A secure future

by Fachmagazin Wirtschaftsflash
coffee world report

A secure future

Schaerer AG in Zuchwil is busy manufacturing and exporting its products.

Even the leading global manufacturer of professional fully automatic coffee machines has been suffering in these last few weeks. "The order situation is constantly changing, orders have to be rescheduled or pushed back", explains CEO Dr Jörg Schwartze in an exciting conversation with Simone Leitner.

Jörg Schwartze, Schaerer AG with headquarters in Zuchwil delivers coffee machines to grand hotels, cafés and restaurants as well as in canteens. Are you able to produce your coffee machines as you have in the past despite the extraordinary circumstances?

We are in the happy situation of enjoying a wide international foundation from retail to major clients in Europe, the US and Asia. For Schaerer AG, all customers are important, and we feel strongly about always offering them the right solution for their individual needs. This has made it possible for us more than to double our business in the last three years. Of course, the current situation is affecting our customers, but not at the same time and not to the same extent everywhere. The order situation is continually changing, and orders have to be rescheduled or pushed back. We have to re-prioritise again and again, also when it comes to staff capacities and the supply of parts. The order situation is still stable, so we can continue to produce our machines.

 

How about export from your headquarters in Zuchwil? Can you continue to deliver to your customers?

Business in Switzerland is suffering from the restrictions on public life, meaning we had to register for short-time work for our Swiss sales and service departments. But the majority of our business consists of export to the US, Europe and Asia. Our order situation continues to be strong in these areas. When it comes to logistical commodity export, we have noticed that service providers are sometimes having difficulties delivering freight on time. But we can react quickly to these situations and ensure delivery to our customers.

 

Your subsidiaries in the US, Germany and Belgium, as well as other partners around the world, offer the full scope of Schaerer services, including sales, marketing and technical support. What else can you do at the moment?

Our subsidiaries are pure sales companies which offer different services. The same applies to our international partners. Unfortunately, we are currently seeing declines in the areas of sales, marketing and technical support. These differ from country to country and primarily depend on the degree of restrictions on public life imposed in the respective country. While sales and service are directly affected by the downward trend in business, this is not strictly the case for supporting functions such as marketing. Nevertheless, we are continually examining our order and profit situation and can react flexibly to ever-changing situations in different countries.

 

How are you currently handling the sales of your products? Are video conferences a viable alternative to B2B business relationships?

At Schaerer AG, we have long been collaborating successfully across several countries at one time and have home office models in many areas of the company. In the first half of 2018, we also invested heavily in our IT infrastructure, for example, in a new wireless network in line with Group standards as well as in-network expansion. Our employees are familiar with Skype conferences and working with similar tools, and they are also used to working from home. This also applies to collaboration with our customers and partners. Since we have been working together very closely for a very long time, the current lack of direct contact is not significantly affecting our business relationships.

 

The Chinese coffee shop operator Luckin Coffee relies on Schaerer AG. What does the coronavirus pandemic mean for the new partnership?

We are still enjoying very fruitful discussions with Luckin Coffee, and our business is currently running normally. In principle, we are refraining from making any further statements about effects on our customers and their business. But I will say that we have been very impressed by the dedication of Luckin Coffee in China. The company thought of something special to help hospital employees during the coronavirus pandemic. On Luckin's initiative, "Luckin Coffee Express" coffee machines, which contain the Schaerer Premium Coffee Engine, were delivered to various hospitals in Wuhan to provide free coffee beverages to medical staff. On February 18, 2020, the first "Luckin Coffee Express" was successfully put into operation in Jinyintan Hospital in Wuhan. In addition to hospitals, this also benefited other institutions like fire brigades. The coffee from the "Luckin Coffee Express" is not only free but also safe — the machine is unmanned and works with almost no contact.

 

You have made considerable investments in a future-proof IT infrastructure, significantly expanded your production facilities and modernised all assembly workstations. Are you worried about the future?

The interest of our customers and our outstanding growth in 2019 demonstrate that we satisfy market demand. Fortunately, the investments we have made do not involve high fixed costs since we, as an assembly operation, are not active in a particularly investment-heavy sector. However, we are aware of the fact that the current situation will have an impact, and on Schaerer AG as well. We will continue down our path regardless. Along with our sister brands WMF in Germany and Curtis in the US, we are the clear market leader in the field of professional coffee machines, enjoy excellent business and are very well-positioned in general. That is why I am sure that we will weather this crisis and emerge stronger than ever. The enthusiasm of our customers, which makes us very proud, encourages us to continue — because we are committed to our customers.

 

Which losses have you suffered up to now, in mid-April?

We are part of a listed company, and we kindly ask for your understanding that we do not wish to make any statements in this regard.

 

What is your forecast for your company for the global economy?

The consequences of the coronavirus pandemic will undoubtedly be substantial worldwide; at the moment, however, their full scope is difficult to predict. For Schaerer AG, we expect a secure economic future. We believe in our business model. The coffee business remains a strong high-growth market. With our innovations in the area of vending machines serving the highest quality of beverages, we also serve a market segment in which interest is growing in times of closed cafés and restaurants. That's why we're confident that we will be able to continue our successful business activities after the crisis.

 

About Jörg Schwartze

On May 1, 2017, Jörg Peter Schwartze became CEO of Schaerer AG and reports directly to Johan Van Riet, President of Global Professional Coffee Machines at the WMF Group. Jörg Schwartze came to Zuchwil from the WMF Group's headquarters in Geislingen, where he had held the position of Vice President for Production, Consumer, Operations Strategy and Projects since 2015. Before joining the WMF Group, Schwartze was General Manager of Beiersdorf Manufacturing Hamburg GmbH, which is Beiersdorf's largest production facility anywhere in the world with over 650 employees. As a traditional Swiss company, Schaerer AG stands for coffee and engineering expertise and is, therefore, an essential brand in the B2B segment of the global French corporation Groupe SEB, which Schaerer, as part of the WMF Group, has been a member of since the end of 2016.

 

Sources

Images: Schaerer archive