Caffe Bene returns to the fundamentals of quality

Caffe Bene is going back to basics in a bid to halt increasing losses and debts.

The company, that once boasted the largest franchise network among local chains with over 1,000 stores across the country, is seldom considered the “go-to” place for coffee lovers, as other franchises have overtaken its market share. The company reported 120 million won ($102,600) in operating losses as of the third quarter last year.

Despite the ubiquitous presence, sales have dropped significantly, which has forced the closure of some 15 stores in recent years.

In a bid to reassure customers that the company is now putting quality over quantity, Choi Seung-woo, the CEO of Caffe Bene who took over last October, has come up with a business strategy that he hopes will turn the chain around.

He said on Monday that the company will enhance the quality of its coffee beans and service, while acknowledging the problems of the past as well.

“The key factors to determining the success of a coffee chain include the taste of coffee, quality of service and efficient management,” Choi said, “but we couldn’t fully focus on the factors because Caffe Bene was busy bolstering quantitative growth.

“But we will get back to the basics. By June, Caffe Bene will sell specialty coffee and will strengthen training for workers to improve service and safety.”

The CEO set a sales target of 132 billion won in the domestic market and 20 billion won in the global market by 2018. Within this year, Choi vowed to turn a profit.

The number of Caffe Bene stores has been reduced to 850 from 1,000 in 2013 during its heyday. It was the first coffee franchise in the country to open up 1,000 stores. But as the chain ventured into different food businesses, such as Italian restaurants, and excessively expanded the number of stores, it failed to maintain standards.

As for safety and compliance with food regulations, Caffe Bene was the most frequent offender of the 10 major coffee purveyors polled, with 62 violations, according to a report released by the Ministry of Food and Drug Safety as part of a national audit.

The poor management pushed Caffe Bene founder Kim Sun-kwon from the helm, and the poor financial conditions forced Kim to sell off some shares of the chain.

Singapore’s Hallyu Ventures purchased a 38 percent stake in Caffe Bene for $13.8 million earlier this month.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]