Q&A: Nomad Coffee Group CEO talks about the brand’s transformation

From a major brand transformation to launching subscription packages and scouting new retail locations, Nomad Coffee Group is in the midst of a major growth push. We chat with CEO Craig Dickson about how the business navigated 2020 and its plans for the year ahead.Inside FMCG: The coffee landscape is quite competitive but what makes Nomad Coffee Group different? Craig Dickson: Nomad Coffee Group (NCG) is quite unique in its market positioning with its brands stretching across various market segments of coffee consumption allowing us to access a much larger part of the market and be less reliant on a single market segment. We have a nationally positioned leading specialty coffee brand in Veneziano Coffee Roasters (VCR) which underpins the entire ethos of the business. VCR primarily focuses on high-end cafes and restaurants who want a premium specialty coffee offering with world-class equipment and training. We also operate Veneziano retail cafes in Melbourne, Sydney, Brisbane and Adelaide which are a showcase of excellence with state-of-the-art equipment, professional baristas, training labs and cupping rooms. However, our largest growing segment was our B2C business which during Covid had over 200-per-cent growth and this will remain an ongoing focus for the business with more people continuing to work from home.Our other division Black Bag Coffee Roasters (BBR) offers bespoke blend and brand development solutions to various large and small businesses who want to develop their own coffee blends and brands to launch into various markets. This business allows NCG to stretch beyond traditional out of home markets into FMCG retail, consumer retail and many other markets. Our smallest brand Coffee Hit is positioned in high-end shopping centres in Melbourne and Brisbane. The concept includes an espresso bar with in-store roasting so you can try the product from the bar and take home freshly roasted coffee to suit your personal requirements. Coffee Hit also has a large online presence with customers from all over Australia and many based in regional and remote areas regularly purchasing freshly roasted coffee.In 2019, we also invested in the New Zealand market forming a partnership with Flight Coffee which is a premium specialty coffee supplier with offices in Wellington and Auckland. Flight Coffee is a leader in the specialty-coffee industry in New Zealand and has a fast-growing dynamic team of coffee professionals. This partnership allowed us to launch BBR New Zealand during last year and will give us significant growth opportunities in the market over the coming years.Nomad Coffee Group owns Veneziano Coffee Roasters, Black Bag Coffee Roasters, CoffeeCoffee Hit and is in partnership with Flight Coffee NZ.Inside FMCG: What are some of the interesting initiatives that you launched during the pandemic that you’re now bringing into 2021?CD: We tried many different things during the Covid lockdowns and the mantra was “trial fast, fail fast”. For B2C users, with everyone working from home, we had a renewed focus on an already large online user base. We offered many free training videos on how to brew coffee better at home and various package deals for people to try our products. We had enormous growth in this segment and look to expand this in 2021 to include espresso machine subscriptions and new product lines designed for the home market. When Covid hit, we reached out to celebrity chef Gary Mehigan  to see if he would be interested in doing a collab, developing some blends that he thought would appeal to the everyday consumer. These products are currently available online and also in selected IGA grocers. We are currently working on expanding the reach via IGA stores nationally. NCG has always competed in the Australian barista championship and exhibits at the Melbourne International Coffee Expo (MICE). For both of these, we source some of the world’s most expensive, rare and amazing coffees. Some of these cost up to $500 per kg. With the impacts of Covid both on MICE and the barista, championships cancelled, we launched the Pinnacle Series,  which offered a tasting pack of 4 x 40gm of these amazing coffees for $40. The line up included Brazil – Fazenda California ‘Tropical Storm’, Brazil – Fazenda California ‘Honeymoon’, Colombia – Las Margaritas and Colombia – Cerro Azul.The limited series sold out in three days and we knew we were onto something. We will now be offering a Pinnacle Series every quarter and stretching this offer beyond online, these will now be available via our wholesale partners, our own espresso bars (Melbourne, Sydney, Brisbane and Adelaide) and online. Pinnacles Series 02 launched online in March.Veneziano Coffee Roasters underwent a major brand transformation in August 2020.Inside FMCG: In August, the Veneziano Coffee Roasters underwent a huge brand transformation. Can you tell me the thinking behind that and what is involved? CD: We had the same brand identity and packaging for nearly five years and as we all know the coffee industry is dynamic and changing rapidly. Daily in our business, we seek to find new ways to maintain a fresh approach to what we do, challenge our status quo and do things better. Our look and feel are no different.The approach we undertook on the brand transformation project was to focus on a strong brand strategy first before looking at the visuals and creative. It was critical we spent time understanding who we are, our purpose and what makes us different from our competitors. What we uncovered was that our experience, our talent and access to resources means we can make significant positive impacts on the lives of our customers and the producers that we source coffee from.The new visual identity we have implemented speaks to our new ‘brand essence’ – coffee with significance – with the hero message of “everyday evolution”. With small and consistent changes in what we do day to day, we can collectively continue to strive towards coffee with significance. For the first time in our 20 year history, the Veneziano blends have a new name to support the new strategy. The range is now known as Crave, Elevate, Pulse, Aspire and Soar. These names evoke a sense of movement, action and evolution. We also updated our hero microlot range to place more emphasis on the amazing coffee producers and communities we work with.Inside FMCG: Tell me about your on-site waste reduction program and how it works. CD: We operate Veneziano retail cafes in four states and offer an extensive menu of breakfast, brunch and lunch dishes. As a result, our kitchen operations have the challenge of managing food waste and one of our key solutions is to use food composters. In our Richmond cafe, we have a large-scale food composter sourced via our partners, Closed Loop, which we feed with organic food waste daily. The composter converts the organic food waste into compost which we, in turn, provide back to some of our food suppliers, Spud Sisters. They send the fresh compost to their farmers to help grow new potatoes. The food composting solution has had significant environmental and financial benefits with a quick conversion of organic waste into compost into just 24 hours and reduced landfill volumes of around 150kg per week. With the success of the composting solution in Richmond, we recently purchased a new composter for our Brisbane cafe with further plans to extend this project in 2021.Subscription coffee became more popular during the Covid-19 lockdown when cafes were shutdown due to the restrictions.Inside FMCG: Tell me about your Veneziano Coffee Roasters’ subscription offering and how it benefits the business?CD: Our online coffee subscription program at Veneziano Coffee Roasters provides customers with a convenient way to subscribe and save and have their favourite blend or microlots delivered to their door without having to remember to reorder. It is important for us to provide the customer with full flexibility to choose their blend, frequency, size and grind type without being locked into a contract. We know if they enjoy the beans and the convenience of the service they will continue to subscribe.This year, we plan to launch some new coffee subscription packages that will also include the ability to tailor your subscription length, choose a gift subscription and bundle in an espresso machine with our equipment partners. The benefits to our business in coffee subscriptions is it provides a clear path to convert new and occasional customers into frequent and loyal customers. Coffee subscriptions are a key part of our consumer loyalty program and we have developed tailored customer journeys to ensure new and existing subscribers get the most out of their package through the beans, brewing recipes, training videos and special offers.Inside FMCG: How does Black Bean Roasters offer specialty coffee solutions to businesses?CD: BBR launched in 2015 and is led by general manager, Lance Brown, an accredited World Latte Art Championship Judge. It offers large retailers, franchises, catering companies and other businesses the opportunity to develop their own blends and packaging within their costing and sustainability requirements. We saw an opportunity in the marketplace for people looking to access specialty coffee roasters, talent and the approach we take to coffee. Our customers can choose their price point by deciding the quality of green they have in their blend. Some choose to use specialty and others pick high-grade commercial coffee. BBR applies the skills and knowledge of a specialty roaster to large volume contract roasting and is one of a select few to offer post-blending capabilities. The company takes an artisanal approach to contract roasting with our team monitoring and tracking every batch.Inside FMCG: How did Coffee Hit adapt to the shutdowns due to the pandemic last year?CD: With Coffee Hit stores being located in high-end shopping centres in Melbourne and Brisbane the pandemic posed some retail challenges. Our team worked with the store owners on a range of Covid-safe retail and marketing policies to ensure they were able to reopen once restrictions eased in the respective markets.We also invested heavily in growing the Coffee Hit home user base through our email and content marketing programs where monthly communications focused on coffee education videos, brewing guides and seasonal coffee offers. This year we will release some new coffee subscription packages that provide Coffee Hit customers with the opportunity to combine a dynamic home espresso machine paired with their favourite blend at an accessible price point. The coffee business is planning an expansion of its cafes this year.Inside FMCG: How did Nomad Coffee Group partner with Flight Coffee in NZ?CD: We knew the Flight Coffee guys for some time through Veneziano Coffee Roaster’s participation in the World Barista Championship and specialty coffee competitions. We have a lot of respect for the Flight Coffee team and think they are one of the leaders of specialty coffee in NZ. There were clear synergies for both companies to work together and achieve similar results. We have grown a successful business here and are now able to share information and learnings between Flight Coffee and our people. With our systems, processes and access to talent, we can help them grow.Inside FMCG: What are your plans for 2021 for both the wholesale and retail sides of the business? CD: We have ambitious plans this year for significant growth in our three businesses – wholesale, retail and B2C. In wholesale we are investing heavily to support our existing wholesale partners and grow our street business. With recent hires in our WA and NSW teams and a national sales and training team we are primed to expand into the metro and regional areas. In retail we are actively seeking additional high-profile, high footfall locations to expand our Veneziano retail cafes in all metro areas and increase our brand exposure.And in our home B2C business, our main focus will be to launch new coffee subscription packages and some espresso equipment partnerships as we seek to address the larger audience who are working from home and brewing at homeInside FMCG: What are some of the interesting consumer trends in coffee that you are interested in at the moment?CD: We are tracking closely the increase in consumption of plant-based and alternative milks through our own retail and wholesale channels and the resulting opportunities to reach out to new audiences. Similarly our own sales of cold brew and ready-to-drink products climbed dramatically last year so we plan to roll out new flavours as consumers seek the convenience of coffee on the go in a can. We also see a gap in the market for consumers of coffee pods who are seeking a specialty grade, premium product with a variety of blends.