Grocery shoppers have gotten used to sipping on a latte while they stroll the store aisles. But most often, those drinks have come from Starbucks or from coffee bars run by the store itself.
Now, local coffee bars are starting to invade supermarkets, and shopping malls and even big city office towers.
In New Orleans, French Truck Coffee, known for its yellow buildings around town, just opened in a Whole Foods in suburban Metarie, as well as in an office building in New Orleans’ Central Business District.
Sweetwaters Coffee & Tea recently opened a franchise in a branch of the Meijers supermarket chain in Ann Arbor, Mich.
And Anchor Coffee House, which has two small shops in Windsor, Ontario, is completing a new store in the sprawling Devonshire Mall, which draws customers from Ontario as well as across the border in Detroit.
What’s fueling the small coffee companies’ push into bigger playing grounds? Geoffrey Meeker, the founder of French Truck, sees three reasons.
First, “the public is becoming much better educated on specialty coffee and how much better it is than the mass produced stuff,” Meeker says. “Once you’ve had the good stuff, it’s hard to go back.”
Second, Meeker says vacancies have been occurring in commercial properties, and the landlords are eager to fill them, at rates that make them attractive to small businesses.
Third, the smaller coffee houses bring their fan bases with them, cultivated via social media like Instagram and Twitter, and bigger places are eager to share in the halo effect of that demographic.
That’s what happened in Windsor, says Kyle Bonzy, one of three partners in Anchor Coffee.
Devonshire Mall, which opened in1970, is one of the largest shopping malls in Ontario. It recently underwent an extensive renovation designed to draw a younger, hipper crowd, like the patrons at Anchor Coffee.
Anchor has two stores, including one in Walkerville, a neighborhood known for small shops, restaurants and art galleries. The other outpost of Anchor is on busy Huron Church Road in a small office park, where it is the only food and beverage outlet.
Both are relaxed spaces that stress house-baked pastries, light lunch items and top quality coffee. In 2017, I named Anchor’s cortado as one of the best things I ate and drank that year.
At first, Bonzy was perplexed about the mall’s offer. “I live in Devonshire Heights, five minutes away, and I never went there,” he says of the mall.
But the mall, which has had a Starbucks as well as Canada’s most famous coffee brand, Tim Horton, convinced him that he fit with its new direction.
For Bonzy, the challenge of building out the 1,000 square foot location is unlike any Anchor has faced.
He, his wife Rachel and their business partner Ryan Laroque built their first two stores themselves, doing all the painting and design work, and even acquiring a used espresso machine that a friend repaired for $150.
They have operated both stores debt free, and resisted offers to franchise their low-key concept, even turning down an offer from a Dubai businessman.
“To be honest, it just scares me to think everything we’ve worked so hard to create could be thrown to the wolves,” he says.
This time, the mall is helping them get ready for the opening, slated later this fall, but the new store has meant borrowing money for the first time, which he says makes him a little nervous.
Still, Bonzy thinks the opportunity is worth the risk. “We’re going to be exposed to a lot of people.”
The mall draws an average of 20,000 patrons a day, and double that during the busy holiday season. That dwarfs the foot traffic at Anchor’s other stores.
Bonzy also wants shoppers and store employees to have a respite from the frenetic retail atmosphere. He agreed to open 30 minutes early each day, so that employees and mall walkers can pick up coffees before stores open.
Beyond that, Bonzy said he wanted to do a community service for Windsor, offering pastries, food items and coffee that shoppers couldn’t find at a big chain.
That was also a motivating factor for Meeker in New Orleans. So was the ease of his investment.
His original French Truck store, on Magazine Street in the Lower Garden District, cost him about $50,000 to open in 2009, including the equipment he needed and transformation of the former martial arts studio into a coffee bar with a few seats.
Now, he estimates that a freestanding store would cost him about $400,000 to $500,000. But Meeker took part in a program called Friends of Whole Foods, in which Whole Foods is partnering with local business across the country.
As a result, he estimates his French Truck outlet cost between $80,000 and $100,000 to open. It replaced an Allegro coffee shop, which Whole Foods featured in many of its grocery stores.
Like the Devonshire Mall, Meeker says Whole Foods wants its stores to be thought of as hipper places, which patrons can use as mobile offices, or to meet up with friends. Coffee vendors can be key to that, Meeker says.
“Coffee shops change neighborhoods,” Meeker says. “They can be gathering places. It’s a win for the community, a win for the grocery store, a win for the mall.”
Source: Forbes – Entrepreneurs
Author: Micheline Maynard, Contributor