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01/02/01 . Andrew Clark and Matthew Fort . Guardian . UK
Mine's a McLatte
They started with a £17,000 loan and a name borrowed from a boarded-up shop. Now the college friends who founded Pret a Manger have global ambitions - and £25 million from Ronald McDonald.
Fabric, the trendy nightclub opposite Smithfield Market in London, was packed as usual on Tuesday evening. But this was a night with a difference - the club, which boasts celebrity members such as Kate Moss and Mel C, was full of Pret a Manger managers.
The sandwich chain's 400 supervisors had been invited to listen to a speech by its founders, Sinclair Beecham and Julian Metcalfe, both fresh from banking multi-million pound cheques. The company, which makes much of being "passionate about people", wanted its staff to be the first to know about a new investor - McDonald's had snapped up a 33% stake.
For a firm which prides itself on its "heart and soul" and constantly stresses its fresh, healthy food, the arrival of the golden arches marked a very rapid change in culture. Pret a Manger took its name from a shop in Hampstead - the genteel suburb which battled for years to keep out McDonald's.
The sandwich chain has made its name as an environmentally friendly trader, banning genetically modified foods and sourcing chickens from humane cages in Seville. For many staff, the idea of a link with McDonald's, which has been demonised by the green lobby, was horrifying.
It also spelt the end of the brilliantly constructed illusion through which Pret seemed to offer a taste of sophistication for little more than the cost of a greasy spoon bacon sarnie. In its early days, the chain's brushed steel stools, magenta labels and immaculate chrome bars seemed the ultimate in industrial chic. Its French name and comparatively adventurous menu all helped create an aura of exclusivity - instead of ham and tomato sandwiches, Pret offered Brie, tomato and basil baguettes.
The origins of Pret's classy three-quid lunches lie in the mid-1980s, when its two creators met at the Polytechnic of Central London (now the University of Westminster), where they were studying property law.
Nine months after graduating, Metcalfe was working as a surveyor in Jermyn Street, getting increasingly fed up with "soggy sandwiches and mush" for lunch, often served with a snarl, from local sandwich shops. Deciding he could do better, he got together with Beecham to open the first Pret a Manger in Victoria, with a kitchen in the basement.
Things got off to a slow start. Metcalfe recalls: "It was a lot harder than it looked."
Although they began with a loan of just £17,000, the pair resolved to offer only high quality, fresh food: "Half the battle was getting preservative-free, chemical-free food. And it was an immense logistical challenge to get the ingredients delivered every morning."
Initially, the pair shopped themselves at local markets. Metcalfe used to go in on Sunday evenings to cook 25 chickens, ready to stuff sandwiches the next morning. For inspiration, they recalled the first meal they had shared - "warmed-over pork and vegetables" at a college canteen called the Blue Lagoon - with its blue walls and carpet tiles, the antithesis of what they wanted Pret to be.
It was three years before a second Pret opened and at that point, the concept took off. Healthy eating had become a fad in the early 90s and hurried commuters liked the idea of fresh food, prepared daily on the premises, which they could pick up off the shelf.
Jim Winship, a director of the British Sandwich Association, says: "Pret was in the right place, at the right time. There was a revolution going on in sandwiches - packaged sandwiches were finally taking off in a big way, mostly thanks to Marks & Spencer."
Pret has always been clear about who its customers are - at £1.20 for a tiny bottle of orange juice, it is targetting urban professionals with little time on their hands. The chain now has just over 100 shops in Britain, and one in New York. Last year it sold 25m sandwiches, baguettes and wraps and just over 14m cups of coffee. Pret sandwiches are still made on the premises, at every store. Shops receive fresh deliveries in the evenings, which are refrigerated every night until cooks arrive at 6.30am to prepare the day's sandwiches.
While Beecham holds the purse-strings, Metcalfe looks after the food - he spends Thursday afternoon with a recipe committee, sampling different ideas. He goes for exotic mixtures, once remarking: "The English respond to strong tastes - look at curry." Recent additions include Scotch beef with crispy onions, "More than mozzarella" sandwiches and Peking duck wraps.
Metcalfe admits he has little patience for the money side of the business - he jokes that he suffers from ADHT, the hyperactivity disorder diagnosed among American children, and colleagues say he has a tendency to hang up during important conversations if he finds them boring.
By 1998, the chain had 65 shops and the pair needed help - they were arguing, and struggling to control their rapidly growing empire. They recruited a former Pepsi executive, Andrew Rolfe, as chief executive. That freed Beecham, the more businesslike partner, to explore overseas expansion. For the past 18 months, he has been in New York, managing the firm's embryonic US operation.
It is this transatlantic venture which has led to McDonald's involvement - the two men realised that if they wanted to take their concept to another country, they needed heavyweight backing. Metcalfe says: "As a private company it's very difficult to set up abroad. We didn't know where to begin in New York - we ended up having all the equipment for the shop made here and shipped over."
There were cultural problems - the company claimed it had great difficulty finding New Yorkers to work in the shop who were prepared to offer Pret's required level of friendliness. British staff had to be sent out to run the new outlet. Critics sniped that it would never take off, because Americans liked bespoke sandwiches prepared before their eyes. Against the odds, the shop, located just off Wall Street, does seem to be working.
Another seven are planned in Manhattan this year. McDonald's will help, by providing contacts, a food distribution network and expertise in finding sites. Further ahead, Pret is eyeing Asia - Hong Kong and Tokyo will be targeted. The risk is that as the company expands, it will lose its upmarket tag. At present, it boasts the Queen among its customers - Buckingham Palace sends out for £1,000 of sandwiches a week from Pret in Piccadilly. But association with McDonald's could deter such glamorous custom.
Metcalfe admits that the reaction to the deal among his staff was initially hostile: "We had to explain carefully what we were doing. If I'd stood up, announced we'd sold 51% to McDonald's and said goodbye and thank-you, it would have been a disaster."
Instead, he emphasised the deal's limits: "We'll still be in charge - we'll have the majority of the shares. Pret will continue what it does and McDonalds will continue what it does."
That is not quite the way McDonald's sees it. A spokesman says: "We have an option to increase our investment and to fully acquire them over time."
There are bound to be clashes. Pret is proud of its ethical record - it was among the first to ban genetically modified food, and it claims to have eliminated all trace of "mass production techniques". The latest Pret fad is organic milk.
This friendship with the environmental lobby could be wrecked by its link with McDonald's. Green activists are deeply suspicious about the way it sources meat. Those on the left are similarly sceptical, complaining of horror stories about staff pay and conditions.
So is there a risk that the next time May Day marchers trash a branch of McDonald's they will train their sights on Pret? "Perhaps," says Metcalfe. "But the proof is in the pudding. We've developed a relationship of trust with our customers over many years. People may have differences with McDonald's about their supply of food but those issues don't apply to Pret."
Metcalfe maintains that Pret will prosper as long as it maintains its attention to detail - the mixture for oat and fruit slices, for example, must be stirred with a four-foot oar to maintain "texture and taste". Staff are persuaded to be nice with an offer of a 70p-an-hour bonus, given to all those who are sufficiently charming during weekly visits by a mystery shopper.
One City analyst reckons Pret is worth around £75m, which means McDonald's has stumped up about £25m for its stake - small fry, by the standards of the Illinois-based empire. Metcalfe and Beecham, who sold shares in the deal, maintain that their personal wealth is easily exaggerated. "Rich lists" estimate their wealth at between £30m and £40m each.
Metcalfe says: "The deal wasn't about money - we could have sold the shares for much more to other buyers, but they wouldn't have provided the support we need."
McDonald's and Pret a Manger make an odd couple. But the logic, at least for the US company, is clear. Britons spend three times as much on sandwiches as on burgers - a third of us eat a sarnie every day.
But for Pret, a company whose success has always been finely balanced on the line between affordability and luxury, environmental awareness and pre-packaged convenience, the deal could yet prove dangerous: the shadow cast by the golden arches is a notoriously long and murky one. Pret's best hope may be that the super-pressurised throngs of young professionals on which it has built its prosperity will simply not have enough time to stop and think about it.
'The tuna wrap tasted like chamois leather but pudding was great' Matthew Fort
"Pret creates handmade, natural food, avoiding the obscure chemicals, additives and preservatives common to so much 'prepared' and 'fast' food on the market today," declares the rubric plastered all over Pret a Manger outlets, packaging, bags and walls. What could such an ethically righteous organisation have in common with McDonald's? Well, perhaps more than you might think.
Perhaps Pret a Manger customers represent the McDonald's customer 10 years down the line, grown health conscious and gastronomically sophisticated and a slave to the desk. The naff colours, melamine and spotty youths serving up the burgers, buns and bags have given way to the shiny metallic surfaces, high,small, round tables with bar stools and spotty youths serving up the lattes, cappuccinos and, oh yes, the bags made of the same recycled paper against a background blur of discreet funk.
Of course the basic food products are widely, if not wildly, different. In place of the queue 'n' serve Big Mac, Chicken McNuggets, beanburger and milk shakes, Pret a Manger brings us the self-service 'n' queue BLT, chicken jalfrezi wrap, sushi and a blackberry, pear, banana and orange drink for the fanatically figure conscious.
I was not in a particularly figure-conscious mood when I stormed into the Pret a Manger in Bristol, (complete with bespectacled man reading the Guardian at a table in the window), and slunk out with a vegetarian sushi, a chicken club sandwich, a tuna Niçoise wrap, a chocolate passion pot and a double-strength latte by way of quality control, and discovered that Pret a Manger had more in common with McDonald's than I had thought possible.
Vegetarian sushi is a bizarre concept. Vegetables have neither the neutrality nor the texture of raw fish. Their cause was not aided by dry and solid rice wrapped up in double strength nori with the chewability of damp cardboard. Whoever had handmade these sushi had also gone rather light on the wasabi and the slices of pickled ginger were withered.
The tuna Niçoise wrap was another grazing compound, owing more to fashion than good taste. It tasted like fish paste wrapped in chamois leather, with a bit of floppy Webb's wonder lettuce, tomato, raw french beans and slices of hard-boiled egg. Any connection with a real salad Niçoise was entirely notional.
The chicken club sandwich was rather good; a wholesome (well, the bread was granary), properly balanced meal in a mouthful. True, most of the flavour came by way of the excellent mayonnaise, but at least there was flavour.
For pudding I had the chocolate pot, for which I have nothing but praise, almost. It is quite solid and very smooth, with the consistency of ready mixed Polyfilla. The quality and intensity of the chocolate is carefully judged to give some measure of pleasure to the chocolate connoisseur without frightening off the Dairy Milk devotee.
The latte was not a success. Bitterness should not be confused with strength; that's what you get from over-roasting substandard arabica beans.
Still, for just over a tenner, you can't really
complain. Can you?