Tatts, beards, bricks: today's cafe

Small hole-in-the-wall coffee venues are rapidly replacing conventional large-format cafes as hip coffee houses.

Commercial agents say the quest to be different and offer customers a boutique experience has driven radical changes in store sizes and locations.

The Leasing manager for Sydney-based City Commercial, Michael Vranic, said: "The standard coffee shop doesn't exist any more. "Everyone's looking for baristas with the biggest tattoos, biggest beard and best cut-off T-shirt."

The change was most evident in fitouts and size, with many operators typically favouring buildings with history or character.

"It's gone from a typical coffee shop with table and chairs to a little hole in the wall, 20 to 30 square metres in size with exposed brickwork and a couple of milk crates for stools out front."

Rents, too, were being pared back. In Sydney's central business district, leases for coffee shops in alleyways and locations with limited foot traffic were at the lower end of the $1500-$1800 a square metre scale, Mr Vranic said.

Melbourne's ubiquitous coffee culture has been rapidly mirrored in Sydney.

In downtown Melbourne, operators were very focused on the quality of coffee, said Mitchell Humphreys from Fitzroys agency.

"People will leave their building and walk a block up a lane to get the right coffee," he said.

Operators were "very astute when it comes to quality and origins and blends".

Small coffee houses could sustain maximum rents of $1500 per square metre and would need to turn over 35 kilograms to 40 kilograms of coffee a week to be viable.

Like their Sydney counterparts, they were moving away from traditional high foot traffic locations to secondary spaces in laneways and side streets to be more profitable. To do so, they were "backing themselves on word of mouth for the quality of their coffee", Mr Humphreys said.

The trend towards smaller venues in Sydney was uniform, particularly in the CBD and inner suburbs from Surry Hills and Darlinghurst to Petersham and Camperdown in the west.

Larger coffee labels were losing out to smaller, single-origin roasters.

"They're driving the change to boutique cafes by giving them what they need to get the customers coming back," Mr Vranic said.

Communal tables for customers and a collaborative approach to sharing space with other businesses - barbers or gourmet grocers, for example - are also popular.

In Melbourne, operators in the suburbs are being forced by rents and returns to either stay very small or scale up to 100-seat venues.

And former suburban corner-store milk bars are being turned into coffee venues.



THE FACTS

■Brazil and Vietnam are the biggest coffee producers, while the US and Europe are the largest consumers.

■Coffee is traded on the New York Board of Trade (NYBOT), Euronext and on the Brazilian Mercantile and Futures Exchange.

■The NYBOT "C" contract specifies the delivery of 17,000 kilograms of arabica coffee. The equivalent robusta contract has the same specifications.