Ormskirk and District General Hospital is working with us to keep its coffee offer – and the profits – ‘in-house’
Ormskirk and District General Hospital has shown that, by working with us to keep its coffee offer ‘in-house’, they can deliver to visitors and staff all the benefits of a High Street brand – without sacrificing the profits…
There’s no doubt that the demand for good quality coffee ‘on the go’ continues to rise unabated. First the High Street, then the service station forecourt and now the hospital café: they’re all being transformed in response to customer demand. However, by inviting in brands such as Costa to take over the coffee offer, are NHS hospitals missing a trick?
The people at Ormskirk and District General Hospital thought so. They decided to launch an investigation to see if it might be possible to give their visitors and staff the coffee-break experience they desired, without sharing the profits with an external supplier.
The hospital’s driving force behind both the investigation and the subsequent installation of Ormskirk’s premium Caffè Kimbo coffee offer consists of Angela Wakefield, and her colleague Tracey Potter. Besides giving staff and visitors a desirable product, they had in mind one objective: ‘We wanted to keep the profits in house’, Angela said. ‘We wanted every penny of the profits generated by coffee sales to be driven back into the hospital’s patient services.’
Elsewhere in the NHS, managers faced with a similar conundrum have elected to take a different route. Indeed, in the same week the protagonists in the Ormskirk initiative met to review the impact of Caffè Kimbo retail offer, Compass Group tweeted that they’d just opened their fiftieth hospital based ‘Costa Franchise store.’ According to Costa Express Managing Director, Scott Martin, his brand is ‘perfect for the healthcare sector – gourmet self-serve vending machines are a fantastic way to demonstrate customer care and create new revenue streams at the same time.’
The downside to the Costa offer, popular as it had proved to be, is that the ‘new revenue stream’ flows into corporate coffers, as well as those of the host hospital.
Mr. Martin’s got a point; but the downside to the Costa offer, popular as it had proved to be, is that the ‘new revenue stream’ flows into corporate coffers, as well as those of the host hospital.
Great coffee is indeed capable of demonstrating a hospital’s commitment to ‘customer care’. One assumes that some NHS facilities concluded that ‘a share in a large profit is better than 100% of a smaller one’, but in Angela’s view, the Caffè Kimbo solution gives the NHS the best of both worlds: the confidence inducing participation of a truly international brand that doesn’t dilute a hospital’s income. ‘We have a top quality coffee offer that makes a healthy profit, all of which goes towards the improvement of patient services’, she said. ‘You don’t have to boost a wealthy corporation’s bottom line to give your customers great coffee’, she said.
So, what’s the deal with Caffè Kimbo?
For several years now, we’ve been providing Ormskirk and District General with a professional vending service. However, there’s more to North West Vending than meets the eye! Along with our sister company Coffee 1652, we were amongst the first companies in the country to respond to customer demand for a better cup of coffee and as part of our mission to ‘take the retail coffee experience to the workplace’, we forged an alliance with Caffè Kimbo, one of Italy’s pre-eminent coffee roasters and an internationally respected brand.
Caffè Kimbo’s UK Managing Director, Angus McKenzie, impressed by our commitment to quality, entered into an exclusive agreement that would see the brand, for the first time, made available through vending machines. As guardian of Caffè Kimbo’s reputation and its brand values, the move into vending was not taken lightly.
‘I was impressed by North West Vending’s approach’, Angus said ‘The company really is on a mission to deliver the best coffee it can to its customers and when I tasted their Caffè Kimbo offer I knew we’d made the right decision. It’s an espresso of a very high quality and it’s an accurate reflection of our brand values.’
So, when our MD, Mike Cowley, learned of Angela’s ambitious strategy for Ormskirk and District General, he was able to capitalise upon our relationship with Caffè Kimbo to put a unique proposal on the coffee table which ticked all the hospital’s boxes.
The reaction of both visitors and staff has been ‘remarkable’. Sales are running ‘over budget’ and satisfaction levels amongst user groups are ‘unprecedented’.
Visitors and staff are now able to enjoy high quality coffee – and fresh brew tea – 24/7; thanks to a modern, airy cafeteria, equipped with state of the art coffee (and tea) machines, which is attracting record customer numbers during the day time and is supported by a high-quality vending service, providing premium quality food and drink out of hours. The reaction of both visitors and staff has been ‘remarkable’. Sales are running ‘over budget’ and satisfaction levels amongst user groups are ‘unprecedented’.
‘We’re offering a first class product at a first class price’, Angela said. ‘It’s true that the price of a cup of coffee has gone up since we implemented the changes, but there’s been absolutely no resistance to the price rise because the new product, quite frankly, is so much better than the offer it’s replaced. What’s more we serve Caffè Kimbo in a ten ounce cup, as opposed to the six ounce offer of old, so customers really do believe that they’re getting a better deal all round.
‘We’re selling a first class latte or cappuccino for £1.50 a cup and that’s perceived as a bargain price by the vast majority of our customers’, Angela said.
‘The NHS, understandably, has a risk averse culture and sometimes it’s seen as preferable to go with ‘the devil you know’, rather than with a comparatively unknown quantity’, said Coffee 1652’s Pete Atmore, ‘but it’s clear that it’s not such a big risk after all to keep coffee in-house rather than sub-contracting it.’
‘It’s clear that it’s not such a big risk after all to keep coffee in-house rather than sub-contracting it.’ Pete Atmore
‘Going down this route did involve a leap of faith’, Angus acknowledged, ‘but the hospital’s strong business relationship with North West Vending / Coffee 1652 mitigated the perceived risk. The hospital knew that it had a trustworthy partner that would commit long-term to the project.’
‘To have accepted a Costa-style proposition would have guaranteed the hospital a certain level of income from coffee sales’, Angela acknowledged, ‘but when we analysed the numbers we concluded that we could earn more money by taking a different route; money that could be invested in improving patient care and so far, that’s exactly what’s happening.
‘I’m delighted with the results’, Angela said. ‘Our solution works on so many levels: it’s sustainable, it’s high quality; it’s local and it’s the result of a genuine partnership, which continues to go from strength to strength. This is not an ‘off the shelf’ solution, it’s been created to address our specific requirements and to my mind, it’s proof that hospitals don’t need to sub-contract.’
‘The expertise required to keep customers happy and contribute funds to hospitals’ coffers already exists in house’, Mike said. ‘By empowering those managers and staff already engaged in hospital catering, by encouraging them to use their expertise and know-how, we’ve shown that there’s really no need to surrender profits to outside interests.’
‘I hope that other NHS Trusts will take time out to investigate what we’ve done here at Ormskirk’, Angela Wakefield.
Ormskirk and District General Hospital’s Caffè Kimbo offer has proved that point and the offer has now been made available to NHS managers the length and breadth of Britain. ‘I hope that other NHS Trusts will take time out to investigate what we’ve done here at Ormskirk’, Angela said. ‘Sometimes its tough to weigh short-term gains against long terms benefits and I hope that colleagues will take a close look at we’ve done and investigate how a similar solution might work for them.’
Mike Cowley concluded: ‘If Ormskirk and District Hospital had gone down the road of a third party, any commission earned would be used to plug the consequent hole in beverage takings elsewhere in the facility, because other sales outlets would have found themselves in direct competition with the company that had been invited on site. There’s a real danger that the money offered up front by outside operators digs an unexpected financial hole elsewhere in the trust.’
‘There’s a real danger that the money offered up front by outside operators digs an unexpected financial hole elsewhere in the trust.’ Mike Cowley
At a time when the NHS needs money, what better time to put the money back in where it matters most, on the NHS bottom line? To discuss your requirements, please get in touch with Mike or Pete.