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Carts and Kiosks Profitability:
Fill a Niche

By Christopher Heyer

As each year passes, the specialty coffee industry becomes bigger and better. Like the coffee shop segment, cart and kiosk businesses are thriving from coast-to-coast. Robert Burgess, specialty coffee industry analyst and leading manufacturer and seller of carts through Burgess Enterprises located in Seattle, Washington, observes that cart mobility offers too many golden profit location opportunities for them to ever fade away.

Fully self-contained cart units are particularly valuable in high customer traffic locations where an operation can’t be hard plumbed. The key to any specialty coffee venture is finding a location that will produce high-volume specialty coffee sales. What you need is a lot of people who find your location a convenient place to drink their daily brew. Simply stated, the larger the number of people, the greater your opportunity.

Your sales with an espresso cart or kiosk placed in the right location can equal or exceed that of a successful coffee shop. Your capital expenditure will typically be one-half to one-tenth the cost of a coffee shop. Your business risk is much lower. There is a lower initial investment and modularity of carts and kiosks. There are more location possibilities.

It is not essential to have hard plumbed water. The opportunity to open an espresso operation without the need to hard plumb opens up incredible opportunities.

It is not cost prohibitive to make the cart or kiosk investment if there is a tremendous traffic flow. A fully loaded cart with equipment ranges in price from $13,000 to $26,000, depending on the cart model and espresso equipment. A bare bones cart alone can run as little as $5,000. Both carts and kiosks work in new, developing and mature markets. You are leasing a very small footprint, letting someone else foot the bill for the building, paint, drywall, flooring, air-conditioning and overall décor, roof and land. This is the beauty of a cart. You can search out and take advantage of great existing populated areas.

So What Exactly is a Coffee Cart?
Coffee carts are self contained espresso bars on wheels, typically between five- and six-feet long with wing extensions on each end, allowing eight to nine feet of counter space for merchandising and making of your products. They are portable units on wheels containing refrigeration, water supply tanks, a water pumping system, hot water tank, and sink with hot and cold running water with a portable drain tank. Carts come with an electrical pigtail, which will need to be plugged into a 220volt/50amp/1-phase female outlet. An electrician wires the male plug to the outlet and plug into the female on start-up. The preference is a 50 amp electrical system with one 220 volt, 30 amp circuit and eight 115 volt outlets. The more drawers and storage access, the better.

Typical Health Department Requirements:
Access is required to a three-compartment sink for washing and a mop sink for cleanup. You will also need to have access to restroom facilities. In some areas of the country you will be required to move the cart to the commissary for clean-up, so make sure it will clear all access ways and doors if this is required. Negotiate this area with the landlord, or find an existing area where you can sublease its use.

Each city has specific health, sanitation, zoning and permitting requirements. So check with the health department and city at the start of your planning, since specific requirements may lead you in a different path than you had originally developed.

Electrical Requirements:
Single cart operations require 220volt/50amp/1-phase female electrical outlets within six to eight feet of the espresso coffee cart.

Extra Storage Requirements:
The health department may allow you to purchase an additional storage cart for extra refrigeration and supply storage. If this is not possible, then make sure you negotiate a storage area with the landlord.

Sumner, Washington-based Dillanos Coffee Roasters helps guide and build a customer market for dozens of mom and pop cart and kiosk business owners.

Teresa Carlile recently took over an existing cart business in Black Diamond, a small community south of Seattle, 4,000 residents strong. With a $20,000 plus investment in a slightly used 15-foot cart and two group espresso machine, she profitably opened All A Buzz in front of a convenience store and gas station center. With nearly 1,000 customers coming in and out of the convenience store a day, the cart owner sells to an average of 250 to 300 customers daily.

“Honestly, if it isn’t an owner-run operation with a cart, it is a losing proposition,” Carlile said. “We know the town, the traffic, and which side of the highway is best to sell specialty coffee,” she added.

While Dillanos has a number of customers who sing the praises of establishing a coffee cart in an existing business, there is a flip side to relying on someone else’s destiny to build your business.

Just out of Seattle, Washington in Sumner, mobile cart business owner Paul Flores started a thriving Java Grind mobile cart business in a perfectly located Safeway Store four years ago. With a new nearby Fred Meyer super store just opening, that Safeway instantly lost nearly half of its customer base, as did Java Grind. Sagging profits has forced Flores to walk away from his lease and open a nearby specialty coffee drive-thru.

“I will never again rely on somebody else’s business to build my own,” said Flores.

Flores pointed out that he has benefited in a huge way by owning and personally operating his cart. He underscored that cart and area cleanliness, professionalism in behavior and appearance, and highly personable customer service is paramount to running a successful walk up business.

Flores’s situation underscores the importance of not being tied down to a long-term lease. He had the ability to walk away from his lease since it wasn’t long term. A one to two-year lease is generally preferred.

So What is a Kiosk?
A kiosk combines an espresso cart with the café atmosphere that meets your specific marketing and operational needs. Easy to roll in, easy to install, and as you grow, the kiosk has built-in flexibility to be able to be modified to your changing needs. In addition, if you need to relocate, you never lose your investment.

A kiosk allows you to capture premium locations where a traditional built-in café is impractical or undesirable due to space constraints, building regulations, health department requirements, or because water and drain are unavailable.

A kiosk can be designed to sell additional complimentary items while people are waiting in line to purchase their espresso and specialty coffee drinks. Such additional items may include hot soup; Panini grilled Italian style sandwiches, dry pastries, cold bottled drinks, juices and desserts.

Kiosks can be customized to your vision of what you want to merchandize with a much broader menu. Canopies, menu boards and lighting are available options. Plus, with kiosks, you can design more under-counter storage space.

Displays for chilled beverages and pastries, and a bulk bean dispenser to sell customers beans by the pound are added touches many kiosk owners enjoy. Extra bells and whistles, such as syrup drawers, cup dispensers, ice bins and extra sinks can be options or part of a custom designed kiosk.

Kiosks range in price from $16,000 to $85,000. You can get a very good beverage center kiosk for $35,000 to $48,000, including everything you would see in a coffee shop.

What Really is the Difference Between a Cart and Kiosk?

Bob Burgess, who has over 20 years of experience in the cart and kiosk manufacturing business says, “There is a lot more space to sell many additional items in a kiosk. For example, the owner has the space to expand into selling items like Italian style sandwiches which require a panini grill. If the menu is extended, it is necessary to have an adequate refrigerator case. Often, they are split in half to accommodate dry goods like cookies, muffins, and brownies; and a refrigerated side for bottled water, juices and sandwiches.”

He added that a kiosk can be designed to extend the beverage options beyond brewed coffee. An ice machine would be needed for smoothies and ice beverages. Burgess pointed out that a kiosk can even be designed with enough space to handle the storage and equipment necessary to accommodate a full service operation. They can even include fold out counter wings for additional work space - or for customers to use.

A cart, on the other hand, is more mobile. It is set on wheels and designed to be transported through doorways, buildings and elevators. It can be used during the week in an office building complex, and weekends at the local sports arena. Flexibility is key with carts.

Which Works Best at My Selected Site?
There are many things to consider in choosing the preferred site, said Burgess. They include:

  • traffic
  • traffic flow
  • hours of operation
  • space available for lease
  • menu items allowed by the landlord
  • whether it can be hard plumbed or must be self contained
  • cost of the lease
  • availability /amount of electrical power

There are many other items to consider, and many unique to your site selection. That is why many cart and kiosk owners work with a kiosk manufacturer with an extensive background in the specialty coffee industry.

Building Your Own:
With start-up costs top-of-mind, many newcomers to the industry who are skilled in weekend carpentry try to keep their budget down by building their own cart or kiosk. However in the long run, it can cost them more. Manufacturers have worked out all of the bugs before their line goes on sale. They understand the operational flow and extensive health and sanitation department regulations, and design with them in mind.

Having to rebuild part of your cart or kiosk because it does not meet health department or city permitting guidelines can mean delaying opening - and delaying income. Equally important is the fact that every move your barista makes must flow. So, saving a few dollars to put the refrigerator on another side can seriously impact your bottom line. Slowing down their rhythm can mean longer lines, and customers who walk away because of the wait.

How To Start:
Go the health department and request the requirements for an espresso cart or beverage kiosk. Find out if it has to be hard or non-hard plumbed. Specifically ask for the commissary requirements, menu items allowed, and submission requirements. Find out if you need a food handler’s permit.

Visit your town or city permit department to obtain a list of dos and don’ts, as well as the necessary applications.

Analyze several locations based on people flow and how many people and employees of the surrounding businesses will frequent your cart. Are they coffee/espresso drinkers?

Find a specific location, talk to the owner or property manager. Without a location, you have no business. Nothing else matters unless you get a location to put your cart.

Sell the landlord or property manager on: why it’s a great idea, how it will enhance their existing operation and create a revenue stream out of unused space. Then sell the landlord or property manager on you and your business concept.

There are a myriad of barista training and specialty coffee management courses available to help make you an expert in your field. Or, work with your roaster to assist you with this process. Why not learn from those who have been through the process?

According to Tacoma, Washington, kiosk business owner Sandy Gardner, one sure way to lock up a great location is to search out lease opportunities in large government complexes. She opened her Common Grounds kiosk business four years ago at the Tacoma Health Department Building. Operating brisk business hours, from 7am to 2pm, her breakfast, lunch and coffee business nets no less than $500 per day. Coffee accounts for over 60% of her daily sales.

Gardner is currently searching out lease opportunities at a large Tacoma Group Health (HMO) medical complex and a nearby federal building.

While Gardner has found her niche, other owners find theirs in unexpected places - concert venues, parks, popular wedding reception sites, seasonal events, and industrial parks. Having mobility can be much more profitable than being tied to an on-site café location.

Going Modular is the Newest Trend
West Seattle Thriftway grocery store president Paul Caproiski helped refine Burgess Enterprises’ vision of a cutting-edge modular coffee service center. Working through the maximum ergonomic flow and a stunning design, the two recently forged specialty coffee as a customer afterthought to a major feature in the store.

“Sales shot up 50% within the first week,” Burgess said. Burgess pointed out that advantages going with custom espresso specialty designed modules include:

  • Elimination of costly time delays (24- to 48-hour installation time)
  • Cost saving ability to salvage your investment when moving to another location

There is a place for carts and kiosks in the specialty coffee business. With proper planning and research, it is possible to turn high customer traffic locations where an operation can’t be hard plumbed into a gold mine.

Chris Heyer is the president of Dillanos Coffee Roasters, one of the largest specialty coffee micro roasters in the Pacific Northwest. He also serves as chief operating officer of Atomic Distributing, stocking over 500 coffee related products for local and national clients, as well as selling espresso equipment to a diverse customer base.

Tea & Coffee - November/December, 2004


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