Hoarditch Grind became a coffee and espresso martini destination at the start of London’s java revolution in the early 2010s.
David Abrahamovich, a lifelong Londoner who was then 20 years old, was left a small circular building on the Old Street roundabout by his father’s will.
His father David also used it as a phone shop. But his enterprising son partnered with Kaz James, an Australian DJ friend, to rethink the space. James brought up a love of Melbourne’s hipster cafe scene and the pair decided to start a coffee shop with a twist. They put up cinema-style billboards to coincide with the launch of Coffee Bazaar in 2011.
When he first started out people asked “what is a flat white several times a day,” Abrahamovich says. But soon, the flat white—an Australian export—began to appear on the hand of every commuter in town. Now you can get one at McDonald’s for 99p.
Today Grind has eight branches around the capital and a 15,000-square-foot roastery in Bermondsey. Despite a drop in cafe revenue during the pandemic, the company expects sales to exceed £20 million this year following a massive rollout of its new compostable coffee pods for the first time.
If you live in London and have ever expressed the slightest interest in coffee online, you may have seen these millennial pink pods advertised in their matching tins.
The product first took off in 2020 as office workers, now stuck at their kitchen tables, looked to replicate Café Brews while working from home.
Abrahamovich, 35, says: “Having something else has been amazing, because the hospitality side of things has obviously been so challenging for everyone.”
The company had already planned to invest “heavy” in pods pre-Covid, Abrahamovich says, as he wanted growth without “as many stores as possible.”
Today about half of Grind’s revenue comes from its cafes, half from online sales of pods and beans.
“We got really lucky over time,” says the founder. “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 £10 million of turnover B2C [business to consumer] business. COVID and our online shift have changed business forever.”
Is it easier or harder now? “In some ways I’m probably better at leading this new business than I was in the previous business — I’d never been a restaurateur,” he says. “From the beginning, we were building a brand that could be more than just a few locations in London.
“It’s been the best of both worlds. You get scary and fast, but at the same time you have the luxury of having some cash to invest in stuff and an existing brand.”
Just before the pandemic hit, Grind signed a deal with Soho House to supply beans to membership club locations around the world. Abrahamovich’s idea now is to partner with high-end retailers and tap into the Nespresso-dominated U.S. home-coffee market.
Will he be able to win over the East Coast coffee snob? Many fans frown at the pods, arguing that they can’t mimic the taste and flavor of freshly ground espresso.
Abrahamovich says he never wanted to be part of the “snobby elitist side” of specialty coffee.
“Our mission is to take an amazing flat white to the world, not just be the coolest, most flashy, most hipster brand out there,” he says.
Ibrahimovic 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 compost options out there,” he says. “And consumers on both coasts care as much as we do in Europe.”
He plans to sabotage America using the £22 million war chest he raised in October. This was Grind’s largest funding round to date. Almost all of the new cash was provided by early Betfair investor and LEK Consulting founder Richard Koch.
Prior to this, the chain had raised £6.8 million through several crowdfunding campaigns on Crowdcube. Investors include London founder John Ayton and links to private equity giant Diremid Ogilvy.
The expansion plans come at a time when the price of coffee is on the rise.
The price of some of the grind beans has gone up by 60-70%. It is difficult to hedge and the company is currently tolerating the increase in prices.
“We’re hoping that the next year or so will be back to normal,” Abrahamovich says.
Grind will begin roasting beans in the US as part of its expansion, which will help address the problem of sky-high shipping costs. Entrepreneur acknowledges that trucking and labor around the US will be expensive, but says: “We are not in ‘really focused on margins and focus on profitability mode.’ International manufacturing is about starting businesses.”
The entrepreneur was born in East London and has lived in Shoreditch for over a decade. Now she’s just a few miles from her first cafe since starting a family in 2020. He agrees that Shoreditch was cooler in the early 2010s, but loves the area nonetheless.
“That Shoreditch east London thing is in our DNA – it’s in my DNA,” says Abrahamovich. “We are very excited at the opportunity to take our coffee to the world.”