Jessica Swanson has been a regular at Espresso Expose for about two years. Like many students, Swanson thought of the Stadium Village coffee shop as a convenient “hang out.”
Many shop owners believe consumers prefer their service over franchises like Caribou Coffee or Starbucks. But with construction, increased coffee prices and marketing troubles, Swanson’s favorite place to study is taking a hit along with other independent coffee shops around the University of Minnesota campus.
Pat Weinberg, owner of Espresso Expose and the Purple OnionCafé in Dinkytown, said light-rail construction on Washington Avenue has definitely hurt business.
While business at the Purple Onion has increased by about 10 percent with the recent increase of the students on campus, Weinberg said, Espresso Expose’s clientele is down more than 30 percent compared to the same time last year.
“Losing a third of business is a huge hit,” Weinberg said. “It’d be silly to say the construction and economy don’t play a part.”
Weinberg said he has no plans to make changes to his business yet, and hopes it will improve with students coming back to campus for school. He also has some new marketing plans in the works.
Brad Cimaglio, owner of Muddsuckers Coffee in the Southeast Como neighborhood, said shops like his are a welcome relief from the coffee shop chains. He recalled the first time he entered an independent coffee shop.
“There were pinball machines, the baristas were yelling — it was very refreshing,” Cimaglio said.
Cimaglio, who moved here from Chicago, originally planned to open a shop in St. Paul, but took over the Muddsuckers space about a year and a half ago.
“Business has been strange,” he said. “It’s a weird area.”
He said it’s been hard bringing residents of the neighborhood through his doors, especially since many people have told of problems with the previous owners.
“I’ve heard from a lot of students that they didn’t like to come in before I took over,” he said.
Cimaglio advertises his business on Facebook and has created events, such as Waffle Wednesdays, in an effort to bring in more business.
“In this business, if you don’t have a built-in clientele, you have to push other things,” he said.
But some cafés have managed to prosper in the downturned economy.
Sales at the Overflow Espresso Café in Prospect Park have increased, said Jeff Barnhart, the café’s owner and a University graduate. The café has about 13 employees. Muddsuckers has four.
But prosperity comes with a black cloud on the horizon.
Construction of a light-rail stop will begin in front of Overflow Espresso next year, along with construction on 29th Avenue, blocking access to the business and taking away parking space, Barnhart said.
“We’ll be devastated next year,” he said.
The possible revenue cut is especially frustrating for the café, because the four-year-old location has only recently paid off debts and become profitable, Barnhart said.
“I’ve worked hard and tried really hard, and even with the down economy we are doing really well,” he said. “Now I don’t know if I’ll have to close doors next year.”
The coffee market around campus became less saturated in 2009 when Espresso Royale left their location in Stadium Village and Espresso 22 moved out of the Dinkydome, all within three weeks.
Cimaglio said the higher price of coffee has also placed a strain on his business. According to a report released by the London-based International Coffee Organization, coffee is priced by wholesalers at $2.12 per pound — a 35 percent increase from August 2010. Starbucks and Dunkin’ Donuts have recently increased the prices of their packaged coffee by 17 percent and 11 percent respectively.
The coffee prices are a concern, said Mark Christenson, vice president of marketing at the Minneapolis-based franchise Dunn Bros Coffee. Although the company is faring well, Christenson said the University-area locations are also running into issues with construction.
“The construction definitely hasn’t helped in the midst of everything else,” he said.
“For sale” signs have become a common sight where coffee shops used to be, Cimaglio said
Heavenly Daze, a coffee shop near the Seven Corners intersection on the West Bank, filed for bankruptcy Aug. 29, selling the space and all assets connected with the business. The coffee shop had more than $280,000 in debt when the petition was filed.
“It’s a tough business,” Cimaglio said. “Margins are tight.”