For Balzac’s to be among this country’s fastest-growing companies is ironic, to say the least. Founder and president Diana Olsen never wanted to build a sprawling coffee empire, with a Balzac’s on every street corner. Olsen opened her first coffee shop in 1996 mostly because she wanted to make a living doing something she enjoyed. That happened to be the same year Starbucks arrived in Toronto. Since then, Starbucks has spread to more than 1,000 locations across Canada, while Balzac’s has just 14, mostly in Toronto, all in Ontario. Olsen describes her approach to growth as “measured.”
So what is Balzac's doing on Canada's Top Growing Companies list? For one, Olsen has gotten more serious about expansion. Since 2016, the firm has opened a new roasting facility, started selling its coffee in supermarkets, and took on new financing. This marks a new phase—one that Olsen says she is content to let someone else manage. “I don't feel like I'm the driving force behind it.”
But it’s Olsen’s original vision—and her commitment to it—that explains why Balzac’s has more than held its own in a world awash in coffee. She created a recognizable brand, focused on a quality product and opened cafes in unique locations. “Diana has been very true to her brand,” says Calgary businesswoman Arlene Dickinson, an investor in the company. “She has figured out how to create a design aesthetic that is evident when you walk in. You know you’re in a Balzac’s.”
Here are a few ways to tell: ornately tiled floors, marble countertops, the faded gold of the Balzac’s logo popping up everywhere from the takeaway cups to the script on the menus, and art deco—style posters lining the walls. The vibe is neither the anodyne sameness of Starbucks nor the aggressive trendiness of so many hipster coffee shops. Olsen took her inspiration from old-world Parisian cafés, which she first experienced while visiting the city as a teenager. The company’s name comes from the 19th century French writer Honoré de Balzac, whose prodigious work ethic was fuelled by unhealthy amounts of caffeine.
Olsen’s coffee career started in the early 1990s in San Francisco, where she learned about roasting beans. She later ran her own coffee cart at Ontario Place, the sprawling Toronto event venue, and opened her first café in Stratford, Ontario. The town proved to be an ideal location. Home to the eponymous theatre festival, Stratford draws large numbers of tourists every year.
Another six years passed before Olsen opened another location. Real estate developers approached her about setting up in Toronto's Distillery District, which was then a collection of decrepit Victorian-era buildings. Olsen was intrigued by the plans to turn the Distillery into an arts, culture and entertainment area, and agreed. Each subsequent location unfolded the same way: developers coming to her. “When the developer comes to you, you know you're wanted there and you've already gained their confidence,” she says.
Olsen is exceedingly choosy about locations. She prefers areas that are undergoing a revitalization, or have a cultural or historical significance. As such, every cafe features a poster depicting what makes the location unique. In Stratford, the Balzac’s store features a Hamlet-inspired poster showing a hand cupping Yorick’s skull brimming with coffee. In Kitchener, Ontario, Balzac’s set up in an old tannery building. Naturally, a poster on the wall features a cow enjoying coffee. Because of her stringent criteria, Olsen has passed up chances to open in high-traffic but nondescript spots. “We turn down a lot of opportunities for busy intersections because we don’t feel it’s necessarily going to have that community feel,” she says.
Her cautious approach to growth has not, she says, led to tension with her investors. Olsen appeared on Dragons’ Den in 2011 and walked away with $350,000 from Dickinson and Bruce Croxon—money she used to open two more locations, including one tucked into Toronto’s largest public library. (Dickinson later purchased Croxon’s shares and serves as a Balzac’s director.) “Arlene and Bruce probably would have liked to grow faster,” she says, “but they were very respectful of how I felt about it.” When asked, though, Dickinson says she doesn’t necessarily believe Balzac’s should have been pushing any harder to expand. “I don’t know that there’s a wrong or a right answer to that,” she says, adding that she was content to let Olsen set the growth pace.
Still, Olsen took another round of financing last year through Dickinson's company, District Ventures Capital, which focuses on food and health products. There are plans to open more Balzac's cafés in Ontario, although the company has not set firm targets. After focusing on cafés for more than two decades, in 2016 the company started a new business selling coffee beans in grocery stores, and its products are now available in Loblaws, Sobeys and Whole Foods across Canada. Again, it wasn't something Olsen pushed for. “It started with retailers coming to us that wanted to carry our coffee,” she says. The timing was right, as Balzac's had opened a new roasting facility large enough to meet demand from retailers.
The revenue from Balzac’s wholesale business is still a fraction of what the cafés earn, but the new division has boosted growth in the past three years. Dickinson says there is plenty of runway left too. “Wholesale is an opportunity everywhere. Cafés take more capital, and they take more time.” But Balzac’s will face a challenge beyond its home province. A shopper in Ontario may well be familiar with the company’s name. At grocery stores elsewhere, the brand might be entirely new to someone coming across it in the coffee aisle.
Responsibility for that hurdle will not fall entirely on Olsen; she made the decision earlier this year to replace herself as CEO and will step into the role of chief creative officer. Like a lot of things about Balzac's, the shift was a long time in the making. Olsen found herself fielding so many opportunities over the years that she realized she needed help evaluating them. She also knows she isn't necessarily the best-equipped person to lead the company at this stage. “My skill set is not so much in the business growth part,” she says. “It's more in the branding and look and feel of the company.”
Indeed, she sees herself as the guardian of the Balzac's brand and is looking forward to spending more time on the design of new cafés. “If I have three cafés to open at once, I will really be enjoying my job,” she says. But not any more than that. “I'd be overwhelmed.”