Ben Hertz is at it again. Hertz already brought the world colored shoelaces from Benjo’s and U.S.-made sheets and pillowcases from Cama. He does real estate deals through his Westwood Hills Partners holding company and has been instrumental in restaurant projects including Martina in Minneapolis’ Linden Hills neighborhood. In his latest venture, Hertz, 33, is co-founder and CEO of Penny’s Coffee with partners Dean Phillips and Adam Roozen. Penny’s Coffee is more cafe than coffee shop, offering sweet and savory crêpes, bakery items and hard-to-find treats. Hertz said Penny’s is set to expand from its downtown Washington Square and year-old Linden Hills locations to a handful of spots in the coming months.
Q: What drives you?
A: I thrive on chaos. This list-building thing is not new to me. This is iterative going back to eighth grade. It’s totally disorganized chaos. Heady thinkers and people who read a lot of books will talk about purpose. My purpose is to kind of be busy all the time. My wife would tell you that I’m a better person when I’m busy. If that to-do list started to get all crossed off I wouldn’t look nervous but I would feel empty in kind of an anxious way. Like people get when their bank account starts running low on money. How am I going to fill it up? I start making calls and creating chaos.
Q: How does Penny’s stand out in a competitive coffee shop market?
A: I don’t think of us as an independent coffee shop. Just north of 40 percent of our sales come from food. When people out of town in this space ask what I’m working on I say that we’ve been building a cafe brand. … What we’re selling is a great guest experience — an escape from your kids, from your house, from your normal routine. We ask people to hang out with us. It could be a 20-minute escape. It could be an all-afternoon retreat.
Q: How did the menu come together?
A: It was Dean’s idea to add the crêpes. Danny del Prado as adviser, our internal team and I, we had the food program before we had a store built. It’s this mix of sweet and savory. It was what menu items can you make using fridges, bowls, utensils and crêpe irons, which won’t require a hood fan. Then we sourced this oven that fit on our counter and built a teeny tiny pastry program. People loved it and they want more. … I’m very transparent with our vendors when we start working with them. We’re working with you right now because you’re the best. But if somebody else comes along and has a better product, we’re going to probably migrate over to that camp.
Q: What is Penny’s position in the coffee market?
A: We shifted from working almost exclusively with La Colombe to a company called Vittoria Coffee, a small 50-some-odd-year-old family-run company out of Australia whose coffee I love and our guests love. I think the market would agree that our coffee is not third-wave tasting. It’s not bright and acidic. Our coffees, our espressos, our drip coffees are all dark roasts.
Q: What is the growth plan for Penny’s?
A: Dean has this magic number of 200 [locations]. At one point we talked about 50 stores. We decided that we would roll out a handful of new stores but in a short period of time as a test. Before summer of ’19, in the Twin Cities.
Q: Why did Penny’s begin paying $15 an hour years before that becomes the city’s minimum wage?
A: We were 60 days from opening and Dean calls and says we have to pay everybody $15 an hour. We’d have a seven-year advantage on everybody else in the market at figuring out how to make it work because it wouldn’t be easy. … We’ve afforded ourselves the ability to be really picky with the quality and the expertise of the staff that we hire. A lot of them come from career-track jobs, from the fine-dining world. We get a lot of people who don’t want the grueling, tiring lifestyle of being at a restaurant.
Q: What’s something you have learned from your earlier ventures?
A: One of the most valuable things I’ve learned was this notion of sharing. I’m fortunate to have a lot of friends who have rock star MBAs and great jobs and made a lot of money in business or in the investment world. One of those people told me in the beginning of Benjo’s — you have to make a choice here. You can own all of something small. If you’re really brilliant about it and really careful you could probably own all of something that’s medium-sized. If you want to have something big you’re going to have to share. You’re going to have to find somebody that you can’t afford to pay. You’re going to have to give them ownership. You’re going to go find an investor or syndicate a group of investors and share with them. That’s something that I hadn’t learned in real estate. This business [Penny’s Coffee] is different. The idea with this was invest, invest, invest, build something that’s great and share a lot of it. Share all the way along the way and you’ll have something great.
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