Does it matter who owns a brand?
Harris & Hoole, a small chain of coffee shops in London and the South East, has been exposed. The Guardian has revealed, the not-so-secret secret, that H&H is in fact part owned by Tesco - and people aren’t happy about it.
It raises an interesting debate around whether ownership matters to a brand or if the strength of a brand supersedes its financial backers.
Is Harris & Hoole a quirky chain of coffee shops that offers speciality blends and good quality food? Or is it an arm of multinational conglomerate Tesco deliberately duping customers?
I’d say Harris & Hoole is a brand, marketing and British business triumph rather than a wolf dressed in sheep’s clothing.
In Harris & Hoole, named after characters in the 1664 diary of Samuel Pepys’, its founders have created a strong brand identity, a good proposition and have an established customer base. The identity of its financiers has no impact on that and it would be a crying shame if the success of a fledgling British brand and business were damaged by misplaced principles.
The brand’s website says its story began as the “brainchild” of three siblings, whose vision it was to “bring great tasting speciality coffee to the high street”.
It continues: “To provide the high street with fantastic coffee takes investment and backing, and few people know the high street better than Tesco - who have made a non-controlling investment in the new business to allow the Tolleys to realise their dream.”
Many seem furious about the revelation that Harris & Hoole is not the wholly independent chain they thought. The fact is it’s no secret and I say good for them for finding financial backing to grow their chain into a thriving business.
Tesco is not the full owner. It holds a 49 per cent share - that’s non-controlling - and it has no input on how the business is run, how it promotes itself or the brand.
Harris & Hoole has 10 stores. With Tesco’s backing it has the potential to grow that number. Without, it would be, like many other independents, facing a very uncertain future indeed and its customers would find themselves having to find somewhere else to scoff coffee and cake.
Would it be any different if Nick, Andrew and Laura Tolley the founders of the chain sought financial backing from a private equity firm or an angel investor?
In Silicon Valley, established tech firms make investments in smaller startups all the time. It’s how the industry works and how startups become successful businesses.
Pret a Manger used to be part-owned by McDonald’s. Innocent is part-owned by Coca-Cola. So what? Small business need financial investment to grow and become successful and Tesco is as good a place as any to seek that investment.
It also gives Tesco an alternative growth driver beyond the reach of its supermarket business.
Tesco suffers an image problem and trust in businesses has been damaged recently but there should be more positive recognition for a giant British firm with interests all around the world giving something back by investing in a British business.