Harrisburg's Little Amps brewing future growth, talking regional retail
It started four years ago with a small commercial roaster, some beans and an e-commerce dream.
But with the backing of a community-minded developer and strong support from the Olde Uptown neighborhood and coffee lovers who have flocked to Green Street, Little Amps Coffee Roasters has become a retail name in Harrisburg since fall 2011.
Earlier this month, the city-based roaster opened a second coffeehouse at Second and State streets, with talk already starting on a possible third location.
"This was an opportunity for a cool space," Aaron Carlson, the founder and majority partner, said of the new downtown location, which boasts an exposed brick and distressed wood style, nearly identical to the vinyl-spinning atmosphere at the neighborhood shop.
Little Amps developed such a following on Green Street — despite its nontraditional residential setting and lack of designated parking — that a downtown location seemed like a natural progression, the owners said.
An upgrade to a roaster with 25-pound capacity sealed the deal, said David Butcher, president of WCI Partners LP, the minority partner in the coffee business. The new off-site roaster provides four times the capacity, he said.
Before opening the new retail location, Carlson was roasting about 160 pounds of coffee per week. Little Amps has now doubled that output and could look to further ramp up its coffee sales with additional locations and increased marketing of online and wholesale operations.
"We currently have a small but steady revenue stream coming from online sales, as well as a couple very small wholesale accounts," he said. "We've chased no business in either, so we'll be able to flex both when the dust settles from the opening of the new shop."
"I think retail can be bolstered by wholesale in the right venue," Carlson said. "We've gotten many happy Fraiche diners who have heard about us that way and then come to check us out."
Stephanie Perry, who operates Yellow Bird Cafe on nearby North Third Street, said the quality of the coffee was one reason she decided to buy from Little Amps. Collaboration within the Midtown community was another.
"We want to be able to collaborate and work together in bringing people to our community," said Perry, who opened the cafe in February with her husband, Ammon.
Complementary establishments help build a great community, said Butcher, who puts WCI and Little Amps in the category of conscious capitalists.
"We share an affinity toward not just doing something to make money, but we believe in it. This is one of the ways to create space," he said. "We saw an opportunity to expand craft coffee in the area. I think there is a market for it."
In general, there is strong demand in Central Pennsylvania for authentic, locally owned, high-quality offerings, Butcher said. WCI is exploring other concepts in hopes of bringing other amenities to the downtown. "There is momentum," he said.
Its financial partner on the expansion, Camp Hill-based Integrity Bank, agrees.
"There is certainly ample room for locally owned and operated coffee shops and coffeehouses," said Jordan Space, vice president of commercial lending, citing growth in the model in New York City and locally in Lancaster County. "There is no reason it can't continue to work in Harrisburg."
Integrity has worked with WCI over the past three years on real estate financings. That financial backing and operational experience, combined with the business model and cash flow, gave the bank confidence that Little Amps could have long-term success.
"If they do (add locations), we look forward to supporting them," Space said.
While there is no firm business plan in place yet to expand, WCI believes the Little Amps model of professional coffee in a relaxed atmosphere would work on a more regional level. The developer is focusing on the real estate opportunities, while Carlson is comfortable in his role of "vibe administrator" and ensuring that he is buying the best beans he can source from around the globe.
As retail opportunities present themselves, Little Amps will consider expanding, Carlson said.
"I was trying not to expect," he said of his expansion to this point. "I've been pleased with the response."
Little Amps plans to unveil a new website this summer. Marketing of its online and wholesale offerings also should increase, the owners said.
"Online sales can help make up for underperformance of a shop, but we're trying to have this not be the case," Carlson said.
E-commerce is icing on the cake to a brewing retail business, he said.
Did you know?
Little Amps partnered with Pizza Boy Brewing Co., an in-house label at Al's of Hampden, for the creation of an Imperial stout brewed with coffee beans called Sunny Side Up.
History of Little Amps
The first Little Amps Coffee Roasters held its grand opening in the Olde Uptown neighborhood of Midtown Harrisburg in October 2011. The coffeehouse is at 1836 Green St.
Owner Aaron Carlson opened the neighborhood shop to serve as a hangout for coffee enthusiasts and as a showroom for his handcrafted brews.
Two years earlier, he started with a small commercial roaster and several hundred pounds of beans. He began roasting in a local warehouse and selling his beans online with the idea of one day opening a coffee shop. The shop is open 6:45 a.m. to 2 p.m. Monday through Friday and 8 a.m. to 2 p.m. on weekends.
Together with WCI Partners LP, the Harrisburg-based real estate developer that has led the revitalization charge in Olde Uptown, Little Amps opened a second location June 3 at Second and State streets. The downtown location has extended hours: 6:45 a.m. to 5:30 p.m. Monday through Friday.
In January, WCI became a minority partner in Little Amps, having started as the real estate partner and landlord. The owners already are discussing a third location.
Little Amps gets its name from the small amplifiers Carlson's bands used during his days as a touring musician.
The coffee and snack shops industry is projected to see $29 billion in 2013 revenue, according to research firm IBISWorld.
Coffee shops make up 42 percent of that industry, which is projected to grow revenue by 3.9 percent annually through 2018 as consumer spending grows.
Starbucks Corp. and Dunkin' Brands Inc. make up more than 60 percent of industry market share.