Coffee Nation completes management buy-out

Coffee Nation, the company which made premium-quality espresso-based coffee a regular feature of motorway service stations, has completed its management buy-out.

Coffee Nation was founded in 1999 to pioneer the original concept of self-serve gourmet coffee, and after an initial investment of £4m from Primary Capital in 2000, Coffee Nation's self-service coffee offering has grown to 550 points of purchase across the country. It can be found in Welcome Break, Tesco, Esso, Moto and Somerfield, sells 15 millions cups a year, and has a turnover of £20m.

The new refinancing will allow the company to introduce new self-serve products on to the market. Scott Martin, the company's CEO, has said:" This is a great vote of confidence in our business. We have already proven that Coffee Nation is a successful business model, and our ambition is to turn Coffee Nation into one of the leading coffee brands in Europe."

Scott Martin told the trade paper Coffee House: "The issue we face is that of simple customer perception around coffee coming out of a machine. Consumers see ‘vending' machines as delivering poor instant coffee, and that is a view that is not easy to change. Our challenge therefore is to ensure that consumers understand that Coffee Nation gourmet vending machines deliver coffee as good as, if not better than the hand-made product.

There are plans for a new machine to improve the self-service concept. The average Coffee Nation machine turns over £40,000, but there are some machines in motorway service areas which return £200,000 a year from one metre of floor space.

The new machine, the Compact, was shown in the last few days at the Convenience Retailing show.

By Ian Boughton