Van Houtte Cafés-Bistros: A Special Blend of Coffees and Customer Service

Fall 2010 - Van Houtte Cafés-Bistros, which also does business as Van Houtte Inc., has produced the very best in gourmet specialty coffee for nearly a century. The company’s green coffee beans are carefully refined with traditional small-batch roasting methods, creating rich, robust blends and a signature flavor that truly lives up to the company’s creed: a taste of Europe in every cup.

This is a remarkable feat for the company, which started out as a small imported goods shop in downtown Montreal on Ontario Street. “The funniest thing is that, when Mr. Van Houtte started his first store in 1919, the store was not devoted to coffee,” explains François de l’Etoile, Van Houtte Cafés-Bistros’ vice president and general manager. “His shop was devoted more to imported goods and specialty products than to coffee. That was something that did not change until Mr. Van Houtte, an immigrant from France, began to experience disappointment at the quality of coffee that was available in Montreal and throughout Canada at the time. He decided to go to New York and buy a roaster, and, slowly, he started to roast green beans in the back of his store. He even began to tailor the coffee’s taste to recreate the coffee he loved to drink when he was living in France, and to allow his customers to discover new mixes of coffee beans and flavors.”
Van Houtte’s methods would soon become his market's standard, making him a pioneer in specialty coffee and the father of a hugely successful franchise with 57 café-bistros throughout Quebec generating annual revenue of $30 million. Headquartered in Montreal, Quebec, the company currently has approximately 1,900 employees, and Van Houtte's techniques have filtered throughout his industry.

“Mr. Van Houtte was the first in the marketplace to start mixing beans,” de l’Etoile says proudly. “Originally, back in 1919, people were not mixing beans, but today, when you go to grocery stores or specialty coffee shops, you can buy mixed beans or you can mix the beans yourself. This all started with Mr. Van Houtte.”

Van Houtte expanded his business to small grocery stores and specialty coffee shops, where the company’s exquisite coffee selection has become immensely popular. Finally, in 1981, Van Houtte made the decision to build the first café-bistro, a division in which the company continues to focus a large portion of its resources.

A Different Way of Doing Business

“Café-bistros are the first place the consumers are given the opportunity to taste and enjoy the coffee,” de l’Etoile explains. “That is why the café-bistro is so important for the company. It’s like having a three-dimensional experience with the coffee. Rarely can you buy coffee at a grocery store and have a chance to taste it beforehand, but with the café-bistro division, consumers can go into the café-bistro, and they can discover a coffee. They can discover new flavors and after that, they go to the grocery stores and find that same flavor they fell in love with at the café-bistro.” It is this strategy that has resulted in the tremendous growth of Van Houtte Cafés-Bistros’ retail business.

Another development that has been crucial to the company’s retail success is its decision to provide its customers with more than just a great cup of coffee. “Funnily enough, when you look at the overall coffee consumption around the world, it drops dramatically after 2 o’clock in the afternoon,” says de l’Etoile. “People are often leery of drinking coffee past this time in fear they won’t be able to sleep at night, and so they limit their coffee consumption. Because we offer a wide variety of food offerings, people come to Van Houtte’s café-bistros in the afternoon for dinner and late at night, and that gives us a little edge over our competitors.”
But Van Houtte Cafés-Bistros is not content to stop there. Looking to increase more than just the company’s selection of goods, Van Houtte Cafés-Bistros has set its eye on westward expansion, taking its café-bistros outside of Quebec and across the country.

“Van Houtte is the leading company in Canada in coffee service,” de l’Etoile notes. “We’re in a lot of offices and in the public environment with our café machine. We have come to realize that if we have coffee distribution all across the country then there is no reason we should not be able to have café-bistros all across the country, as well.”

A Collaborative Business Model

A crucial component in making this goal a reality is maintaining a consistently high level of quality and service in each Van Houtte franchise, something the company takes very seriously. “When we attract franchisees, we are extremely critical in our selection process,” de l’Etoile explains. “First, we want to make sure that we attract the franchisee with the right profile. Having the money to build and open a café-bistro is one thing, but the success of the café-bistro depends on the personality profile of the candidate and his or her ability to understand what this business is all about.”

Realizing that the selection process is a two-way street, Van Houtte Cafés-Bistros often suggests that franchise applicants shop around, comparing the company with its competitors to ensure that Van Houtte Cafés-Bistros and its company policies are a proper fit for the applicant.

One way the company assists its applicants in making informed decisions is by offering full disclosure of Van Houtte Cafés-Bistros’ inner workings. “We have one convention a year that all the franchisees are invited to attend,” de l’Etoile notes. “We also have four general meetings a year, and the reason we have these meetings is for information-sharing and training. We offer training in, for example, coffee making and muffin and Danish making.”

Van Houtte Cafés-Bistros also allows its franchisees to take an active role in the company and make decisions on how the company is run. “We have two committees,” de l’Etoile explains. “One is what we call the standards committee, which decides on our standards of operation, recipes, equipment, etc. We have many franchisees sitting on that committee. It’s not only a committee where they [franchisees] can make recommendations. In fact, they are making decisions right alongside the franchisor.” As de l’Etoile puts it, each franchisee has a voice in the system.

Franchisees are also privy to information on Van Houtte Cafés-Bistros’ marketing funds, right down to how each dollar is spent, thanks to the company’s marketing advisory committee. “It is not something that is kept behind closed doors,” de l’Etoile says. “We share everything. And what we found is that the franchisees love this because of the level of trust and respect it creates between us and them. We do not hide information.”
Van Houtte Cafés-Bistros also refrains from charging its franchisees undue fees. “Van Houtte is not taking any mark-ups on equipment or construction costs, while most of the franchisors in Canada are doing that,” de l’Etoile says. “Our franchisees are paying royalties and marketing contributions and that’s about it. We do not make any money that the franchisees are not aware of.”

Franchisees are also given the opportunity to get up close and personal with the company during a two-day observation and training session inside a café-bistro. “Ninety-nine percent of the time, franchisees love it,” de l’Etoile says proudly.

After the two-day workshop, those who choose to continue in the process and who are officially selected are then sent to an intensive six-week training program that is non-negotiable. There, each franchisee is trained in everything from coffee making and store management to employee scheduling. Following successful completion of the program, franchisees are then given permission to open up shop.

Van Houtte Cafés-Bistros’ involvement does not end there. “We provide franchisees with full drawings for their restaurants for a fee, and we also help them to pick the right contractor for the job to get the best bang for their buck,” de l’Etoile explains.

Van Houtte Cafés-Bistros also sends its operations team to each fledgling franchise two weeks prior to its opening to assist in training employees and to provide the franchisee with a marketing kit to assist in increasing the new restaurant’s visibility. Operations teams usually remain on site until a week after the store opening to make sure everything proceeds smoothly. It is a gesture that speaks to the company’s commitment to maintaining a high level of quality wherever you see its name.

It is not just about Van Houtte Cafés-Bistros, however. “We require that franchisees purchase equipment standard with the franchise so that there is uniformity in equipment across the board,” de l’Etoile explains. “We want our customers to have the same kind of experience no matter which Van Houtte café-bistro they frequent. When customers enter a franchise, they look for familiarity and for a consistently wonderful experience, and we do our best to give that to them.”

Looking Ahead

Offering consistent quality is a goal that Van Houtte Cafés-Bistros has more than achieved, with the company now fielding requests to expand its brand into the U.S., China and some Latin American countries. And while most companies would jump at the chance to make a name for themselves in the international market, it is a step Van Houtte Cafés-Bistros is putting off – for now.

“We believe in doing the first thing right and the right thing first,” de l’Etoile says. “That is why we are accelerating our growth to achieve our goal of 100 restaurants in Quebec. This will position us as a leader in the specialty coffee arena, and at that time, we will be ready to move beyond Quebec.”

It is this careful attention to detail and the company’s firm commitment to quality customer service and expertly controlled expansion that makes the Van Houtte Cafés-Bistros business model and experience a rich and distinctive blend positioned.