Onyx Coffee Lab co-owner Jon Allen would love to have a café in the downtown districts of Bentonville, Rogers, Fayetteville and Springdale.
It’s a “long-term goal” for the company, Allen said, and if all goes to plan the coffee brewer will be halfway there sometime in 2017.
Onyx made its downtown Bentonville debut about a year and a half ago on Northwest Second Street, just off the square, and is now fixing up the former Dollar Saver building on East Walnut in downtown Rogers. Onyx purchased the property in December 2015 through a company called Red Brick 1907 with the intention of moving its roastery, now located in Springdale.
“We fell in love with the building,” said Allen, who owns the company with his wife Andrea. The 30,000-square-foot facility is large enough to meet Onyx’s needs, it is centrally located downtown and it was within the company’s price range, Allen said. “That’s pretty hard to find, so when it came up for sale, it was a no-brainer for us.”
Because of the building’s status as a recognized historical property, Allen said much of the time during the past year has been dedicated to meeting requirements on a state and national level to ensure the integrity of the property is upheld. At the same time, it needs upgrades, including more energy-efficient features and a new roof, but Allen projects the café and roastery will be open sometime this year.
Onyx intends to relocate the education arm of its company to the basement of the Rogers building, Allen said. The brewers host regular educational programs for the public on coffee-making. The informational portion of the business is important to the Allens within their goal to elevate the standard for coffee in the region.
Ozark Modern principal architect Bradley Edwards is handling design for the project, as he has on Onyx’s previous locations, including Gregg Street in Fayetteville and West Sunset Avenue in Springdale. This facility will be unique in that the roastery will be on display for patrons of the cafe. The roasting area and coffee shop combined will take up an estimated 12,000 square feet.
Allen said he’s ready to relocate, as the current roastery is at-capacity. Onyx’s business has grown 30% since last year, and the brewer has been putting out 5,000 pounds of coffee beans per week from a 5,000 square-foot facility.
Onyx’s new space will allow the company to install a third roaster.
WHOLESALE KEEPS THE LIGHTS ON
Out-of-state wholesale orders make up 80% of Onyx’s business. By gaining media attention and taking top spots in various nationwide and international competitions, the coffee company has been able to break into markets that would not ordinarily be easily attainable for Arkansas roasters.
Allen said the business has landed some “nice accounts” that way, including recent deals with high-end coffee shops in London and Singapore.
Here in the U.S., the Midwest market is cracking wide open, he said.
“We’ve always done well on the West Coast and the northwest,” Allen said. “But now modern, upscale coffee shops are popping up all over the Midwest, in Missouri, Oklahoma, Texas. It increases our options for wholesale.”
Coffee is now a $37 billion industry in the U.S., according to IBIS World, and a good portion of that is from gourmet espresso drinks consumed on-premise at a coffee shop.
One-third of consumers surveyed for the National Coffee Association’s 2016 National Coffee Drinking Trends Report said they drank gourmet coffee the day before, compared to 24% in 2008. About 18% drank an espresso-based beverage. That’s up slightly from the previous year and nearly triple the percentage in the NCA’s 2008 coffee trends report.
By and large, the trend is being driven by younger consumers, according to the association.
Daily coffee consumption among individuals between the ages of 18 and 24 nearly doubled between 2000 and 2016, jumping from 25% to 48%. The age group’s consumption of gourmet beverages rose from 13% to 36% from 2008 to 2016, and consumption of espresso-based drinks rose from 9% to 22%.
For individuals age 25 to 39, the number who consumed coffee rose from 42% to 60%. These older Millennials were most likely to drink gourmet coffee beverages weekly, according to the NCA. Consumption of gourmet beverages rose from 19% to 41% for the age group, and for espresso drinks it rose from 8% to 29%, according to the data.
KEEPING THE RETAIL SIDE SMALL
While Onyx continues to plan growth for its wholesale business, the company intends to stay small in terms of its cafe footprint.
Allen said he has been given offers to open Onyx branches in other areas, including, for example, a rent-free location in Little Rock.
However, he and his wife believe quality control would suffer if they spread themselves any thinner.
“We’re not going to take over the world of brick-and-mortar.” Four or five cafes “is plenty,” Allen said.
At the same time, the cafés are how the company stays plugged into Northwest Arkansas, a region Allen and his wife love. Both are Springdale natives but once spent the majority of their time in Fayetteville, and now they spend it in Bentonville, Allen said. The couple has an appreciation for each town in Northwest Arkansas and looks at the region collectively, as one “larger metropolis.”
A positive regard for all four cities is why the Allens want to have a presence in each downtown.
While Allen doesn’t want Onyx to be the largest coffee shop chain in Arkansas, he wants it to be the best. If he only has four cafés, each one should be top-notch, in his mind. “We want to put Northwest Arkansas on the map for quality coffee,” he said.
Now in its fifth year, Onyx won several awards at the U.S. Coffee Championship in April. Onyx Barista Dylan Siemens won the United States Brewers Cup, roaster Mark Michaelson placed first in the U.S. Roaster Championships and Onyx co-founder Andrea Allen placed second in the U.S. Barista Championship, according to a June 12 press release from the company.