Subscribe + save
Would you join a waitlist to save cash on coffee? At Blank Street, 4,000 people are in line for a monthly subscription program. Let's discuss what comes next.
Well, would you?
I’m asking because these types of commitments, where customers essentially pledge money and loyalty up front, are getting more popular. They provide businesses with recurring revenue, a success metric that’s more popular in tech circles than in restaurants, tied to the type of growth that investors love to see.
Blank Street Coffee, based in New York City, runs a 4,000-person waitlist for its monthly subscription program, dubbed “Regulars.” Right now, 5,000 customers pay up to $18 per week for access to 14 drinks, including cold brew, espresso drinks, and tea. A pared-down $9 weekly option buys customers up to 14 basic beverages; teas, hot brewed coffee, Americanos.
Participation in the program is capped for now, hence the waitlist. The company’s chief product officer told CNBC that’s so baristas don’t get overwhelmed by order volume. But the company was built to scale from its 2020 launch. In under four years, Blank Street has expanded to 74 locations in New York, Boston, Washington, DC, and London. That scale is important to Blank Street’s subscription business; you can’t invite people to come to physical stores multiple times per day without making it extremely convenient.
But by the company’s own admission, it needs to beef up its physical presence before it can let more subscribers in — even though the New York Times declared Blank Street “suddenly inescapable” a year-and-a-half ago.
Blank Street may have been built to scale with tech in mind, but it’s not the only business with a coffee subscription. Panera Bread offers a drinks subscription for just $12 per month. Pret A Manger launched its own coffee subscription years ago; on a recent visit with a London-based friend, we arranged our day around Pret locations so she could grab oat lattes at regular intervals.
Of course, we can’t forget that coffee is a chemically addictive product, an obviously attractive target for building a spending habit. But the subscription model, often one that adds incremental recurring revenue, is catching on for independent restaurants, too.
The National Restaurant Association says that 63 percent of adults — including 78 percent of millennials — say they’d participate in a meal subscription program from a restaurant. According to a 2022 consumer survey conducted by market research firm C+R Research, the average American spends over $200 per month on subscription services. It’s such an ingrained habit, we probably underestimate what we’re spending. When asked to guess how much they spend monthly, respondents’ guesses averaged $86.
I’m being vague on purpose, because it’s tough to answer without a clear understanding of what you’re getting in return.
During an interview with restaurateur Caroline Styne a few weeks ago, she explained a new wine subscription program from A.O.C., a longstanding wine bar with two locations in Los Angeles. For $90 per month, members get three bottles of wine chosen by Styne. She includes notes about why she chose each particular bottle, and they’re important:
“Anybody can pull descriptions and technical information off of Google, but getting that connection to why I chose to include a wine, or how it was brought to me, or more about the people behind it becomes personal,” she told me.
A.O.C.’s wine club is hosted on Table22, a service that handles restaurant subscription logistics for a cut of the sales. Its website lists over 100 programs; many offer wine clubs, special ingredients, or prepared meals.
Coffee, wine, butcher boxes, dinner to go — common subscription offerings are known quantities. Is it possible to slap a subscription price on hospitality and access?
In a recent LinkedIn post, Blackbird’s Ben Leventhal asked (in the way founder-CEOs love to ask when they know the answer and have a proposed solution): Is the traditional financing model for restaurants broken?
Restaurant investors aren’t just looking for ROI, they are, as Leventhal writes, buying special access and VIP treatment, too. New and more promising approaches to restaurant funding can replace investor returns with access and benefits. (Worth noting that he offered Blackbird for free to restaurants who want to give it a shot.)
A package full of delight of special access and periodic free stuff might be enough to inject cash into a certain type of restaurant, whether at regular intervals or all at once.
“Don't underestimate the amount of money people are willing to spend on their egos,” is a thing that a restaurant tech exec told me recently. I laughed, because they’re right.
This story about Chipotle founder Steve Ells’ latest venture has it all. Quirky glasses frames, robots, food halls, commentary on the future of lunch. And journalist Elizabeth G. Dunn tells us all about it in a way that doesn’t vilify robots or quick-service restaurants; instead: “The slow march of automation, the shrinking of restaurants, the disappearance of seating: Regardless of what we might say to one another, our habits as consumers consistently demonstrate that we want these things — or at least are willing to trade them for a cheaper bite.” — GrubStreet
What happens when the tech restaurants rely on fails? I’ve taken a stab at answering this question, but it’s getting a fresh look in my hometown paper this week. The San Francisco Chronicle talks to local business owners about how tech fails translate to trouble at small businesses. — SF Chronicle
Instacart is adding ads to shopping carts that it built. At the time of its IPO, Instacart’s future seemed dependent on its ability to grow its ads business. Order volume seemed unchanged over time, but the advertising business was growing, accounting for nearly all of the company’s increasing revenue. So, Instacart bought a company that manufactures “smart carts” that know what’s being added — and now the carts will recommend sponsored products to in-store shoppers.The tech will show up at a few stores in Southern California to start. — Fast Company