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When it opened in 2009, Brooklyn Roasting Company was part of a burgeoning new wave of NYC coffee. The plan, says Jim Munson, founder and CEO of BRC, was to serve superb and sustainable coffees at a time when New York really didn’t have a coffee company focused on that. It would be better than Starbucks but without any pretension.
It was a tricky identity to maintain, especially as names like Blue Bottle and Intelligentsia entered the market. Alas, last week Brooklyn Roasting Company filed for Chapter 11 bankruptcy and announced that it would close both its flagship in Dumbo, at 25 Jay Street, and a Flatiron outpost in order to refocus on “the core character and profitability of our business” — for now, the wholesale operation and four remaining Brooklyn cafés.
It wasn’t just the pandemic. BRC’s troubles go back to 2018, court documents say, when the small chain was almost acquired by an investment group … and then wasn’t, leading to financial troubles. And while it had mostly recovered and was “making considerable gains into 2020,” AM New York reports, it “apparently wasn’t enough” to see the company through this degree of sustained crisis.
According to Munson, this is hardly the end for Brooklyn Roasting Company. It’s just that they’re going to have to do some rejiggering. He called Grub Street to chat through a difficult time in his company’s history.
So, um, how’s your week?
Well, as you may have seen in the press, we filed for protection under Chapter 11 subchapter V to reorganize and sort of free ourselves of two of our leases in particular — the Dumbo location and the one in Flatiron — that were just impossible to manage. We probably saw the writing on the wall as business collapsed in March and that’s extended up until right now. At our core, we felt like we had a very healthy company, and these retail leases were just a real monkey on our back that we needed to free ourselves of. So, that’s sort of the last week. In general, you know, the business has been dramatically affected by COVID. I think that’s not unusual for coffee companies and restaurants, really anybody in the food and beverage service business in New York. We’re dealing with that, too
How is that playing out at Brooklyn Roasting Company specifically? Obviously, people aren’t hanging out in coffee shops these days, but on the other hand, they’re definitely still drinking coffee.
The volume at our retail cafés has dropped substantially, but it’s leveled off at around 50 to 60 percent of what it had been before the pandemic. Our wholesale business is a little harder to characterize. Obviously, the office coffee business that we did has completely disappeared. We had cafés at Goldman Sachs and Credit Suisse, J.P. Morgan, and those people have just not returned to work yet. I would say that was maybe 15 or 20 percent of our business. But then our online and grocery sales are four times what they were. So it’s been a real mix.
You opened in 2009, right when names like Stumptown and Blue Bottle arrived in New York, too. What’s your role in the NYC coffee landscape now?
The original idea for the business was and it still is to purchase mostly third-party certified coffee of extraordinary character. And to be a serious but not snobby coffee company. I think the idea and the idea of the character of our company hasn’t changed. We’re a locally based, quality-focused coffee business that wants to continue to serve the New York market as its local coffee roasting company. There have been a lot of changes, but they’re external: specialty coffee growing by leaps and bounds across the country, acquisitions by larger companies and conglomerates, and, most recently, COVID, which has changed consumer behavior enough to lead to another shift in the coffee industry.
What does that shift look like for you?
People’s habits have changed. They aren’t hanging out in coffee shops, obviously, they’re purchasing more whole bean coffee to go. I’d say the biggest shift in behavior and patterns is people’s willingness to brew coffee at home, to experiment with different methods of brewing, from pour-overs to French press to home espresso machines. And I think that that change is probably permanent. Certainly it’s not something that we think is going to go away in months. People now know how to make good coffee on their own, and that’s a good thing. That’s a really good thing. So part of our business strategy going forward is, first of all, to recognize that and, second of all, to assist it with online efforts and educational programming that we’re in the process of creating for that kind of customer.
So if customers are savvier now, after spending however many months brewing coffee at home, maybe getting into it, what does that mean for the idea of coffee shops in general? Like, what if we’ve perfected our own fancy drinks?
It’s a very good question. I think it’s a good thing. Whenever people know more, it’s a good thing. And one of the things that I think this will definitely mean for retailers is that they’ll have to up their game. I love the idea that people can see themselves as the experts and not always sort of in a position of kowtowing to the coffee pooh-bahs that are out there. They experiment. They decide what they like, and they understand the variables in how they brew their coffee in the morning. And I think many retailers are going to be hard-pressed to maintain the air of exclusivity that has sort of separated them from the pack in the past.
What does that mean for the future of Brooklyn Roasting Company?
I’d like to say that we’ve always been in that situation; we’ve always wanted to help our customers become knowledgeable and expert. I don’t think that we’ve put ourselves on any kind of pedestal as coffee purveyors. We do make great drinks, and we are experts in how to do that. I think it’s an attitudinal thing: We’ve always embraced the fun, exciting, energetic side of coffee, as opposed to, you know, the sort of pretentious aspect.
What about the future of the coffee-shop experience? Coffee shops are about coffee, obviously, but also they’re just a place to be.
Coffee shops have had a long history of being places where people get together and talk about ideas. And that’s probably been the single biggest, crummy thing. That’s what people miss the most about their neighborhood coffee shop — not being able to get together with other people and have that sense of community and conversation that historically coffee shops have provided. Even people that have their earbuds in, and they’re on their computer, they still like that sense of background community. That’ll come back at some point, I think. But companies like ours are rethinking, How many square feet do I need for a coffee shop? If I can do two-thirds of the business with one-tenth of the space, what makes sense in the future if you’re paying by the square foot? Banks are thinking about this, offices are thinking about this. The real-estate aspect of the retail coffee world is working itself out right now.
How are you thinking about it?
I don’t want to get too far ahead of myself. But I would say smaller footprints, compelling menus, clear statements about sourcing, and how you want to approach customer service. Coffee itself isn’t going away. Everybody’s still drinking coffee. But their coffee drinking patterns and habits have changed.
This interview has been edited and condensed for clarity.