In the grind: The who’s who of Wellington’s cafe scene

Saturday, 16 March 2024

Wellington, it’s often been claimed, has more cafes per head of population than some of the world’s largest cities.

Among them are some pretty famous and long-standing names. So too the coffee roasting scene, which, for years has been dominated by a colourful core of independents.

Think Boulcott St Bistro, Nikau, Maranui, Flight or Havana coffee.

But appearances can be deceiving. That award-winning café or demi-tasse espresso with its smoky tasting notes, might not be quite as it seems.

Hospitality is a tough business, especially for an owner-operator staring down the barrel of a punishing 12-hour plus a day, seven-day-a-week operation, or competing for customers in a saturated market.

Covid-19 and a cost of living crisis have only exacerbated the challenges.

Wilton’s Espresso in Wellington’s Northland, is a case in point. Opened just over two years ago, it closed for good last weekend. It was family-run – mum, dad and the kids – and catered to a community starved of a decent, local coffee house.

The owners had tried to sell it, citing its all-consuming demands and their desire to, put simply “have a life”. There were no takers.

It follows other high profile closures in the city, and a revolving door of ownership across restaurants, cafes and in-house roasteries.

Nikau, in the city gallery for instance, was sold by its original owners, who now run Rita in Aro St, in 2018; Brooklyn Deli, opened in 2014 and run as an Austrian bakery for a number of years is now Chimichurri Argentinian BBQ; the Deluxe on Kent Tce, often described as an institution, has had several changes of ownership since the Maranui team sold it; Loosies, the new kid on the Cuba St block, is owned by hospo behemoth Star Group.

Eric and Miriam Heycoop, long-time owners of Emporio coffee in Abel Smith St, had better luck. Their roastery and espresso bar, which they had nurtured over nearly a quarter of a century, is now part of the Mojo chain – albeit still under its original name.

Like the city’s original so-called coffee barons – people like Tim Rose and Geoff Marsland of Havana, and Supreme’s Chris Dillon – the Heycoops set the capital’s bean roasting ball rolling.

Specialty roasteries sprang up across the region, competition ramped up. Cafes with their own roasting machines had an added income stream, pitching product nationally across a range of retail outlets and into other stores.

Jason and Cate Hall set up Ripe coffee and their Petone cafe Go Bang in the early 2000s. As the business took off they moved the roastery to Moera, where it shared space with another cafe they ran. They also had coffee kiosks in Featherston St, at Hutt Hospital and in Queen’s Drive.

They were, says Jason Hall, the heyday of the Wellington coffee scene – before the global financial crisis changed the business environment.

“Coffee and the cafe landscape really started to change around this time. There were more players in coffee roasting, there was more competition from Australian roasters, and Mojo was taking Wellington by storm, opening more and more cafes in the lobbies of refurbished high rises.”

Still, there was enough new business to go around and there was was mutual respect among the Wellington roasters, along with an unwritten rule that you didn't try to steal each other's accounts.

“We would even all get together prior to Xmas for a boozy lunch and share stories and gossip,” Hall says.

In 2006, Caffe L’affare, the main player at the time, sold to Cerebos Gregg’s for an estimated $25 million.

That sale, the Halls argue, started the dismantling of the Wellington roasting scene.

Havana was next, selling to Lion – a subsidiary of Japanese beverage conglomerate Kirin.

Around the same time Flight sold a majority stake to Nomad Coffee Group in Australia, and Mojo went to market.The last of the large Wellington roasters, Supreme, sold to Pioneer Capital in 2022.

The coffee wars were heating up.

Says Jason Hall: “While the Wellington coffee roasting scene may look the same on the outside, inside things are very different. The market has changed from the local to global and the focus is on profit, growth, and return for investors.

“While once you would supply a cafe that wanted to use your coffee, bought the equipment from you, and paid full price for the product … now a cafe is in touch with any number of coffee suppliers requesting free on loan equipment, and discounted coffee.

“This makes things harder for the remaining locally owned coffee roasters who have to contend with the deep pockets of the multinationals.”

The Ripe production roastery is now based in the old Unilever complex in Petone, a block or so from the Halls’ Small Batch cafe. They opened Hauora cafe on the ground floor of the Ministry of Health in 2016.

Wilton’s used an organic house blend roasted by Rich coffee, a boutique outfit based in Berhampore and helmed by Cam McClure (formerly of Supreme and former owner of London’s Flat White and Milk Bar cafes) and Richie Russell – one-time head roaster with Monmouth Coffee.

The pair launched Rich in 2012 as a passion project. It remains so and is, with a weekly roast of around half a tonne … a small player.

The partners are not particularly interested in expanding or being subsumed by a corporate, preferring instead to focus on supplying a range of seasonal blends, single origin beans and filter coffee to their clients, “predominantly cafes”.

Says McClure: “We’re a little bit different. We’re not super competitive or aggressive about trying to sell our coffee or convert people.

“We’d rather align ourselves with new start ups and businesses, where people can evaluate us on taste first and then we can form a relationship.

“Most coffee roasteries would be producing espresso blends as their main cut and thrust; but we’re also doing a lot of single origin for people’s homes.

“And we‘re a bit like the milkman [used to be], so we run around Wellington dropping off jars of coffee in people’s letterboxes.”

There were plans, right before Covid hit, to set up a flagship store. It never got off the ground.

Mojo Coffee Cartel hurtled on to the local scene in 2003. Founded by Steve and Julie Gianoutsos, it was also launched as a boutique roastery café. However, it didn’t take long before it became the city’s very own Starbucks with cafés, if not on every corner, then certainly in almost every third office block.

It went gangbusters for a time and there were dreams of conquering the US and Asia. At one stage Mojo was poised to be bought by Cooks Global Foods, now Cooks Coffee, operators of the Esquires franchise.

That didn’t pan out, but other investors did step in, in the form of Alvarium, the wealth management company behind the New Zealand SailGP team, Gough and ADP Investments.

As Covid hit Mojo was forced to retrench, pulling back on its cafe expansion and closing at least half a dozen Wellington outlets.

The upshot was a new direction; and a new business model, whereby it could sell more coffee, just not under its eponymous brand. It now sells around 80% of its coffee into other cafes.

Its acquisition of Emporio last month adds to other recent buy-outs – of Auckland’s Eighthirty and Christchurch-based Vivace and Prima, all of which began as independent, specialty cafe/roasteries.

Mojo was also behind the Superfino (with sites on the Terrace and Lambton Quay) and short-lived Saloon (Bowen precinct) cafe branding.

Chief executive John Holloway says, in the scheme of things, Emporio was a very small player in the industry, roasting around a 10th of what Mojo does each week.

“Basically we bought it because it was for sale and we thought it would be nice to have another brand of coffee in Wellington we could sell. Not everyone wants Mojo and it gives us a point of differentiation.”

Covid, and the subsequent lock-downs, alongside fluctuating but significant price rises for green beans, also prompted the company to look at its risk levels.

“We were probably the worst affected coffee company in New Zealand by a country mile. We had 54 CBD cafes, before Covid, in Tokyo, Chicago, Auckland and Wellington. Our business reduced by 80 to 90% overnight … we knew we were at risk if we didn’t change our model.”

Holloway says the trajectory of coffee roasting ran almost parallel to that of craft beer brewing, where the market kicked off with a few boutique establishments, but quickly became saturated, resulting in a loss of market share.

“The ones that haven’t sold are struggling along. If you look at the last year I think there were four craft brewers that fell over.

“I feel sorry for those owners. They’ve been nurturing the business for 20 years, they’re trying to get through the back end of Covid, they’re dealing with a cost of living crisis, and the cost of importing coffee. It’s tough.”

The Gianoutsoses are still involved in the company.

Moonshine in Pauatahanui is home to Elemental Coffee, a micro-roastery set up by Rob Taylor in 2016.

Taylor sells via an online shop, offering free personal delivery in Wellington. Elemental supplies cafes from Wellington to Te Horo.

He, like most roasters, offers equipment, support and training alongside the beans, with an emphasis on the circular economy.

“The big companies have deep pockets, especially those owned by larger conglomerate companies. We are small, family owned and instead of supplying expensive new equipment, we keep things simple and cost effective for all involved without affecting a quality fresh roasted speciality local coffee experience.

“We love to source older machines and renew them rather than source new expensive machines for cafes.”

He says the pandemic has had a lasting effect on the coffee scene, with a noticeable reduction in “reliable inner city custom” as people took to working from home.

“As a result the bigger coffee companies are spreading their reach into the suburbs and regions, so the smaller local roasteries are feeling the pressure on the small corners they have.’’

Havana estimates Kiwis drink around 550,000 cups of its coffee each week.

Its early success, says Stefan Gray, general manager coffee, was instrumental in its purchase by Lion, while investment by the brewery – which also owns Emerson’s, Little Creatures and Panhead – had allowed the iconic brand to grow and expand.

Lion invested in a new roastery in Auckland, which opened in 2021, enabling a significant increase in production capacity.

Being able to tap in to extra support across areas like sales, marketing and supply chain has been invaluable, Gray says, adding that larger brands, such as Havana, served a key function in supporting and growing the industry, setting trends and driving awareness and adoption of coffee consumption.

“This creates a setting where smaller independent roasters can also do their thing and thrive.”

The Halls are not so sure. They predict shaky times ahead.

“Wellington coffee as we once knew it has changed … there are too many cafes. There are a lot that are making little to no money so you can understand why the owners are looking for sharp pricing,” Jason Hall says.

“The issue is that independent cafes just don't do the coffee volumes they once did. With more franchise cafes around and the availability of an OK coffee at your local petrol station, there's only so many coffee drinkers to go around.

“The start-up cost to open a cafe, wage costs, the high rent and operating expenses means the model in Wellington will change [again].”

Likely, they say, to be more cafes with simple food offerings, no kitchens, and multinational coffee.

A bit like Starbucks.

Who’s who

Flight Coffee: Part of the Australian-owned Nomad Coffee Group, a collective of coffee brands including Veneziano Coffee Roasters, Coffee Hit, Black Bag Roasters and Flight.

Supreme: Bought by New Zealand owned and operated Pioneer Capital in 2022. Pioneer Capital is a growth-orientated investor that currently has a list of 29 New Zealand businesses, including Raglan Foods, Fertility Associates, Tom and Luke, and Rockit Apples.

Mojo: Mojo Coffee Group, formerly Mojo Coffee Cartel. Now owns Emporio, Eighthirty, Prima and Vivace. Of its 28 shareholders 22 are staff, 35% investment from Alvarium/ADP Investments

Havana: Established by Geoff Marsland & Tim Rose in 1989. Lion Nathan, since 2018.

L’affare: Sold to Cerebos Gregg's 2006, later taken over by Suntory and now owned by Japanese-based UCC, which also owns Robert Harris, Bruno Rossi, Orb, and Atomic.

Aro Coffee, Caribbean Coffee: Part of the Siem Reap stable, which includes Aro Café and Caribe Café in Brooklyn. Owner is Sokunthea Pheab.

Good Fortune: Matt Wilson and Freya Atkinson

Rich Coffee: Cameron McClure and Richie Russell

Peoples: Started by Matt Lamason in 2004 from the company’s original 25m sq cafe in Constable St.

Ripe: Jason and Cate Hall

Revive: Andrew Littlejohn, owns Revive cafe in Petone, Bellbird eatery at The Dowse.

Elemental: Rob Taylor. Partner and stepson run Elemental Eats food truck.

Acme Coffee: Founded 2011 by L’affare’s Jeff Kennedy and Bridget Dunn of Prefab fame.

Karamu: Founded in 2007 by Michael Pullin, also had the short-lived Fika cafe in Miramar.

The Immigrant’s Son: Kaiwharawhara. Founded in 2005 by Andrew Meo. Director and roaster is now Alistair Boyce, owner of the Backbencher pub.

Note, this is not an exhaustive list. As Rob Taylor says Google maps is your friend. “Search for 'speciality coffee near me' and you will find small roasteries and cafés doing amazing things off the beaten track of larger commercial coffee companies, anywhere in the world.”

The regional barista champs (Wellington) are being held tomorrow at Mojo in the Asteron Centre, 55 Featherston St.