Coffee business takes lead on sustainability

A shared passion for business and sustainability has helped David and Marguerite Lawlor make a success of their growing venture Watermark Coffee

Husband and wife David and Marguerite Lawlor own and run Watermark Coffee, which supplies and services coffee machines for corporate and hospitality clients and sells sustainable coffee brands Woodland Coffee and Green Ocean Coffee wholesale and online. The Lawlors are both Chartered Accountants who trained with KPMG and employ 19 people in Dublin. Here, they tell Accountancy Ireland about their experience running a business.

You acquired Watermark Coffee in 2007. What prompted you to go into business together? 

Marguerite: During my time with KPMG, I gained valuable exposure to the financial services sector, and then I moved into life assurance.

When we came across Watermark, it seemed like the business could have potential. Even though we had a small child at the time, we weighed it all up and decided to go for it.

We negotiated a Put and Call option to purchase Watermark Coffee from the previous owners in November 2005. This involved David starting as Managing Director with the option to purchase the business with an agreed price for assets, goodwill, and a formula to allow for any further movement in net assets. 

At the time, the business employed six people selling and servicing coffee equipment. Just three customers accounted for 80 percent of sales. The option was for a five-year period, but allowed us to walk away with no contractual commitment. 

David: I’ve always enjoyed the cut and thrust of business. My father was one of the founding partners of JPA Brenson Lawlor in Dublin and my brother, Ian Lawlor, is the Managing Partner there now. 

I realised early on that being a Chartered Accountant gives you a great edge in business and instils confidence and knowledge at a young age. 

I received fantastic and varied training with KPMG and worked with really clever people, but like Marguerite, my heart leaned towards a career in business, rather than business advisory. 

I worked for a few years in industry before starting to look for opportunities to run our own business. We started talking to the previous owners of Watermark two years before I seriously got into talks to buy it. 

What was the process of acquiring an existing business like?

David: It was challenging. There were numerous operational, contractual, and sales-related challenges. With any small business, there is also a concentration of technical knowledge, contacts, and know-how. 

We couldn’t justify purchasing the business in a normal share transfer arrangement. There were just too many risks. 

Instead, we proposed the Put and Call option, which allowed us to get a start on addressing any challenges while working on a strategic way forward. 

One year later, in early 2007, we exercised the option and acquired Watermark Coffee. 
Would we recommend this method of acquiring a business now? In a word, yes. 

Buying an existing company can save you a lot of time setting up basic business structures—from running stock management systems to developing terms and conditions of employment and everything in between. 

There are significant risks involved in acquiring a small business, however, so it’s really important to structure an agreement that helps to mitigate as many as possible. 

How has Watermark evolved in the years since? 

David: The financial crisis hit just after we bought the business. Eight months in, the subprime mortgage crisis was taking hold in Europe and we had acquired a business dependant on finance being available to our customers. 

Our response was to keep reinventing ourselves. We changed the way we engaged with the market. Rather than just selling equipment, which is fine if there is available credit, we started renting our machines in 2011.

We were only selling commercial coffee equipment at that time and we had a small group of customers, so we tried to broaden our customer base and access new markets, such as the UK, and became a distributor for commercial Gaggia coffee machines over there in 2009. 

That was a fantastic opportunity as there wasn’t a lot happening in Ireland at the time, but it did involve setting up a UK business from scratch. 

After several attempts in 2011, we managed to successfully launch an equipment rental option in the Irish market, which was still deeply impacted by the lack of available credit. This increased our relevance in the market and the phone started ringing a bit more. 

By 2014, we launched our first coffee range. It was a great supplementary product to our coffee equipment and it allowed us to maintain a much closer relationship with our customers.

Woodland Coffee launched in 2020. A sustainably sourced coffee, Woodland funds tree-planting on a 30-acre site we purchased near Pallasgreen in Limerick. 

Our customers for this speciality grade arabica coffee include Virgin Media, Docusign and Twitter.

Buoyed by our success with Woodland Coffee, we decided to launch our second range, Green Ocean, this year. It is our most ambitious endeavour yet.

Tell us about the sustainable aspects of your business?

David: Green Ocean Coffee went on sale in January with three speciality grade arabica coffees, including single origin and blended coffees. 

For every 1kg of Green Ocean Coffee sold, one square metre of seabed in Clew Bay, Co. Mayo, is being restored. 

We commenced this restoration project last July with Clew Bay Oyster Co-Op. We are reseeding the ancient oyster and seagrass beds in special areas of conservation in Clew Bay.   

Seagrass sequesters carbon 35 times faster than the same area of rainforest. Oysters also sequester carbon, but filter the water, enabling sea grass and other marine plants and fish to thrive. 

As divers and sailors ourselves, we have witnessed enormous change to the marine environment over the past 20 years and sustainability is at the heart of everything we do. 

The projects we support have to be authentic, worthwhile, local, and transparent. When it comes to climate action, authenticity trumps everything else.

What has your strategy for the business been to date?

David: Our strategy has been to stay relevant to the market. We are never going to be the biggest. 

Globalisation will ensure that others take that spot, but we can be one of the best and, with Green Ocean Coffee, we can involve our customers in our restoration activities. 

This can be as basic as providing simple updates on their contribution to the restoration, hosting talks by the marine biologists working with us, or organising site visits to Clew Bay—and, if they are really interested, a scuba dive over the reefs!

We want to make the restoration work real and fun for our customers and their staff. Green Ocean Coffee is about the positive steps we can take and how that makes a meaningful difference. 

How do you divide up the responsibilities involved in running the business?

Marguerite: We both have very different skill sets. David works on the sales and creative side of the business as he loves talking. I take the lead on operations and finance—basically, making sure that we are meeting our promises to our customers. 

We have a great operational team. After our engineers go on the road to service and install machines, I will ring each customer to ask about their experience. We get a lot of feedback that way. 

I also oversee the financial side of the business, which allows David to focus more on sales, marketing, and creativity. 

I’ve found that my training as a Chartered Accountant has really helped me to set up and manage processes for new staff as we’ve expanded and to deliver on our promises to customers.

We really try to keep business talk to the office and make decisions with our staff rather than over the dinner table and we meet with our sales team and operational managers every two weeks to discuss how we are doing. 

The coffee business is very competitive and fast-moving, so fast effective communication is a real strength in our customer service delivery. 

Tell us about the biggest business lessons you have learned so far?

David: First, if I see something wrong, I try to act upon it immediately, even if it is painful. If I’m not sure what to do there and then, I sleep on it and act on it the following day. 

Second, I’ve learned the importance of continually reinventing what our business means. This is really necessary, but also a lot of fun. 

Third, discomfort comes with the job spec. As soon as I realised this, I become much happier co-running the business.

Marguerite: Keep in touch with your customers and listen to their feedback. Customer service is at the heart of every business and every role within our business is crucial. 
It was open discussion with our team that led to the development of Woodland Coffee and Green Ocean Coffee. 

Do you think there is a specific mindset you need to run a business successfully?

David: You have to be incredibly enthusiastic and driven to be self-employed. This mindset is contagious, and customers will get it and want to be involved, so it really works. 

Running your own business is also a little ‘all or nothing’. You need to throw yourself in 100 percent. Once you have a genuine interest in what you’re doing and you do it with enthusiasm, entrepreneurship will come easily. 

What are your plans for Watermark Coffee in 2023 and beyond?

David: We want to restore 180 more hectares of seabed in Clew Bay by getting as many like-minded businesses as possible to partner with Green Ocean Coffee in the year ahead. After that, I’m sure we’ll find another couple of hundred hectares of seabed somewhere else!