Deanna N. Fox
Feb 10, 2021
“The pandemic led to collaboration,” said Lopez
The best things Jeremy Cowan ever discovered on a street corner were a chocolate maker and a coffee aficionado.
As Cowan, the owner of Shmaltz Brewing and its 518 Craft bar and bottle shop in Troy, recalls, he was driving east on Congress Street in Troy when he saw Oliver Holecek (owner of Primo Botanica bean to bar chocolate brand) and Hernan Lopez (owner of Alias Coffee Roasters) hosting a pop-up event to share their products. At the time, Cowan was looking to increase daytime activity in his Monument Square-facing bar, and the idea of including coffee and confections appealed to him. He already knew Holecek from the weekly Troy Waterfront Farmers Market, where Holecek sold his chocolate near Cowan’s bar on Monument Square in Troy. When Cowan saw the duo’s pop-up outside of the Mount Ida Preservation Hall location, he thought the combination of beer, chocolate and coffee might be the right combination to bring people into 518 Craft during the day.
“It was a kind of kismet,” said Cowan of the Congress Street encounter. He invited Holecek and Lopez to do pop-ups at 518 Craft last summer to see how it would attract customers. “I don’t think they knew I was scheming to get them to move in.”
Holecek said that the offer to work within the 518 Craft space came from needs each entrepreneur independently had.
“I’ve been wanting to open a storefront for a while but was limited by the cost of space in Troy,” he said. For a chocolate shop like his — which focuses on single origin, whole-spice chocolate and confection production — he needed exposure to walking traffic, and 518 Craft’s location right on Monument Square provided that.
Lopez had been hoping to open a coffee shop since he moved to the Capital Region from New Jersey over four years ago, where he owned a cafe. He worked for Stacks Espresso Bar in Albany as manager and roaster and met Holocek through that connection. He roasts his Alias Coffee products in Delmar, but working with 518 Craft and Primo Botanica allowed him to open a coffee shop in a location with built-in customers.
“The pandemic led to collaboration,” said Lopez, as businesses looked for ways to cut expenses while sales were down. “We thought this was a great idea because we could share the space and resources and collaborate,” he said. The three businesses operate under a service agreement in which all sales are handled through 518 Craft’s point-of-sale system. 518 Craft essentially purchases the chocolates and coffees, similar to how a restaurant or bar would pay a food distributor for produce. The difference is that the customer is able to interact with the source of their coffee and chocolate.
“It creates more of an experience for my brand,” said Holecek, adding that since he and Lopez took up space in 518 Craft in October, his sales have grown by 25 percent, especially online because new local customers are ordering chocolate for faraway friends. For Lopez, the arrangement allows him to sell coffee later in the day before customers transition to alcohol in the evenings. “People want to enjoy some downtime and relax, to enjoy their coffee, chocolate and beer in their ‘third place.’ We all gather a common clientele and all draw from a certain type of dedicated customer,” Lopez said.
Lopez said he and Holecek took the opportunity to work with Cowan because of his decades of knowledge on building a national business. “It is rewarding to collaborate with two other companies. We are benefiting from Jeremy’s experience and his branding advice,” he said. For Cowan, it also brings in nonalcoholic options for those not partaking in beer, spirits, wine and cider and meets New York State’s COVID-related requirement that bars sell at least snack-sized food with every beverage purchase. (Bakery products from next door’s The Placid Baker are also available at 518 Craft.)
Cowan was aware, coming from his own personal shortcomings, that there is a benefit from working with Holecek and Lopez. “It was a big change for me to move from Clifton Park to downtown Troy,” he said. The Shmaltz brewery was located in Clifton Park before selling the building and assets to Rich Buceta, owner of SingleCut Beersmiths of Queens, in 2018; Shmaltz currently contract brews its products in Newburgh. It was a challenge to convince customers to try a new location with so many established regular haunts in Troy, but working with people who already have a following in Troy helps introduce new people to 518 Craft. He calls it “micro-marketing.”
He had explored offering food and coffee service on his own, but the lag time of developing expertise did not alleviate the problem at hand. “Just because you know one thing doesn’t mean you know how to do another cool thing,” he said.
The potential for sharing space with complementary businesses is growing in appeal, said Katie Hammon, executive director of Downtown Troy BID. “We are seeing businesses interested in sharing space,” she said, mostly by independent craftspeople or makers. “A lot of our businesses are small and don’t need all the space available to them,” she added, noting it can help with rent costs.
The businesses at 518 Craft are examples of arrangements designed to accommodate customers from morning to late night in Troy. Superior Merchandise Co. opened with coffee, but now also sells beer and wine. Troy Kitchen added a bar in addition to its food stands, as did River Street Market inside the Hedley Building.
All three entrepreneurs said that the 518 Craft arrangement is overwhelmingly beneficial, but there are issues each is mindful of. Cowan said that adding more decision-makers into the mix means “more work, more conversations.” Learning to adapt was a challenge as well. “We have different styles. I’ve never had partners before. They’re not my partners but also not my employees,” he said. Holecek said the rapid growth in business, which has benefited from the attention from his recent win of a national Good Foods Award, has made it difficult to keep up production. “I’m limited in the amount of personal time that I have now. Any retailer can agree that self-care suffers,” he said.
Still, they agree that other businesses should consider their model. “If other businesses were thinking about doing it, make sure the businesses are synergistic and not competitive,” Holecek said, a sentiment Lopez echoes. “If the businesses complement each other, then go for it,” he said.
Cowan said he is looking forward to producing beers using Primo Botanica chocolate and Alias Coffee beans and offering tastings of the brews with the ingredients they are made from. He said the common threads that weave the three companies together are “love and goodness,” and any partnership or product derived from the 518 Craft arrangement will be built on the same concepts.