Jan. 26, 2016 By Christian Murray
Frank Raffaele, the CEO and founder of the Long Island City-based coffee chain Coffeed, is a familiar face in the neighborhood, often serving drinks or clearing tables at his Hunters Point South Park café location, LIC Landing.
He’s typically wearing a short-sleeve shirt–even in winter– a red apron and dons an old baseball hat that reads “Yale.” He can be seen darting from table to table, conversing with visitors.
Raffaele, 42, despite his modesty and low-key demure, is on the cusp of converting a small Long Island City-based coffee chain into a significant player in the New York City food and beverage arena.
He’s in the process of adding several new cafes —and will soon be opening a large centralized commissary kitchen in Long Island City where the company’s food will be prepared and then distributed to his growing network of cafes and kiosks.
He plans on raising between $6 million and $10 million in capital for expansion and aims to double his revenue from $5 million in 2015 to $10 million this year.
“I’m really excited right now,” said Raffaele, who currently has 12 cafes/kiosks throughout New York. “We are at a big tipping point as we grow. It is going to be interesting and challenging to scale our model.”
The company has just inked a deal that will help it streamline its operations, making it easier to add new locations.
Coffeed will open a 7,000-square-foot space at 47-16 Austell Place, which is located near Sunnyside Yards in Long Island City, in the next few months.
“It is a substantial space for us,” he said.
Coffeed plans to use about 3,000 square feet of the new space to replace its existing commissary kitchen at its flagship 37-18 Northern Boulevard café, which was the first café it opened. The Northern Boulevard kitchen has been able to keep pace preparing and distributing food to its growing network of kiosks and cafes but it has started to become stretched.
The company needs a bigger commercial/commissary kitchen as it adds locations.
“We’re opening a commissary here [at Austell Place] to help us expand,” Raffaele said. “Many sites don’t have that much space for a kitchen, and in Manhattan [the rent] is so expensive you want to maximize the retail area.”
Coffeed plans to use 2,000 square feet of the Austell Place site for offices and open up a 2,000-square-foot café. The café will include a 100-pound coffee roaster that will be visible from the lobby.
On top of the building, which is known as the Zipper Building, will be a 20,000-square-foot farm, which Coffeed will use for its produce.
“The farm will be pretty amazing,” Raffaele said. “There will be a lot of greens, such as tomatoes, peppers, eggplant, cucumbers and kale.”
The farm will supply the commissary kitchen that will serve most of Coffeed’s locations—which are now in Manhattan, Queens, Long Island, and soon to be Staten Island.
“The idea from day one was always to be big,” he said. “Not just to open one café. We want to make a real dent in the market.”
Raffaele anticipates owning more than 20 locations within two years.
The Company’s Origins
The company was founded by Raffaele in September 2012 after he ended his career as a stock trader at a Wall Street firm called Trillium Management. He joined forces with two of his peers on the trading desk—Sam Kim and Abe King– to form the company.
“I liked trading and the adrenaline rush you get when you trade,” Raffaele said. However, “I got to the point where I wanted to do something I’m passionate about and trading wasn’t it long term.”
His late father was in the food and beverage industry in Coney Island and his greater family has owned the Coney Island pizzeria Totonno’s since 1924. Although Raffaele grew up in Howard Beach, he still identifies with his Coney Island roots.
The three Wall Street traders pooled their funds together and opened Coffeed on the ground floor of the Standard Motors Building at 37-18 Northern Blvd., when the area had little activity.
“This was a forgotten part of Queens at the time and we were one of the first movers here.”
Raffaele said they entered into an affiliation with Brooklyn Grange, known for its rooftop farm on top of the Standard Motors Building, from the get-go.
Coffeed started donating five percent of its store revenue to the charitable arm of Brooklyn Grange, City Growers. City Growers provides educational tours of the rooftop farm to thousands of school-aged children every year.
Coffeed also provided Brooklyn Grange with office space.
“We used their produce from day one,” Raffaele said. “It was a no-brainer.”
The company generated a lot of positive publicity for its farm-to-table produce.
Coffeed expanded its Northern Boulevard space from 1,500-square-feet to 3,000-square-feet in February 2014 and installed a 10-pound roaster, which can produce a batch every 12 minutes. The additional space was also used as a commissary kitchen, as new cafes were beginning to come online.
The commissary kitchen at this location will close as it is being moved to Austell Place. The free space left over will be converted into a coffee museum, Raffaele said.
“We will be turning some of that space into a coffee museum—totally dedicated to the history and all things coffee.”
“It will be a full-on museum, with vintage coffee, coffee apparatuses,” he said. “We will do micro-batch roasting so we will get rare beans in here. This will be a destination for all things coffee.”
“It will go with the whole vibe of the farm and the building,” he added.
Raffaele said people have given him old grinders and he will be looking for more items on eBay.
A History of Charitable Giving
Raffaele’s concept from the get-go has been to combine profit with charity.
The company donates between three percent and 10 percent of its revenue to a charity affiliated with each café/kiosk. The company has donated nearly $250,000 to charity since its inception.
The concept of charitable giving has opened many doors for the company.
One such collaboration was sparked after Raffaele received a phone call from the executive director of a non-profit who ran a coffee shop in Port Washington to benefit Community Mainstreaming Associates, which helps the developmentally disabled. The café, which also provided job training for the disabled, was struggling to remain economically viable.
The executive director, who knew more about helping the disabled than running a food business, sought his help.
Coffeed took over the cafe toward the end of 2013 and hired 10 to 12 developmentally disabled staff members, in addition to donating a percentage of revenue to CMA.
The company then put in a bid for its location at Hunters Point South Park with an eye toward community improvement, while the park was undergoing construction.
“We put an aggressive proposal together for LIC Landing,” Raffaele said. “I was also fixated on creating a ‘Friends of [the park]’ group and said I would do that in the proposal.”
“It’s not just a regular park in New York,” he continued. “It’s the jewel of Queens and needs a good steward and we hope we do that.”
Many of Coffeed’s locations are in parks, which is no accident. Raffaele once worked for the City Parks Department, which he found satisfying despite the modest pay. It was here that he earned his nickname “Turtle,” from Parks Commissioner Henry Stern, after the Teenage Mutant Ninja Turtles series of the mid 1990s.
LIC Landing opened in May 2014, leading to the formation of the Hunters Point Parks Conservancy. The Conservancy represented a merger between the members of the Friends of Gantry Plaza State Park and residents who wanted to get involved in the new park.
Coffeed donates three percent of its revenue to the Hunters Point group, which puts on events and maintains the upkeep of all the parks in Hunters Point.
Raffaele then opened a kiosk in Gantry Plaza State Park in August 2014, with a portion of
revenues from that operation also going to the Hunters Point Parks Conservancy.
It was around this time that Raffaele was working on opening his first Manhattan cafe.
The company was invited to bid for a $6,000 per month space in Chelsea by the non-profit group the New York Foundling, which is a large provider of foster care and adoption services. The rent was half the market rate at the time.
While many firms bid for the space, Coffeed won after it said it would donate five percent of its store revenue to the Foundling. Furthermore, it said it would use 25 percent of the space to inform the public about poverty and where possible hire Foundling’s clients.
The company nabbed the space and opened the Chelsea location at 590 Avenue of the Americas in February 2015.
The company continued its push into Manhattan when it took over a restaurant near The Cloisters called New Leaf at the beginning of 2015. The restaurant, which has views over Fort Tryon Park, had been run by the New York Restoration Project, which was founded by singer/actress Bette Midler to take care of park space.
The NYRP closed it since the building needed repairs.
“We took it because it is a beautiful restaurant,” Raffaele said, who has a close affinity with green space.
Coffeed donates a portion of its New Leaf revenue to the New York Restoration Project and the Fort Tryon Park Trust.
The company then opened a kiosk at Bryant Park in June 2015. Coffeed applied for a space via a RFP and had initially missed out before a spot suddenly came up.
“Bryant Park is a treasured park and a magical place,” Raffaele said. “Its offers us great exposure in a place where there is a great vibe.”
The company also took over a café at a state park on Long Island in 2015 after putting in a bid. The company manages the food and beverage at Planting Fields Arboretum State Historic Park, which is well known for wedding receptions and events.
Coffeed has recently opened a café in Times Square (264 West 40th St.), taking the spot that had been occupied by Caffe Bene.
The company does have some Korean affiliation. Coffeed has an ownership stake in a café in Seoul that was started by a friend of one of the founding partners in January 2015. The Korean entity, called Coffeed, is 4,000 square feet consisting of two levels.
The company also opened a kiosk in Manhattan’s Korea town, located at 2 West 32nd St.
Since January, the company has opened a location in the West Village on 7th Avenue (btw. 12 and 13th Streets) and is now the food provider at the John McEnroe Tennis Academy on Randall’s Island.
The next big step for Raffaele is Staten Island. Coffeed will be opening a large café on the ground floor of a new waterfront development in the Stapleton Homeport section of Staten Island in the next two months.
Raffaele is working on plans to open a café in the financial district.
His big test in coming months will be juggling all these balls while keeping a close bond with each community.
“It is going to be challenge given our strong ties to the community,” Raffaele said. “We are just trying to get more efficient in our operations. It’s a work in progress.”
“We don’t want 20 locations with seven different concepts,” Raffaele said. “We will develop our system, get funding and replicate it, replicate it and replicate it.”
At the moment Raffaele is working 16 hours per day, drinking plenty of his product to stay sharp.
“Hey, I’ve got a great supply,” he said.