When Nick Stone, a former professional AFL football player, opened his first location of Melbourne, Australia-inspired premium coffee chain Bluestone Lane in New York City in the summer of 2013, he said he “didn’t really have ambitions to grow to this scale.”
Now, 10 years in, the chain has 55 US locations and counting, a nationwide partnership with Hilton Hotels, and Stone will be on Gordon Ramsay’s Food Stars this week judging other coffee chain start-ups.
Bluestone Lane—which offers classic coffee bevs along with Aussie favorites like a hot milo (malted chocolate with steamed milk) and food like its popular avocado smash—emphasizes community and hospitality, Stone said, making consumers feel “like a local, not a customer,” so much so that he refers to customers as locals.
“I have no background in coffee…I was a consumer,” Stone, who is also the company’s CEO, told Retail Brew. “For me, getting coffee was not just getting a product; it was about being part of a community.”
While the company shuttered all but 14 of its locations during the pandemic, it now serves 80,000 “locals” a week, with more café openings to come. That growth required some strategic moves and “hard decisions” over the last few years, and Stone shared some of the more notable ones that have paved the way for Bluestone Lane’s success.
Out of the blue: While for many years the company “over-indexed” in core urban areas, particularly locations in office buildings, the chain has made a push into suburban commuter towns outside of nine major metropolitan markets, including New York, Los Angeles, Boston, and San Francisco, and Houston.
Bluestone Lane plans to expand to 80 locations by the end of 2024. New locations won’t stray outside those markets, to “leverage the investments we’ve already made,” with openings to come in New Jersey, northern California, and the greater Houston area, Stone said.
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The company has also doubled down on digital with online ordering and a loyalty program to give customers more control, Stone said. “Providing those different channels is wonderful because that is a terrific forum to understand their feedback and to receive information about the experience or the innovation,” he said.
No stone unturned: Lots of coffee chains have gained traction over the last few years, from Blank Street to Dutch Bros, but “it’s very hard for most companies to put together those three elements” of hospitality plus premium coffee plus healthy food options in one business, Stone noted.
“There’s just tremendous whitespace because the big guys, Starbucks and Dunkin’, alone have nearly 70% of all coffee shops in the US. So there’s lots of opportunities just to be an alternative,” Stone said.
On the coffee and food front, it has differentiated itself by partnering with a slew of CPG brands on products. This summer, Bluestone Lane teamed up with the Vita Coco Company on a cold brew drink featuring the brand’s coconut water, a unique drink combo you won’t find on a Starbucks or Dunkin’ menu, Stone noted.
“It’s very mutually beneficial, but it also provides and acts as a catalyst to think about different ideas and ways we can develop LTOs [limited-time offers] that could resonate with our locals,” Stone said.
+1: CPG nerds out there will remember the company debuted a line of ready-to-drink iced coffees and cold brews in 2019 via FreshDirect and Amazon, but the products ultimately got scrapped due to Covid-19. While Bluestone Lane’s focus is currently on its retail locations, CPG products “will happen at some stage,” Stone said.