06.05.2011 – Stumptown Coffee Making Inroads in New York

Stumptown Coffee Making Inroads in New York

by Benjamin J Spencer

The Stumptown Brew Bar in Red Hook.       Photo: Stumptowncoffee.com

Red Hook, Brooklyn –  In a sparsely-populated industrial corner of Red Hook, Brooklyn, within sight of sprawling docks and looming ocean-bound freighters, sits a small, unassuming brownstone building. From its looks, it probably used to be an auto shop. Now, from inside wafts not the stench of axle grease, but the thick, dark tang of roasting coffee.

Some might deem the Brooklyn working waterfront an unlikely place for a coffee roaster. But actually it makes perfect sense, since these Stumptown beans, green and oily when delivered, hail from around the world – from small family and co-op coffee estates where owners and workers are paid a premium for their product that is unmatched in the industry.

Steve Goodwine is a barista behind the counter at the Brew Bar, which takes up a small storefront adjacent to the roasting garage here in Red Hook.

“There are two guys in our company who spend about nine months out of the year travelling to different coffee farms around the world,” he says.

At these small farms, batches of coffee are rigorously tested for quality. The conditions of the farm (organic methods, plenty of shade) and workers (well-taken care of) are checked, and new business relationships are forged with small growers. Stumptown set up this year-old Brew Bar specifically to educate the public on the uniqueness of that model in the coffee importing world – and of course, sell some more coffee.

The beans are also roasted with a care and consistency rare in the world of coffee, and at an exceedingly small scale compared to the mega-conglomerates that feed Manhattan’s endless train of Dunkin’ Donuts.  It seems improbable that from this modest and laid-back feeling roasting facility, every wholesale and café- bound order of Stumptown Coffee in New York City is delivered.

“The roasters are just really efficient,” says Brian Philippi, another barista here. “They work really hard.”

So do the brewers, if today’s demonstration is any indication. As he talks, Philippi, bewhiskered and lanky, stands behind a wooden counter currently decked out like some kind of mad doctor’s lab. The Brew Bar coffee is all ground and brewed to order right in front of sometimes bemused customers, but you won’t see any familiar drip machines here.

Overhead racks of fat glass beakers, plastic plunger tubes and presses of all sizes, and other technical paraphernalia attest to Stumptown’s painstakingly scientific approach to creating the perfect cup. Visitors can test four different labor-intensive methods of brewing up to 16 varieties of single-source, direct-trade gourmet beans.

One simple method involves slowly pouring near-boiling water over a pile of dark, coarse-ground joe, while another, called the Aeropress, resembles a large syringe with a stopper that squeezes hot water through wetted grounds with a column of pressurized air.

As the afternoon wears on, bicyclers enjoying the mild weather chain up and file inside in chattering groups. A sense of community takes hold in the little bar. One man tells the three brewers behind the counter that despite his best efforts at home, he can’t quite get his own Aeropress to make a cup as perfect as theirs.

“The difference between here and home is that here, everything’s precise,” he says. “Maybe because there aren’t three kids shooting soccer balls at me.”

Although anyone can order Portland-based Stumptown’s whole bean, direct-trade coffee  via the Internet, New York and Seattle are the only other localities where the company has a physical presence –  and New York’s inclusion was based more on serendipity than any business plan, according to Matt Lounsbury, Stumptown’s director of operations in its Portland headquarters.

Lounsbury explains that the success of Seattle-based boutique luxury Ace Hotels inspired the chain to start another hotel in Portland in 2007, and they asked Stumptown to run a coffee bar in their lobby. The hotel, and the bar, was a great success, and when Ace set up on 29th Street near Madison Square in mid-town Manhattan two years ago, they asked Stumptown to work the old magic again.

“At first we were like, what? New York City?” says Lounsbury. “We’re just this little coffee company from Portland. For a while we couldn’t quite put our minds around it.”

When they did decide to take the plunge, immediate problems arose. The biggest problem: finding space for their roaster.  Normally, Lounsbury says, if Stumptown can’t build a roaster in a location, they won’t even consider moving any operations there, and for space and financial reasons, Manhattan was simply out of the question. “It’s a freshness thing,” he says.

So they scoured Brooklyn instead, and found the perfect location in Red Hook.

Though the recently opened Brew Bar and the Ace Hotel lobby are so far the only company retail locations in the city, Stumptown does an increasingly brisk wholesale business to area restaurants. In the two years since Stumptown’s introduction to New York City, the business has grown to include wholesaling to dozens of cafes and restaurants in the five boroughs. Several locations in the East 20’s near Baruch College serve at least a Stumptown house brew, including Star Café and the the Mexican chain Dos Caminos on 27th Street and East Third Avenue. In fact, it has become rather a badge of honor to serve Stumptown.

Craig Cochran, the owner of Terri, a successful new vegetarian, vegan and organic sandwich café on West 23rd St. and 6th Avenue, says in an email that since he and his business partner had named their café after their moms (both named Terri), “we only wanted the highest quality products to be associated with us.”

Cochran says that as he relied on his “coffee connoisseur” friends for advice, Stumptown came up again and again.  He had crafted Terri’s menu carefully to appeal to vegetarians and non-vegetarians, with sandwiches that come off like healthy comfort food while being something he could feel proud to serve. So he knew they had to get the coffee right – and preferably socially responsible.

“When I found out that Stumptown also has the highest standards associated with every aspect of their coffee production,” says Cochran, “I knew that this was the right brand to serve at Terri.”

Lounsbury says Stumptown simply got to New York at the right time. Even if their research shows that the term “direct trade” hasn’t quite penetrated into the coffee lingo around here yet, nevertheless, in the past few years, more direct-trade coffee has made it into independent cafes city-wide.

Competitors include North Carolina’s CounterCulture Coffee (served at midtown’s Café Lucid, among other venues) and Chicago-based Intelligentsia Coffee, – along with Stumptown, one of the pioneers of the direct-trade model – with vendors like 9th Street Coffee in Manhattan’s East Village and their own small coffee bar in the Chelsea Market.

“We are definitely responding to a lot of energy around local food in New York, especially in the last year,” said Lounsbury. “We’re starting to see a lot more traction. All across the country there’s a lot of interest in specialty coffees and brewing methods. It bodes well for us as roasters, but also it bodes well for coffee lovers and for independent farmers.”

Not to mention the coffee-lovers on this sleepy stretch of Van Brunt Street in Red Hook. The customers, who might pay up to four dollars for their mug of fresh-ground, exactingly-brewed Stumptown Coffee (depending on the brewing method), don’t seem to mind the extra cost at all.

As one bearded and square-spectacled gent explains to me,  “You pay for precision.”


06.03.2011 – People to Watch in Silcon Alley – Slideshow Profiles – CRAIN’S NEW YORK BUSINESS

The Video Guy





05.03.2011 – Asian-Americans Dominate NY’s Top Minority Firms – CRAIN’S NEW YORK BUSINESS

Asian-Americans dominate NY’s top minority firms

Latest Crain’s ranking of minority-owned businesses shows Asian-American firms accounting for 10 of the 25 largest names. Top Asian-American firm? ASI System Integration

By Benjamin J. Spencer
May 3, 2011 3:00 p.m.

Asian-American firms are making it big in the Big Apple, accounting for 10 of the Top 25 minority-owned companies in the New York area, according to a new Crain’s list.

There were nine Hispanic and Latino-owned companies and six African-American firms on the Crain’s list, which ranked the region’s 25 largest minority businesses by their 2010 revenues. The No .1 company was Goya Foods Inc., of Secaucus, N.J., with an estimated 1.7 billion in revenues last year.

The top Asian-American firm on the list was information technology company ASI System Integration, which reported $175 million in revenues for 2010, placing No. 5 overall.

Six of the 10 Asian-American-owned companies on the list operate in either apparel or construction and construction supplies, industries that have struggled during the recent recession. Indeed, seven of the 10 Asian-American firms on the list lost revenue from the year earlier.

By Design, a Manhattan-based apparel wholesale company, was founded in 1994 by Korean-American Chief Executive Jay Lee. Though still successful enough to make No. 10 on the list, the company’s revenue last year dropped to $77.1 million from $87.1 million in 2009. By Design’s director of human resources, Richard Eagan, said the continuing lull in the economy, paired with some retailers’ desire to save money by sourcing their own apparel overseas, made things tough last year.

The company is banking on innovation to help blunt the impact of falling revenue, acquiring a partner last summer in Los Angeles-based jeans-maker-to-the-stars David Kahn. Their high-end denims should appear in New York boutiques soon, Mr. Eagan said, noting that the move is “totally new” for a company that sells mainly knits and sweaters for young women.

One apparel wholesaler appears to have emerged unscathed: Lafayette 148 New York. The women’s apparel company ranked No. 8 on this year’s list with $100 million in revenues in 2010, up from $95 million in 2009.

Chief Executive Shun Yen Sui said Lafayette 148’s success in rough times resulted from a refusal to compromise the brand and the product. Favorable manufacturing locations also helped: “Certainly,” Mr. Sui said, “our vertical operations, with our own production facility in Shantou, China, give us a competitive advantage.”

Despite individual success stories, John Wang, president of the Manhattan-based Asian American Business Development Center, said apparel manufacturing has been falling for years. “Much of the manufacturing has moved to Asia, Vietnam,” he said. “And Americans are not spending as freely as before.”

Construction services also continued to slow in 2010: Though all three of the Asian-American construction and construction supplies firms on the Crain’s list moved up in the rankings, their total revenue dropped anywhere from 7% to 22%. (Overall construction spending in New York City plunged 12% in 2010 alone, and it’s off more than 20% from peaks seen in 2007 and 2008.)

Mr. Wang said whatever the sector, local Asian-American businesses will need to continue expanding into unfamiliar territory—even international markets—to stay competitive. He mentioned Latin America and Africa as potential markets for expansion, a trend growing for decades in Chinese business. But he also pointed to a growth market much closer to home.

Previously isolated minority groups are starting to put aside language and cultural barriers and are “developing each other” as potential customers, he said.

“On the smaller scale, people have been teaming up from the neighboring minority communities,” said Mr. Wang. But he said Asian American-owned companies “could be marketing much more heavily to Hispanic, African-American and gay and lesbian markets.”

04.22.2011 – Boathouse Labor Rally Draws Public Officials – CRAIN’S NEW YORK BUSINESS

Boathouse labor rally draws public officials

Workers claiming they were illegally fired from the Loeb Memorial Boathouse restaurant rallied Thursday; the city’s Parks Department has so far stayed out of the fray.

By Benjamin J. Spencer
April 22, 2011 3:46 p.m
Workers who claim they were illegally fired from the Loeb Memorial Boathouse restaurant in Central Park publicly aired their grievances at a union rally adjacent to the restaurant on Thursday, backed up by a chorus of pro-union City Council members and union officials. So far, though, the popular concession’s landlord–the city’s Department of Parks and Recreation—has stayed largely out of the fray.

The Parks Department responded Friday to repeated requests for comment with a written statement.

“The city is not party to this disagreement which is between a labor union and a restaurant operator with a concession to operate at Central Park,” read the statement. “The concessionaire has met all of his obligations to the city under the agreement.”

The rally was the latest turn of events in an intensifying dispute. The New York Hotel Trades Council is representing the group of workers, who said the concession’s operator, Dean Poll, and his managers systematically mistreated workers on the basis of race and sex, stole tips from servers, and improperly fired 14 banquet employees when they attempted to join the Local 6 union chapter in January of this year.

Yasser Nijim, one of the fired employees attending the rally on Thursday, said he worked at the Boathouse for three years, mostly full-time. He said when he and many other employees joined the Local 6 union committee in June of 2010, “management started bribing us.”

“They gave us a raise. They offered us health insurance that we couldn’t afford,” said Mr. Nijim. When he persisted in advocating for the union, he said, his hours were changed drastically. “We’d leave at three in the morning, come back at eight in the morning–that kind of thing,” he said.

Finally, in January, he was terminated along with 13 other union supporters. “It was because we supported the union,” said Mr. Nijim.

City Council Speaker Christine Quinn, widely considered to be a likely candidate for mayor in 2012, said she was “incredibly concerned and outraged” over the employee reports.

“Operating a business in Central Park is not a right, it’s a privilege,” she said. “The thing about a privilege is that it can be given, and it can be taken away.”

David Weissman, legal counsel for the Boathouse, disputes the charges.
“Boathouse Management has investigated these claims and found that there is no basis for any of them,” Mr. Weissman said via email Friday. He said allegations of union-busting were “untrue” and that claims of racial and sexual harassment were “totally false.”

The union has filed several complaints with the National Labor Relations Board. The NLRB said through a spokeswoman Friday that the complaints were “under review.”

City Councilwoman Melissa Mark-Viverito, who represents the district the Boathouse is located in and also chairs the City Council Parks and Recreation Committee, called on the Parks Department to do more to pressure Mr. Poll to comply with his contract. She said she “wasn’t really pleased with the response of the [Parks Department Commissioner Adrian Benepe] so far.”

“I interpreted his response as a little dismissive,” she said. “I would hope that we’d have a strong partnership with the Parks Department and this administration on these concessions.”

Mr. Weissman said Mr. Poll was in “constant contact” with the Parks Department.

“Not one of the elected officials who spoke out at yesterday’s rally has ever inquired as to any of these claims,” said Mr. Weisman. “The Boathouse welcomes the opportunity to speak with them about any concerns they might have.”

According to the Parks Department website, the city’s contract with Mr. Poll extends until Dec. 31, 2021.

04.15.2011 – What Tech Bubble? VC Funding Holds – CRAIN’S NEW YORK BUSINESS

What tech bubble? VC funding holds

Nearly 70 companies in the New York area received more than $580 million in funding, according to a Friday report; funding was down 3% from year-ago quarter.

By Benjamin J. Spencer
April 15, 2011 3:49 p.m.

Despite rumblings of a tech bubble, New York area funding for tech startups held fairly steady in the first quarter.

Some 69 companies in the New York area received more than $580 million in funding, according to a Friday report from PricewaterhouseCoopers and the National Venture Capital Association. Funding slipped 3% from the first quarter of 2010 but was up 6% over the fourth quarter. The number of deals was down 21% over the first quarter of 2010 and down 22% over the fourth quarter.

“Despite recent hype about both funding gaps and bubbles within the venture capital industry, the first quarter demonstrates an investment pace that is reasonable, rational and relevant to the long-term nature of our business,” said Mark Heesen, president of the National Venture Capital Association, in a statement. “What we are not seeing this quarter is just as critical as what we are seeing.”

In New York, startups in software and IT dominated funding in the first quarter, accounting for $198 million, or 34%, of venture capital dollars, according to the report. The life sciences sector, which includes companies specializing in biotechnology and medical devices and equipment, accounted for 33% of funding, or $190 million. Media and entertainment startups received nearly $129 million in funding in the first quarter; recipients there included Beyond Oblivion, a cloud-based music service that snagged a whopping $77 million in the first quarter—the most of any New York-based company—and question-and-answer website Stack Overflow, which received $12.3 million in funding.

David Silverman, managing partner for PwC’s New York emerging-company practice, said the average deal was high this quarter, reflecting a growing business savvy in New York’s Internet and tech sectors. He said business owners who may have developed two or three other successful tech companies since the 1990s are now bringing their experience to the field.

“What we saw 10 to 15 years ago in San Jose, we’re seeing now in New York City,” said Mr. Silverman.

The New York area still trailed California’s Silicon Valley and New England in tech investments during the first quarter, according to the PwC report. In Silicon Valley, 212 companies received $2.5 billion in first-quarter funding; in New England, 90 firms received $639.3 million.

But the Big Apple is gaining traction. According to a separate analysis from CB Insights, New York state received more venture capital dollars in the first quarter than Massachusetts, which due to its Boston tech scene has long been No. 2. New York brought in $379 million in venture capital in the first quarter, according to CB Insights, compared with $227.6 million for Massachusetts. CB Insights’ report includes five sectors: software, Internet, mobile and telecommunications, computer hardware and electronics.

“There’s a lot of optimism surrounding New York right now,” said CB Insights Co-founder Anand Sanwal. He noted that the city’s seed-stage startup accelerators, which help prepare young companies for evaluation by venture capital firms, are helping.

“They churn out some really interesting companies and entrepreneurs,” he said. “There’s a lot of momentum. The ecosystem just kind of feeds on itself.”

04.01.2011 – Transportation App Roadify Wins BigApps Contest – CRAIN’S NEW YORK BUSINESS

Transportation app Roadify wins BigApps contest

The company, which makes a transportation app for mobile smartphones, received a $10,000 prize, which was presented by Mayor Bloomberg at an awards ceremony

By Benjamin J. Spencer
April 1, 2011 3:29 p.m.

After judging ended and the dust settled Thursday night in Chelsea at the NYC BigApps 2.0 awards ceremony, one company emerged the “appiest” of them all: Roadify.com, a parking, traffic and public transportation real-time information application for mobile smartphones.

Mayor Michael Bloomberg presented the awards personally at the ceremony, held in the IAC building. Mr. Bloomberg announced during the ceremony that BMW had agreed to double all cash prizes for the winners.

The city’s Economic Development Corp. and the NYC Dept. of Information Technology and Telecommunications, who co-sponsored the contest along with BMW, handed Roadify a $10,000 prize, which, according to the company’s head of marketing and design Dylan Goelz, will go “100% into the product,” including readying the app for Google-based Android phones to augment their existing iPhone and text-message-based service.

“We were floored last night,” said a still out-of-breath Mr. Goelz. “We had literally no idea when we were called up on stage that we had won.”

Mr. Goelz, along with founder Nick Nyhan and software developer Ethan Arutunian, created the original app in November 2009 as a text-based Park Slope, Brooklyn parking finder. All the user had to do was text “Get” to the number provided, and a user who had just vacated a parking spot would text back the location of the spot.

Roadify quickly expanded to include crowd-sourcing social updates from on-the-spot commuters as well as real-time city traffic and transit data from the Metropolitan Transportation Authority and the NYCDOT—including buses and subway lines all over the five boroughs.

“We wanted to make an app for New Yorkers, and New Yorkers are inherently commuters,” said Mr. Goelz. “It’s a massive part of their life.” Roadify’s “mash-up” of real-time data and social updates allowed commuters to find anything from “crowd-sourced alerts and updates from other commuters about delays, to whether there’s a mariachi band on the third car.”

“The data is great,” he said, “but it’s the social element that will make commuting a bit more enjoyable.”

Simon Buckingham, chief executive of Appitalism, an NYC-based apps marketplace, said developers like Roadify have just started to realize the full potential of this “mash-up” of technologies. Roadify is “typical of the type of apps that are winning awards,” Mr. Buckingham said. “Utilizing the on-board capabilities of the smartphone, the GPS and mapping built-in—that is really a great service in my opinion,” he said.

Savvy advertisers have jumped on the app bandwagon, he said, because while “mobile advertising is only a billion dollar out of a $700 billion advertising industry,” sponsors like BMW know their core audience too well to let the growth opportunity of apps slip by.

“[BMW] understands something very fundamental,” said Mr. Buckingham. “The most engaged app consumer is the 25- to 35-year-old male or female with a graduate degree. The simple reality of it is that they’re realizing that this is an attractive audience. Their target market is there, and they’re trying to get ahead of the curve and exploit the intimacy and the location information of smartphones.”

The BigApps competition, only in its second year (hence the ‘2.0′), challenges programmers to develop mobile software applications that encourage users to access a wealth of publicly available city data. Though contestants had more than 350 city data sets to work from in 2010, provided on the NYC DataMine site—essentially double what they had in 2009—developer submissions dropped from 81 to 58.

“The Bloomberg administration has been working on [making city government more open] for nine years,” said Nicholas Sbordone, a spokesman for NYC DoiTT, which built and maintains the DataMine site. “This is the public’s data, and we want to keep on making it accessible for as many people as possible.”

An EDC spokeswoman said that transparency was only one goal of the contest, though. “The real goal is to support New York City’s tech sector,” she said.

The spokeswoman noted that last year’s BigApps winner, MyCityWay, had so far received millions in venture capital. The MyCityWay money included an initial $600,000 investment from the NYC Entrepreneurial Fund, which is managed by FirstMark Capital.

Mr. Goelz said that as a privately funded company, Roadify is “in the process of seeking capital now.”

In the meantime, he said, Roadify is “absolutely looking forward to working with the MTA” to coordinate a better overall rider experience. He said the app could help the transit bureau find out “everything from customer service to understanding where the most and least satisfied riders are. It makes it clearer for them and clearer for their customers.”

03.26.2011 – 2011 40 Under 40: Aaron Shapiro, HUGE Inc. – CRAIN’S NEW YORK BUSINESS

2011 40 Under 40:

Aaron Shapiro, 39

HUGE, Chief executive

Aaron Shapiro

Aaron Shapiro’s work life is not simply paperless; it’s downright nomadic. The chief executive of HUGE, a digital marketing and design agency, doesn’t even have an office in the firm’s Brooklyn headquarters.

“I just have my laptop. That’s all I need, right?” he said from the company’s expansive Web design floor.

Mr. Shapiro’s overriding management directive: “Make something you love.”

His approach wins major clients. HUGE redesigned websites for CNN and Reuters and spearheaded the Web design of Pepsi’s novel Refresh campaign, which reallocated $20 million in funds intended for Super Bowl advertising to fund community initiatives.

Mr. Shapiro sold HUGE for close to $40 million to The Interpublic Group of Cos., a global network of marketing agencies, in 2008. The corporate backing allowed the married father of two to raise $10 million for a major international expansion, which started last year.

Adding to the string of achievements, Online Media, Marketing and Advertising magazine dubbed HUGE the social media agency of 2010. And Advertising Age recently named Mr. Shapiro’s firm to its A-List of hot agencies to watch, for the second straight year.

“Aaron’s incredibly driven and very, very relentless,” said Philippe Krakowsky, head of talent and strategy at Interpublic. “He’s always projecting himself to the next place.”

Indeed. HUGE had nine employees when Mr. Shapiro joined in 2005 as a business and strategy partner. By the time he became CEO last year, the firm boasted 300 employees and had offices in London and Brazil. Profits jumped by 50% in each of the past three years, topping $60 million in 2010. HUGE e-commerce platforms such as Target.com and JetBlue.com help generate some $12 billion in revenue for clients worldwide.

Next up: regional offices in Shanghai and Tokyo.

By Benjamin J. Spencer