Brewing Success: Coffee Shops Seen as Spur to Local Development

Neverwhere Coffee, Comics & Oddities (Emma Mayes)

Local coffee shops are brewing more than artisan coffee across Arkansas, serving as economic anchors for new developments and fostering community connections in the face of competition from national chains.

The state has seen a lot of growth of local shops in recent years, as consumers drift back toward in-person services. But even as new shops open and existing shops expand into other locations, there’s still room for more, according to Jon Allen, co-owner of Onyx Coffee Lab of Rogers.

“People think the area’s really dense now with specialty coffee or different coffee shops, and I would largely push back on that based on the rest of the country,” Allen said. “There are still numerous communities and neighborhoods that don’t have their local cafe.”

Allen and his wife, Andrea, founded Onyx in 2012, and have since opened four locations, plus a specialty restaurant in northwest Arkansas. Onyx also offers business consulting for hopefuls looking to open a coffee shop of their own, designing 10 to 15 shops a year.

Though more cafes are opening, the industry is still tough. Just in Little Rock, shops like Blue Sail, Andina Cafe, Zeteo Coffee and Meteor Cafe have closed in recent years.

But Allen and Micah Boswell, owner of Neverwhere Coffee, Comics & Oddities of Little Rock, believe the industry is in an upswing.

Economic Anchors

These locally owned coffee shops are becoming integral to Arkansas’ economic landscape.

They play a significant role in the local economy by creating jobs, supporting other local businesses and circulating money in the community, said Esperanza Massana-Crane, director of small business and entrepreneurship development at the Arkansas Economic Development Commission.

But as new cafes sprout up across the state, they are also stimulating the local economy in less visible ways, emerging as hubs for business meetings, networking and community gatherings.

Local shops often have more seating, a quieter atmosphere and unique branding that make them a better fit for remote workers and freelancers to “exist in,” Boswell said. Neverwhere opened its doors in the rejuvenated Breckenridge Village in 2023, and expanded to a second location in Hillcrest within a year.

The idea of an auxiliary workplace has “really taken off,” Allen said. Coffee shops have become a service to the community by providing a low-cost — the cost of a cup of coffee — meeting spot or hub for entrepreneurs to work.

“There’s a real correlation between where the cafe is located and the creative and the business and economic activity that surrounds it,” Allen said. “The cafe needs the community to survive, but the community needs the cafe as a meeting place that is on neutral territory. It’s just a natural space for people to come to work, meet and conversate.”

Both Allen and Boswell agree that local shops can also be more nimble than larger chains when it comes to the fast-changing food and beverage trends in the industry. Rather than taking weeks to approve a new drink and distribute it to all its locations, small shops can make a new drink in a week or even days.

Another aspect of local shops? Foot traffic. It’s “typical” now for developers to look for a coffee shop to anchor their project, Allen said.

That’s been a “dramatic change” from when Onyx was founded, Allen said.

“There wasn’t really that respect,” Allen said. “And now, it’s not uncommon to receive one email a day of someone wanting you to build a shop somewhere.”

This change is largely due to the traffic pattern that coffee shops can establish in new communities or planned commercial developments. Shops can bring 300 to 500 people a day to a neighborhood, Allen said.

“Economically, it’s going to drive building, it’s going to drive commercial rates, and theoretically help anchor tenants in all the other places that are nearby,” Allen said. “It just has this natural marketing aspect to it. It usually helps reputationally in most neighborhoods.”

Shops do bring in outside customers and money, though the main aspect of success is still retaining regular customers and community involvement.

Community Collaboration

“The local community is everything” to a shop, Boswell said. And this emphasis on community extends beyond just serving coffee. Local shops are hubs for social events and collaboration between businesses.

Neverwhere hosts trivia nights and pop-up events. Other coffee shops in the state host local artists, book clubs and community meetings.

Boswell said he has customers “from all walks of life” come into Neverwhere. And though the prices may be higher than those of a chain, people are willing to pay a premium for the customer service, human connection and better coffee they gain at a local shop.

Consumers are drifting toward “more authenticity” and originality, Massana-Crane said.

“We are valuing anything that is local,” she said. Shops may purchase their pastries or products from local bakeries and farms. “I think that makes it special. And that is a point of differentiation, knowing that it’s homegrown.”

Allen also believes that connections are not just made between shops and customers, but also between local businesses.

Onyx has partnered with local businesses to host events and cater parties. Neverwhere hosts other small businesses inside its cafes.

Even between local shops, Allen believes there’s room for collaboration.

“Growing up in it, it was more of a divisive industry. I think there was a lot of competition and it was a very secretive industry,” Allen said. “There’s more collaboration within the industry now. And it’s pretty important that people have the right idea — that it’s not local shop versus local shop. It’s more about can we make the coffee or the beverage or the food scene in Arkansas something so special that we will start to get coffee tourism here and food tourism.”

Massana-Crane also believes the “diversity of coffee shops” is great for a city and that there is room for more shops to open up in the state.

“Coffee has not reached its peak in Arkansas even by a low margin,” Allen said. “There is a lot of room for more business owners to come into this industry from a roasting standpoint, and from a cafe standpoint.”