Café Ceres to Close
DDP Restaurant Group, led by renowned chef Daniel Del Prado, told employees and customers Thursday that its four Café Ceres coffee shops, all in Minneapolis, would close April 13, citing poor economics.
The small chain grew out of what was the original Penny’s Coffee in Linden Hills, the brainchild of former congressman Dean Phillips and marketing guru Ben Hertz. (Del Prado is partners in Ceres with baker Shawn McKenzie.)
In an interview, Del Prado declined to say if he is planning to convert any sites to restaurants. (All are substantially smaller than his restaurants, though the Linden Hills location features a sizable kitchen.) He said the closure decision was made in part to focus on his core competency of restaurants, which have superior economics.
Del Prado was originally attracted to coffee because the businesses are easier to scale than restaurants due to economies of scale and modest upfront expense, a tenth of restaurants. At one time he and McKenzie foresaw opening a dozen Ceres coffee shops.
But Del Prado says his investors lost enthusiasm due to the spiraling cost of doing business in Minneapolis, which has the highest wages, rents, and taxes in the region. He says with just four locations, Ceres could not realize economies of scale by roasting its own beans and baking its own pastries: “So they became money pits.”
Last year Unite Here Local 17 organized the Ceres shops but had yet to agree to a contract with DDP. The local similarly organized Ann Kim’s Uptown restaurant Kim’s, which subsequently closed as well.
To those who puzzle over the consistently packed state of the Linden Hills Ceres and the closure, Del Prado noted that his coffee shop customers stay as long or longer than his restaurant diners and spend a fraction as much. He says Ceres consistently lost money.
TCB’s upcoming April/May issue features a comprehensive report on the Twin Cities coffee business, including Ceres, Caribou, and other players.
