Wednesday 29 June 2016 4:14 pm

Does the acquisition of Harris and Hoole from Tesco mean Caffe Nero is entering a new era?

Last week's announcement that Caffe Nero has acquired in-supermarket coffee chain Harris and Hoole from Tesco sent a strong signal that the brand is committed to modernisation.

This is vital in a market where casual dining brands have to fight huge levels of competition and a fast-moving, fickle audience base that will often be swayed by promotions and convenience.

The acquisition has been a clever one for Nero – the Harris and Hoole shops have a strong sense of identity and locality, following the current trend towards crafty, artisanal spaces that offer high quality products as well as good value for money. 

So what is driving change in this sector and, crucially, will we see the Nero chain's own-brand cafes receive a makeover to match the look and feel of their new brand stablemates?

What drives brands

In my view, successful brands are driven by charisma. Using this insight more effectively could transform the casual dining sector, moving it away from a reliance on location and price, and instead towards brands reinventing themselves for a modern audience. 

The quick-serving restaurant (QSR) sector, within which coffee chains such as Caffe Nero sit, is typically a low-performing market in terms of charisma. The only brands exuding personality in the segment are those that actively position themselves in contrast to the sector's norms.

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Leon, for example, prides itself on its recipes and the quality of its fare; namely fast food made slowly. 

Chipotle offers "food with integrity" and boldly shares its vision of responsible sourcing and sustainable consumption with its customers. 

Compare the visual vitality of Itsu’s butterfly, its vibrant pink and friendly, confident tone of voice, in contrast with the look of Burger King. Where once Burger King was the brash, bold new kid on the high street, today it seems to have barely moved on from this period in its history and appears tired and dated as a result. With flourishing brands such as Itsu on the scene the contrast grows starker by the day.

These giants of the QSR category already have near-universal brand recognition, not to mention great products.

All change

However, the time has come for them to look to new horizons. They must start learning from the emerging challenger brands in the sector which are making a real impact with consumers and starting to grab significant market share.

This is not necessarily about total reinvention, but more about finding ways to make already successful brands more charismatic and more likely to be noticed.

Read more: Why design is finally having its day

Coffee shops such as Nero need to ensure their bricks and mortar environments are being used to full effect to engage with consumers old and new. For example, why make every branch look identical?

This is where Nero’s acquisition of Harris and Hoole becomes interesting: the H+H brand was originally built on the notion that each branch reflected the community and spirit of its location.

It’s extremely encouraging that the Nero brand is expanding its empire to include this offering, and indicates that it is well aware of the need to adopt individual styles across branches.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.