A Specialty Coffee Roastery in Buenos Aires Navigates the Argentine Business Environment
In Buenos Aires, hot coffee is always nearby. Standard options include espresso with or without milk, accompanied by “medialuna” croissants. Yet emerging from this coffee-rich environment are a small number of start-ups that take coffee much more seriously, collectively creating a specialty coffee movement in Buenos Aires. I had the opportunity to visit LAB Café, a specialty coffee shop, roastery, and training center located in the trendy Palermo neighborhood. I asked about LAB Café’s business model, about their customer base, and about the challenges of managing a specialty coffee operation in the volatile Argentine business environment.
Meeting with owner Paula Zyssholtz and manager Maria Jose (“MaJo”), I ask about their business operation and how they keep their customers coming back. Paula explains “We work hard to maintain a consistent customer experience, that’s the most difficult part of any business.” MaJo Adds “Customers come for the product, the experience, and the consistency.”
LAB Café works to ensure every step of the coffee operation is done to specification, starting with the raw imported coffee beans from a local distributor, through the closely monitored roasting profiles, and finally through preparation and presentation to end customers. MaJo tells me “We work from the raw bean to the cup of coffee, even working to show customers how to better enjoy their coffee…That moment, pausing with the customer, is one of the things that is most [rewarding]. And it’s also something that allows us to gather more information.”
LAB Café’s Palermo location is one of their two roasteries in Buenos Aires. The ambience feels like home for North American coffee drinkers. It’s spacious and welcoming, and the menu, with generous use of English, offers coffee variations that are common in Seattle but which can be hard to find in South America. On the second floor, a large glass window is labeled “Training Center Cupping Room.” LAB Café’s own employees all receive extensive training, and they also teach commercial clients’ baristas how best to brew coffee using LAB Café’s roasted beans. This training allows for more consistency and quality. MaJo mentions that LAB Cafe even offers an amateur class once a month for consumers who simply want to be more knowledgeable.
Paula and MaJo are so focused on the details of their own operation, they almost seem unconcerned with what other coffee shops may be doing. “We work from the door inward” Paula says, “What others are doing, honestly, no idea. We work focused on what we offer.” Their formula has been working well, so it’s hard to argue with the approach. As I sat at the coffee bar, a steady flow of regular customers entered and ordered their coffee. Customers receive their coffee made to order, served atop a saucer labeled with the customer’s name in dry-erase marker. Some customers ordered food from the extensive menu created by LAB Café’s chef from New York. They offer a variety of farm-to-table options including breakfast sandwiches with egg, bacon, and fresh vegetables. Other fresh options include carrot cake, brownies, and cinnamon rolls.
While LAB Café tries to focus on its own products and customers, they operate in a challenging and unpredictable business environment. Last year Argentina had inflation of 47.5%, affecting LAB Café’s supply costs as well as its customers. “You can’t fight the market” Paula states plainly. She tells me that LAB Café’s raw coffee beans are imported from abroad (Argentina is not a coffee-producing country), meaning that relative currency prices can quickly raise the cost of doing business. Beyond commodity prices, inflation affects other aspects of the business, including business decisions from commercial clients, as well as increased cost-of-living affecting customers and employees. “Timeframes in Argentina are very short. This happens from one day to another, literally. And this means you need to have sufficient commercial bandwidth to overcome it.” Listing some of the moving targets including costs of inputs, taxes, and a commercial environment of delayed investment decisions awaiting this year’s upcoming election results, Paula summarizes “It’s a complex country.”
Adding to this complexity is the variety of products that LAB Café offers. LAB Café’s consumer customers primarily come for coffee, but they also come to eat breakfast or lunch, which requires its own kitchen infrastructure. Other customers simply purchase roasted beans off the shelf to brew coffee at home. For commercial customers, LAB Cafe creates a customized coffee roast profile, which requires managing a variety of roasts which need to be delivered consistently to specification. LAB Café has even branched into producing chocolate for its commercial customers, a product for which they are well-equipped using their existing coffee infrastructure.
All things considered, LAB Café is doing well as a pioneer in Buenos Aires’ specialty coffee movement. Paula and MaJo tell me that their reputation brings people in from all over the world. Tourists are often referred by friends, and LAB Café is included in several online list of the best coffee shops in Buenos Aires. Beyond its domestic and international customer base, noteworthy clients include politicians and rock bands. Paula even mentions a band manager who came in asking for ten liters of chilled cold-brew coffee.
It’s an impressive operation, a high-quality coffee roastery that prides itself on consistency, despite operating in an environment that is anything but consistent. As we discuss future challenges that tomorrow may bring, Paula explains her management outlook based on her experience, “We can count ourselves lucky for having seen it all before in this country.” It’s clear that this LAB Café will not be easily set off course. Any future hurdles will be assessed and navigated like the others before them. And one thing is for sure, whatever happens, the coffee will be consistently excellent.
