Smart retail: specialty coffee shops format drive investors’ hype
If three to four years ago, one could have counted just a few specialty coffee shops in Bucharest, today the market has increased significantly with around 40 locations in Bucharest in central street locations and new office buildings. According to Razvan Crișan, Co-founder of m60, the market is split between two major categories: the specialty ones, independently operated, and the big chains. “In shopping malls, for the moment, it is all about convenience: fast, big and accessible, while specialty coffee shops are more about experience, quality and niched products. Outside Romania there are niched shopping malls and maybe when those type of real estate developments will appear on the local market, we will also see there some concepts focused on experience and quality”, he explains.
m60 STORY
m60 started in 2015 and opened a new area for coffee shops in Bucharest, near Amzei market, on Mendeleev street. He remembers how he trusted his intuition, despite realtors’ advice: “When we chose the location we were discouraged by experts on the market, arguing the area was inappropriate. The lesson here was that sometimes you don’t listen to the expert’s opinion and trust your entrepreneurial instinct, especially when you are a start-up”. Today the coffee shop has an average of 250-300 daily clients and an annual turnover exceeding 2 million RON (400,000 EUR). The secret? Three criteria, as Crișan explains: “we focus on quality design, with an original approach, that suits the location, we offer very good quality products, trying as much as we can to buy from local producers and we invest in creating a motivated and involved team”. The business expanded in the last two years, with a seasonal location – Spațiul m60 – functioning during the summer, near George Enescu square and a restaurant, Kane, functioning in a modern office building near Stefan cel Mare metro station.
ORIGO: COFFEE SHOP & ROASTERY BUSINESS
Another successful story, Origo was opened in 2013 by local entrepreneurs Mihai Panfil and Bogdan Nicolae, close to the old city center, on Lipscani street, in a quiet area. The place is today a successful business and serves coffee during day time, while in the evening it transforms in a cocktail bar. Due to a very appreciated product, the coffee from Origo can be served in other locations such as French Revolution éclair shop in Piata Victoriei and Cooperativa FruFru – a restaurant with four units opened: in Universitate and Amzei market and in America House and Eurotower office buildings. The same coffee from Origo roastery can be found in Steam, a smaller coffee shop concept, with two units opened near Romana and Aviatorilor Sq.
BIGGER INVESTORS COME IN
As the specialty coffee gains ground and more and more clients are looking for this type of product and places to experience it, the business is in the attention of bigger investors that want to develop specialty coffee chains. The founders of Salad Box and Marty Restaurants announced last year investment plans of 500,000 EUR to develop Narcofee Roasters, with 15 locations in Bucharest and Cluj by the end of 2018. The company has opened three locations in Cluj and one in Bucharest, in AFI Cotroceni.
TED’S COFFEE – THE INTEGRATED EXPANSION STRATEGY
Ted’s Coffee, the specialty coffee chain owned by Romanian entrepreneur, Vasi Andreica, has adopted an integrated expansion strategy and today has 35 units in Bucharest, Sibiu and Ploieşti, planing to add Braşov to the list. The expansion strategy for this brand included: street locations, shopping centers, office buildings and “shop in shop” locations.
BREWTIFUL – THE “RETAIL IN RETAIL” FRANCHISE
Brewtiful Café is the first “retail in retail” franchise specialty coffee concept in Romania, developed by Ţiboc family, which also owns IT retailer QuickMobile and luxury perfumery, SOLE. The espresso bar can function on a surface of 4-5 sq.m and is present in five QuickMobile and SOLE shops from Bucharest, Timişoara, Constanţa and Baia Mare and two Cărtureşti book stores from Bucharest. The owner has invested 350,000 EUR and in one year plans to reach 30 locations in all major cities from Romania.
In the context of a rapidly emerging Romanian real estate industry, with new office hubs opening as well as new retail formats, the local market of specialty coffee shops enters a new development phase.