A View from the Top: The founder of Grind, a crowdfunded coffee chain, on the impact of coronavirus
David Abrahamovitch tells Zlata Rodionova about the value of having loyal customers, especially now
It’s been an emotional rollercoaster both physically and emotionally,” admits David Abrahamovitch, as he reflects on the coronavirus outbreak and the speed at which it affected Grind, his multimillion-pound coffee shop, bar and restaurant business.
Grind, founded in 2011, has expanded from one outlet on London’s Old Street to 11 locations across the capital, including larger venues serving food, espressos and cocktails, and smaller stores in train stations. Today it employs more than 300 people and it achieved annual sales of £9.4m in 2018.
The entrepreneur financed this growth through crowdfunding, with the firm raising £1.3m in 2015, followed by a further £2.1m in 2017 and £3.5m in 2019. This allowed the business to remain flexible and independent but it also enabled Abrahamovitch to create a supportive community, which is particularly important right now.
“Our crowdfunding rounds have been big moments and our crowd investors are an important part of our journey and our company’s DNA,” he tells The Independent. “We’ve had lots of investors emailing us and asking how they can help, and we’ve also been communicating and answering questions from our customers.
“Everyone needs to support the businesses they like now, otherwise there’s a risk they won’t be there when we come back out of lockdown. Hopefully we might all be 5 or 10 per cent kinder on the back of this. Everyone might just slow down a little.”
Like many other companies in the hospitality sector, Grind is already feeling the “pain” of the coronavirus crisis with all of its venues closed until further notice and 290 of its 300 team placed on furlough with the government supporting their wages. But what the entrepreneur is mostly worried about is rent. “I was due to spend £500,000 in rent, and obviously we can’t do that now. Our landlords have been mostly cooperative, but it’s hard to say if they will be as generous in three months’ time.
Everyone needs to support the businesses they like now, otherwise there’s a risk they won’t be there when we come back out of lockdown
“The government did say that no landlord can make a tenant forfeit for three months but it needs to go further than that. Leaving tens of thousands of landlords and tenants to negotiate across the country is going to be difficult and messy. We need more clarity. The other scary part of all of this will be coming out of lockdown because I think a lot of businesses haven’t thought about how cash intensive it will be to reopen again.”
The one silver lining of the crisis is that Grind’s online operation is booming. Sales in the company’s online store – where the company sells Instagram-friendly pink tins containing Nespresso pods, or whole bean ground coffee, plus letterbox friendly refills packs – have exploded since the UK went into lockdown, and this relatively new channel has now become quite meaningful.
Their coffee roastery in Elephant and Castle has processed around 5,000 orders in the past 14 days, which is an increase of about 500 per cent compared with the two weeks before, and the entrepreneur is expecting to see this growth continue throughout the rest of April.
“Our highest day of sales so far was 2 April, in which we saw more sales than the entire month of April 2019. It’s been a long way from a holiday so far. We’ve been working with the banks, working with our landlords, communicating with our investors, customers and staff. I don’t expect it to continue at the same intensity for the next few months, but it’s been pretty busy. Two weeks down, 10 weeks to go. Right?”
The entrepreneur has never been one to shy away from a challenge. With no previous background in hospitality, Abrahamovitch, who studied economics at the University College London, made the leap from tech entrepreneur to restaurateur almost by accident.
He was 25 when his father died, leaving his mobile store business to his son. Abrahamovitch faced the situation head on, taking parts of the business he inherited and launching a totally new venture.
“I found myself quite suddenly inheriting a retail business that was winding down and that I didn’t really want. However, one of the store’s locations was this very cool building on Old Street roundabout, which was just becoming the Silicon roundabout. It had sentimental value, so I wanted to turn it into something fun and it became a coffee shop.
“The sector was very different back then, you had successful big chains and some really great independent coffee shops but ran in a neighbourhood business kind of way. The speed of service and hygiene weren’t always up to standards.”
His idea was to take the best of both worlds – the quality, passion and expertise from the independent coffee shops combined with the speed and efficiency of the chains – to create Grind. “Everyone said we were crazy to open our first location just next to a Starbucks but the experiment paid off, we were cash positive from day one and opened our next location within two years.”
Abrahamovitch had ambitious expansions plans to open new sites in the coming year but the reality is that this budget might now be spent to keep the current business running. “Of course, we will keep growing at some point – but this will depend on how long this lockdown goes on for.
“If it’s one more month plus one year for footfall to get back to where it was, then lots of the cash we raised for expansion is inevitably going to be spent on plugging gaps, which is a shame.”
Like most of us expercing home life, he has never spent as much time in his Shoreditch flat as he does now, but exercise and work is what keeps him sane. “My wife has got me doing bar classes every day and I’m trying to go out for a daily bike ride.
“It looks just like a film set, you’ll just never see London looking like this again.”
His advice for any entrepreneur building a business out there is to trust in their idea, execute it and try to succeed or fail as quickly and as cheaply as possible.
“I see people who spend years in the planning phase and they try to adjust what they’re doing to suit every opinion they’ve ever heard. But at some point you have to just back yourself and get on with it. Obviously, maybe not right now. Add an asterisk to that – once we’re back to normal.”
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