So, it's kinda official - Starbucks is going to open a new store in Fishtown, at 1405-21 Frankford Ave (the site is currently under construction). As noted in the article, it's about a block north of the La Colombe flagship store, and a few blocks away from Reanimators Coffee (my personal go-to in the area). What's most amusing though, is the reaction that this announcement has brought out among the local residents - or at least those that are on social media.
There's two camps, though one is certainly much larger than the other - on social media comment pages at least. Camp A is vehemently anti-Starbucks, and they oppose the company on various grounds (no pun intended) including arguments of gentrification, amplifying current racial tensions between the company and general public, and a general disgust for chain restaurants/perceived homogenization of the urban environment. Camp B is less pro-Starbucks than they are nonchalant about them locating in the area. These people are more nonplussed, pointing out that there are already chain restaurants in Fishtown (Dunkin' Donuts, McDonalds, and an existing Starbucks inside the Acme at 2nd & Girard), as well as noting that as a capitalist society businesses are free to locate where they believe they can make the most profit.
In my opinion, both sides have reasonable points - but there's a deeper question under all this: is this location actually a good spot for a Starbucks? Ignoring the current firestorm of racial tension that the company is going through in Philadelphia (which is admittedly hard to ignore), I couldn't resist sitting down and putting the green mermaid from Seattle through SSC's own process for site selection.
In order to determine if Starbucks (or any company really) should actually locate in Fishtown, SSC runs the following analyses:
1. Competition Analysis - what's there that would compete and how well are they doing?
2. Demand Analysis - are there customers that want what's being offered, and how many of them are there?
3. Customer Profiling - what're the type of people that live nearby that would be customers?
4. Market Potential - do those potential customers have the money to spend or is the market saturated?
5. Forecasting - if the customer isn't there now, will they be in the future?
So, is Fishtown a good location for the coffee giant? Let's start with Competition Analysis.
1. Competition Analysis
In terms of direct competition - there's quite a lot in the area - though none of which really compete in Starbucks' frozen/cold/specialty drink sector. Certainly, La Colombe is the biggest and closest, but even they don't offer the variety and scope of Pumpkin Spiced Lattes that S'Bux does. Other competition nearby includes Reanimators as mentioned, Steap and Grind, Milkcrate, and One Shot Coffee - all in all around 10 stores in a 1/2 mile that would sell coffee first and foremost, as opposed to restaurants that serve it as a compliment. Ironically, the closest competition in terms of offer, Dunkin Donuts, is on the periphery of the neighborhood, and the other competition (McDonalds) doesn't offer the same type of in-store atmosphere. It was surprising when doing the research - but the biggest competition for a Starbucks is really itself at the Acme - and few people would venture into a grocery store just for a Frappucino. Those Starbucks Acme customers are making an impulse buy while doing other shopping.
While Starbucks does sell food and other retail merchandise - it's still drinks that make up the bulk of their income - and the Frappucino by itself makes up around 20% of their total revenue. Honestly, if I was engaged by Starbucks to do this research - I'd already be encouraged by these findings.
2. Demand Analysis
So, with the competition strong in the general coffee sector but weaker in the specialty drinks arena, SSC then needs to proceed to the demand analysis - that is, is there no competition because there's not really a demand for the product?
The answer? There's absolutely demand for the product, and in the immediate area as well! ESRI's Business Analyst actually has information on how many people visit/buy Starbucks products and then crafts models on predictive behavior. I looked at the two variables - people who buy/use the pre-packaged Starbucks coffee and also those who have visited a Starbucks in the last 6 months, at rates higher than the national average. Amazingly, that area of Fishtown and Olde Kensington actually had very high rates of people who purchase Starbucks products (the areas in blue). Furthermore, there are over 11,000 people that live an estimated 10 minutes walk-time (about 1/2 mi) from the proposed location, with a median household income at ~$50,000, which is about $5,000 higher than the City as a whole.
In short - the areas in blue above show concentrations of people who have both the inclination and the income to buy Starbucks. So, there's demand for the product, but, do those customers actually want Starbucks, or do they buy it because due to their sheer number of stores, it's convenient? For that answer, a customer profiling of the neighborhood is required.
3. Customer Profiling
ESRI has what's called "Tapestry Segments", which essentially outline the mindsets and other behaviors of consumers, based on spending patterns, demographics, and other variables. In the 10 min walk area mentioned, there's four different segments: "Trendsetters" (23.7%), Emerald City (19.9%), Front Porches (18.2%), and Old/Newcomers (13.0%). Together, these groups account for over 75% of the local population. But, what does any of this mean?
Well, Trendsetters would be a challenging demographic for Starbucks, as "image is important to these consumers," and they are "socially and environmentally conscious...are willing to pay more for products that support their causes." These are likely the people responsible for the most vocal backlash against a new location - but they are less than 25% of the total customer market. Emerald City people are similar to Trendsetters, but they're older, and have a bit less disposable income. They're conscious of nutrition and environmentally friendly products, but are less ideologically motivated for their purchases. Front Porches are blue collar individuals and families for whom "price is more important than brand names or style," and "are not adventurous shoppers," - which may make them both less and more likely to visit a Starbucks depending on whether they would consider a Unicorn Frappucino an adventure. Lastly, Old and Newcomers are an older subset, mostly single households, and 32% of these households are on Social Security. They're "price aware...but open to impulse buys," which makes that coffee jolt a bit harder for these individuals to turn down.
In summary - of the roughly 11,000 people who live within a short walk to the store, less than 25% would really be unlikely to be a Starbucks customer by ideology. The rest of the neighborhood would have a mix of people that are either fans of the brand or indifferent - which confirms what we already suspected with the demand analysis. With a revised likely customer base of around 8,000 people, not including visitors to the area on a daily basis - it still makes sense for a Starbucks to be located in Fishtown. In theory...
4. Market Potential
So, the competition is relatively weak, demand is pretty good, and there's not enough people who hate the brand to be enough of a deterrent to open. All great stuff - but more research is needed before making a confident recommendation. For that, financial projections are necessary - what's the market doing and is there actual room for a new operator?
Leakage is a term that's used to describe when consumer dollars are leaving a community to be spent on products outside it. It's a good metric for whether there's scope for a new business to come in and operate. Looking at the Supply/Demand metrics for the area, there's an estimated $676,000 surplus (red numbers) for Special Food Services and over $7m surplus for Restaurants/Other Eating Places. It's hard to determine where Starbucks would fall between those two definitions, but it's a safe assumption that the area is pretty well served in the cafe/restaurant category. While this doesn't mean SSC would recommend against a Starbucks locating here, it means that there's not a ton of room for error, as their customers in part are likely going to be pulled from other nearby competition who prefer the convenience of this new location, or had preferred Starbucks' offer from the beginning. Now, there's just one last piece of research crucial to a thorough recommendation - forecasting.
So, the market may be saturated, it may not be - but what's expected for the future? Real estate is a long game - is there enough growth coming that could offset these numbers in the next 3-5 years?
Well, population growth to 2022 is projected to be about another 1,000 residents - which is good growth but not astronomical. Household income though, is projected to go WAY up - from $50,000 to almost $60,000 per year, and vacancy is projected to go down by 2% falling from 8% to 6%. This means that the area is going to become more densely populated with rising wealth - people who can buy that $5 latte.
While no one knows FOR SURE what the future will bring - it's at least a reasonable assumption that if things keep going the way they are in the neighborhood, Fishtown/Olde Kensington is going to be a more densely populated, increasingly affluent community.
So, after all that, what's the outcome? If SSC was advising a client (in this case, Starbucks), the report would say that opening a store would come with moderate risk. Competition is generally strong, but specifically weak in the variety of offer Starbucks provides. Demand for the product is solid, and customers opposed to the brand are limited in number. The market appears saturated today for another coffee shop, however future population and income growth could mitigate that risk in the future. From an operations standpoint - the store would do well to more heavily market its cold, frozen, and specialty drinks, as well as its line of healthy, organic convenience foods to take advantage of the consumer preferences and gaps in the market. Strong community outreach and engagement would also be advised to help mitigate any current ill will that exists in the neighborhood.
So what do you think? Do you think the Green Mermaid will thrive in Fishtown, or will she be filleted by the locals? Leave your thoughts in the comments!
Holy cow it's been a long time since I've put out a post - and with nary a warning, I'm sure my faithful readers were wondering if I would ever post again. Well I must admit things have gotten very busy for me these past few weeks, so I've had less and less time to devote to a good blog post - but at long last I have an interview to share with you all! This week's (month's?) interview subject is Jesse Blitzstein of The Enterprise Center. Jesse and I had the pleasure of working together a few years ago, and I thought his work and organization would be of interest to read. So without further ado, please enjoy 10 questions with Jesse!
Hi Jesse! Thanks so much for taking the time to be my interview subject. So, for those who don't know much about you, can you please describe your organization, your position, and basic responsibilities?
You're welcome Dan! I work at The Enterprise Center (TEC), where I’m our Director of Community Development. The Enterprise Center is a community and economic development nonprofit that has three interrelated areas of focus – we help people grow their small businesses, with a focus on minority and women entrepreneurs; we do small business lending, with a focus on entrepreneurs who may face challenges accessing capital through the traditional financing world; and we do on-the-ground community development work, with a focus on parts of West Philadelphia. My job is tied to this latter part. I help oversee our community engagement and neighborhood revitalization work, including the ongoing revitalization of a neighborhood commercial corridor and the implementation of a neighborhood plan.
Sounds like fulfilling work! So, what made you interested in planning?
I first got interested in city planning and community development during my senior year of college. I took a great class on urban politics, and at the same time I served in a position with the university’s student government where I was a student liaison to the local city council. Both really opened my eyes to the world of planning, policy, and politics at the local level and on an urban scale.
Clearly you went against the stereotype of student government being just a resume builder. And what led you specifically to join TEC?
I moved to Philadelphia for graduate school, and when I was finishing I was looking for an opportunity to stay in Philly and work in community development, which is what I focused on within my city planning studies. An opportunity came up with TEC that was not exactly what I wanted, but was a foot in the door with a dynamic organization. I took it and several years later my role has evolved and I’m in a somewhat more ideal position now.
Goes to show you what patience and perseverance can get you if you're in the right place for you. In that vein, what’s something that you learned along your career path that you wish you knew 5 years ago?
Relationships matter. That’s not necessarily something I didn’t know five years ago, it’s just an ongoing lesson throughout my professional career. In this line of work, being smart and knowledgeable from a technical standpoint will only get you so far. You have to develop strong relationships with partners, funders, community stakeholders, and coworkers to really accomplish anything of value. And that’s something that’s hard to teach in planning school, although I would argue that more time could be devoted to cultivating those types of professional soft skills with planning students, on top of the traditional skill, theory, and history training.
Very good points all around. So, if you weren’t in planning, what other career path do you think you’d have gone into? Why?
That’s a good question! I mean I’ve always wanted to be a professional athlete but . . . I’d just be doing that already if I could, so clearly it’s not that! I would probably still be working with youth in some fashion, which is what I was doing for a couple of years before I went back to school to get a planning degree.
It's not too late Jesse, I'm sure you can get a spot on the professional Curling circuit if you're really keen! Though given that it seems you're unlikely to be leaving the planning world any time soon, what do you find to be the most interesting part of your job?
The most interesting part might be the strategy development component of what we do, and within that the fact that there are so many gray areas to this type of work. There isn’t necessarily one right way to revitalize a neighborhood, to run a community meeting, or to redevelop a property, for example. There are strategies, best practices, guidelines, and so on. But there is a lot of variability to what we do. Building consensus among community stakeholders, leveraging finite resources, and developing strategies to achieve positive outcomes – it’s all interesting and challenging.
And the least interesting?
The least interesting part is probably the administrative side of the work. Paperwork, reporting out to funders, sitting through meetings – the nonprofit system is an imperfect beast.
I'm sensing a trend about paperwork...
But lets go back to interesting topics - what was something that you were really proud of that you worked on?
I’m going to flashback to graduate school for this. I was and still am proud of the work that my group and I did for our final studio project, where we looked at all the school closings at the time in Philadelphia (this was in 2013). We explored possible reuses for the school buildings, and beyond that we tried to think through how the city and school district could bring different policies and strategies to bear to reactivate these sites and mitigate some of the ill effects of closing these schools, so that the buildings didn’t just languish as vacant and become eyesores in their communities, many of which were already quite upset about the school closings in the first place. The work was interesting and collaborative. While city agencies and politicians ultimately ignored most of our recommendations, it’s been very interesting to see what has (and hasn’t) happened with the shuttered school buildings in the five years since then.
When you say interesting - what do you mean? Anything in line with what you recommended or wildly off base?
At the time, we recommended that other city departments and agencies be more involved in coordinating the disposition process, which to some extent happened (PIDC helped manage the process for the school district); but in particular we also recommended that the city make a concerted effort to to use tools like pre-existing development incentives and already-completed neighborhood plans to stimulate and guide the reuse of sites, particularly in the weaker neighborhood real estate markets. I'd say that never totally came to fruition.
More specifically, I think several of the buildings are in the midst of conversions to housing in one form or another, or will be soon, which is kind of what we expected. Three different sites (two in West Philly and one by Temple) were acquired by universities and demolished for new development associated with those universities, which we also anticipated. At least one, Bok in South Philly (which is a beast of a building) is being reused in some creative ways, although not without some controversy regarding gentrification. Lastly, the sites that my partner and I had looked at for our case study, Vaux and Reynolds and the area around them in North Philly, are actually being repurposed in a somewhat similar manner to what we had recommended! They are part of the Philadelphia Housing Authority's Sharswood Blumberg Choice Neighborhoods initiative (which is a controversial initiative unto itself, but that's a whole 'nother story!).
Schools in Philly are always a delicate subject, and certainly the urban planning around them is even more so. Given what you've seen the last few years, is the Philadelphia region right now a good place to be a planner?
Tough question. I think it’s a good place in the sense that there is a lot going on in the city and region. Philadelphia is one of the largest major cities in the country, and it has an amazing history and a great downtown. It is experiencing exciting growth and newfound real estate development, and yet faces serious challenges related to poverty, inequity, gentrification, and the ongoing effects of decades of disinvestment. These are challenges that are interesting yet daunting from a planning perspective. But as for the job market for planning-related work in the Philadelphia area, that might be a different story! I think the job pool is somewhat constrained for planners.
I might tend to agree with your latter statement, though hopefully things loosen up as all that development keeps happening. Pivoting, you mentioned gentrification and that's often a major issue planners have to address both publicly and privately. In your opinion, what’s the biggest challenge facing the planning field right now?
I think the biggest challenge facing the planning field right now is the ability to affect change. To be not just planers but doers. To take what are often complex concepts and analyses and make them digestible for constituents and policymakers so that smart city and community building can occur. And to do this in a way that is mutually beneficial to the diverse populations that make up our cities and communities, not just to the benefit of the wealthiest or most influential among us.
How do you mean? And how do you suggest planners be better at being doers?
I think the planning stereotype of "plans sitting on the shelf collecting dust" exists for a reason. Too often it actually happens. So, for example, if you're a planning consulting firm that does neighborhood plans, how are you sticking with an organization or neighborhood to make sure aspects of the plan actually get implemented? Could you alter your business model or fee structure to actually build in some ongoing technical assistance after the plan itself is completed? I think another specific example I see in Philadelphia is around zoning, where so much effort has been made in the last decade to revise the zoning code and rezone swaths of the city, and yet so little planning support is offered to the everyday residents who deal with zoning variance requests from developers under the "Registered Community Organization" system that came with the new zoning code. The Citizens Planning Institute is a great program, but I'd argue it doesn't have the bandwidth to really empower community members all over the city to more effectively shape their own neighborhoods, from a planning and development perspective.
Unfortunately in Philadelphia, like many other cities, planners are hamstrung by the local political processes, resulting in barriers to implement these seemingly smart plans and policies. I think one thing the planning field could do though (at least based on my experience) is to do a better job of integrating the study of politics and policy into the planning school curriculum, so that professional planners are prepared not just to conduct analyses, design sites, make maps, and run proformas, but also to navigate political systems and influence policymaking.
And that last bit, about navigating political systems and influencing policy ties back neatly to your earlier point about the importance of relationships in planning. Final question, and it's an easy one – what was the best thing you did in Philadelphia in 2017?
That’s easy – the best thing I did in Philadelphia in 2017 was get married! I met my wife in planning school and that’s by far the best thing I got out of it.
Now THAT'S an important relationship. John Landis take note! Thanks Jesse and all the best to you and your lovely wife.
Like what you read? Know someone who should be next? Leave a note in the comment section below!
In case you've been living under a rock for the past few days, the Eagles won the Super Bowl, beating the Patriots 41-33 in one of the most exciting Super Bowls ever played. I can't say best because with 3 missed extra point attempts, a missed field goal, and enough defensive lapses to fill a swimming pool, the word "sloppy" came to mind more than once in the first half. Eventually though, the game found its groove and the Eagles showed what quality, aggressive coaching can achieve at the highest level of the sport. It's not an easy task, beating 5x champions on a neutral field. Doing so on a championship stage while having previously lost their starting quarterback, left tackle, and utility man Darren Sproles over the course of the season is a tremendous accomplishment.
Living in Center City, I had the unique opportunity to be a part of the revelry and merriment that followed after the historic win. Below are a few pictures I managed to get while walking through the horde on Broad Street.
As the pictures show, there was something magical about the city after this win. It wasn't that dissimilar to the excitement I experienced after the NFC championship victory, which had probably about 30% fewer people out in the streets celebrating (and with far fewer pole climbers). Of course, the size of the crowd isn't what matters (cough) - it's the attitude of the people there that count. For Philadelphia - that attitude felt like...hope? No, it wasn't hope - that was two weeks ago. It was pride - but more than that. It was confidence. Sure, many residents didn't do their city any favors by committing various acts of property damage (flipped cars, smashed windows, destroyed Ritz Carlton awning) - but overall the celebrations were loud, peaceful, and fun. For a city that for decades has been the butt of so many jokes, derision, and legitimate economic concern, the ascendance of the Eagles put a loud exclamation point on the past 10 years of Philadelphia's progress. Philly is no longer a city that can backhandedly be referred to as the "6th Borough". Philly is Philly, and should be proud to call itself such. New York will always be bigger. LA will always have Hollywood and better weather. Washington DC will always be more important - and all of that is OK. None of that matters, nor should it.
Let this be the moment where the City can take pride and ownership, not just in its history or cultural icons, but in its story and idiosyncratic offerings. Let us move past the cheesesteaks and water ices, as good as they are. Let us move away from touting the Liberty Bell and Art Museum, as iconic as they are. Let Ben Franklin and William Penn be revered - as they deserve reverence - but I urge Philadelphians to let this win propel them into a mindset of hope and optimism for the future and excitement for where Philadelphia is today.
This is something I know a thing or two about as a native St. Louisan. St. Louis shares many historic trends with Philly and other rust belt cities. If there's one thing St. Louisans are good at, it's being nostalgic - particularly the year 1904, when it hosted the Olympics and World's Fair. Somehow though, nostalgia turned to necropathy, as the city's spirit decayed along with its economy and infrastructure. Today, even as the city lurches into the 21st century, long-time residents of the region are incapable of seeing it as anything other than a shell of its former self, with the cry of "back then" preceding a torrent of negative comments about today. This doesn't describe everyone - but it describes a lot of them; and it describes a lot of "Negadelphians" too.
Look, I'll be the first to acknowledge that Philadelphia is FAR from a finished product. Poverty, violent crime and drug abuse rates are way too high, the public education system has systemic issues, and the local taxing structure needs serious overhaul. But each of those have been moving in the right direction for years - even if at a glacial pace, they're improving. It's time for everyone in the city to embrace that narrative.
If Philly was going to win a championship, other than beating New York, is there a better city to beat than Boston? Truly - Boston has been everything Philly hasn't over the last 20 years. A booming hotbed of economic resurgence. Home to championships in every major sports league, with a few repeat winners. But now? This win places a flag at the top of a mountain of progress that's been growing for years. William Penn over Paul Revere. Penn over Harvard. Cheesesteaks over Clam Chowder.
Eagles over Patriots.
Philadelphia has come into its own this year. Let us all embrace that feeling and forever stop thinking that we've got something to prove. We don't. We won.
Now, join me as I raise my celebratory Wawa sandwich and repeat after me:
Fly Eagles Fly - Philly Philly!
General thoughts and musings about the work SSC Solutions does and other things happening in and around Philadelphia