Nick Stone pictured in Sons of Mary cafe in Brighton.Credit:Simon Schluter
"I was drinking coffee twice a day every day to escape from banking because I was working big hours,"Stone says."Going to get coffee wasn't part of the daily ritual because it was a much more functional product,rather than an experience. Secondly,they didn't have much connection with their local establishment,it was just very routine. No one had a local,nobody had any connection. It was just crazy when you think about it. Coffee was so transactional it didn't have deeper meaning,it was just where can I get this commoditised caffeinated product."
Even though 75 per cent of hospitality ventures in New York fail within five years Stone says he realised there was potential in coffee after identifying the similarities between coffee and cigarettes.
"[Warren Buffett] said cigarette companies are the best investment of all time because they are addictive in nature,there is incredible brand loyalty and low capital intensity and phenomenal GP[gross profit] margins,"Stone says."When I look at coffee it's addictive,it has tremendous brand loyalty,all you have to do is look at Starbucks'success,it has incredible GP margins and if you apply the prescriptive focus that we've applied it can be low capital intensity. That pretty much sums up the way I looked at the business."