How Gregorys Coffee is taking the craft coffee business to scale

That’s at least been the unofficial strategy for the cafe chain over the last few years. Gregorys, which initially launched in 2006 in New York but has expanded to more than 50 locations throughout the U.S., sits at the intersection of craft coffee and convenience.

It first launched during the early years of the third-wave coffee boom. Gregory’s early days “sort of dovetailed with the third wave of coffee, as they called it — people focusing more on things like latte art, pour-overs, single origin coffees,” said Gregory Zomfotis, the company’s founder and CEO. “So, as we are seeing all these new and interesting and innovative things happening in the coffee space, I was able to weave them into the operation almost immediately.”

Zamfotis joined this week’s Modern Retail Podcast and discussed the growth of his chain and the direction of the coffee world in the coming year.

A few years after Gregorys launched, more cafes caught on and higher-end coffee began to become a national phenomenon. But things changed with the coronavirus, where even the most premium coffee chains began focusing on speed and convenience. Conversely, Gregorys has always seen itself as a third-place destination where people can buy quality coffee and sit down for a few minutes.

“I don’t really see anybody else really operating in our space after all these years that can focus the way that we do on throughput as well as giving them all those bells and whistles that they’re expecting from the convenience factor,” Zamfotis said.

The focus for Gregorys now is to continue expanding throughout while keeping the quality consistent.

“I think we’re focused this year on: Let’s optimize what we’ve done, let’s make sure we’re creating the best possible experience, learn, adjust as needed and then be ready to move forward in a real big way,” he said.

Here are a few highlights from the conversation, which have been lightly edited for clarity.

Offering both quality and convenience
“There are plenty of places at this point in time where you can find a great cup of coffee. There are also a lot of places that, mostly on the national chain side, offer a significant amount of convenience — great apps, [you] can find them at every corner, [they have] a wide breadth of menus. But [they] often are lacking when it comes to quality or the premium feel. So it seemed to me that most folks were either in one camp or the other. We said, ‘Look, well, why not do both?’ Why not offer the convenience, have a great menu with innovative forward-thinking products and creating LTOs, while also focusing on quality in a real way? It’s really hard to do it in a volume setting. That’s why not that many people have even tried. But I don’t really see anybody else really operating in our space after all these years that can focus the way that we do on throughput as well as giving them all those bells and whistles that they’re expecting from the convenience factor.”

Why 2024 was a big year of expansion
“This year was unique. I mentioned [that we opened] a lot of stores. Today, where I’m at, here in Nashville, this is the 15th store we’ve opened this year. And we have a few more to go before the year comes to a close. But the majority of this growth has come through a strategic partnership we did with Simon Property Group. So, they had a number of opportunities to backfill previous coffee operations in some of the best properties across the country, and we were able to do it in a much quicker fashion than it would normally take us. To penetrate some of these markets would have taken us years, if not longer. [Whereas] many of these were able to get in the door and be ready to start serving coffee within a matter of weeks.”

How the pandemic changed the coffee business
“I think what’s happened is people sort of over corrected earlier during Covid, and certainly, for many reasons, people didn’t want to dwell or spend much time in places because they didn’t feel safe. So a lot of folks thought, ‘Well, hey, there’s a great opportunity.’ We could take smaller spaces. We could focus on just speed and efficiency. We could do drive-through only. We could do all these things that sort of limit the customer interaction and focus just on getting product out to folks. I don’t know what I was thinking, per se, but I just truly believed that was a moment in time and not a permanent change. So we went the other direction during Covid. So when many folks were focused on micro-spaces, limiting interaction — we’ve seen sort of new chains pop up that their whole thesis was we just want small micro-space; we’re just going to focus on getting people product in and out, and we don’t even offer seating or very limited — I was going into suburban locations and trying to find the biggest location I could.”