Tchibo Holding AG



Think of Starbucks coffee in America and how the outlets seem to be everywhere. Well, multiple that by at least 300 and you get an idea as to how pervasive Tchibo is in Germany.

Four years ago I visited Eduscho, a competing coffee roaster in Bremen which seem to have stores everywhere. Since then, Tchibo bought Eduscho and now their coffee products as well as non-food articles can be purchased through a network of over 37,000 sales outlets in Germany. We're talking about a lot of company stores and shop-in-shop sales outlets in bakeries and supermarkets. You literally can't walk down a retail street in Germany without seeing a Tchibo or Eduscho sign in a window. Revenues in 1998 were DM 18.6 billion with a workforce of over 23,000. Not bad for a company started in 1949 by Max Herz as a mail order business for roasted coffee.

Many coffee drinkers can't function until they've had their caffeine fix in the morning. Evidently the top guys at Tchibo sat around brainstorming for a similar addictive product and viola!--bought 75.1% of Reemtsma, one of the world's largest cigarette manufacturers. Friends of mine say they can instantly spot a heavy smoker because of the person's wrinkly-looking skin. Well, Tchibo seems to have taken care of that too with their 25.9% stake in Beiersdorf, a cosmetics, health care and adhesives concern. Beiersdorf's Nivea brand, with more than DM 3 billion in sales, is the world's largest global brand in personal care.

Offices for this coffee and cigarette giant lie about eight miles north of Hamburg's city center in two six-story buildings. The building closest to the street looks to be from the 1960's and the one in the rear from the 1990's. Office buildings abound in this office park enclave comprising an area of about a square mile. Some buildings have the 1960's look, which lets me know when this area was built up and some are brand new. IBM, which always has Class AAA buildings, occupies a large modern building directly to the left of Tchibo while Hewlett Packard occupies a large building directly to the right.

Entering, I explain myself to one of the two receptionists and sit down while she places several calls to find the whereabouts of the introductory letter sent a month earlier to CEO Guenther Herz. She comes up empty-handed saying they don't have any record of receiving the letter. Hmm, I make a mental note to myself, "never place a coffee mail order with them". After pestering the receptionists to find someone to meet with me, I'm told Alexandra Grabner from the press office will be down shortly to meet with me. Visitors can relax on the 15-foot long brown vinyl couch or four cloth chairs. A vase of fresh sunflowers graces the reception counter and over to one side is a glass display case filled with women's bras and panties-including price tags. The Handelsblatt and Frankfurter Allgemine, two of Germany's more prestigious newspapers, lay side by side on a coffee table.

My visit with Grabner is short and disappointing. She's relatively new and doesn't know many answers. About 700 people work here. Was there a Mr. Tchibo? No, it's the initials of two people put together. Parking isn't a problem with plenty of free parking. The cafeteria is located on the first floor off to the side of the reception lobby. How's the food? Grabner says it's "okay". Any unusual employee perks? All the free coffee you can gulp down. It's no surprise to learn smoking is allowed in the building but, it is a surprise to learn this marketer of cigarettes doesn't give employees free or discounted smokes.

My request to see CEO Guenter Herz's top floor office in the new building is denied along with seeing the boardroom. Herz is the son of founder Max Herz.

I must admit I'm impressed with the company's fitness facility in the basement. Besides the indoor pool and solarium, there're two lanes of bowling, two kegel lanes (similar to bowling), two pool tables, darts, one ping pong table, a TV room, two bumper games, a squash court and full size gymnasium with basketball court. The kicker? A prominently displayed cigarette vending machine greets users entering this FITNESS facility.