Bean baron with a heart serves up 60m cups of coffee a year
With cafe society feeling the pinch in 2008, Java Republic boss David McKernan cut costs and focused on the core business of coffee roasting
DAVID McKernan set up his coffee company, Java Republic, in 1998. Since then, he has become a key player in developing Ireland's thriving coffee culture.
Java Republic is an importer, roaster and wholesale distributor of premium coffees as well as teas and drinking chocolate. The company supplies more than 1,200 outlets in Ireland, both north and south, including restaurants, coffee shops, boutique hotels, colleges, hospitals and many of the country's best known blue chip companies.
I meet up with David, in his purpose-built coffee roastery in Ballycoolin, Dublin 15. It's an impressive building which also houses a bustling restaurant.
It's lunchtime when I arrive. Before taking me on a tour of the place, David takes the opportunity to introduce me to some of his regular customers. As we work our way around the tables, David has a friendly word for everyone. He is naturally upbeat and gregarious. To some, he might even be considered annoyingly positive.
However, David's journey has not been without its fair share of challenges.
But first I want to find out how he came up with the idea for the business.
"I have a long history in the coffee and catering business" David tells me. From Lucan in south Co Dublin, he joined Bewley's straight from school. There, he worked his way into a senior sales and marketing role where he led the drive to introduce freshly ground coffee into the Irish market which, up to that point, was largely dominated by instant coffee brands.
It was while on a trip to San Francisco in 1992, that he saw a roastery that impressed him so much that he just couldn't get it out of his head. "It really made me want to develop one here," he tells me.
In 1998, he decided it was time to convert his idea into reality and he launched the Java Republic brand of coffees, teas and drinking chocolate. Initially, he started the business in a 5,000sq ft facility on the Kylemore Road in Dublin.
He remembers the first year was challenging. "There were some nights I'd wake up at 4 o'clock in the morning in a sweat," he admits. At the time he had nine staff and really felt the responsibility that came with knowing that the success of the business, and his ability to pay them that month lay ultimately with him. He was fast learning what it meant to be an entrepreneur.
He worked harder than ever; leveraging the many contacts he had built up in the catering, hotel and bar trade, while working with Bewley's.
He still remembers, with delight, the very first account he opened. "It was with Weston Airport; I sold them my first ever box of coffee," he says smiling.
From the very outset he was determined that the company's brand would reflect his personal commitment to transparency and ethical practice in business.
For that reason, David made the decision to source his coffee from farmers or farmers' co-ops in places such as Costa Rica, Mexico, El Salvador, Peru, Colombia, India, Ethiopia and Haiti.
"It is important to me that the money we spend goes directly to the farmers. For us it's all about fairness and sustainability," he insists.
"Coffee is a difficult crop to grow," he explains. "It comes from the fruit of the coffee tree, an evergreen plant which yields between one and three pounds of coffee per year. It is also a very labour intensive crop to harvest. Up to 90 per cent is picked by hand, mostly by women and children," he explains.
"Sometimes coffee will sell at up to $2.00 per pound in cities like New York while the farmers who actually grew and harvested it only receive between three and five cents for all their work. There is an inherent unfairness in that.
"We like to treat the people who grow the crops as our partners," insists David passionately. He is also proud that his company is the largest buyer of fair trade coffee in Ireland. In addition, he supports a number of charities which provide education and healthcare programmes for coffee growing communities.
Some years ago on a trip to Haiti, David got an opportunity to see, firsthand, the challenges faced by coffee growers in that country. He wanted to do something to help. He decided that the best way to help was to offer the growers trade rather than aid. So he came to an agreement with the farmers to supply him with a newly created brand of Haitian coffee which now falls under Java Republic's Coffee with a Conscience programme.
His biggest challenge came in 2008 when he decided to build a new and much larger facility near Blanchardstown. The move involved a major investment of more than €6.5m.
"It all took place at the wrong time," admits David. "None of us knew at the time how challenging the recession would be".
However, it didn't take long for him to realise that he was in trouble. Like a bleeding patient, presenting at the equivalent of a corporate A&E department, he knew he had to stem the blood flow in the company and stabilise the situation before he could hope to put a rehabilitation plan in place. He immediately began cutting overheads and eliminating costs where ever possible.
He then set about restructuring the company in order to allow him focus on future developments.
Before he could do that, he had to face one more challenge. The restaurant he had opened next to the roastery was draining his focus and his resources. Realising that this was not his core business, he immediately licensed the cafe to Kay's Real Chef's, Real Food a catering company run by Bart and Bernie Glover. "They do a wonderful job," David explains. "They provide great food and great customer service. What we do is provide a unique and appealing environment."
David is a man who has learned to acknowledge his achievements but he is equally quick to acknowledge his mistakes. He is quick, too, to acknowledge the commitment, loyalty and professionalism of his management team and staff. Grace O'Shaughnessy, the company's managing director, joined the business in 2006 as operations manager and soon progressed to become the company's managing director. Jeffrey Long is the company's financial director.
"Together, they have allowed me adopt a more strategic role," explains David.
His story is reminiscent of the advice of business guru, Michael Gerber, to a small business owner, ironically, of a cafe and bakery, in his book The E Myth Revisited, where he explains how important it is to work on your business, not only in it.
Today the company employs 32 staff directly and almost as many more with distributors around the country. Turnover has grown to an impressive €12m, with 16 per cent growth experienced in 2012 alone. It's a story of success built on passion, team work and effort.
The company has achieved a long and distinguished list of awards for both their business achievements and the products they produce. They now hold in excess of 120 Great Taste Awards and were the first coffee company in Ireland to win a Gold Great Taste Award.
What about future plans? I ask David. "We are excited about the future of the business even though we operate in a highly competitive market where the commodity price of our product lies outside of our control," he says.
"We are currently producing 450 tonnes of coffee or 60 million cups every year. With capacity here in the roaster to produce up to 2,000 tonnes per year, there is considerable room for expansion in our existing business," he says.
"We are also very interested in opening a chain of Java Republic-type coffee shops and restaurants," he tells me. "Where we would also provide healthy soups, sandwiches, and good-quality food, and not the over-processed food available in many cafes," he says with resolve.
'The first year was challenging. "There were some nights I'd wake up at 4 o'clock in the morning in a sweat." He really felt the responsibility to his staff'
Before we finish our tour, David is keen to show me some of the coffee machines the company supply, instal and service for the outlets that serve his coffee. "It's all part of the process of maintaining the quality of the experience for the customer," he stresses.
He also shows me the training area where he has set up his own Barista University.
"Here we train staff from the catering and hospitality sector in how to make and serve coffee. Everything we do is about ensuring that every coffee that is served does justice to our award-winning, hand-roasted coffee beans," he stresses.
David McKernan is full of beans. He is gushing with enthusiasm and energy. He has an almost limitless list of ideas about how to develop both his own business and the coffee industry generally.
He is passionate about sharing his love of coffee and is committed to helping develop new ethical standards for the treatment of the farmers who grow it and the labourers who harvest it.
He is a man who understands the importance of having a clear and focused vision. And that such a vision is more effective when it is aligned with the entrepreneur's personal values.
He understands, too, the importance of surrounding himself with a dedicated team, whom he, in turn, is committed to inspiring and empowering so that they can be their best selves.
If positivity is contagious, then I only hope that David McKernan starts an epidemic. He and his business, Java Republic, are a testament to the modern adage that in business you can do good and still do well.