Lessons Learned: Rustica Owner Greg Hoyt Returns to the Mall
Just a few miles, but a whole suburban vibe, from Rustica at Calhoun Commons, the popular Minneapolis bakery and coffee house is set to open a second location in early 2020 at Southdale Center in Edina. It may seem like a no-brainer to set up shop next door to the posh new Life Time health club and co-working space, but this isn’t Rustica’s first mall experiment. Owner Greg Hoyt, who also co-owns Dogwood Coffee, opened an offshoot called Rustica Cookies & Creamery at Mall of America in December 2016, and it lasted just eight months. As it became apparent the MOA location wasn’t working, Hoyt announced plans to open Rustica in Wayzata but eventually pulled out before starting construction. So what makes Hoyt think the Edina venture will be different? He says the lessons learned from the MOA misstep put Rustica in a better position today and prompted the formation of Hoyt’s new management company, Gather Venture Group.
Don’t overestimate the cookies
Cookies are Rustica’s top-selling bakery item, but that’s not what draws the crowd. “We had no seating,” Hoyt says of Rustica Cookies & Creamery at MOA. “The staff knew nothing about this brand. The experience people had there was different than what this brand represents.”
“We opened [at MOA] in December, and I knew by the end of January that it wasn’t working,” Hoyt says. “Better to admit that than keep pouring money into it.” Rustica Cookies & Creamery closed in July 2017.
Stay true to your brand
When Southdale’s owner, Simon Property Group, reached out to Hoyt about bringing Rustica to the mall, he told them, “I did something at a mall; not sure I want to do that again.” But Simon wasn’t looking for a Rustica variation. “We want this,” they told Hoyt, sitting in his flagship bakery with its community tables, the scent of coffee in the air, and a stay-all-day attitude. Beyond the scones and cookies, Hoyt says one of the things he knows is essential to Rustica’s success in Minneapolis is convenient parking out front. So, too, in Edina, Rustica will be accessible from the Southdale parking lot, not the mall. “I love the idea of being part of Simon at Southdale, without this being a true mall play.”
Hoyt sought help to rethink Rustica’s next chapter and realized other restaurants and food startups need the same advice. He formed Gather Venture Group, a management company that aims to support emerging food and beverage businesses as they scale. “I didn’t have this when I opened at Mall of America. What I’m aiming to do with Gather is exactly what we have at Rustica now: templates to better manage the business as it grows.” Hoyt brought on operating partner Michael Stern, who has a background in consumer packaged goods and consulting. “He’s the quant to my vision,” says Hoyt, who knows that strategic thinking can make or break a small business. “Food service and consumer packaged goods are capital-intensive businesses. And there’s a very clear barrier in access to capital—both money and intellectual capital.”
“I believe Minnesota is primed to be a 21st-century food mecca, largely because of our legacy in agriculture and manufacturing. We have some very entrepreneurial people who have come out of big companies in the last few years and are really adding to the food ecosystem.”