New York Times Article - New York City's Rise as Coffee Capital

[Abe Carmeli]

For an enthusiast who's lived in Manhattan for the past 22 years, the pace of changes in the Artisan Coffee Scene in New York City, has left me with my head spinning. The New York Times in an article published today reveals what's laying ahead in the coming year for New Yorkers. Stumptown, Ecco, Intelligentsia and a few other well known names will all be opening rosteries and some also cafes and training centers in NYC. To that list, add some local coffee shops like Grumpy who will be starting their own roasting. After 250 years of searching, it appears the big names were finally able to find New York. We should all thank Google Maps . I shall take the smirk off my face now and direct you to the article: Specialty Coffee Roasters Brew In New York

[WilsonHines]

I think they are setting themselves up for a disappointment, IMHO. I hope not, but I think they are doing just that. Like I said on my blog this morning...Ken of Ninth Street said it best, "...most people from other towns come here and look around and scout it out and put a calculator to it and just go home."

Think about the money. They better have deep pockets. Intelli, Stumptown and Counter Culture may can handle the cash drain, but who else?

[espressoed]

That may be so to a large degree, Wilson, for those who focus solely on the storefront but think about the added revenue from east coast online sales as part of the equation. I, for one, will not order coffee online from the west coast when I'm looking at five days for delivery without paying extra for shipping via air. Now I'll be able to order from Ecco and Stumptown if I wish and get fresh beans without paying upwards of $25 for a pound. My location will mean next day delivery via standard UPS or USPS. Let's also not overlook the potential for restaurant business in the east. All told, this is more than just selling latte art between six and nine am and maybe twice more during the day. And the New York Times has just given each of them thousands of dollars worth of advertising today alone.

[WilsonHines]

That may be so to a large degree, Wilson, for those who focus solely on the storefront but think about the added revenue from east coast online sales as part of the equation.

OK, I will give you that! I had thought about the same things, too. But, really now, I live in Eastern NC and I get beans from Intelli and Double Shot (Tulsa) in three days. CCC is next day. Ecco is five days. Now, my experience with ALL of these is that the beans, regardless of it being an espresso or otherwise roast, needs to sit for at least six days and better yet for seven. But, then there is the environment, UPS/FedX isn't the best environment for our wonderful beans, I guess.

I have been wanting to order some "Hair bender" for some time, I guess I should just do it!

Oh yeah, restaurants. Ask Mark Prince about the disappointments of trying to sell to restaurants. They don't care if their coffee sucks or is the best in the world, they really don't. Coffee, for the most part, is way off the radar of the vast majority of restaurant owners/managers.

[iginfect]

What Wilson forgot to mention is the high cost of dealing with the city gov't and waiting months until all the licenses go through and the cost of the city inspectors getting their share. I too hope that this all works as I would like to try some of these great coffees w/o expensive shipping charges and delays here in central NY.

Marvin

[WilsonHines]

What Wilson forgot to mention is the high cost of dealing with the city gov't and waiting months until all the licenses go through and the cost of the city inspectors getting their share

Good point and there is taxes, taxes and more taxes (remember the mess Murky found himself in just with "TAKE OUT TAXES" EDIT:: had the wrong link. Just take a walk @ google: http://tinyurl.com/66xdtg).

That podcast at portafilter.net was a fantastic listen. It really will open up people eyes as to how much it cost to do business in that city. I mentioned at least $125 per sq foot, but some of the numbers he said were over $210. That comes to $31,500 per month for a 1,500 sq ft space @ $210. Or $18,750 for a $125 per sq ft space @ 1500 sq ft. That is just enormous. There isn't but so many bags you can fill and cups you can serve in a day.

[farmroast]

I see specialty coffee as getting into that national chain mentality. Not so sure it will be a good idea in the long run. It's more and more like the NCA approach. Having been part of local agricultural food and fiber commodities systems development for over 40 years I've seen the negative effects of successful local companies attempting to go national and those effects on the association groups. First signs are a drop in open disscussions and a drop in group public education. Both of which I see in the SCAA.
farm

[AndyS]

Stumptown, Ecco, Intelligentsia and a few other well known names will all be opening rosteries and some also cafes and training centers in NYC. To that list, add some local coffee shops like Grumpy who will be starting their own roasting. After 250 years of searching, it appears the big names were finally able to find New York.

He is too modest to admit it, but the real reason why all these companies are setting up shop in NYC is that they want to be in the vicinity of coffee consumer extraordinaire Abe Carmeli!

[Marshall]

That may be so to a large degree, Wilson, for those who focus solely on the storefront but think about the added revenue from east coast online sales as part of the equation.

Think about wholesale.

[malachi]

The math is tough.
Realistically, you need a couple retail locations plus a roastery capable of handling around 200 wholesale accounts and you need to have ancillary revenue streams (equipment, training, mail order, etc.).
It's not at all impossible, but you need some serious capitalization and need to ramp up sales fast if it's going to work.
And, of course, you need to pick your spots. Figuring out where your various locations are is a mix of art and science (and it's not simple).

You can make it all easier by doing things like starting with a roastery/cafe in a well chosen location. This requires a ton of work in the near-term but means less risk and lower initial capitalization.
Or (if you are lucky) you can do something like what Stumptown is doing and get a location like The Ace where your capitalization costs are lower and you have a built in audience.

I've got nothing but respect for the people who have the guts to make a go of this.
With luck - the customers in NYC will appreciate what they're getting.

[WilsonHines]

Realistically, you need a couple retail locations plus a roastery capable of handling around 200 wholesale accounts and you need to have ancillary revenue streams (equipment, training, mail order, etc.).
It's not at all impossible, but you need some serious capitalization and need to ramp up sales fast if it's going to work.

From a retail standpoint: Not to belabor this point, but once again referring to Ken's interview on the pf.net podcast, in NYC you can be considering a location on a particular street and get hammered with customers, and on the same street but one block down you will starve to death. From what I could gather, it really takes a New Yorker to analyze that stuff and come to the right conclusion of where to locate. I think there is plenty of room for more retailers in NYC. PLENTY. "Build it and they will come" mentality is "right on target." But, whether that retailer can stand the real-estate pressure is another thing ALL TOGETHER.

Ken's PF.NET Interview: http://tinyurl.com/5wfrx7

[Abe Carmeli]

He is too modest to admit it, but the real reason why all these companies are setting up shop in NYC is that they want to be in the vicinity of coffee consumer extraordinaire Abe Carmeli!

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Andy,

We missed you dude. Sadly, I've been doing most of my consuming at home. But I am hopeful that the newcomers from as far as Portland Oregon will give me a reason to get out of the house.