Patrick Campbell of Campbell Bewley is resting up this week after seeing through a group strategic plan for the next decade which envisages turnover growing from £100 million to £1 billion per annum. It is "bold but achievable", he says.
Mr Campbell aims to improve the profit margin achieved by the group, which is currently a tight 3 per cent, and by 2008 he aims to reach profits of more than £30 million. His family owns just over 67 per cent of the business.
Planning for a compound growth rate of 23.5 per cent per annum in turnover is ambitious, but this year the group recorded a 50 per cent growth in sales. One third acquisitions, two thirds organic growth, synergies and a determination to be constantly open to change as it occurs, are the basic elements of the plan.
Mr Campbell expects the bulk of the growth to occur in Britain and the US and says it is "a toss up" at this stage as to which country will provide the main focus. Opportunities for growth in the Republic are limited because of the size of the economy but also, he says, because the Government persists in taxing low-wage workers.
"Catering is in the lower half of the wages league and there is a limit to what you can do. We have very tight margins."
In the Republic, workers in his cafes and catering operations on wages of £140 or £150 per week find their incomes being taxed. This is not the case with workers in Northern Ireland or British branches, who on average find themselves £10 per week better off because of the different taxation regime.
In the Republic, he says, it is hard for the group to offer incoming workers wages which constitute a significant improvement over what they might get if unemployed. Women who have raised their children and wish to return to work, take up employment with Campbell Bewley, but have to leave after a few weeks because of disappointment with their take-home pay. "It just doesn't work out for them. They want to work but they lose too much. I think it's tragic."
People underestimate the value of starter jobs, he says. They can be important and lead to other and better positions for people who are unemployed. He says it is estimated that 8 per cent of the adult population in the US has worked for McDonald's at some stage. "And obviously that number doesn't work for them now." He was, he says, "very much disappointed" by the failure of the Government to take low-wage workers out of the tax net in the last budget.
The Campbell Bewley group is involved in the running of the Bewley's cafes; in cafe franchising; contract catering; baking; coffee and tea blending and distribution; and the hotel sector. It operates in the Republic, Britain and the US.
The group employs 4,500, about half of whom are involved in the contract catering operations. The Campbell family owns more than 67 per cent of the group; the venture capital company, Granville Investments, holds 18 per cent; and the remaining 15 per cent is owned by staff. The company expects that 20 per cent of the shareholding will be held by staff by the end of the year. There are no plans for a public flotation.
"I would like to see everyone in the business owning shares. Companies that have a significant degree of employee shareholding tend to outperform those which do not." He says employees who have a shareholding become conscious of how shareholders take risks. "They learn that it's not all rosy, that there can be downturns in business."
The group's flagship cafe on Grafton Street in Dublin is currently closed for a £4 million renovation which is expected to be completed by September. Table service is to be reintroduced for a 300-seat cafe which will be fully licenced and will operate as a brasserie type establishment in the evenings. "It will not be a pub."
The project involves the building of a new floor above the main cafe "but the work will interfere as little as possible with the cafe that people know and love. It is important to me and to Dubliners and to the staff themselves that Bewley's survives on Grafton Street".
Grafton Street is one of the most expensive streets in Europe to do business in, he says. The company leases the building, which it sold in a sale-and-lease-back arrangement to the Investment Bank of Ireland at the time Campbell Catering bought Bewley's in 1986. The cafe is "the heart of the Bewley's brand" and the refurbishment of the cafe is linked to the plan to make Bewley's a truly international brand.
Mr Campbell is obviously still excited about owning the cafes and talks easily about the renovation carried out after they bought them. He often comes into the cafes at the weekends to just sit and look around. We met in the newly-refurbished cafe on Mary Street in Dublin. He got embarrassed when he asked one young waitress if she was new and it turned out she'd been with the company for some time. He exhibits a paternalistic air when talking to his staff.
In fact, he says he would like a family atmosphere to pervade within the group. Planning permission has just been granted for an £8 million headquarters and bakery at the Northern Cross Industrial Park near Malahide, Co Dublin. The group bakery, coffee and tea production and administration operation will all be moved to the new 100,000 sq ft premises, which will be called the Bewley village. State-of-the-art production methods will operate at the centre, which he expects to see open this time next year.
"We hope to create a family atmosphere, to create a sense of belonging," he says.
Last year, the group spent more than £5 million on the Rebecca's Cafe chain in and around Boston. The business has 11 cafes all of which deliver coffee and food to offices and businesses in their area. They have 11,000 corporate clients who use the service on a regular basis. The business also has a bakery and an event catering arm. The Rebecca brand is being retained at the cafes but Bewley's coffee and tea have been introduced.
He says he has an open mind as to what will happen in the future in terms of the brand name for the cafes. A new cafe has been opened in Boston and another two are planned. "We also have begun to develop the contract catering business."
The contract catering arm of the group is less well known, but accounts for half of at that the company still retains its first customer, Royal Sun Alliance. One of the keys to success, he says, was continuing to value existing customers, while seeking out new clients.
Growth in the business has been fuelled by general economic prosperity and also by the trend towards contracting out activities which are not a company's core activity. Among the customers serviced are Hewlett-Packard, Intel, and Cork and Limerick Universities.
The group runs a hotel on Fleet Street in Dublin and has a franchise hotel at Newlands Cross on the Naas Road. A new franchise hotel is due to open next year in Dublin 4. He doesn't want to give any details.
It's all a long way from the years spent residing "over the shop" at Lees Cross in Swords in north Co Dublin. He and his wife, Veronica, lived there and ran their catering business, never knowing what the future held. That was the most difficult part of the whole adventure, he says, "not knowing if all the sacrifice was going to pay off".
These days, since passing on the role of chief executive to Michael Cummins in 1996, he has more time to concentrate on his other passions. Most days he jogs six or seven miles, along the lanes of north Co Dublin, or in the Phoenix Park. His other passion is painting. He attends night classes in the National College of Art and Design, and has completed art courses in Florence. "Art was the only subject I got honours in in the Leaving Cert."
Despite some generous offers, he says he has no intention of selling the business and retiring to live a life of leisure. "I am still very ambitious for the business and see it as having huge potential." He is critical of the tendency of Irish entrepreneurs and capitalists to sell their businesses to foreign concerns, once they have them up and running.
"It's a sort of banana republic mentality. There is state encouragement for people who fatten the calf and then sell it off. What we need is encouragement for people who keep their business and develop it." He sees himself as bucking a trend.
