the espresso cart is the perfect entity for the new millennium: like most things these days, it is fast, convenient and takes up less space. In a world where population is increasing and free time is becoming something of an anachronism, it would seem that opening an espresso cart, offering customers this kind of “quick fix,” would be a wise business decision.
Owning an espresso cart is one way to enter into the coffee business-or to expand a current operation-without the enormous investment of hundreds of thousands of dollars. It is possible to own a cart for $5,000 to $15,000, while for $15,000 to $30,000 you can purchase a kiosk (a more permanent structure, not on wheels). Bob Burgess of Burgess Enterprises in Seattle says a cart owner needs to bring in just $250 a day to make a living-and a successful cart may generate as much as $700 a day or more. Carts are portable, so they can be set up in high-traffic spaces that a permanent retail operation cannot. And, if for some reason the location you have chosen doesn’t work out, you can easily move elsewhere. Finally, it arguably may just be the “next big thing.” Espresso carts are a novelty, and they are growing in popularity.
“Espresso carts fill a niche,” says Bill Moore, vice president of Van San Corporation, manufacturer of high-end espresso carts. “We don’t always want a white tablecloth dinner. Sometimes people just want to walk up, grab it and go. That’s the beauty of a cart. It’s just sitting there.”
And then there are the success stories. Says Barbara Evensizer, president of Carriage Works in Oregon, “A used car salesman came here and bought an espresso cart, and next time in he bought a kiosk for an inside mall location. The next thing I saw was his brand name of coffee on billboards and on the sides of buses. He now does his own roasting and owns coffee shops around the U.S.” Burgess reports having sold a cart that made $8,000 a day during the Christmas season while Van San reports selling a single cart operation that takes in $2 million a year.
Further proof of the popularity of carts and kiosks, SCAA membership by cart or kiosk operations jumped from 1% to 4.3% in the past year. But before an entrepreneur jumps on the bandwagon, there are a variety of issues to consider. Beyond basic retail savvy, there are elements unique to this type of business that must be accounted for.
LOCATION, LOCATION, LOCATION
|A basic cart from CMCespresso with brass touches.
Arguably the most prominent factor in a cart’s success is, of course, where it’s set up. “Location is the single most important aspect of a cart or kiosk operation,” says Marcus Bezhuly, owner of CMCespresso, a cart manufacturer in Grass Valley, California. “Sadly, it’s even more important than the quality of the coffee.”
As for options in this respect-they are basically unlimited. Successful venues include shopping malls, hospitals, church functions, college campuses, high school cafeterias, food courts, restaurants, hotel lobbies, office buildings, street corners, casinos, health spas, parking lots, train stations, airport terminals, and hardware stores. Evensizer says carts are now even being set up on military bases.
Obviously, the owners of most of these sites are going to charge rent. Luckily, they don’t often overcharge because they see the cart as an added-value benefit to their business, and it is often space they wouldn’t be using anyway. For instance, many cart owners are now finding hospitals to be a successful venue for their carts, because the hospital is happy to have such a service to provide-especially to their staff working long hours.
Office buildings and offices themselves are also popular. “Many companies are doing it not for the money but for the amenity. They offer the products at rock bottom prices or even give it away for free,” says Moore. Content to be able to offer this perk to their employees, companies sometimes won’t charge rent-in addition to providing the benefits of secured facilities, free electricity and steady traffic.
College campuses are places where there is heavy foot traffic-and a high level of interest. Young adults are statistically the fastest growing population of coffee beverage drinkers, with young adults aged 18-24 as the largest group of consumers of espresso-based beverages, cappucino, and iced or ice-blended coffee (Source: SCAA). Bezhuly sold a cart to man who opened a business at Foothills College in San Jose, California, which was so popular that he made as much as $1,200 to $1,500 a day. He went on to expand into multiple cart locations.
Evensizer says the wisest way to pay for space is through a set fee and not a percentage of profits. “If you are giving them a percentage, then they are into your books all the time. Make them an offer of a monthly fee and let them know you are also offering a great service to their customers,” she states.
Outside help in finding good locations is also available. Often, the cart company itself will offer consultation on this issue. Burgess publishes their own location guide, Sidewalks to Skywalks: Landing a Location for Your Espresso Cart, which helps step-by-step with site selection and other aspects of the cart business.
Another possible route is through location brokers, who already have locked in locations such as the lobbies of particular chains like Safeways or Walmarts, or department stores. For a monthly surcharge of around $600 they allow cart owners to use the site.
BUYING A CART
|8-foot long cherrywood cart by Van San
One of the first things to plan for before purchasing the cart or kiosk is a Board of Health inspection. From how much storage space is available to the ease of cleansing of counter space, depending on the state, standards can be very specific. Additionally, carts must often be stored in a Board-approved commissary-a place it can be brought to every night for washing and storage-which usually must include a three-compartment sink for washing the structure and a refrigerator for storing spoilable items, like milk.
Local companies may design their carts specifically to fit the Board of Health requirements in particular areas, or the cart may have to be customized to meet local standards. Carts can also be subject to building codes and city laws.
Beyond health and safety considerations, however, how your cart looks will be a primary concern. It is the very first thing the potential customer is exposed to, and is what attracts them to your business.
“Every successful retailer knows that visual presentation is critical,” says Moore. “If the structure doesn’t look attractive enough for the customer to take the walk over to it, you can forget all the rest.”
Many companies sell standard models-especially helpful if you have a location and are ready to sign a lease-but also have design departments where customers can customize their own carts or kiosks. Today, these designers use computer programs like 3D Studio Max and AutoCAD so the customer can see their virtual cart or kiosk from all angles or design it specifically to meet certain dimensions.
Manufacturers usually offer a choice of different wood laminates, woodgrains or metal finishes for the body of the cart. Van San offers a variety of wood facades such as mahogany, canopy styles and materials like hemlock and tweed, and brass fixtures.
Matching the decor of the building you are in is often pleasing to the eye-and to the building owner. Mitchell Duggan, who runs a cart in New York’s Hilton Hotel in Rockefeller Center, bought a Van San cart in a light maplewood finish to match the decor of the hotel’s new lobby.
Another aesthetic element is signage. Options include silk screening, logos, banners, and hand-drawn illustrations. Flashing neon signs are becoming popular as attention-grabbers.
Besides your basic cart or kiosk, companies now offer carts with a huge variety of themes. From kiosks that look like San Francisco cable cars, carts modeled after French chateaus, flying saucers or tropical huts, the choices are out there to help attract customers with fun and unusual looks.
|Top left: Burgess Enterprises made some of the first espresso carts in the US. Bottom Left: A Carriage Works cart in an office complex in Hong Kong generates $350,000 per year. Right: A cart from Michaelo Espresso run outdoors.
Carts usually average around 4 to 8 feet long, but can be much larger for a bigger operation. Duggan says that when considering size of his cart, he wanted to make sure it fit into the hotel’s elevators so it could be moved from floor to floor to service different banquets and to the lobby during heavy check-in times.
When deciding cart length, Moore also advises the retailer to think about where he or she will be going with the business. “Every little square inch will become prime real estate-you start thinking, ‘I could fit another jar of muffins or biscotti here....and even more money goes in my pocket.’”
Kiosks sizes are also only limited to the space provided for them, and are often in an horseshoe or L-shape. Carts are often modular, and can become kiosks by adding on.
At any size, durability is key in avoiding extra expenses along the way. “You want to buy a cart that will stand the test of time. It takes a pounding to get the puck out of the portafilter. Customers are leaning against it and banging into it all the time. It’s a workhorse. Will it fall apart in six months? What kind of investment is that?” asks Moore.
Waterproof plastic paneling of interior parts helps eliminate the possibility of weather damage on outdoor carts. And if a cart is set up near an ocean, on a boardwalk for instance, a special coating is necessary, or it will deteriorate quickly from the salt water in the air.
Finally, Jerry DePorter of Bridge Industries says to make sure the structure of the cart aids in service of its equipment. “A simple outside access door to service your water pump can save a big disruption in your business by not having to remove all your tanks and equipment to reach your pump. The longer it takes a service repairperson, the longer you’re out of business and the higher the service call bill.”