Minor DKL Food Group’s CEO believes the Netflix-esque subscription model can work in Australia
Nick Bryden also talks about convenience-driven coffee, building a culture of innovation and immediate plans for its Bonchon franchise.
Minor DKL Food Group CEO Nick Bryden believes the Netflix-esque subscription model, as demonstrated by major fast food chains in other markets, is sustainable in the Australian market, saying it could potentially work as a third tier to The Coffee Club’s evolving loyalty programme.
“I think subscription[s] can work. We are investigating it. It makes a hell of a lot of sense, right? A customer understands that model really well because they have it in various parts of their life, particularly with the likes of Netflix. The buy-in on a monthly basis is typically pretty modest,” he told QSR Media in an interview. “If it makes sense from a customer point of view, it probably makes sense from our point of view as well.”
The Coffee Club’s rewards programme starts with a free tier that provides $1 for every $10 spent. Their “VIP Club” subscription — $25 a year or $3 a month —- is more perk-based, granting 2 for 1 coffee and free upsizes. For a limited time, the chain is giving away three free coffees with every new rewards app member until June 27.
In a bid to create a digital ecosystem, the chain has also integrated table ordering in their app. Bryden also expects to add an order-ahead mechanism, both in the app and website.
“We developed this app in-house to have an industry-leading user experience. We're continually modifying, with our in-house technology team, that experience to make sure that it really provides customers with something that's really easy to use, [that] it's very intuitive and [that] they want to use it,” he said.
Flexible drive-thru formats as convenience play
Bryden cited digital as one of three pillars of the transformation of the 460-store-strong coffee brand, whose customers have been spending “a lot more” compared to pre-COVID periods. Takeaway and delivery channels are also rising in terms of volume transactions.
As more and more chains offer coffee, he says they “certainly” want to further play in the drive-thru space, with plans to expand that particular channel.
“Coffee and convenience have really been hand in hand,” he said. “We believe this trend is here to stay.”
“We [are] certainly not first to market in drive-thru. But we, as the largest national coffee chain, [are] well-positioned to expand,” he added. “The second thing that we're bringing to the marketplace is a real flexibility in terms of formats. During COVID, we launched a major project to expand our drive-thrus and we've come up with a design, which is a modular, factory-built design for the store. We're building those in a factory and then shipping them directly onto site, and they're up and running within a matter of days…From the modular concept all the way up to a free-standing drive thru, you know, we can play in all of those spaces and we think that's a compelling offer for landlords.”
Bryden also continues to see development of understanding about taste profiles and different origins of coffee or the “hunt for the better coffee”, he added, along with automation.
The Coffee Club — laser-focused on their Coffee Is Our Middle Name campaign at home — already has 200 stores in overseas markets, with Bryden confirming they are “very active in discussions” with franchisees in Asia and Western Europe.
“Wherever there's a cafe culture, I think our brand can do well,” he said.
Bonchon slated for Melbourne growth
Minor DKL acquired franchising rights to Korean fried chicken chain Bonchon, which has already set up outlets in Melbourne and Craigieburn. Expansion for that brand is also in their docket.
“Chicken is a very fast growing channel, the world's number one protein so it makes a hell of a lot of sense to play in chicken,” he explained. “Our parent company [Minor Food Group] is the franchisee for BonChon in Thailand. The brand does exceptionally well there and it's growing rapidly.”
A culture of innovation
Looking at ways to expand the reach of their virtual brands, Bryden called the group’s current test of their Newcastle store — which trades as The Coffee Club by day and flips into a Burgers with Bite by night — as “promising.”
He adds that offering the virtual brands by themselves to prospect franchisees is not out of the possibility.
“The message that the team and I really live by is to be flexible. You have to be prepared to adapt your business these days. I guess we're in a lucky position in that we're the franchisor, we’re the brand owner so we can, within reason, change our business to adapt it to what customers want,” he said.
“So when we do things like create a virtual brand, we're always thinking, “Well, how can we make this bigger? How can we take it further? Can we franchise the virtual brand? Can we make it a local store? We really consciously ask ourselves these questions. Most of the time, they're just questions. But sometimes, like the Burgers with Bite in Newcastle, they result and lead to a physical store being created.”
Questions, he says, come from a culture of innovation.
“The fact that we've innovated in a lot of different areas is really built upon having teams challenge themselves to think differently. We look very much at ways of working, we've implemented design thinking in the organization, agile methods, so it doesn't just come out of nowhere, I think it comes out of a culture, which is increasingly innovative.”
