How I woke Ireland up to the taste of coffee

In 1998, David McKernan left his job, remortgaged his house, and cashed in his pension to fund his start-up coffee company, Java Republic. Now he's turning over €8m.

David McKernan, 42, isn't troubled by appearances. In the early days of his ethical coffee company, Java Republic, he went nude in a local coffee bar to promote it. "My wife wouldn't talk to me for a week," says the Dubliner. "I hadn't exercised in ages and the body wasn't looking all that good." But having taken on the two companies that controlled 90% of the Irish coffee market in 1999, he had to do everything he could to get his brand off the starting blocks.

Brought up in Lucan, West Dublin, McKernan "went to a great school called Kings Hospital, which I can't talk about now because those two eejits (Jedward) from X Factor went there". After school, he joined Bewley's, the dominant coffee firm in Ireland, rising to become sales and marketing manager with a company Mercedes and a salary of IR£80,000 a year.

But in 1995, he travelled to San Francisco and came across Caffe Roma on Columbus Avenue. "I decided I would love to have a caf and roastery just like that one day. I just thought if we did it differently and ethically it would work." What's more, Bewley's and Robert Roberts had a stranglehold on the market, so there was a gap for someone to do something different.

With the Celtic Tiger beginning to roar, it seemed like a good time to start a coffee company in Ireland. So in September 1998, McKernan left his job and spent four months drawing up a business plan. The aim was to target hotels, restaurants and large companies with his freshly roasted coffee. He remortgaged his house, cashed in his pension and sold options worth IR£10,000 to fund the start-up. "Everything was on the line. If I was gone, I was gone forever. And at that stage in Ireland, going bust was not a good idea."

In September 1999, he leased premises on the Kylemore road in Dublin and took on nine staff to set up a roastery. In his first four weeks, he sold just one case of coffee, costing him IR£25,000.

"I stuck to my guns. I knew it could work."

Passionate and pushy, McKernan approached companies one by one, selling them the advantages of his coffee. "We were the first people to put the grade and the percentages on the front of the pack, and the first to put the date the coffee was roasted on. We got an enormous amount of PR, especially when we launched the first Fairtrade coffee in Ireland." By the end of the first year, he had cornered 11% of the catering market and won over more than 240 wholesale clients, who were also impressed by his open and frank ethical credentials. Of McKernan's profits, 11% go to communities in regions where his coffee is grown a policy that continues today despite the recession in Ireland.

Turnover was IR£350,000 in the first year, rising to IR£1M in 2001 and €3m by 2002. Today, it's almost €8m, even as the Irish hunker down for some very dark times ahead. As for the future, "there isn't a business I know that's not down 10%. Even in the good days, Ireland had too many Michelin-star restaurants that weren't going to survive. But anyone who is still standing in two years' time will do exceptionally well because things will come back."

Recommended

Zhao Weiguo: China’s No. 1 chip tycoon vanishes
People

Zhao Weiguo: China’s No. 1 chip tycoon vanishes

Zhao Weiguo rode a decades-long boom in China pursuing Beijing’s core industrial policy of semiconductor self-sufficiency. Then he fell foul of Xi Jin…
5 Aug 2022
Jennifer Lopez: the American dream on steroids
People

Jennifer Lopez: the American dream on steroids

Jennifer Lopez built a business empire on top of an entertainment career, thereby paving the way for the likes of Reese Witherspoon and Gwyneth Paltro…
31 Jul 2022
Herbert Diess: VW CEO runs out of road
European stockmarkets

Herbert Diess: VW CEO runs out of road

Herbert Diess’s tenure at VW came to a premature end after he fell foul of the group’s powerful owners. Matthew Partridge reports
27 Jul 2022
Ruja Ignatova: the crooked cryptoqueen
People

Ruja Ignatova: the crooked cryptoqueen

Ruja Ignatova’s charm and guile, honed in the dark markets of post-Soviet Bulgaria, persuaded millions to invest in OneCoin, her Ponzi scheme. Then sh…
24 Jul 2022

Most Popular

Don’t listen to the doom-mongers – the future is bright
Economy

Don’t listen to the doom-mongers – the future is bright

With volatile markets, raging inflation and industrial unrest, it may feel like things are bad and likely to get worse. But the end of the world is no…
15 Aug 2022
How solar panels could lower your energy bill
Energy

How solar panels could lower your energy bill

Solar-panel installation firms are reporting a four-fold increase in orders this year compared with 2021. Ruth Jackson-Kirby explains how solar can he…
14 Aug 2022
Fill your portfolio with your very best ideas
Investment strategy

Fill your portfolio with your very best ideas

Fund managers’ top picks beat the market, but the rest of their portfolios often add little value, says Chris Sholto Heaton.
13 Aug 2022