Overlooking the harbour in Margate, Carey Karlberg’s Scandi coffee shop, Mala Kaffe, holds prime position for both locals seeking a soul-stirring view with their morning latte and tourists craving a caffeine fix.
Karlberg opened Mala Kaffe after moving to the town from London where she ran a popup coffee shop. “When I moved here I spent some time working out what the town needed,” she says over a flat white as we sit outside on an overcast day. Noting that the area lacked good independent coffee shops, she wanted to create a destination for serious coffee fans.
Karlberg is one of a growing number of entrepreneurs smelling the potential in the coffee industry. The total value of the coffee shop industry jumped to £3.4bn last year, up from £2.4bn in 2011, according to Mintel, and as of 2016 there were 22,845 coffee shops in the UK, up 6% year on year, according to a report from Allegra World Coffee Portal. While the big coffee shop brands such as Costa Coffee continue to expand, smaller chains are also seeing a sales boon, the report says.
“People want an experience when they’re drinking coffee out of home, and independent coffee shops try to package their product so people remember the experience around the coffee,” says Mintel food service analyst Trish Caddy.
Grind, founded in 2011, has expanded from one outlet on London’s Old Street to three restaurants and six cafe-bars, each serving coffee, food and cocktails. “It’s been a lot of work, but it’s helpful when you love it,” says David Abrahamovitch, co-founder and chief executive. Grind received £1.3m in crowdfunding in 2015 to help build its coffee roastery and expand.
“Our success so far has really come down to the amazing team of over 200 people,” he says. Abrahamovitch takes pride in being one of the first mini-chains to introduce nitro cold brew – a cold-brew coffee charged with nitrogen – and says this year the company has been on “a bit of a health kick” with iced turmeric and beetroot lattes, adding that the new additions look great on its Instagram posts.
Like Grind, Edinburgh-based Artisan Roast has become a mini chain with three branches in the Scottish capital and one in Glasgow since it opened its first branch in 2007. Co-founder and managing director Gustavo Pardo was tempted into the coffee business after meeting his future business partner Michael Wilson. “He was a real coffee man from New Zealand,” says the former management consultant. “We found it hard to get good coffee in Edinburgh and had wondered what business we could do together. I didn’t have a real passion for coffee, but I had always wanted to start my own own business.” The business now has about 60 wholesale partners, mainly in Scotland.
Pardo says that running a coffee shop was easier 10 years ago. “At the time, no one was really doing coffee around here – we were one of the first. We had a roastery so people were coming in and smelling the coffee, and we’d have a chat with them. We were one of the first places selling flat white coffee in Edinburgh – now it’s popular everywhere.”
Speak to coffee shop owners and it’s clear that there’s one thing that makes them slightly disgruntled and concerned about the future: the saturation of the market. Pardo says that it’s not the Starbucks and Costas of this world that he’s competing against, but other local independents. “It’s getting really tough now,” he admits. “I’m not planning on expanding anymore as the level of saturation is incredible. In the one block I’m in now, there’s three coffee shops. Two of them opened in the last year.” Pardo attributes the rise in the number of independent coffee shops to entrepreneurs avoiding moving into other retail sectors. “People aren’t opening shops as people are buying online,” he says. “But they’re still going out for a coffee.”
Karlberg has had a similar experience. She says she would have considered opening up another coffee shop in Margate but a local independent is launching a second branch and a new shop serving coffee is also opening nearby. “I’m going to open somewhere else along the coast in the next three years,” she says.
With competition heating up, coffee shop owners are finding new ways to entice customers. From next month for two months, Karlberg is set to serve up coffee-based alcoholic drinks, such as espresso martinis and Irish coffee from 6-11pm: “You’ve got to keep going and find new innovations.” She’s even set up a WhatsApp group for customers so they can check opening times and is looking to introduce cold brew next year. “You’ve got to do things differently and offer something different,” says Karlberg, who also runs Chalk, a vegan restaurant in Margate.
The prospect of Brexit is another challenge. “If you look across my shops, a lot of the workers are immigrants,” says Pardo. “Fewer Europeans are coming over here to work and others here are concerned. The catering industry is a sector that the British are not really keen on working in. It’s going to become more difficult [to attract staff] and there’s huge competition.”
Karlberg admits that the winter can be a difficult period for independents in a seaside town: “I think I’ve found it more difficult than if I was in the old town of Margate, although I’ve been busier in the past month than I was last year.” She remains upbeat, however, and despite the local competition feels she has something her rivals can’t offer. “Look, we’ll always have this amazing view,” Karlberg says, looking out over the harbour.
