Tatts, beards, bricks: today's cafe
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.
Frequently Asked Questions about this Article…
The article describes a shift from large-format cafes to small 'hole-in-the-wall' boutique coffee venues. Operators favour character-filled buildings, tiny 20–30 square metre fitouts, and a strong focus on barista culture and coffee quality.
Operators are reducing rent costs and backing word-of-mouth for quality. The piece notes cafes are deliberately locating in alleyways and secondary spaces where rents are lower and customers will walk out of their way for the right coffee.
Popular formats are tiny venues of about 20–30 square metres with exposed brickwork, minimalist seating like milk crates or communal tables, and fitouts that highlight building history and character.
Leases for coffee shops in Sydney alleyways and low foot-traffic locations sit at the lower end of a $1,500–$1,800 per square metre scale. The article also states small coffee houses could sustain maximum rents of about $1,500 per square metre.
According to the article, a small coffee house typically needs to turn over about 35 to 40 kilograms of coffee per week to be viable at the rent levels discussed.
Yes. The article reports larger coffee labels are losing out to smaller, single-origin roasters that drive the shift toward boutique cafes by offering specialised blends and provenance-focused coffee.
The story highlights demand for small, character-filled retail spaces in laneways, conversion opportunities such as turning former corner-store milk bars into cafes, and collaborative space-sharing concepts (for example with barbers or gourmet grocers) — all relevant considerations for property investors looking at food and beverage tenancy.
The article notes Brazil and Vietnam are the biggest coffee producers while the US and Europe are the largest consumers. Coffee is traded on exchanges such as the New York Board of Trade (NYBOT), Euronext and the Brazilian Mercantile and Futures Exchange. The NYBOT 'C' contract specifies delivery of 17,000 kilograms of arabica coffee, with the equivalent robusta contract having the same specifications.
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