If you walk into any bar of any size, they’re likely to have five, ten, even dozens of beer choices. So, why not do the same thing with coffee?
That’s the philosophy behind Fairgrounds Coffee & Tea, a privately held Chicago-based coffee and tea bar chain that is about to expand. Next week, Fairgrounds is opening a new store in Minneapolis, its first outside the Windy City, to be followed by one in Los Angeles later this summer.
Fairgrounds founder Michael Schultz, a food industry veteran, believes that the concept eventually could result in dozens of stores around the country.
Schultz has experience in seeing a coffee concept take off. He is the founder of Infuse Hospitality, which provides upscale coffee service at 32 corporate locations, including Tyson Foods, Yelp, ConAgra and SalesForce. Another 15 will be added by the end of 2018, and he expects to have 100 Infuse locations open by the end of 2019, averaging one new one per week.
Infuse provides everything—beans, equipment, and baristas. Some coffee bars are free standing; others are mobile carts that circulate through the office setting.
While tech companies are known for the perks they offer their employees, Schultz says craft beverages are something that the staff in any kind of firm can appreciate. “It not only relates to tech companies, it relates to finance firms, it relates to everyone,” he says.
“The only choice that these companies had before was institutional food service companies. And they knew nothing at all about culture. We turned around and said, ‘We’re expert at this and do it in the world of retail. We can assist you in offering an employee benefit. You’re caffeinating them, you’re keeping them in the building.’”
Employees at major companies spend 67 hours a year to get coffee and tea, Schultz says. “If I have 200, 2,000, 4,000 employees—what’s the cost of leaving the office 67 hours a year?”
Companies have a choice to completely subsidize the service, provide a partial subsidy, with employees paying minimal prices for their drinks, or charging the employees the full price for their coffee or latte, he says.
Schultz says an attractive coffee and tea program can help companies retain millennial employees, and improve the appearance of their buildings. The coffee bars “become a showplace to bring people through,” as well as gathering spots where people from across a company can meet.
Aesthetically, they can be a huge improvement.
“The days of a 10,000 square-foot sterile marble lobby are over,” he says. “Amazon is not leasing space from your building, Google isn’t leasing space from your building when it looks like that.”
Choices, Choices, Choices
With Infuse underway, Schultz launched his Fairgrounds concept in 2017. It started with two Chicago stores, one on Milwaukee Avenue in the trendy Bucktown neighborhood, the other in the Loop on Michigan Avenue at the Chicago Athletic Association Hotel.
Each offers a choice of roasters, such as La Colombe, Stumptown, Parlor Coffee and Verve, among others. You can choose your brew, order an espresso drink, or get a flight of different coffees. There is a tea selection, too.
Schultz said the inspiration came during business trips to visit coffee bar clients. “We would leave meetings and take a coffee break. Wherever we were in the country, two people would go to Blue Bottle and two to Intelligentsia. And then we’d go to dinner, and have 112 beers to choose from,” he said.
He says he thought, “This is crazy. Why is there no consumer choice in coffee or tea? Why have consumers allowed this to be done this way?”
His idea is a big departure from the single-brand coffee shops that have sprouted across America and around the world the past 20 years, led by Starbucks Coffee.
Still, Schultz believes Starbucks “did a phenomenal job of introducing people to new things. They were the second wave of drinking coffee” after traditional no-frills coffee shops, he says. “What an unbelievable marketing machine. It’s a recognizable brand that’s everywhere.”
Beyond coffee, Schultz wants to do Starbucks one better: He is serving quality food that’s prepared in house to go with the choices in beverages. He likens that approach to European cafes, where patrons can stop in for coffee, or order snacks or a meal. (When I visited the Michigan Avenue location at Christmas time, there was an eye-catching selection of doughnuts as pastries right inside the entrance.)
“We wanted to make a better experience available and approachable to everybody. There’s massive areas of opportunity in many, many places. (Our approach will be) one guest at a time,” he says.
And while scale is a goal, “We’re going to do it in a smart way. We’ll be learning each time that we’re doing it,” he says.
He sees a need for Fairgrounds stores “in many, many places. We’re disrupting a $50 billion a year industry. Consumers are going to start demanding choice.” But Schultz says he isn’t favoring one brew over another, leaving that up to his customers.
“We wanted to be roaster agnostic,” he says. “The days of Illy and Starbucks and Peet’s and Caribou—I think it’s gone. I think people want local, authentic experiences in their buildings. Putting a Starbucks in the building doesn’t have the impact that it had ten years ago.”