Independent coffee shops suffer

Construction and increased coffee prices are taking their toll.

Junior Emily Neighbors pours a lemonade for a customer Tuesday at Overflow Cafe on University Ave.

Anthony Kwan

Junior Emily Neighbors pours a lemonade for a customer Tuesday at Overflow Cafe on University Ave.

Megan Nicolai

Jessica Swanson has been a regular at Espresso Expose for about two years. Like many students, Swanson thought of the Stadium Village coffee shop as a convenient  âÄúhang out.âÄù

Many shop owners believe consumers prefer their service over franchises like Caribou Coffee or Starbucks. But with construction, increased coffee prices and marketing troubles, SwansonâÄôs favorite place to study is taking a hit along with other independent coffee shops around the University of Minnesota campus.

Pat Weinberg, owner of Espresso Expose and the Purple OnionCafé in Dinkytown, said light-rail construction on Washington Avenue has definitely hurt business.

While business at the Purple Onion has increased by about 10 percent with the recent increase of the students on campus, Weinberg said, Espresso ExposeâÄôs clientele is down more than 30 percent compared to the same time last year.

âÄúLosing a third of business is a huge hit,âÄù Weinberg said. âÄúItâÄôd be silly to say the construction and economy donâÄôt play a part.âÄù

Weinberg said he has no plans to make changes to his business yet, and hopes it will improve with students coming back to campus for school. He also has some new marketing plans in the works.

Brad Cimaglio, owner of Muddsuckers Coffee in the Southeast Como neighborhood, said shops like his are a welcome relief from the coffee shop chains. He recalled the first time he entered an independent coffee shop.

âÄúThere were pinball machines, the baristas were yelling âÄî it was very refreshing,âÄù Cimaglio said.

Cimaglio, who moved here from Chicago, originally planned to open a shop in St. Paul, but took over the Muddsuckers space about a year and a half ago.

âÄúBusiness has been strange,âÄù he said. âÄúItâÄôs a weird area.âÄù

He said itâÄôs been hard bringing residents of the neighborhood through his doors, especially since many people have told of problems with the previous owners.

âÄúIâÄôve heard from a lot of students that they didnâÄôt like to come in before I took over,âÄù he said.

Cimaglio advertises his business on Facebook and has created events, such as Waffle Wednesdays, in an effort to bring in more business.

âÄúIn this business, if you donâÄôt have a built-in clientele, you have to push other things,âÄù he said.

But some cafés have managed to prosper in the downturned economy.

Sales at the Overflow Espresso Café in Prospect Park have increased, said Jeff Barnhart, the caféâÄôs owner and a University graduate. The café has about 13 employees. Muddsuckers has four.

But prosperity comes with a black cloud on the horizon.

Construction of a light-rail stop will begin in front of Overflow Espresso next year, along with construction on 29th Avenue, blocking access to the business and taking away parking space, Barnhart said.

âÄúWeâÄôll be devastated next year,âÄù he said.

The possible revenue cut is especially frustrating for the café, because the four-year-old location has only recently paid off debts and become profitable, Barnhart said.

âÄúIâÄôve worked hard and tried really hard, and even with the down economy we are doing really well,âÄù he said. âÄúNow I donâÄôt know if IâÄôll have to close doors next year.âÄù

The coffee market around campus became less saturated in 2009 when Espresso Royale left their location in Stadium Village and Espresso 22 moved out of the Dinkydome, all within three weeks.

Cimaglio said the higher price of coffee has also placed a strain on his business. According to a report released by the London-based International Coffee Organization, coffee is priced by wholesalers at $2.12 per pound âÄî a 35 percent increase from August 2010. Starbucks and DunkinâÄô Donuts have recently increased the prices of their packaged coffee by 17 percent and 11 percent respectively.

The coffee prices are a concern, said Mark Christenson, vice president of marketing at the Minneapolis-based franchise Dunn Bros Coffee. Although the company is faring well, Christenson said the University-area locations are also running into issues with construction.

âÄúThe construction definitely hasnâÄôt helped in the midst of everything else,âÄù he said.

âÄúFor saleâÄù signs have become a common sight where coffee shops used to be, Cimaglio said

Heavenly Daze, a coffee shop near the Seven Corners intersection on the West Bank, filed for bankruptcy Aug. 29, selling the space and all assets connected with the business. The coffee shop had more than $280,000 in debt when the petition was filed.

âÄúItâÄôs a tough business,âÄù Cimaglio said. âÄúMargins are tight.âÄù