Shake Shack founder, no-tipping pioneer, and all-around hero Danny Meyer is betting big on third-wave coffee. Today Meyer’s Union Square Hospitality Group announced it’s investing in NYC-based mini-chain Joe Coffee.
Launched in 2003 with a single location in Manhattan’s West Village, the family-owned company has 14 locations across New York City and Philly serving a menu that’s more straightforward than that of say, Starbucks — no Pokémon Frappuccinos or bagel balls, but a healthy selection of drip coffees, pour over, and espresso drinks, plus locally made pastries and doughnuts.
The company roasts all its own coffees at a facility in Red Hook, Brooklyn, and supplies coffee to numerous restaurants (such as Manhattan hot spot Cosme), touting a “fair” and “sustainable” approach to sourcing its beans.
Joe Coffee founder Jonathan Rubinstein has known Meyer and the USHG folks for years, with Joe Coffee being served at select USHG ventures over the years and Joe even using Meyer’s best-selling book about hospitality to train its staff. He notes that the company has been approached by various private equity companies and other potential investors over the years, “but they never felt right” — until now. “We’ve aspired to be known for our warm hospitality, and that’s very different from other coffee shops in NYC so I think we were mutual admirers,” Rubinstein says.
USHG’s investment will enable the coffee chain to expand, as well as to update some of its existing locations with fresh interiors and new equipment and technology. Joe intends to expand its footprint in NYC and Philadelphia first, but Rubinstein says opening in other U.S. cities won’t be far off: “In 2018 we want to identify a few more cities where we can develop our brand. We feel like there‘s so much opportunity and the world is our oyster.”
“While there were many factors that went into the decision to invest in Joe, fundamentally they share our philosophy of putting employees first, align with the culture of USHG, they are leaders in a category we believe has tremendous potential, and are led by a talented management team,” a rep for USHG said via email.
This marks just the second time USHG has looked beyond its in-house projects — such as the recent relocation and revamp of its flagship restaurant, Union Square Cafe — to invest in outside companies: In 2015, the company invested in a California-based fast-casual chain called Tender Greens, which is also now plotting national expansion.
Meyer has also personally invested in D.C.-based fast-casual chain Sweetgreen, further proving that the Shake Shack king sees big opportunity in small, budding chains that share his focus on serving a high-quality product with a side of hospitality and strong leadership. The USHG CEO has proven he has a keen eye for investments, once selecting a stock portfolio for CNBC’s Mad Money that crushed the S&P 500.
• USHG and Affiliates Make Strategic Investment in Joe Coffee [BusinessWire]
• Danny Meyer’s USHG Invests in California Chain Tender Greens [E]
• Why Danny Meyer Just Invested in a Home-Cooked Food Delivery Startup [E]