UK markets close in 7 hours 3 minutes
  • FTSE 100

    +6.15 (+0.08%)
  • FTSE 250

    -181.81 (-0.83%)
  • AIM

    -13.19 (-1.20%)

    +0.0015 (+0.12%)

    -0.0038 (-0.28%)

    -1,148.12 (-4.05%)
  • CMC Crypto 200

    -23.19 (-2.71%)
  • S&P 500

    -6.52 (-0.15%)
  • DOW

    -129.61 (-0.38%)

    -0.37 (-0.42%)

    -16.60 (-0.91%)
  • NIKKEI 225

    -841.03 (-3.11%)

    -482.90 (-1.99%)
  • DAX

    -138.99 (-0.90%)
  • CAC 40

    -40.89 (-0.59%)

Grind founder David Abrahamovitch on taking millennial pink coffee pods to the US after surviving the pandemic

·5-min read
David Abrahamovitch is taking his chain’s pods stateside  (Mike Palmer)
David Abrahamovitch is taking his chain’s pods stateside (Mike Palmer)

Shoreditch Grind became a coffee and espresso martini destination at the start of London's java revolution in the early 2010s.

Lifelong Londoner David Abrahamovitch, who was in his 20s at the time, had been left a small circular building right on Old Street roundabout in his father's will.

His father, also David, had used it as a phone shop. But his entrepreneurial son partnered with friend Kaz James, an Australian DJ, to re-think the space. James brought a love of Melbourne's hipster cafe scene and the pair decided to launch a coffee shop with a twist. They put up cinema-style billboards in 2011 just as the coffee market took off.

When they first started out people asked "multiple times a day what a flat white was," Abrahamovitch says. But soon, the flat white — an Australian export — began to appear in every City commuter’s hand. Now you can get one for 99p at McDonald's.

Shoredich Grind, the first Grind location, opened on Old Street roundabout in 2011 (Grind)
Shoredich Grind, the first Grind location, opened on Old Street roundabout in 2011 (Grind)

Today there are eight Grind branches around the capital and a 15,000 sq ft roastery in Bermondsey. Despite a hit to cafe revenues during the pandemic, the company expects sales to exceed £20 million for the first time ever this year following the large-scale rollout of its new compostable coffee pods.

If you live in London and have ever expressed even a slight interest in coffee online, you will have been advertised these millennial pink pods in their matching tins.

The product first took off in 2020 as office workers, now stuck at their kitchen tables, looked to replicate cafe brews while working from home.

Abrahamovitch, 35, says: "It's been amazing to have something else, because the hospitality side of things has obviously been so challenging for everyone."

The company had already planned to invest "heavily" in pods pre-Covid, Abrahamovitch says, as he wanted growth without "more and more and more stores".

Today around half of Grind's revenues come from its cafes, half from online sales of pods and beans.

"We got really lucky with the timing," the founder says. "Thank God we started that process when we did.

"In 10 years we built this £10 million turnover restaurant business, and then in 10 months we built a £10 million turnover B2C [business to consumer] business. Covid and our shift online has changed the business forever."

Is it easier or harder now? "In some ways I'm probably better at leading this new business than I was the last business — I was never a restauranteur,” he says. “From the beginning, we were building a brand that could be more than just a few locations in London.

"It's kind of been the best of both worlds. You get to be scrappy and fast, but also you've got the luxury of having some cash to invest in stuff and an existing brand."

If you live in London and have ever expressed even a slight interest in coffee online you will have been advertised these millennial pink coffee pods (Grind)
If you live in London and have ever expressed even a slight interest in coffee online you will have been advertised these millennial pink coffee pods (Grind)

Just before the pandemic struck, Grind signed a deal with Soho House to supply beans to the membership club's locations worldwide. Abrahamovitch's idea now is to partner with high end retailers and tap into the US home-coffee market so dominated by Nespresso.

Will he be able to win over the East Coast coffee snobs? Many aficionados frown on pods and argue they can’t replicate the taste and flavours of freshly-ground espresso.

Abrahamovitch says he has never wanted to be part of the “snobby elitist side” of speciality coffee.

“Our mission is to take an amazing flat white to the world, not to be the coolest, edgiest, most hipster brand,” he says.

Abrahamovitch sees “an amazing opportunity” for Grind’s compostable offering. He points out that when people are surveyed about using plastic pods, they say they “literally feel guilty every time they make one”.

“There aren’t great compostable alternatives out there,” he says. “And consumers on both coasts care as much as we do in Europe.”

He plans to crack the US using a £22 million war chest raised in October. It was Grind’s biggest funding round by far. Almost all the new cash was provided by early Betfair investor and L.E.K consulting founder, Richard Koch.

Previously, the chain had raised £6.8 million via several crowdfunding campaigns on Crowdcube. Investors include Links of London founder John Ayton and private equity veteran Diarmid Ogilvy.

Expansion plans come at a time when the price of coffee is soaring.

Grind has seen the cost of some of its beans soar by 60-70%. It is difficult to hedge and the company is currently absorbing the price increase.

"We're hoping that will normalise over the next year or so," Abrahamovitch says.

Grind will start roasting beans in the US as part of its expansion, which will help offset the problem of sky-high shipping costs. The entrepreneur accepts trucking and labour around the US will be expensive, but says: "We're not in a 'let's really focus on margins and eke out profitability mode'. We're in growth mode and it's about starting to build those international businesses."

The entrepreneur was born in East London and has lived in Shoreditch for over a decade. Now he is a few miles down the road from his first cafe after starting a family in 2020. He agrees that Shoreditch was cooler in the early 2010s, but still loves the area.

"That Shoreditch east London thing is in our DNA — it's in my DNA," Abrahamovitch says. "We're just very excited at the opportunity to take our coffee to the world."

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting