Why these Melbourne coffee shops are swapping bricks and mortar for mobile vans

Why these Melbourne coffee shops are swapping bricks and mortar for mobile vans
  • PublishedApril 4, 2024

For years, Arun Subba has been immersed in the art of coffee.

“The moment I got in touch with coffee, I knew that that’s what I wanted to do,” he said. 

After more than 14 years of working as someone else’s barista in Melbourne, he decided it was time to be his own boss.

With the support of wife Chantara Lowe, Bearded Brewmaster began brewing in September last year. 

Now, they are everywhere. 

Coffee caravan serves coffee in a takeaway cup.
Mr Subba and Ms Lowe are hoping their caravan business can become a full-time job.(Supplied: Chantara Lowe)

Unlike a conventional coffee shop, the couple travels around Melbourne, serving cups from a caravan.  

As a first-time business owner, Ms Lowe said doing so was affordable and involved less risk than keeping up a brick-and-mortar shopfront.  

“If everything failed, we could obviously sell the caravan and get most of our money back,” she said. 

The couple runs their business on top of their weekday jobs, but said the end goal was to go full-time.

Food businesses on the move

While food trucks are common in event and festival settings, more of them are setting up shop along Melbourne streets. 

Anna Heaton works at Monarch Institute, which provides business mentoring on behalf of Business Victoria.

She said entrepreneurs were attracted to the mobile business model because of its “flexibility”, and the lower set-up costs could help build their confidence.  

A man sets up his danish doughnut food truck at the side of the street.
Food trucks setting up in front of Melbourne’s Art Centre.(ABC News: Gabriela Rahardja)

“I think everyone can see there’s been an increase, they’re popping up on every corner,” she said.

According to data collected by FoodTrader — an online government registration portal for mobile food businesses — the number of applications across Victoria has consistently increased over the past five years.

The data does not specifically show the number of businesses registered as a coffee business, but it does paint a broader picture of a food business trend.

Falling foot traffic spurs swap to van

The Old Mate Windsor cafe used to sit on Chapel Street, a popular shopping strip in Melbourne’s south-east. 

But what sounded like a great business venture turned out to be the opposite for owner Kristian Pirotta. 

He said he ran the cafe for two years with a rent of $1,700 per week in 2020.

With utilities, it costed him between $7,000 and $8,000 per month.

It used to run with 16 employees, costing $20,000 in monthly wages.

A coffee cup and toasties served on the table.
Old Mate Windsor opened its doors serving brunch and coffee in 2020 and closed down two years later.(Supplied: Facebook)

The entrepreneur said the business was struggling to make ends meet with the small number of turnovers, and COVID just made it worse. 

“While the landlords are still thinking the rents should be this massive cost because Chapel Street still has a reputation, the … [customer] traffic just isn’t replicating that,” Mr Pirotta said. 

“It’s still got a good vibe, some night life, but the day-time trading has really fallen off.”

Mr Subba and Ms Lowe also considered Chapel Street to set up their new cafe but were dissuaded after seeing the condition of the strip.

“Chapel Street was basically dead,” Mr Arun said. 

When looking into buying an existing cafe, the couple said it would cost them $120,000 for the cafe itself and about $6,000 a month to lease.  

A group of customers standing in front of a coffee caravan waiting for their coffee.
Bearded Brewmaster serves coffee at private events and Sunday markets.(Supplied: Chantara Lowe)

James Lockwood is a division director for Fitzroys, a Melbourne-based property agency. He said despite rents rising in the last 12 months, Chapel Street hadn’t lost its status as a sought-after area to start a business.  

“We don’t have enough properties to lease on Chapel Street … they’re very popular now,” he said.

According to a recent property report by the agency, rental vacancies in Chapel Street were at a six-year low in 2023, with a 7.9 per cent vacancy rate.  

Mr Lockwood said although he had already seen rent increases in the past 12 months, it shouldn’t be blamed for every business collapse.

“The difference between a good hospitality operator and an average one, the average one is being found out,” he said.

“If you don’t have something different to offer, I’m finding they’re the ones who are struggling.”

Cutting costs to the next level 

Ryan Valentino is the man behind Nola, an electric-powered coffee van driving around Melbourne’s north-east.  

Mr Valentino has run the family-owned business since mid-2023 as a side hustle, selling in private functions and community events on the weekends. 

The family spent around $60,000 in total to set up the business — around $20,000 for the vehicle, $20,000 for the power system, and another $20,000 for coffee equipment.  

A white coffee van parked near a local park.
Coffee at Nola is a roving coffee shop operating in Melbourne’s north-east suburbs. (Supplied: Coffee at Nola)

Despite the high start-up costs, Mr Valentino is confident the mobile business will cost less to operate than a brick-and-mortar business in the long run.  

Nola’s recent performance report shows the business spent just over $75 on energy to operate between November 2023 to February 2024, and just over $5 to run per event.  

On top of that, Mr Valentino does not need to pay for wages or rent.  

“After that $60,000, we haven’t added any more money to it … it’s been running on its own,” Mr Valentino said.  

A man stands in front of his white electric caravan while charging it.
Ryan Valentino’s coffee van is 100 per cent electric and can travel up to 100 kilometres. (Supplied: Coffee at Nola)

Mr Subba and Ms Lowe spent approximately $40,000 to set up Bearded Brewmaster, which included the cost of the caravan, coffee machine and supplies.

To cover monthly expenses, the couple operates in bigger events such as weddings, sporting events, and Sunday markets.

“As long as we have four to five events a month, that sort of [covers us] the rest of the month,” Mr Subba said.

Mr Pirotta said his caravan had cost $17,000. 

He also spent an additional $20,000 for revamps, and $20,000 for a vintage car to tow the van. 

A man crossing his arms and leaning against his caravan.
Kristian Pirotta bought a caravan in January 2024 to set up his vintage-themed coffee business. (Supplied: Kristian Pirotta)

He said he had decided to run his business on his own to avoid paying wages. 

“Staff costs for a cafe now is just completely overwhelming … and that’s what was burning, probably more than the cost of rent,” he said. 

Support for start-ups

Ms Lowe wants to see more resources made available specifically for the food-truck community, including a way to have permit processes streamlined and more public spaces open for mobile businesses to operate. 

She said obtaining permits for street trading in their council area remained the biggest challenge. 

“We think of all these cool spots we would love to be able to put the caravan out … but there is no chance we’re getting a permit,” she said.  

Paper coffee cups stacked on top of a coffee machine.
Nola serves takeaway coffee in community events and private functions on the weekends.(Supplied: Coffee at Nola)

Whitehorse City Council, the area where Bearded Brewmaster operates, said it received around 550 Statement Of Trade notifications per year, and was encouraging mobile businesses to trade at organised events or on private land.

“Trading on public land is usually only permitted … as part of council or community events … due to parking restriction and impacts, and safety concerns,” Whitehorse Mayor Denise Massoud said in a statement. 

Mr Pirotta said he would like to see the government offer more financial support for start-ups. 

“I think what the governments are forgetting is for people who have lost businesses during COVID, we’re still stuck,” he said. 

Business mentor, Anna Heaton, standing in front of a wall smiling to the camera.
Anna Heaton from Monarch Institute provides virtual mentoring for entrepreneurs on behalf of Business Victoria. (Supplied: Anna Heaton)

Ms Heaton said government grants were always highly competitive and businesses would have a better chance of succeeding by creating their own business plan.

“I always tell businesses to create a business plan. That’s where a lot of businesses will fail, because they haven’t done that research and planning before they start,” she said.

“Slow down, get it right the first time so spend the time now doing the research, and you’ve got a much better chance of succeeding.”

SOURCE: ABCNEWS

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