The future of the Flat White is in good hands

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Interview by Molly O'Brien, Marketing & Communications Specialist, Advance

Fact: a uniquely Australian coffee – the flat white – is now available to order on a Starbucks menu in New York. A big achievement, considering that this particular coffee order required a lot of explaining just a few years ago. 

A person who may have had an influence on this is Nicholas Stone, the founder and CEO of Bluestone Lane – a rapidly expanding hospitality and lifestyle brand whose raison d’être is creating premium café experience for its clients, influenced by “culinary capital” Melbourne. Transferring to New York in 2010 to continue his finance career with ANZ, Nick was astounded with the lack of options for his daily caffeine fix – the impetus of Bluestone Lane’s establishment.

Since its July 2013 inception, Bluestone Lane has become the fastest growing premium coffee and café brand in New York – with 13 stores currently open, and a further seven under development.

Well on the trajectory of revolutionising the coffee culture across America, Nick had a thing or two to say about Australia’s global influence on the hospitality industry.

From AFL to ANZ, you have been involved with multiple industries throughout your career. How did you make the jump from the corporate world to hospitality?

This all came about because it was something I sorely missed from a customer’s perspective. I moved to New York in 2010 to continued my MBA studies at Business School, and I couldn’t believe how much I missed the Melbourne coffee culture. In fact, I didn’t really appreciate how much of an immersive and wonderful experience food and coffee is in Australia until I noticed how inconsistent the experience was being provided to customers in New York. When I moved here, there were only a handful of cafes that were considered “higher, premium quality,” all of which were located in destination areas of the city (such as SOHO, Williamsburg, Tribeca etc.). Working as finance professional based in a business-centric area of midtown, these destination areas were not accessible to integrate into my daily routine.

How many Australian cafes were around when you moved here in 2010?

Very few. There was Toby’s Estate in Williamsburg and Milk Bar café in Brooklyn.. It’s worth noting that those establishments were also much more coffee shop centric than holistic cafes – a one-stop-shop to get your caffeine fix where could only get to experience a couple of the great Australian café elements. Even the better-quality speciality brands weren’t consistent across the elements we are focused on being: quality/premium product, fantastic and engaging customer service, thoughtful environments, and an aesthetic where it feels like you can escape the hustle of the city, even if it’s for brief respite. We want people to feel like Bluestone Lane is their local.

Had you had anything experience in hospitality before opening Bluestone Lane?

I had no experience at all! No retail experience, anyway. I was selected in the AFL draft when I was in my final year of school at Wesley in Melbourne, played for 6 seasons, while completing my undergraduate degree at Monash University to go straight into banking at UBS, before transitioning to ANZ. I’m fortunate to have had a career where I have lived overseas. I’ve had short stints in London, Asia and now have lived in New York for the past 6 years.  It’s worth noting, that it was an intense experience trying to build a company as a side project while juggling my full time job as a Director in Corporate Finance at ANZ.

Which cafe or coffee shop was your first location in New York?

Our first location was Midtown East, which is a little hole in the wall coffee shop – a quintessential Melbourne style setup. We have eventually transitioned from this model to developing larger stores that provide more immersive experiences, and to grow our brand awareness, however for our first two locations we were very deliberate in our aesthetic and the way we introduced our brand – displaying Melways maps, imagery and light boxes to really tell the customer in a bold way that we’re from Melbourne and this is the authenticity of our brand.

Did your customers respond to the first coffee shop straight away?

Yes absolutely – our customers liked that we were Australian! Our third location, Collective Café, opened in the West Village in June 2014 and was a really bold statement, because we went with an aesthetic that no one else was using in the café space, and it expelled the notion that a coffee shop should be dark and grungy and hipster. We created a café that looks like a restaurant by leveraging natural light, using elements like white-washed timber and green seafoam tiles, powder coating the coffee machine, and paying attention to decorative details.

Why do you think you’ve been able to scale so successfully?

I do think it was a big gamble trying to pull the Collective Café Greenwich Ave location off, as the space is challenging and difficult to manage from an operational perspective. We don’t use what you would call “traditional” cooking appliances, so we had to innovative and leverage how we used raw food products. We have amazing people working on our menu who oversee it all, including my wife Alexandra Knight, who has a background in nutrition and health science. I think that’s why we’ve been able to scale so successfully – customers have been able to resonate with us and our hands-on, detailed, authentic approach.

I want to cultivate an open and welcoming environment – I want everyone to be able to walk in and order what he or she’d like without any judgement. It’s just about being authentic to what we want to provide, which is sophisticated healthy café food. It doesn’t need to be doused in sugar; it doesn’t need to be fried. You don’t have to change the flavour of great quality coffee; you don’t have to add sugar, or syrup to it. We just think the customer experience should be open and free, and should be everyone’s escape. It shouldn’t be dominated by a particular type of customer. That’s why people keep coming back, and why we’ve been able to scale.

Do you think many Aussies have been inspired by the success of BL and want to emulate its success for their own career? The Australian coffee culture is a movement!

Bluestone Lane was one of the first Australian café and coffee brands to demonstrate early traction and awareness in New York, but I don’t think we were the catalyst per se. I do think we’ve had an influence, yes – particularly our rate of growth and our focus on creating a brand, may have inspired a lot of other groups.

What do you think it is about Australians succeeding in the hospitality industry abroad?

I think Australians are excelling in all industries in New York – not only hospitality. It comes back to being part of a culture that’s based on really strong values that resonate well in a city like New York: lot of hard work, being open minded, being creative, being resilient, dealing with adversity extremely well, a deep thirst for knowledge and taking on challenges.

I often refer to Melbourne as the Silicon Valley of the culinary world. Melbourne’s café culture is consistently better than anywhere in the world. Yes, people will proclaim I'm biased because it’s my hometown – but we have visited all of the recognised specialty café and coffee cities in the US and a number globally, such as Stockholm, Copenhagen, Hong Kong, Singapore, New Zealand, London, Paris, Rome, Milan etc.  We believe they are not as progressive and consistently good across all the key elements that go into a premium specialty café experience as what you can easily find in Melbourne.

What type of research did you have to carry out before opening the café?

I’m a very analytical person – some would say “risk adverse”. I didn’t have any hospitality or retail experience – but I did have 12 years’ experience in analysing and advising companies. Without doubt, my business background has helped tremendously and that’s why I think we’ve been able to scale and avoid a lot of the early-stage pitfalls.

While attending Business School in New York, I had to work on a Venture Capital project for a 4 month period. All of my fellow peers decided to focus their projects on the development of digital products, apps and flash sites such Groupon, given it had just successfully IPO’d and there was also Living Social,  Amazon deals – ecommerce was just exploding!  However, for my project I couldn’t get over my disbelief in how inconsistent the specialty coffee experience was in New York and how high the rate of consumption was – so these factors kick-started my interest in formulating my VC project on developing a highly scalable, premium coffee and café brand in New York and beyond.

My initial project steps involved observing customers and their consumption patterns at existing New York coffee stores (primarily Starbucks). I probably spent about 30-40 hours observing customers in New York; and where they would go, what they would spend, and I started to devise a business plan to try and see if it could work. The whole focus was on a brand – never just one store. I wanted to build a hospitality and lifestyle brand that could be scaled expeditiously, and if you could develop a model, cost structure and a product mix that’s built for scale, while remaining premium. That’s really been the recipe of success for us – the focus on brand. I am obsessed with brands.

What brands do you admire?

LVMH. They have the most amazing story – the mass of luxury brands they’ve aggregated – from high-end fashion, through to watches, through to alcohol. I’m also fascinated with brands that have been able to scale through their product innovations and marketing. You look at Apple, Nike, Amazon – they don’t sell products, rather offer a change in their customer’s lifestyle.

Did you ever envisage that Bluestone Lane would be as successful as it is?

There are now 13 Bluestone Lane stores – Dumbo in Brooklyn has just opened. I looked at an investor presentation I put together in 2013 and we are through hard work and a little luck, on track to where I said we’d be. I guess writing a figure on paper, say 15-20 stores; is very different from bringing it to reality and making it tangible. That’s me as a banker –extrapolating a business model, but actually putting it together has taken a tremendous amount of effort from the whole team. We’ve had a lot of people who have contributed a huge amount of energy into developing our brand and this project.

How many Bluestone Lane’s would you ultimately like to see?

I think the market capacity is huge, simply based on the population. Take Starbucks for instance – they have 220 stores in New York alone, so I’d be very satisfied if we could have that amount across America. I think we’ll be in the West Coast next year.

How many of your customers would you say are Australian?

In the coffee shops it would only be 10 percent, but in the cafes it would be 50 percent. Our coffee shops are in high-density areas, with the cafes in more destination areas such as West Village and the Upper East Side. We put the first one in West Village deliberately – because it’s on an Australian tourist thoroughfare.

How different (or similar) do you think are the Hospitality scenes in Australia and America?

America is too broad of a generalisation – but I think in New York in particular – there are some similarities with Melbourne and Sydney.  I think New York is the best dining precinct in the world for variety, but I do think the quality of food in Australia is just so much higher. If you were at a general restaurant in New York – if you had access to Australian produce, they’d be about 30 percent better. Australian produce far exceeds what you can get here. That’s why the “farm to table” movement is so popular here. It doesn’t really exist in Australia because of course the produce is coming from the local farms and markets. In New York, that scene is an anomaly - its specialty. A lot of the food produce is coming from Central America or the west coast, primarily frozen.

Is there anything you look forward to when you go back home?

When we go back, we visit about two-three cafes a day. I love South East Asian food – the South East Asian food movement in Australia is just unbelievable. We lived in Prahran before we moved across to New York so we always love to see what’s happening in those inner city areas.

Are there any big misconceptions about working in hospitality in New York?

I think it’s really challenging. It’s a lot harder than what it looks like. It’s tremendously human capital intensive. There’s a huge amount of regulation that makes it hard to open a business in New York – it’s not for the faint of heart. It’s seven days a week, and the hours are long.

Finally… Why are people so obsessed with avocado toast?

Well, there are three elements. One – it tastes really good. If it’s made well, it’s plentiful and delicious. Two – it’s good for you. It’s a much better alternative than a waffle or a bagel. Thirdly – it plates so well. It’s got the aesthetics – perfectly aligned to Instagram. When you plate it up – the colours juxtapose so well with the plates. What more could you want? 

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