Startup profile: The indie cafe
At first glance, it may appear that the cafe/coffee-shop business is approaching a point of maximum saturation in Northeastern cities. Not so, says Francisco J. Migoya, author of “The Modern Cafe,” one of the seminal books on the business.
“There are an enormous amount of cafes and coffee shops that aren’t as good as they could be. Many of these places will outsource a lot of their products. Sometimes, all they think about is coffee, and their pastries are made in a factory somewhere,” says Migoya, who also teaches at the Culinary Institute of America. “In New York City there are maybe between seven and 10 very good cafes,” Migoya adds. “So for somebody with a little bit of capital, who makes sure they’re offering fresh, quality products, it’s a really great business to be in.”
Longtime barista Brittney Lewis noticed a dearth of coffee quality in her Philadelphia neighborhood and, more importantly, a lack of positive community spaces.
In 2010 Leotah’s Place Coffeehouse opened its doors in the Kensington section of the city. But Lewis quickly realized she had to upgrade her food offerings if Leotah’s was going to survive.
“When I started, all I really had in my mind was coffee: direct-trade coffee. It’s organic. I know the farmer. I know the roaster. And that’s great, but that’s all I had,” says Lewis. “Once I got in the space, my customers demanded more food and higher-quality food.”
Coffee still is the bread and butter at Leotah’s. Lewis estimates that about 75 percent of her profit is strictly on drip coffee and lattes. But the food guarantees a steady flow of customers.
“It’s a great business because the bar has been set fairly low,” says Migoya. “So if you care about making a superb cup of coffee — if you care about simple, great, fresh bread — it’s not that tough a climb to offer the customer something a little more than what they were expecting.”