Coffeebar recently inked a lease at The Oddie District in Sparks for more than 6,000 square feet of space to open a small retail store.
The pandemic taught many retailers some hard lessons. For Coffeebar founder Greg Buchheister, the main takeaway was that he couldn’t rely solely on his retail locations to generate revenue.
Coffeebar recently inked a lease at the Oddie District in Sparks for more than 6,000 square feet of space to open a small retail store. More importantly, though, the lease provides new warehouse and fulfillment space for Coffeebar to grow its subscription and wholesale coffee programs.
While those last two channels currently account for a miniscule amount of Coffeebar’s annual revenue, they are primed for growth and provide an important hedge against any future slowdowns in retail sales.
“When COVID hit, we realized that only having a retail focus is kind of scary when you might have to close all your restaurants,” Buchheister said during a recent interview at Coffeebar’s newest retail location on McCarran Boulevard. “COVID was like getting sat on by a thousand-pound gorilla that smelled. It took all the fun out of everything.
“It extinguished all the hope and optimism that you go into a cafe for when your barista is a health code enforcement officer, a therapist and a referee,” he added. “You didn’t hire them to do all that stuff. It made us realize we needed to have other revenue sources.”
Greg Buchheister The move to The Oddie District is threefold, Buchheister said. A 1,200-square-foot cafe will complement the arts, culture and entertainment establishments slated to open at The Oddie and also serve the many patrons expected to experience the community center. Secondly, it provides Coffeebar with much-needed commissary and prep kitchen space to serve all its locations. Lastly, it provides warehouse and storage space that should help the company streamline operations, increase profitability, and grow its wholesale distribution and subscription coffee services. Coffeebar currently bakes all its pastries in west Truckee and drives them down to Reno every day.
The commissary will be around 2,000 square feet, Buchheister said. Baked goods will be delivered daily from that location to Coffebar’s retail stores. Coffeebar has retail locations at Mt. Rose Street and McCarran Boulevard, and it also operates stores in Menlo Park and Redwood City in the San Francisco Bay Area.
The new space at The Oddie comes with about 3,000 square feet of warehouse space that provides room for storing pallets of goods. Currently, goods move in and out of Coffeebar’s roastery in Midtown, and large semi-trucks have to navigate a tiny alley to unload palletized goods.
“It’s kind of a logistical nightmare at times,” Buchheister told NNBW. “A warehouse is going to solve a lot of our problems – it gives us a base of operations for our wholesale program, which we are expanding, and we will be able to take in pallets of our own cups or alternative milks, so we will have more control since we haven’t be able to rely on other third-party vendors to maintain supply.”
Coffeebar also stores some of its goods stored in a few storage sheds around town. It also will be able to store more raw coffee beans – employees drive to the Bay Area each week to pick up green coffee to roast in Midtown and then return roasted beans to the Menlo Park and Redwood City locations.
Buchheister said he’s also been working on growing Coffeebar’s monthly coffee subscription service, although the direct-to-consumer approach hasn’t had as much traction as he expected.
“If we can do a thousand subscriptions, that’s like having a retail store,” he said. “A thousand subscriptions seems totally feasible considering we serve 1,000 people at one store in one day. It just broadens the scope of the business.”
The wholesale business, meanwhile, represents another area of growth that could be a hedge against any future economic slowdowns that tighten consumer spending. Coffeebar currently ships bulk coffee to a handful of auto dealerships in the Bay Area that serve Coffeebar-branded products.
Courtesy Coffeebar
Coffeebar recently inked a lease at The Oddie District in Sparks for more than 6,000 square feet of space to open a small retail store.
The company has rounded out its wholesale program by hiring additional sales and management staff. Coffeebar employs around 170.
“Now we have a program that’s supported with maintenance and wholesale representatives who can train your whole staff,” Buchheister said. “If you have a cafe and want to serve our coffee, we will ship it directly to your businesses, and we can even train your staff and help you hire managers – it goes pretty deep.”
The moves are all part of a pandemic-induced diversification strategy, he added.
“We needed to diversify our income streams,” Buchheister said. “Covid has been challenging, and you can’t just rely on retail anymore; you have to innovate.”
