The Aroma Cafe facts for kids
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| Public services | |
| Industry | Coffeehouse |
| Founded | 1991, in London, England 2000, in Buenos Aires, Argentina |
| Headquarters | Buenos Aires, Argentina |
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Key people
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Sergio Gratton |
| Products | Coffee Tea Pastries |
| Parent | Freddo (a subsidiary of Grupo Pegasus) |
The Aroma Cafe (which means "Aroma Coffee" in Spanish) is a coffee shop chain. It started in London, England, in 1991. Later, it also began operating in Buenos Aires, Argentina, in 2000.
In 1999, McDonald's bought Aroma Cafe. They helped the chain grow in both the UK and Argentina. However, in 2002, McDonald's sold the London Aroma shops to Caffè Nero. These shops were then renamed Neros. The part of the chain in Argentina was sold in 2004 to Freddo, an ice cream company. Freddo is owned by a group called Pegasus Capital.
Contents
The Story of Aroma Cafe
How Aroma Cafe Started
Aroma Cafe was founded by Michael Zur-Szpiro in 1991. He had moved to London in 1975 to study. Michael felt that London needed more cafes like those in Europe. He wanted a place that offered simple snacks, good coffee, and tasty pastries.
He put his cafe idea on hold for over 10 years. During this time, he worked as a consultant in the United States. When he returned to the UK, he became interested in starting cafes. These cafes would sell coffee and sandwiches, but also things like packaged pasta. In 1989, he started planning his business. He visited many sandwich shops and snack bars. He talked to owners, real estate companies, and designers.
In 1990, a company called Alan Patricof Associates invested a lot of money, about £2.5 million. This was 80% of the money needed to start. Michael Zur-Szpiro put in 15% of the money himself. He wanted to invest a lot in the cafe's design. He hired a company called ORMS Architects & Design. They created a "bright, cheery, contemporary Mexican look" for Aroma.
Michael said Aroma's goal was to offer a "15-minute holiday in the sun." The first Aroma Cafe opened in December 1990 in Dean Street in London. The cafe had yellow and white walls. Its outdoor seats and employee uniforms were a bright blue-green color. Aroma did not make its own food. Instead, it received deliveries from bakeries and a small business that made sandwiches. The cafe started making a profit just four months after opening.
By 1994, ORMS Architects & Design had worked on Aroma's sixth location. A magazine called Architects' Journal said the design created a "Mediterranean atmosphere." Around 1995, Aroma also started providing food for companies like ITN.
In 1995, a company called Apax Partners (which was Alan Patricof Associates before) asked a consultant named Finlay Scott to check on Aroma Cafe. They felt the chain was not doing well. Aroma was not growing fast enough outside London. Also, its prices were not right. Scott found that Aroma was selling too many different products. He cut the number of items from 400 to 120. He kept Michael's idea of selling equal amounts of coffee and sandwiches. This made Aroma different from places like Pret a Manger (which focused on sandwiches) and Starbucks (which focused on coffee).
By 1996, Aroma had 11 locations. It was selling over three million cups of coffee each year. A reporter in 1999 described Aroma as a chain that sold "coffee and sandwiches in a lively atmosphere." The cafes had bright yellow and orange colors and played Caribbean music.
Joining McDonald's
In 1999, Aroma Cafe had 23 locations and about 300 employees. McDonald's bought Aroma Cafe for £10.5 million. At that time, the company Apax Partners owned 50% of Aroma. Michael Zur-Szpiro, the founder, owned about 10%.
McDonald's said that Aroma would still be run as a separate brand. It would have its own management team. Aroma was the first non-American chain that McDonald's bought to run as a separate brand. It was also only the second company McDonald's bought outside of its usual fast-food business. The first was Chipotle Mexican Grill.
While McDonald's owned Aroma, some people protested against it. These protests were aimed at McDonald's, but they affected Aroma too.
In 2001, McDonald's started looking for a buyer for Aroma. McDonald's had also partnered with Pret a Manger, which sold both sandwiches and coffee. Some people thought this made Aroma less important to McDonald's. Also, there were many coffee shops in the UK already. McDonald's found it harder than expected to make Aroma successful. It faced strong competition from other coffee chains like Costa Coffee, Starbucks, and Caffè Nero.
Becoming Caffè Nero
Caffè Nero agreed to buy 26 Aroma locations on February 18, 2002. This deal would make Caffè Nero have 107 shops in total. Caffè Nero planned to spend money to change all the Aroma shops to the Caffè Nero name. They did not want to use the Aroma name anymore.
Caffè Nero bought 31 Aroma stores for £2.45 million in May 2002. This made Caffè Nero the third-largest coffee chain in the UK. Costa and Starbucks were still bigger. McDonald's lost a lot of money when it sold Aroma. It had spent £10.5 million to buy it and another £17 million to improve the shops. McDonald's increased the number of Aroma shops from 23 to 35. The Guardian newspaper said that McDonald's had ended its "disastrous foray into coffee bars." McDonald's could not find a buyer for all 35 Aroma stores. The remaining four stores were sold separately.
Aroma in Argentina
Aroma expanded to Argentina in mid-2000. Sergio Alonso, a former McDonald's executive, led this expansion. The first goal was to have 50 Aroma locations in Argentina by 2004. However, economic problems in Argentina made this goal hard to reach.
On June 7, 2004, McDonald's sold the Aroma chain in Argentina to Freddo. Freddo is an ice cream chain owned by Pegasus Capital. This sale included all six of Aroma's branches in Argentina. Two of these Aroma branches were in big shopping centers. By the time of this sale, McDonald's had sold all its Aroma chains around the world.
In 2018, a newspaper called La Nación reported something interesting. Several Aroma locations in Argentina started to include Freddo ice cream stands inside them. This was a way to improve how much money they made.
See also
- List of coffeehouse chains
