There’s a barista battle brewing in Boston
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In March, Jared Mancini wrote an e-mail, the subject in all caps:
"WHERE DO YOU LOOK TO HIRE STAFF???"
Mancini is the owner of the SIP Cafe in Post Office Square, and the missive was sent to three dozen coffee shop managers in Boston. Many wrote back, echoing his frustration, and saw the e-mail as a clarion call: The city's coffee scene has never seemed more robust, but there's a barista shortage brewing, and Boston's cafe owners are struggling to hire and retain talent.
There's now a lot of money backing the latte business. As a "third wave" of roasteries has ramped up, dedicated to sourcing high quality beans and treating coffee as an artisanal product, a subset of successful coffee entrepreneurs have found favor with well-heeled venture capitalists. With this influx of cash, high-end roastery cafes are expanding across the country.
Here in Boston, that's colliding with a tight labor market, leaving the city's independent coffee shops increasingly nervous. They're upping prices while the deep-pocketed new arrivals scramble to hire staff.
"I've worked in New York City and Los Angeles and spent some time in Chicago and Tulsa and I've never seen anything like this," said Chris Pradzinski, the manager of the new Intelligentsia cafe, a Chicago transplant set to open this spring.
For local owners, it can feel like an onslaught. "There's just a ton of money, and a ton of out-of-towners coming in," said Jaime van Schyndel, the owner of Barismo, a roastery and retailer with cafes in Cambridge and Arlington.
Presumably, these investors all want a slice of the next Starbucks and its $80 billion valuation. Consider the competition: The Silicon Valley darling Blue Bottle Coffee, which has a staggering $120 million plus in funding, is opening a shop in Harvard Square later this year. Intelligentsia, which was acquired by Peet's Coffee in 2015, is constructing a new training lab and cafe in Watertown. Philadelphia's La Colombe began serving draft lattes in the Leather District last April, while Caffe Nero, from London, has set up 11 shops in town. And San Francisco-based Philz Coffee, which has raised $75 million and has Snoop Dogg as an investor, will arrive this year.
And then there's Reserve, Starbucks' own boutique spinout that will soon open a new outpost in the Boston Park Plaza Hotel, where exclusive eight ounce bags of coffee can retail for $80.
"There are people who just can spend whatever they have to spend to open another shop. And they can spend whatever they have to spend to staff them," van Schyndel said. Hiring has been so difficult amid rising rents and low unemployment that he's wary of opening new cafes. Even after raising base salaries by $2 an hour to keep his staff, he still watches his employees receive offers from shops trying to hire them away.
His executive officer, Lucy Valena, said she's even gotten cold calls from recruiters looking for managers. "It's getting ugly," she said.
The entire city is struggling when it comes to staffing positions in the service industry, but coffee shop managers say the sudden surge in well-funded competition has made it that much worse. Cafes that established themselves by serving third-wave roasts are now feeling bigfooted when the very brands they've taught their customers to love set up shop on the next block.
And even in the era of the $7 specialty drink, the rising minimum wage and constant uptick in Boston-area retail rents are driving down margins. It's forced cafe owners across the city to cautiously raise their prices by 10 to 15 percent over the last few months.
Donna Vaillancourt, who operated the Wired Puppy coffee shop on Newbury Street, said the hiring shortage was so bad that it forced her to sell the business in January. "We couldn't keep anyone on long enough to even bring them along as a manager," she said. The cafe was bought by Revelator Coffee, an Alabama-based coffee roaster backed by a San Francisco venture capital firm with big expansion plans.
It isn't helping that as offices are offering more employee perks, they're adding free, in-house coffee programs. LogMeIn has gone as far as hiring two full-time baristas to staff an internal coffee bar. Alina Rudnieva Inacio began running the cafe last year after working as a barista trainer at a local roastery. "I have a family and it's good to have that stability," she said.
Who needs a tip jar when you can have a 401(k)?
"How do you compete with that?" Mancini asked. "Having this conversation makes me worry more."
For the newcomers, it's meant walking a careful tightrope. Pradzinski, the retail manager of the Intelligentsia, says he appreciates the city's already vibrant coffee scene, and since arriving here in December, he's been touring shops and attending Thursday Night Throwdown latte art contests.
But he knows that the perks he can offer through his larger company can be an allure for hourly workers (Intelligentsia is owned by JAB Holdings, which owns Panera, Peet's Coffee, Keurig, Stumptown Coffee Roasters, and the Boston-based Tatte bakery). Paid time off and sick pay, health, dental, and vision are hard to come by as a barista. And that's meant trying to hire while simultaneously seeming like he's not out to poach staffers.
As result he's been looking outside of the industry — and the city. One of his first hires was a woman looking to relocate to Boston from Alabama.
The notion of poaching is a sensitive one. Several cafe owners contacted for this story said they've been on the receiving end of calls from other shops complaining about perceived attempts to steal baristas away.
"We had someone who called us saying we tried to poach someone from there," said George Howell, the city's closest thing to a coffee guru, having ridden the last coffee wave when he sold his 24 Coffee Connection storefronts to Starbucks in 1994. When it comes to poaching, he said, "you just don't do that period. Speciality [coffee] is always amazing for its collegiality and I don't want to lose that."
Today Howell operates three eponymous cafes, and is able to gives his most dedicated staffers opportunities to move up within the company. He hopes that having more prominent coffee shops in town will allow baristas to grow in the industry, whether they want to manage cafes or learn more about sourcing green coffee beans.
But Howell's happy to watch from the sidelines as this generation's well-funded roasters clamor to expand. "I experienced that when we got venture capital for Coffee Connection. The dangers are that you're like a rocket ship," he said. One that can crash and burn if you move too fast.
Barismo's van Schyndel worries that independent cafes will be collateral damage. "When customers stop caring about the community aspect," he said, the experience changes. "The choices become watered down and that's a scary thing."