The Truth Behind Blank Street Coffee’s Rapid Expansion

By Cleo Thompson

Walking down a NYC street, one may notice the name “Blank Street Coffee” on awnings left and right. However, it seems like they just popped up out of nowhere- how could this be possible in such a competitive real estate market? In 2019, Blank Street was selling coffee and pastries out of a tiny green cart in Brooklyn. The prices were attractive and the friendly aesthetic drew customers in. In the last two years, they have moved into store fronts in wealthy neighborhoods all across the city, such as Park Slope, Carroll Gardens, Washington Square, SoHo, Midtown and more. They have opened more than 40 locations in the city and are still growing. This growth is shocking, and begs the question: how did the previously tiny company expand so ambitiously? The answer lies inside the patronage of the company, which is much different from what their brand perceives. Many question the morality behind this deception and choose to boycott the brand as a result of this. However before an opinion can be formed about the company, the facts need to be revealed. 

The creators of Blank Street, Vinay Menda and Issam Freiha, are both immigrants who met during college in New York City. The duo began to pursue their financial interests by starting a venture fund during college, in which they invested in companies such as SweetGreen and Reddit. With this background of business and finance, they possessed the fundamental knowledge about how to productively invest in businesses which would allow them to eventually start a business of their own. The idea for Blank Street came from asking their classmates their opinions about coffee, which revealed that many thought that coffee places were too overpriced. Menda and Freiha were up for the challenge, and wanted to explore how to sell coffee at a lower price while still making a satisfying profit. With their background finance knowledge, they recognized the mistake that many coffee businesses made, which was the poor usage of real estate. Rather than renting out cheaper spaces, coffee businesses would purchase large store fronts in order to capture an aesthetic which realistically couldn’t be funded because of the inexpensiveness of their coffee. This being said, Menda and Freiha knew that they had the ability to create a more productive, even better brand of coffee. Their ideas were ambitious and driven, but the financial capability of two college students was holding them back from these big plans. 

After starting with the coffee cart, an affordable and contained venture, their ambition was found to be profitable, and they received large investments. In 2021, Blank Street received a 67 million dollar investment from large venture capital funds such as General Catalyst and Tiger Global Management. It’s hard to believe that they would be this lucky because it wasn’t really a matter of luck at all. Because Menda and Freiha had a background in finance being venture funders themselves, they knew the system and had connections and potentially previously made deals. They had a profitable idea, in a bustling market, and so the investment was very attractive to these funders. 

This being said, they would still need something to set them apart from the hundreds of other coffee startups. In addition to their clever idea of smaller storefronts, they also wanted to explore the idea of using high power espresso machines, which would ideally save them time, money, and allow employees to focus on customer service, something that would help keep up their friendly and welcoming environment. The machines they use, Eversys, claim to have a mission that also prioritizes customer experience. They describe their machines as, “inspired by DNA and delivered in a compact package.” By using these efficient machines, Blank Street can afford to hire less employees and ultimately save money. This conservation of money allows them to put even more focus on the customer experience, including creative membership programs. Recently, Blank Street established a “regulars program,” which for only $12 a month, allows customers to receive a cold brew, hot brew, or tea for free every 2 hours, get all other drinks for $1, and get 20% off all merchandise. Tremendous deals like these are very attractive to customers, but certainly aren’t the usual offerings of the “local coffee shop” that they also admire. 

No ordinary local coffee shop would be able to afford to provide these services, so it’s time that customers stop viewing Blank Street as a local coffee shop. In an interview with Forbes, Menda describes that they “really want to be known as this neighborhood hyperlocal marketplace that elevates local brands we discover and enjoy,” This idea is admirable, and has been implemented by partnering with other business such as EV Foods, Gertie Bagels, and King Street Baking Co. However, some worry that despite this effort, Blank Street’s rapid expansion will force genuinely local coffee shops out of business, similarly to the trends seen with other coffee chains like Starbucks. A survey by Medium conducted in 2021 reveals that 66% of consumers prefer Starbucks over a local coffee shop when given a choice. This is probably due to the wide accessibility and convenience of Starbucks, however these statistics are forcing locally owned coffee shops out of business, which is a problem for local businesses trying to make a profitable salary. What makes Blank Street an even fiercer source of competition is that they also use the local coffee shop vibe, one of few leads that local coffee shops have over chains like Starbucks. 

Despite controversy, there is no denying that Vinay Menda and Issam Freiha are very clever businessmen. At a young age, they navigated business ventures, establishing connections and creating a very successful name for themselves. However, the aesthetic of their business has come off as quite dishonest, leaving some people very misled. There’s no doubt that everything Blank Street does is a business tactic, but it’s important that customers are aware of the truth behind these moves to create a fair competitive environment in such a specific market. In order to create that fair competitive environment, customers should rethink their priorities  about what kind of businesses they want to support, and whether it’s worth it to them to spend those few extra dollars to support a local business.  

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