Why Locol’s $1 Coffee Brand Matters

A perhaps unexpected signature of Locol, Roy Choi and Daniel Patterson’s fast-food chain with a soul, was its one-dollar cup of coffee, which was not like most other one-dollar cups of coffee: Engineered by Tony Konecny and Sumi Ali, two veterans of the fancy coffee universe, it’s made with some pretty nice coffee beans, and it is probably vastly better than any coffee you would get anywhere else for a buck. And, it turns out, it was also the first step in building a new coffee company.

While the coffee operation at Locol has quietly always been a separate company — essentially, a coffee roaster that Locol is a partner in, and that has, until now, exclusively supplied Locol and most of Daniel Patterson’s restaurants, including the Michelin-starred Coi — it formally came out the other day in the New York Times as Yes Plz. The company’s core offering, to start, will be bags of its coffee blend, the Mix, for between eight and nine dollars. Though only available in Locol outposts right now, Konecny, who sold his subscription coffee service, Tonx, to Blue Bottle in 2014, unsurprisingly plans to return to selling coffee online.

At some point those plans will include some kind of standalone coffee shop, very possibly under the Locol branding. (In recent months, after what co-founder Daniel Patterson has admitted was an occasionally challenging first year, Locol has expanded into a number of different formats, including a truck and a bakery.) Where these will exist in relation to other upcoming Locol outposts — for which the current plan, Patterson told California Sunday Magazine, is to “start in low-income places that need it the most, and then spread into the affluent areas” — seems less clear. What Konecny will say now is that he and Ali “have long simmering itches to scratch around trying to do a really high volume retail concept,” but for the moment, the idea is “something that can side-car alongside a future Locol location or supplement another spot rather than trying to make it work in isolation.”

The issue with a standalone Locol coffee shop, as some people in the specialty coffee industry will eagerly tell you, is the economics. The magic of Locol’s dollar cup of pretty good coffee ($1.50 if you want milk and sugar) — which more highfalutin’ coffee shops seem to sell for three bucks or more — is multi-faceted. Locol thickens the slim profit margins for cheap coffee by combining clever sourcing, a single coffee blend, a tidy menu of just four options, fast-food volumes, and a riff on the old trick of turning old hot coffee into new cold coffee, producing very little waste.

More importantly, the amount of money that a full-blown fast-food operation has to make from each cup of coffee sold is far less than what a standalone coffee shop has to make. (Locol has lost money in its first year, Patterson admitted last month, and some have speculated that the coffee is a loss leader. But Konecny coyly told me that “there is a lot of room between coffee as a loss leader and coffee as a primary profit center.”) No doubt this is one reason that a “really high volume retail concept” is what interests the Yes Plz partners — even if the expanded coffee menu that’s in the works inevitably produces some drinks with higher margins.

Audrey Ma / Locol

The economics, in fact, are the most recurrent trope in the narrative of Yes Plz, frequently used to position it on the opposite side of a gulf from the fancy coffee industry in story after story (like this one) — all while ignoring that there’s a lot of space between the current context and audience for fancy coffee and Yes Plz’s more populist vision. This is made possible because of the comparative quality of Yes Plz’s coffee for the price (no one would care if it cheap and bad, after all), because of Konecny’s history in the specialty industry — before starting Tonx in 2011, he helped open Intelligentsia’s first L.A. coffee bar in 2007, after a stint at Seattle’s Victrola — and because the one-dollar cup of great coffee has a beautiful subtext: Is there anything more satisfying than the idea that the mythical snotty barista, one of our most persistent cultural memes, is lording their superiority over you by standing tall on a pile of reeking artifice, after all?

This is, not coincidentally, part of Konecny’s pitch about making good coffee more accessible. “The biggest thing holding back a broader, craft-beer-scale, mass market embrace of craft coffee,” he says, “is how little we’ve empowered the average coffee drinker to believe their own opinion is of value and led them to believe that only trained connoisseurs can safely separate shit from shinola.”

To the limited extent that the economics of Yes Plz have genuinely unnerved some people in fancy coffee, as implied in the Times piece, it is precisely because of the possibility of it being considered in the same context as the Stumptowns and Blue Bottles of the world. If considered equivalent, it could undermine the fulfillment of the fantasy that has long undergirded the fancy coffee industry, which is that one day consumers will wake up from the fog of cheap caffeine and recognize that a cup of Good Coffee is not an inevitability of capitalism but a tiny miracle — the result of a finicky agricultural product being successfully navigated through a vast global machine that stretches from seed to novelty mug.

If consumers could just realize that, the dream goes, they would taste, and value, fine coffee like fine wine — coffee professionals would pause here to note that there are even more aromatic chemicals in coffee than there are in wine — and perhaps pay for it accordingly, happily parting with far more than a dollar for the right cup of coffee, maybe five or 10 or even more dollars, because actually it’s a really good bargain compared to wine, dubious stunt pricing aside. And then coffee farmers and baristas and everyone in between would be paid a wage closer to what they really deserve — and maybe shops could even afford to pay their rent in New York City and San Francisco.

This is all to say that, to the extent that the fancy coffee world is united in any single belief, it is that high-end coffee should probably cost more than it does, even though that dream has already become kind of real: A surprisingly wide swath of people no longer bat an eye at paying four or five bucks (or more!) for a cup of coffee, as long it is presented with the proper ceremony or the correct sequence of dog whistles.

But, Konecny argues, correctly I think, “It’s still a very narrow slice of the public that is buying into paying more than a couple bucks for a brew, and doubling down on all the second-order bougie signifiers of high-end taste, bespoke aprons, all that stuff, isn’t moving the needle enough, especially when the coffee oftentimes just isn’t sourced, roasted, or brewed well enough to justify the presentation.” The real issue that could lead to people undervaluing coffee, he continues, is that “when the coffee is just ho-hum, the message all this sends to the consumer is that either A) the emperor has no clothes and this fancy coffee thing is B.S. or B) the consumer takes the blame for not have a sophisticated enough palate to appreciate it.”

In other words, Fancy Coffee, even to the extent that it has tried to offer a more humane experience in recent years — the mark of a truly cool coffee shop these days is that they will ask if you want milk and sugar in your coffee — has still largely moved in a direction of capturing a wider swath of an audience already predisposed to its tastes and trappings. The core argument of Konecny, Ali, and Yes Plz is that while, yes, a cup of very interesting obscure coffee might well be worth $10, there are a lot of people out there who will never have access to or interest in Fancy Coffee and what it signifies. But maybe they would like to drink better coffee than they currently are, even if they don’t know it — and maybe a cheaper cup of coffee is how to get them in the door.