Coffee shop businesses brewing in Old San Juan
San Juan’s expanding gourmet coffee service sector suddenly got more interesting with the entry of a Utah-based franchise with an eye catching name, a world-class product, and big plans for Puerto Rico.
Bad Ass Coffee of Hawaii is a coffee bistro franchiser based in Salt Lake City that specializes in Hawaiian gourmet brews, most notably 100 percent Kona coffee, among the most expensive in the world.
With an online presence and 42 retail locations in the U.S., Malaysia, Japan and St. Thomas, the company is stepping into the local market via entrepreneur Miguel Rodriguez who picked up the exclusive franchise for Puerto Rico.
Rodriguez is an internist doctor in San Juan who was so impressed with the Bad Ass store in St. Thomas that he and his wife decided to bring the concept to the island. He was not available for comment.
Plans call for establishing nine stores, with the first one opening this weekend in the former Los Muchachos building in Old San Juan. It represents a $250,000 investment and will employ six people, a number that could increase in tandem with business growth.
“It will be a soft opening. We like soft openings to give the staff hands-on-training. I call it baptism by fire,” said Connie Alexakos, vice president of marketing & product development, who along with Steve Meeker, vice president of operations, traveled from Utah to supervise the opening of the company’s Puerto Rico flagship.
The location of the other eight stores is presently unclear.
“We like tourist locations but will leave it up to Mr. Rodrigues to decide. We trust the franchisees know their area better than we do,” she said.
A few days from its scheduled opening, the Bad Ass cafe was still far from complete but already had the distinct vibe of a laid-back Hawaiian lanai (patio) with bright orange and yellow walls remindful of Hawaiian sunsets, ersatz palms, and wooden tiki masks. The opening, scheduled for today, was postponed until the weekend, possibly Saturday.
The store’s coffee selection will include Kona coffee, Hawaiian-grown coffees from Oahu, Kauai, and Maui, and Hacienda Las Nubes coffee from Adjuntas. Gourmet coffee must meet high standards and Alexakos described this local brand as meeting the profile of a world-class brew.
“It’s fabulous,” she said.
In addition to smoothies, breakfast and light meals as part of the menu, the store will market packaged coffee beans (including Kona at $71 a pound), accessories, and gifts bearing the Bad Ass coffee logo: a donkey carrying a coffee bag past a palm tree.
The company name was inspired by the donkeys of Hawaii’s Kona region used to carry coffee beans down the mountains. According to the company website, the Kona natives call them “The Bad Ass Ones…because of their cantankerous nature and perseverance.”
Distinctive java, specialty brews
In choosing Old San Juan to set up a foothold in the local market, Bad Ass Coffee joins other entrepreneurs who in the past couple of years have been inspired by Starbucks’s success in San Juan to open coffee shops featuring distinctive gourmet and specialty brews. In so doing, these businesses have turned the old section of the capital city into a premier destination for coffee lovers.
Just two months ago, entrepreneur Ricardo L. Torres opened PRTea, a combination coffee and tea shop inside an airy locale on Cruz Street.
The shop, elegant yet informal, features its own label of coffee and tea blends, baked goods, pizza and salad with a retail section where clients can pick up canisters filled with the house brews to enjoy at home.
PRTea will also have an online presence.
Last December, Lady Lee Andrews opened Café Poetico, next to her Poet’s Passage gallery which sells products inscribed with poetry, including her own. Its specialty coffee is from Hacienda San Pedro, served in a variety of ways under poetic names. There is “Metaphor Café Latte,” “Monologue Cappuccino,” “Rhyme-flavored latte,” “Stanza Mocha,” “Sonnet Caramelo Macchiato,” “Oxymoron White Chocolate” and “Free Verse American.”
Opened at an investment of $150,000, the coffee shop has the feel of a writer’s den and is imaginatively furnished with an eclectic mix of tables and chairs; visitors are invited to share their poems and drawings.
“We make people feel at home,” said manager Elizabeth Vega.
The establishment employs 11 people and, according to Vega, is breaking even thanks to tourists and crew members from visiting cruise ships. But the goal, she said, is to make Café Poetico a favorite stop for locals and office workers in Old San Juan since capturing this niche is vital for the off season.
Cuatro Sombras Café, across from the Federal court on Recinto Sur, opened in 2011 at an investment of $100,000. Here, owners Pablo Muñoz and Mariana Suarez serve coffee from their family-owned plantation in Yauco, Hacienda Santa Clara.
It is a farm that dates to 150 years ago but closed operations in the 60s only to renew production in 2008. Muñoz said the establishment is a way to introduce his product whose name, Cuatro Sombras or Four Shadows, refers to shade grown coffee.
“We wanted a direct contact with clients,” he said.
Espresso Art celebrates this month its third year doing business out of a charming locale on San Justo that owner Joaquin Pastor fixed up with a $15,000 investment. He said he kept his costs down by doing all the work himself, including electricity, floors, bathroom and the beautiful cedar wood countertop that divides the work area from the main floor space.
“I opened it to offer pleasure,” said the affable Pastor. The shop resembles a cozy living room with a couch, armchairs, and slowly stirring overhead fans. It serves a delicate blend of Arabica coffee, which he produces in a small farm outside the town of Ciales, hence the coffee’s name: Finca Cialitos.
The coffee is a blend with other locally-grown beans since the farm’s production is limited, held down by the heavy costs of farming. A bag of fertilizer, which cost $17 in 2005, is now $47 dollars.
“It’s a lot more expensive than it was before,” Pastor said.
Prior to opening the store, he concentrated on selling coffee and then on processing it. These activities did not generate enough income; a coffee shop offered a way to introduce Cialitos to the public. Pastor does not advertise and relies on word-of-mouth and free publicity, like a recent story in U.S. Airways magazine that has increased traffic. His coffee can also be purchased online.
What’s behind the wave of coffee shops?
Entrepreneurs and service staff interviewed for this story pointed to several factors fueling the mini-boom, not the least of which is Puerto Rican’s passion for coffee.
“Coffee has always been an important part of our culture and now it is having a resurgence,” said 19-year-old Nicole Bordali, the barista at Café Poetico. “Puerto Rico has excellent coffee and it’s great to be able to take advantage of this.”
Coffee shops, she said, serve a useful function: they are places where people can start a conversation and even make important decisions. And because each shop has its unique personality and coffee brand, customers have a wide spectrum of choices, according to Andrews, who welcomes the competition. In Old San Juan, she said, “you can go coffee hopping.”
For entrepreneurs like Muñoz and Pastor, a coffee shop clearly offers advantages: its helps promote the coffee they produce at their farms and expand the client base.
Another factor to consider is the growing popularity of “baristas,” the employees who prepare and serve coffee. Having a barista adds cache to a place and serves as a lure to attract customers seeking a quality coffee experience and the thrill of the popular latte art, decorative patterns made in the foam toppings of espresso drinks.
As a business, coffee shops offer an alternative to would-be entrepreneurs seeking opportunities in the island’s stagnant economy.
Said Vega:”People are forced to find options and coffee shops are a familiar business.”
Still, as with any business, these are operations that need a lot of attention and dedication. Pastor, who works six days a week and reserves his free day to deliver Cialitos to private clients, keeps his costs down by employing only one person and taking on multiple duties at the shop, including brewing coffee and coming up with interesting beverages. One popular cold drink he concocted combines Cialitos, bananas and sugar.
Financing is an issue
Getting financing can be a problem. Andrews said the coffee shop had always been her dream but “it was difficult to convince the bank about the concept. The world of poetry is not on top of the financial list.”
And the tough economic climate means coffee shops must seek new ways of capturing clients. Café Poetico, for example, is looking to improve its wi-fi system to raise its appeal.
“The devotion we have for this place makes us look for ways to keep it going,” said manager Vega.
Starting a coffee shop can be quite an ordeal as Bad Ass Coffee found out when establishing its first Puerto Rico store. Alexakos said it has taken three years to make the project a reality with permitting a sore point. Also, construction proved to be a challenge due to the building’s historical status which required many unexpected changes in the design of the store. The last tenant of the Los Muchachos building was an insurance company.
Bad Ass Coffee was founded in Hawaii in 1989 and has been franchising since 1995 when it opened its first franchise store location in the continental U.S. in Salt Lake City.