super important. It’s super important. Coffee is that it’s a sacred drink to people on a daily basis. And I know that sounds like a funny thing to say, but even as we’re going through these tougher economic times, your daily ritual of a coffee is almost a thing that you give up last. So you might choose to not buy a secondary item with your coffee but you still want to have your coffee. You might cut down from two a day to one a day, but you’re still going to have your coffee. So coffee is critically important. And when you are called the coffee club, you have to take it seriously. And when the brand started, that was absolutely what the brand was about. So when it started 35 years ago, everything about coffee was different. We would still drink coffee at nighttime.

And people would go out and they’d go to a restaurant. And then after the restaurant, they’d go to somewhere else for dessert and coffee. And back then, the coffee was much more inspired by the Italian way of drinking coffee, which was darker, a bit more bitter than what it is today. And that palette has changed. So people are after a longer, sweeter coffee than what they were. And when I say sweeter, I don’t mean adding to sugars, which is what used to happen.

Sarah
Mm.

Scott Meneilly
But the actual black coffee itself has just got a sweeter finish to it now than what it has. So we have to make sure that we’re incredibly current with that. And most recently, we did what we understand to be Australia’s largest coffee sensory survey, just to understand where are the tests right now? What are the flavor profiles that consumers are enjoying? What works best with with dairy, what works best with non -dairy but milk? What works best black, whether it’s short or long? Just to understand where do we need to be positioning our coffee? So we’ve recently relaunched our coffee for a new brand called Three Stories. And we’ve retrained 750 baristas across the country, which is main feat because all of that continues to evolve as well. So it’s an incredibly important part of our business and you’ll see that focus intensify every year from here.

Sarah
So we’ve got a new look with variety and elements of customization, which goes across the food as well. We’ve got new coffee kind of brands. Where are you heading with all this? What’s your sort of long -term strategy other than growth? Is there a point that you want to get to with the brand?

Scott Meneilly
Well, yeah, mean, the overall point is something that you just mentioned, right? It’s all about growth and it’s all about sustained long -term growth and repositioning us in the minds of everyday consumers where we are not as broad as we would like to be. We want to be involved in a lot more of the everyday or every week consumer

Sarah can
Mm

Scott Meneilly
mindset. And so that’s what it is that we’re trying to be. We want to obviously have a really distinct and ownable place in the market. So when you’re thinking about where is it that I’m going to go or where is it that I’m going to meet up with my friends or family that instantly you’re thinking about the coffee club. Whereas today maybe some people are, but maybe some people are not. So

We want to create that really exciting, exciting space for people to go to and, and, you know, I guess put us back on the map.

Sarah
So what’s the timeline and in terms of kind of growth and feeling, I guess two questions, what’s your timeline and what are your success markers along that timeline?

Scott Meneilly
Sure. timeline for us to reinvigorate the brand or reposition the brand. So we want to do that as rapidly as we can. our target would be to have the brand repositioned, you know, in most part by the end of 2025. So there’s still 18 months for us to go ahead and do that. But obviously we have a considerable number of stores and of course we’ve got

Sarah
Hmm.

Scott Meneilly
our franchise partners that we need to take on that journey. So there’s a lot to navigate, but in most part, we would like to be through that, you know, within the next 18 months. In terms of what success looks like for us, I guess it’s really about higher volume. So higher volume stores, higher consideration from, you know, various consumer groups, and then more opportunities that open up for us to grow and expand our brand.

Sarah
So those opportunities, are they going to come from within? Are they going to be new stores, new franchises? Where do see the growth specifically?

Scott Meneilly
So the growth will come in two parts. So the growth will come from increased sales volume of existing stores, but then yes, new footprints, new formats. And we’re anticipating that over time we’ll get anywhere from 50 to 100 more stores on the ground. We think we should be sitting around about that 300 store mark is roughly where we will be ending. Well, not necessarily ending, but definitely targeting.

Sarah
Hmm.

Scott Meneilly
But there’s a few years for us to get to that. What we’re not trying to do is scale the mountain as rapidly as we can. But we are trying to make sure that we are, know, each step that we take is well considered, it’s well thought through, that it’s having positive impacts for the franchise partners, you know, to the customers, you know, and driving our business forward.

Sarah
and how much of the growth would be overseas.

Scott Meneilly
so there’s a tremendous amount of opportunity overseas. So when I’m talking about 300 stores, that’s domestic. So we’re obviously, as I stated earlier, we’re already 400 nationally, but we’ve got an incredible amount of interest overseas. And right now we’re actually just finalizing a deal in India, in Cyprus, in Kenya. So we have a lot that’s

Sarah
Mm. Sure.

Scott Meneilly
actually happening in the interstate market. that’s growing tremendously well outside of Australia.

Sarah
The Kenyan market’s interesting, it’s like the first African… Yeah?

Scott Meneilly
Yeah, yeah, it is. So that’ll be our first venture. Yes. And, and, know, that will be open before the end of this year. So, but throughout Africa, there is a lot of opportunity over there. So, so we’re doing some great work with a, you know, a new master franchise partner, you know, in Africa. So yeah, it’ll be an exciting journey for us. And obviously one that, you know, there will be a little bit of learning. We can’t move into a market like that and expect that we know everything. This is about us.

Sarah
Okay.

Fantastic.

Scott Meneilly
collaborating with the franchise partner, leveraging up their skills in the hospitality industry, then utilizing the benefits that come from an Australian brand and all of the freshness and quality cues that come from that.

Sarah
Now technology is such an important part of hospitality, well of any business now, but hospitality certainly plays a large role doesn’t it? What are the developments that have been influencing the success of the performance at the coffee club?

Scott Meneilly
So, you know, I think there’s a lot of similarities that we share, you know, really across the industry in just in relation to data points and the more data points you have, the better decisions you can, you know, the better decisions you can make because you’ve actually got the data to support it. So this is why having loyalty programs and having access to

the insights of the consumer, what their buying patterns are, when they’re spending, what they’re spending, what their age groups are, what their frequency is like, what is it that we change that increases frequency or decreases frequency? So data is king, it’s been king for a long period of time. So it’s just about us making sure that we’ve got platforms that make a whole lot of sense to consumers. And it seems like…

you know, an integrated part of our business and something that makes transactions easier for the consumers as opposed to a, please sign up to our app type push. it’s going to be more of a natural usage. And an example of that is, you know, providing people the, the ability to order at the table. So if you want to order when you’re ready, as opposed to waiting for a waiter or a waitress to come over or

waiting to go up to the counter, you might just sit there and order that. So if you want to sit there and order your product, what’s the data we’re actually capturing from you? Because we still need to understand who you are, where you’re from, how often you’re shopping with us. How can we make your stay more enjoyable with us? And then if we can also capture things like what music are we actually playing at the time that you’re here? Is that making you stay longer?

Or is that making you leave quicker? So those are really interesting insights for us because if we can make you stay longer, then maybe you’ll buy another coffee or you’ll buy a tea or a dessert or something like that. it’s really about integrating it so it’s quite a seamless user experience. It adds benefit to the consumer, but also taps into some of the other technology that we have going on in the business so we can get more accurate data points and help us.

Scott Meneilly
you know, improve the experience.

Sarah
So just going back to my first point where you’ve described yourself as obsessed about operational excellence, how do you see that at the coffee club? What do you see? Do you see the of the strengths, if you like, of the operation?

Scott Meneilly
The strengths of the operation would be the customer centric nature of the business. People get involved with the coffee club because they’re passionate about people. So it’s not because they’re passionate about making money. There’s probably easier ways in the world to make money than, you know, owning a cafe, you know, or running a hospitality business. you know, that’s probably, you know, a natural benefit, you know, that we’ve got, you know, in our organization is that

Sarah
Mm.

Scott Meneilly
You know, we’ve got hundreds of franchisees that are passionate about people. And then from our point of view, it’s then that passion to genuinely understand what the customer wants. And because we have got that focus, I think that makes it a real strength. We’re not just assuming that people want coffee that tastes a little bit more unique or bespoke or a bit more, have some more floral notes to it. We’re asking the customer.

So, what is it that you actually want us to deliver? And then we’ll do those surveys and we continually survey in a really robust fashion so that we make sure that we’re going to deliver what the customer is after.

Sarah
So you mentioned there about the passion of franchisees, which is so important. Are there any other traits that you see that successful franchisees share across the coffee club? there particular skills beyond passion? Yeah.

Scott Meneilly
Beyond the passion.

absolutely. And the whole reality of this is you can be an amazing, passionate people person, great at grooming and developing your team, but you also have to be a really good business person. You have to understand, you know, what it takes to turn revenue into profit. So, you know, with the costs continually increasing.

And it’s increasing across the board with occupancy, labor cost, cost of product, as we’ve all seen, coffee prices are continually increasing. And that’s because the cost of coffee, green coffee beans is increasing. And so with all of that, you’ve got to be a great business person. You need to understand how to maximize opportunities, how to minimize waste, how to make sure that you’ve got the right products.

You know, if you’ve got fresh products on display and they’re not selling and you’re throwing out 10 of them every day, you need to have the mind, which sounds really simple, but to say, well, maybe I shouldn’t be putting that product out every, you every day. Maybe I should switch that out for another product. And, and so it sort of goes to the point of, you know, being great business people. And you know, that without question, you know, is, is a real differentiator between a successful.

franchisee and one who was doing a little bit tougher.

Sarah
And is that something that you can teach? mean, can someone come into the coffee club as not with that business understanding and be able to, sorry, be able to perform?

Scott Meneilly
Of course, 100%. And that’s the benefit of franchising. That’s the benefit that we can bring. What we need to make sure is that we are partnering up with people that have that willingness and eagerness to learn. So you can teach something to somebody so long as they want to be taught. So if there is a barrier, if there is a block, if there is a lack of willingness to understand or try or learn, then of course that makes the journey much harder.

But if there is the willingness there, then yes, you can be taught that.

Sarah
So let’s just turn to you, if you don’t mind, and your career in hospitality, because you’ve had quite an impressive career. I think you studied hospitality management. You’ve been with Sushi Sushi and Retail Zoo, which obviously is a parent company of the overarching kind of company for boost Jews. What is it about hospitality? What took you into hospitality in the first place?

Scott Meneilly
The very first thing actually was food. So if I go back to when I was in high school trying to figure out my pathway, the only thing that I sort of really enjoyed was cooking. And I thought maybe there’s something in this cooking space. So I thought where my first foray would be would be as a chef. And then from there, there was an opening up,

when I was at school and I did some work in a hotel. And really, I guess it was then understanding this customer facing piece that I really enjoyed. I really loved interacting with people and guests. And it was something that I found really joyful. So from there, I guess it was a bit of a natural calling. And I just followed that pathway and it just really

really continued. you know, I think there was bit of fortune in there for me to be able to find my path.

Sarah
What have been, if you look back over the years so far, what would you say the biggest challenge has been for you?

Scott Meneilly
The biggest challenges for me.

Scott Meneilly
You know, there, I guess the challenges come at all various levels and they come at various stages. And I think at the end of the day, you know, it’s really about satisfying the current need. And there’s always another enormous challenge that comes up at any point in time. You know, I would say that, you know, the biggest challenges are around individuals, around human lives.

So, you know, what is actually taking place at the lives of those individuals that you’re working with or in the lives of the franchise partners? Because at the end of the day, we’re in this business to improve the lives of others. And we have got franchisees that invest, you know, their time, their livelihood, their life savings with you. And…

The reason they do that is they want a better life for themselves. And whatever that means to them is really unique and independent to them. And as human beings, there are a lot of stories, right? And there are a lot of things that don’t go in a perfect linear fashion. Things happen. And I would say without question, that would be the most challenging thing is really working with

our partners are navigating through normal human stories. They can be really quite challenging and harrowing moments that you need to help navigate through.

Sarah
And has that informed your style of leadership in any way?

Scott Meneilly
100%. Yeah, 100%. And I think that is, I think it’s a really important way to lead. And we’ve all heard a lot about your empathetic leadership and making sure that you understand the entire human being, that you’re not just trying to understand the person nine to five, Monday to Friday, leave your baggage at home and come in. That’s just not the way of contemporary leadership, right? You have to understand who they are.

you know, did you, did you, you know, where did you grow up and what was your, what was your background like? And, and, know, where are you now? You have to take interest in, you know, the, the lives of, you know, individuals, because that’s what you’re dealing with. You’re dealing with a whole person, you’re dealing with part of a person. and you’re trying to make sure that, you know, their, journey and, know, their success sort of ties into, you know, your own.

business success or personal career because everything is interlinked.

Sarah
So what’s your driving force now? You’ve been in the industry for quite a while. What keeps you going?

Scott Meneilly
winning, I’d say. And when I say winning, it’s not that I win all the time, but it’s the desire to win. It’s the desire to see that there is a fix for the problem. Whatever that problem might be, whatever that challenge is, it’s the passion to overcome that. it’s just one of those things that, for me, I guess I have this…

Sarah
Hahaha

Sarah
Mm.

Scott Meneilly
continuous curiosity, you know, there is a better way and you know, the focus is to figure out how do we do that? How do we overcome that? And I find that exhilarating. So I guess that’s the driving force.

Sarah
Okay, well thank you Scott. It’s been great to chat today. Really appreciate your insights into what’s happening with the coffee club and a little bit of personal aspect as well. Thank you for your time.

Scott Meneilly
Thank you very much for yours. Take care, Sarah.

Sarah
Thank you.