Local Coffee House JJ Bean Takes On The Big Guys
Owner John Neate attributes success to quality, high standards and loyal staff
Vancouver Sun
When JJ Bean House of Coffee owner John Neate started up his little coffee company in Vancouver 11 years ago, he knew he’d have to produce something very special to compete with a U.S.-based coffee giant that was targeting the city in a big way.
Although Neate has always had, and continues to have, the utmost respect for Starbucks, the 50-year-old believes there is always room for improvement.
He also feels he’s benefited from a backlash against the American giant by an increasing number of coffee aficionados who like to patronize companies that are smaller and locally based.
“I have very much respect for Starbucks,” Neate said in an interview. “They do an amazing job with their staff, the quality of their coffee, and what they do in their community. Starbucks deserves everything they’ve got.
“But any big company gets slammed, [and] we benefit from that. Many people would rather support a local Canadian company. But that only goes so far. It’s only if you’re as good, or better.
“We have three stores right next door to Starbucks.”
Neate, who noted that JJ Bean (“JJ” is for John Junior) is opening its sixth coffee store in December — all of which are in Vancouver and North Vancouver — said he believes his company is doing well for several reasons, primarily because of the quality of the coffee, high standards at each store, and a loyal staff — now numbering 120 — whose opinions matter.
“We make sure we get the very best coffees. I also developed a method to roast coffee fresh each day. And our managers and I meet weekly — where things always start off with a ‘cupping’, a group tasting of a new coffee or blend. We make decisions democratically. I have veto power, but I never use it.”
Staff, he said, not only have an excellent training program, but also their own medical plan and bonuses for meeting customer service and sales targets.
“And my staff really believe in our company. Without them, it would be absolutely nothing.”
Neate noted that it’s not just the number of JJ Bean stores that’s rising.
“In 1996, we had $950,000 in retail and wholesale sales. In 2006, we did $7.1 million. This year, we’ll do $8 million. Next year’s forecast is $9.5 million.”
Neate said he’d like to eventually have 10 stores in the Vancouver area, followed by new stores in the Fraser Valley, Calgary and, possibly, Seattle.
“We like to do one store a year. And I’d love to have the opportunity to compete head-to-head with the Seattle coffee companies. But that would be at least five years [down the road].”
Neate, a religious man who said the company’s success was literally “the answer to my prayers,” noted that coffee has been part of his family since the 1920s. “It’s in my bloodline.”
His grandfather, Francois James Neate, started roasting for Nash Tea and Coffee, but in 1945 formed F.J. Neate & Co. (a.k.a. Neate’s Coffee), a coffee wholesaler that supplied many of the city’s top restaurants and stores. Neate’s father, John Sr., joined the family business in 1951 and helped Neate’s Coffee grow.
Neate began an apprenticeship with the company in 1979, working alongside John Sr. until Neate’s Coffee was sold in 1990.
Then, Neate said, Starbucks started opening stores in Vancouver and he saw an opportunity to start his own company called JJ Bean, Vancouver’s own micro-roaster.
“I knew that if I could put together a team of people crazy about coffee, if I could meet or exceed the new coffee standards and then go one better and find a way to deliver roasted coffee, fresh everyday — I could compete.”
In 1999, JJ Bean merged with specialty coffee roaster Torrefazione Coloiera “to add a little Italian to our Vancouver roots” and changed the operating name to JJ Bean, House of Coffee.
Neate, who owns 80 per cent of the company with wife Melanie — business partner David Mindell owns the rest — said another factor in his company’s success is providing more elbow room for customers.
“We try to have more square feet per seat. I wanted to make it more like a living room, more comfortable. We wanted more spacious rooms for people to sit and relax.”
Neate’s advice to budding entrepreneurs?
“Find something you enjoy, and find a way to get paid for it. I wanted great coffee and couldn’t find it in Vancouver. So we spent a lot of hours finding a way to make the very best espresso coffee.”
Neate said about 25 per cent of their coffee is fair-trade organic, a type of coffee he believes will become more popular in the coming years.