General Atlantic predicts digital to drive 50% of Joe & the Juice

'When we invested in 2016, our digital offering was nascent, whereas today, the delivery app and digital side drive about 30% of the business,' says managing director Melis Kahya Akar.

Melis Kahya Akar, General Atlantic

General Atlantic (GA) will ride the healthy lifestyle wave to expand Joe & the Juice globally with a focus on digital offering and franchising, Melis Kahya Akar, managing director and head of consumer for EMEA, told PE Hub Europe.

Joe & the Juice, a Copenhagen-headquartered juice bar and coffee company, in mid-November agreed for GA to take a majority stake as Valedo Partners, a Swedish investment company, announced it would fully exit.

New York-headquartered private equity firm GA was already a minority investor. “When we invested in 2016, our digital offering was nascent, whereas today, the delivery app and digital side drive about 30 percent of the business,” said Akar. “That really kicked in during covid in 2020. We believe there is potential for that to go up to about 50 percent in the next phase of growth.”

Growth in the physical business will come geographically, with GA seeing the franchise model as a source of growth. The total output of franchised businesses will increase by 4.2 percent to $860.1 billion in 2023, up from $825.4 billion in 2022, according to the International Franchise Association’s 2023 Franchising Economic Outlook.

Last year, GA trialled franchise operations in the Middle East, where “we felt partners would know the territory better than us”, said Akar, adding that units in the region are performing particularly strongly.

“We see new franchise opportunities down the road, including in newer territories such as Latin America and Asia.”

Branching out

Consumer preferences have evolved since GA’s initial investment, according to Akar. While healthy living is still part of the investment thesis and a big part of consumer behaviour, it now has a added lifestyle element, as people look for “hipper” places to get their daily caffeine hit.

Inflation doesn’t seem to deter customers either, potentially signalling that wealthier individuals don’t have to worry about dropping coffee shop visits from their daily routine. For Akar, it’s about consumers’ conviction with the brand. “Despite inflation, all the regions are achieving very high double-digit sales,” she explained. “That speaks to how strong the brand is and how well it resonates with the consumer.”

There is still work to be done within existing Joe & the Juice units. GA plans to implement operational changes to deliver faster service to customers, by improving layouts within units. The menu might also see some updates, but Joe & the Juice fans will be relieved to hear their favourite items are safe. Akar talked about expanding on the current offering, rather than taking items off the menu.

GA’s consumer portfolio covers subjects such as beauty, restaurants and apparel and contains brands Gymshark, depop and Sézane. A loyal consumer base is a key ingredient when selecting a consumer target, according to Akar. “Across categories within consumer, community-driven brands are essential to us.”