Orignally a single high street cafe deli in Clerkenwell, Benugo's reach has grown to include standalone restaurants, concessions in public spaces and business and industry sites and a healthy events catering business. Co-founder Ben Warner tells Janie Stamford about taking his commercial experience into the contracted world and life at the WSH board table
What was the original idea behind Benugo? We opened our first store in Clerkenwell 14 years ago because we felt there was a gap in the market for great food made the way the customer wanted it. By that, I mean not embalmed in plastic and chilled to three degrees, but made to order using fresh ingredients of good provenance.
We modelled ourselves around the modern New York deli - a warehouse feel where the colour comes from the abundance of food instead of strong graphics and mission statements.
We now have many high street stores and we're also in some of the most successful B&I companies in the world, and some of the biggest and best known public spaces, including Natural History, V&A, Ashmolean and Science Museums; the BFI, and seven Scottish castles.
How did you make the move into B&I? In 2000, we had opened two high street stores and at the time we didn't know the B&I market existed. Then Paul Gardner, who worked for Lehman's, came into one of our shops and said they wanted something like this in their offices. Next day we turned up, presented our vision and three weeks later we were in there.
We were successful from day one. We helped change the mentality of corporations into actually believing that not only did they not need to pay for catering, they could rent the space to a food business and get a return while giving the staff exactly what they want to eat.
What were the challenges of taking a high street concept into a B&I site? It's not easy. The problem with in-house is you instantly have a lot of people tell you how to do it differently. But we have a strength in just saying no and believing in what we do. Contract caterers are often trying to be everything to everyone, but if you try that you end up with very little for everyone; you get diluted and end up having to sell 10 different brands of crisps, 20 different fizzy drinks, 30 types of confectionery. Effectively you become a tuck shop with no real vision or direction. It's better to be the best that you can for the majority.
What's the alternative? Our policy was you either want us or you don't. We have a strong brand and we don't compromise on it. You wouldn't see Pret A Manger going into a corporation and being told to sell a Mars bar. I was always quite principled, but I learned from Pret about attention to detail and to never ever compromise, particularly on product. When you develop a new product you should aim for the absolute best. Sometimes you can't sell that because of the price point but if you aim halfway, you end up with mediocrity.
Brand success is often linked to location. Are there some locations that wouldn't be viable? The history of Benugo is riddled with disasters but for every disaster you learn a bit more. No matter how successful your business is, if you've one single account doing badly it becomes a drain on your resources. You have to make it better or get rid of it. Cut your losses even if means writing off a lot of money. We opened a store in Soho and it was just the wrong place. It wasn't the customer profile that makes a Benugo store successful and we wrote off £400,000 when we closed it. We're grown up enough to know when we've made a mistake and when we do, we're out pretty sharpish.
How do you choose your next project? We're very selective. When we pitch for a public space or B&I contract we consider the customer profile and whether we fit in culturally; can we make a difference and improve what's there? Our drive for success is not singularly about expanding the business but making sure that everything that we do represents our brand and makes a difference to our clients. Of the 10 to 12 things we're asked to do every year, we probably do two.
Is the Benugo concept viable outside of city centre locations? Can it be scaled down? Totally, we're thinking of doing it next year. But it's never been an ambition to have a Benugo on every street corner, but to have it where it feels special. The brand is transferable and not just in this country. I've just come back from New York and our Clerkenwell store would do incredibly well there.
Our locations are not prime I'd say, but secondary, They're in areas that have a certain style of clientele. We don't rely on footfall. We like to think of ourselves as becoming a destination. We should do a lot more research before we pick a new site; we go on gut instinct. Sometimes it works and sometimes it doesn't. We've got to get cleverer.
Tell me about the Benugo relationship with WSH. It was a merger in 2007. We're often told we're owned by BaxterStorey, which is fundamentally wrong. We're all owned by WSH.
The great thing about the merger was that Benugo retained its independence and was allowed to continue as it was but with greater infrastructural back-up to give it greater success. Benugo retains its own central support office in Clerkenwell, own purchasing, own HR - all of the cultural things are retained.
What do you bring to the table? We now do joint pitches with BaxterStorey. They look after the staff catering and we do the coffee bars. We're able to go into sectors we couldn't enter before and we've brought strength into B&I contracts with our branded concept.
The days of subsidies are becoming fewer and you've got to have a commercial arm of your business to succeed. I don't think caterers can develop a commercial proposition on their own. It's incredibly difficult. I've seen so many people try and fail. It's difficult to describe in a tangible way, but it's the wrong way round.
Is there anything you'd like to see contract caterers do differently? They should be more discerning about the products they sell. If they make great cakes, for example, why sell 20 different types of confectionery beside them? They could be sold out of vending machines. It's a cheap way of filling a display unit. Contract caterers should be more true to themselves and know when to say no. Very few do. "Yes. What is the question?" is more often the case. I accept there's compromise; you're in somebody else's house. But sometimes you should stand up for what you are.
Benugo's annual turnover in 2009 was £22m. This year you're expected to surpass £50m. How did you achieve this? It's come from huge like-for-like organic growth and winning some major accounts, particularly in the public space arena. It's as challenging to run an account that turns over £500,000 as £4m. In fact, a £4m account is easier. I'm really not interested - and I don't mean this arrogantly - in anything less than £1m, because the effort that's required is greater than a large account because of the resources needed. As we've grown it's become easier to run Benugo.
What will 2012 look like for Benugo? It's going to be a great year. We're perfectly placed to get all the advantages of the Olympics coming to town. Some of our venues, like the Serpentine Bar & Kitchen, are within Olympic venues. We've already catered for all the test events and they've gone really well, with a promise of much more to come. The Queen's jubilee is going to be held at Westminster Abbey where we operate. The economy will have a tough time, but we remain very optimistic and confident that more people will want to spend their money on things that make a real difference in their lives and good food is right up there with anything else.
You formed Benugo with your brother Hugo. What is his involvement now? Hugo helped take Benugo as far as he wanted to. He remains a shareholder but decided to take his entrepreneurial spirit on to something new. Watch this space.
Merged with WSH 2007
Annual turnover £50m+ (expected for 2011)
Key contracts Westminster Abbey, BFI Southbank, Natural History Museum, Victoria & Albert Museum, National Museums Scotland
Number of commercial sites 6
Number of contracted sites 49