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Coffee shops may have seen a dip during the pandemic, but they\u2019re back and booming.<\/p>\n
That\u2019s especially true for the coffee chain Bluestone Lane. The company is ten years old, but has really kicked business into gear over the last few years. The coffee shop has over 60 locations and has seen its business grow 350% since the pandemic. Its founder and CEO Nick Stone joined the Modern Retail Podcast this week and spoke about Bluestone\u2019s strategy and future ambitions.<\/p>\n
Part of the thesis behind Bluestone is customer service from Down Under. \u201cIf you have a coffee shop or a cafe in Australia that has the best coffee, but if they deliver it in a way that is cold and impersonal and obnoxious, Australians will boycott it,\u201d Stone said. (It shouldn\u2019t come as a shock that he is Australian.)<\/p>\n
According to Stone, the best way for a business like his to thrive is to provide a good experience. \u201cIn hospitality, you really have no intellectual property.\u201d Instead, he has tried to build Bluestone as a place people want to spend time in. <\/p>\n
That means doing one thing and doing it well. While Bluestone has attempted side-hustles like its own line of CPG products, Stone now believes that it\u2019s hard to run multiple types of businesses at once. \u201cI think it\u2019s incredibly hard to do both at the same time unless you have enormous resources,\u201d he said.<\/p>\n
For him, the focus is on opening more locations \u2014 Bluestone is slated to have 70 locations by the end of this year \u2014 while making sure customers feel comfortable and welcome in them.<\/p>\n
\u201cI think ultimately coffee shops should be about driving community,\u201d he said.<\/p>\n
Here are a few highlights from the conversation, which have been lightly edited for clarity.<\/p>\n
A focus on warmth<\/strong> Why Bluestone isn\u2019t expanding into CPG<\/strong> The suburbs are where it\u2019s at<\/strong>
\u201cOne of the reasons why I started Bluestone was: I couldn\u2019t believe that the more specialty coffee shops came across at times as a little bit pretentious \u2014 a little bit cold. If you ask for milk in a beverage, you\u2019re viewed as a second-class citizen. And that was very strange to me because you charge more for someone that has a milk-based beverage like a latte, than you do for for an Americano or a long black. I think ultimately coffee shops should be about driving community. And it should be about driving this ritual where people look forward to having the experience on a daily basis \u2014 where they leave feeling more excited about the world and that they\u2019re part of a business [and] they\u2019re part of a community.\u201d<\/p>\n
\u201cI think at some stage, we will definitely push further into CPG. But I think it\u2019s incredibly hard to do both at the same time unless you have enormous resources. I think a lot of brands try and do both, and they get caught halfway. And I think it can be a really poor return on intellectual capital and financial capital. Honestly, Covid forced you to make some really really hard decisions. We were pursuing a dual-track approach. We launched two ready-to-drink beverages, the Australian iced lattes. One ended up winning best new coffee beverage at Expo East. So our first entry, we won. [I was] thinking, wow, this is amazing \u2014 this is so great. A first-entry gold medal. But once you peel back the layers, you realize how much capital and how much focus \u2014 and the skill set required \u2014 to build a CPG business while you\u2019ve got this retail business that\u2019s already doing $50, $60 million at that stage. It\u2019s hard to do both unless you just have abundant resources.\u201d<\/p>\n
\u201cThe real estate footprint has been shaped tremendously by Coivd. We had a really precarious real estate strategy going into Covid. We were so over-indexed in these inner urban business districts. We only had one suburban store. And, Covid showed everyone that the play was to be in the suburbs. If you wanted to have a business that survived, you\u2019ve got to go where people were residing, not where they were working. And Bluestone\u2019s strategy was kind of the opposite \u2014 it was where people were going to work. And we had our cafes in residential areas, but they were primarily inner urban. So since Covid, we\u2019ve really focused on exclusively residential areas. And we\u2019ve pushed into a lot of these commuter suburbs. So, not deep suburban, more like these commuter suburbs.\u201d<\/p>\n<\/div>\n