This was published 6 years ago
How Aussie flat whites and smashed avocado have taken New York
By Cara Waters
Within two months of Giles Russell and Henry Roberts opening Two Hands cafe in New York they were struggling to keep up with demand.
"We had lines stretching out the door and down the street for avocado toast and flat whites," Russell says.
Giles Russell and Henry Roberts are the owners of Two Hands in New York.
Two Hands opened in New York in 2014 and is one of a wave of Australian-owned cafes now operating in the Big Apple including Little Collins, Brunswick, Flinders Lane, Sweatshop Coffee, Hole in the Wall (owned by former captain of the Essendon AFL team, Jobe Watson) and Bluestone Lane.
These little Aussie cafes are big business with Bluestone Lane raising $19.5 million in funding from billionaire Stephen Ross this month.
'Somewhere you felt at home'
Talking to Fairfax Media over coffee in their sunny Tribeca cafe with its whitewashed walls and photographs of Bondi Beach, Russell and Roberts say if they have captured a zeitgeist it's been more accidental than intentional.
"We just wanted to open a cafe that we wanted to hang out in," Russell says.
The pair were both 25 when they opened the first Two Hands using $500,000 from family, friends and an inheritance.
"We were quietly confident because what we had in our head, what we were missing from back home, we knew it would work," Russell says. "It was that classic Aussie vibe we were going for where you know the barista and they know you. That's the community we were going for. You could get half-decent coffee in New York but what we wanted was not just good coffee but somewhere you felt at home, that third space."
Inside Two Hands cafe in Tribeca New York.
What you can't get at Two Hands is syrup in your coffee, decaf, doughnuts or half-litre cups.
"We had to be a bit hard-line," Russell says. "People would come in and say, 'Can I get decaf coffee?' We just said 'no'. If you drink coffee it should be caffeinated. People were not very happy about that."
This focus has paid off for Russell and Roberts who have opened two cafes with a combined turnover of about $US3.5 million ($4.75 million) a year and a profit margin of between 15 to 20 per cent thanks to lower wage and food costs than those faced by Australian cafe owners.
The pair are "actively searching" for a third venue.
"We want to expand the brand and capitalise on what we have as a brand and what people want in the States," Roberts says. "At the moment that is New York for the forseeable future. We don't want to get ahead of ourselves."
Avocado toast at Two Hands in New York.
'Human connection'
New York has been the launching pad for cafe chain Bluestone Lane, which started out as one tiny cafe in midtown Manhattan five years ago and now stretches across 30 locations.
Founder and chief executive Nick Stone started Bluestone Lane when he was working as a banker for ANZ in New York and couldn't get his coffee fix.
He found that in New York going to get coffee wasn't part of people's daily ritual and nobody had a local coffee shop.
Stone says the Australian cafe is all about an experience instead of a transaction.
"The Australian cafe scene thrives on developing a localised ritualistic following," he says. "It’s not about just providing amazing coffee product, it’s far broader and more centered on human connection and offering a chance to disconnect."
Nicholas Stone, founder of Blue Stone Lane at Melbourne cafe Sons of Mary. Credit: Simon Schluter
While Bluestone is growing rapidly, Stone describes the cafe chain as just a "pimple on a whale" compared to coffee behemoth Starbucks, which has 25,000 stores across the United States.
Bluestone Lane will use the $19.5 million in funding from Ross, through his investment vehicle RSE Ventures, to open at least 100 stores in the next three years across the US, Canada, Britain and Asia.
Stone says demand was hot with Bluestone Lane receiving inquiries from over 25 institutional partners about making an investment in the cafe chain.
"We want to be a leading export of Australian hospitality and lifestyle culture and feel we have played a role in growing the awareness and brand of Australian coffee culture," he says. "However, we are just part of the vibrant scene and are supportive and proud of the other Australian independent cafes who are exporting this culture to the US and other parts of the world."
Nick Stone at a Bluestone Lane cafe in New York.
Watching closely
The other Australian cafes in New York will be watching Bluestone Lane's expansion closely.
"It’s good to see other businesses go ahead of us, and we hope to learn from their mistakes," Roberts says. "The great thing about New York is everyone is willing to help you, but they also want to sell you a dream and they will throw money at you."