Mugshot: is it possible to have too many cafes?

My neighbour is a kind of Melbourne Everyman: 40-something, network admin for a large public institution, two kids under five, and a Holden station wagon parked out the front of his California bungalow.

He likes a weekend cafe breakfast and a latte as much as the next Everyman, and he's amazed at how frequently new cafes open, and how infrequently they appear to close.

''Hey,'' he'll often say when he sees me in the street. ''I've spotted another one!''

He has a theory, the Cafe Sustainability Index: there's no need to explain it.

Too many cafes? Is that even possible? Tony Eldred is a hospitality consultant with more than 30 years' experience, and he says there are already too many cafes and restaurants in Melbourne.

''We're oversupplied by 30 per cent. Every time someone enters the market they dilute it for the good operators,'' says Eldred.

That'll be news to anyone who has spent a weekend morning queuing for a brunch table (but then, weekends are when a lot of cafes are making most of their money).

With a boom in mixed apartment/retail development along main roads in the inner and middle suburbs, property developers are hunting for tenants. Those new, street-level shops can too easily end up home to generic cafes with little to distinguish them - serviceable coffee, cookie-cutter menus and classic Campari posters. We probably don't need any more of them.

But among the new entries in this year's Age Good Cafe Guide are Cafe Bu in North Carlton (where a mother-and-son team serves great coffee and a tiny menu from a converted backyard shed); Dakdak in Moorabbin (a former steering-wheel factory in a suburban industrial estate, where the food comes out of a caravan kitchen); and Local Birds (a little nook in a lane off Collins Street). They're quirky spaces that all bring something unique to Melbourne life.

According to Eldred, the successful operators are often experienced people who started out small. Think of the gang behind Top Paddock in Richmond and Two Birds in South Yarra, who worked their way to coffee empire-dom from APTE in Alphington via Liar Liar in Hawthorn and Three Bags Full in Abbotsford, with a new venue, Kettle Black, about to open in South Melbourne.

''Cafes are opening and closing all the time,'' Eldred says. ''They open with lots of publicity, but when they close all you see is a 'For lease' sign.''

My neighbour and I are keeping our eyes peeled.