Specialty Coffee Retailer is a publication for owners, managers and employees of retail outlets that sell specialty coffee. Its scope includes best sales practices, supplies, business trends and anything else to assist the small coffee retailer.
Issue link: https://read.dmtmag.com/i/103518
Sharing your space Running a shop, bar or kiosk inside a space dedicated to something else can be an inexpensive way to start or expand a coffee business. BY PAN DE METRAKAKES R unning a coffeehouse takes dedication. But it can help if the space is already dedicated. Coffee establishments, from kiosks and bars to fullservice shops, can often be found inside buildings and spaces completely dedicated to another use, like libraries, airports, government buildings and other businesses and institutions. Others are in privately owned or leased spaces, but they share that space with another kind of business. (See "Dual-use cafés create symbiosis" on page 12.) Being in a dedicated space can bring unique advantages— and challenges. That's what Joe Valente found when he opened an outlet of his Boston Coffee in the courthouse of Volusia County, Fla. about six years ago. It came about when the county became dissatisfied with the service being provided by its then-concessionaire. Through a friend in the business, Valente learned that the contract was open, and he applied. "The county actually paid for a lot of the permits, because it's in their building and they're going to keep it," he says. "So the only thing I had to really provide was some mobile things like the espresso machine and refrigeration. And the rent is beyond inexpensive. I mean, it's unbelievable." Cheap rent is one of the biggest draws for a dedicated coffee operation. It's possible because in most cases, the owners of the surrounding space see retail coffee more as a way to attract and/or serve visitors than as a cash-cow tenant. Coffee industry consultant Bruce Milletto kept that in mind when, about 20 years ago, he was in talks with Albertsons Inc. about opening outlets of his Water Ave. Coffee in some of their supermarkets. Eventually the conversation came around to rent. "I looked at him and I said, 'So how much do you want to pay me to be there?' And he looked at me and laughed and he said, 'You gotta be kidding me.' 10 Bonlife Coffee recently opened an outlet inside the public library in Cleveland, Tenn. "And I go, 'No, I'm not kidding at all. You already told me that the main reason that you want me there is to give people a reason to come to Albertson's rather than Safeway. So basically, you're going to make more money off just glazed doughnuts alone in a month than you're going to be asking me for rent.'" Milletto offered $250 a month, which was accepted for two stores on a trial basis. (The deal didn't go any further, for other reasons.) CAPTIVE CLIENTS The other major advantage of a dedicated coffee shop is what might be called a captive audience. Ideally, the surrounding operation will bring in a steady stream of potential customers who don't have any other options if they crave an espresso. Evaluating this customer stream should be one of a potential coffee retailer's first steps. "In the creation of that type of operation, somebody has to take into account who their market is going to be," says Jack Groot, owner of JP's Coffee in Holland, Mich., and a columnist for this magazine. "Is the market large enough to provide the sales that are needed to make a business like this successful?" Bonlife Coffee recently opened its fourth outlet in Cleveland, Tenn., inside the main branch of the Cleveland Bradley County Library. Jeremy Moore, co-owner of Bonlife with his wife Erika, says he evaluated potential traffic carefully after library representatives approached him. "Like with any location, you really don't know [if the customer base is adequate] until you go into it," Moore says. But the library furnished numbers on total library visitors and sales from its existing cafeteria (next to which the coffee shop would go). The Moores combined that with sales history from an existing nearby Bonlife and other demographic info, and decided it would be a good bet. The low rent and guaranteed clientele are advantages, as are certain other amenities, like the use of existing utilities, washrooms and storage. The latter two mean that the library coffee shop will get the most from its 650 square feet. "While it's certainly a lot smaller than our average footprint would be, when you take out the need for storage and restrooms, the sales space is probably pretty close to the same," Moore says.