MERLO BUILDING ON A RICH COFFEE HERITAGE
Written on the 3 July 2015 by Karen Rickert
WITH a history as rich as its brew, Merlo has come a long way since introducing the first espresso machine to Brisbane in 1958 as it moves to take on the coffee capital of Melbourne.
The company has been spawned on family tradition, from Papa Merlo's small trattoria in Tirano to Gino Merlo migrating to Australia with an Italian coffee contraption, and finally Dean Merlo starting an espresso bar in Queen Street.
Merlo Coffee is now sold in more than 1000 cafés, as well as its 12 company-owned BarMerlo stores and torrefaziones, or roasting houses, across Brisbane and the Gold Coast.
The man forging the interstate expansion is Merlo's business partner James Wilkinson, who started on the factory floor in 1993 and worked his way up to CEO in 2013.
Wilkinson immersed himself in the different roles of the company's 300 employees during the transition, from working as a barista to the accounts department at head office.
He says Merlo has inked a deal to open a roasting house in the bustling Queen Victoria Market and it is expected to open in October.
"Great coffee is great coffee wherever it is really."
"Great coffee is great coffee wherever it is really," Wilkinson says.
"Merlo will always be south-east Queensland and northern NSW primarily, but it will be an interesting push into the Melbourne market.
"Hopefully they'll take us with open arms on face value and make an opinion based on the taste of the coffee, rather than as a Brisbane company trying to come down and take over.
"There's room for a little Brisbane roaster in Melbourne they're certainly coming up here, so it would be nice to go there."
The change of scenery is just one of the exciting initiatives that Merlo has in the pipeline, with the company planning to roll out two or three roasting houses every year.
The target is to have 30 company-owned locations in the next five years, with the new stores having a similar fit-out to Merlo's torrefazione in Toowong.
The store is strategically located outside of a supermarket, and roasts beans on demand for customers using a transparent air bed roaster manufactured in Germany.
"It's a bit like Willy Wonka and brings a little theatre to the whole process," Wilkinson says.
"When you go there you can watch the beans flying over in see-through pipes in a loading system and see the coffee poured fresh.
"A café is a café at the end of the day, but we decided we needed to show people the roasting side and sell the coffee as fresh as we can."
Merlo has also tapped into the trend of cold-pressed beverages, with the launch of Black Bear in April.
Rather than chilling hot espresso, the bottled drink is made using cold water at the start of brewing to achieve a more delicate and less acidic brew.
Sales have been soft as the original release date was delayed to get the flavour combination right, but Wilkinson says he is expecting an improvement come summer.
"It's a great product, nice and strong without being overpowering. We're expecting to do some good numbers this year," he says.
Merlo's renewed focus on innovation is expected to attract more fans to the brand which has a loyal following, while also consolidating against increased competition in the market and coffee pricing.
"Business wise that will always make things a little bit more difficult," Wilkinson says.
"Whether or not enough coffee is being grown to keep up with increasing consumption throughout the world will be interesting.
"The biggest thing we need to concentrate on is continuing to make great coffee, give our customers great service, sell as fresh a product as possible and focus on what we're doing rather than worry about any other coffee company."
Giving back to the community is instilled in the company's culture, with both Merlo and Wilkinson participating in the Vinnies CEO Sleepout and supporting charities such as OzHarvest and Red Cross.
This mindset is demonstrated in the company's commitment to staff training and educating customers about the art of coffee.
Merlo is scouting for a suitable premises to open a dedicated training centre, to teach new employees about all aspects of coffee before starting work in a busy café.
The knowledge is then shared with customers through coffee appreciation lessons held at each store, Merlo's annual Clean Your Machine Day on August 1 or simply visiting a roasting house to buy a cuppa.
A new website will also be launched later this year, sharing how coffee is farmed and streamlining the e-commerce side for wholesale customers.
Wilkinson says Merlo will continue to thrive in the high-end market as the public's coffee palate evolves.
"Brisbane has come a long way in the last 10 years. The coffee that is getting imported and roasted is a lot better quality than what it has been before," he says.
"I've been to Italy, the States, all over Europe, Sydney and Melbourne and I think a coffee from Brisbane is just as good as anywhere."