Sydney's coffee industry reaches a new peak

Esther Han
Latte life: Benjamin Terkalas at his cafe.
Latte life: Benjamin Terkalas at his cafe. Photo: Dallas Kilponen

Should 20-year-old Benjamin Terkalas serve you a coffee with that perfect crema at Beejay's in Marrickville, don't discount him as just the waiter. He's the boss.

Mr Terkalas opened the cafe and wine bar in May last year. He wrote the menus, designed the interior and oversees 13 staff, all of whom are older. "Everyone kept saying, 'You're too young, go get a job somewhere else.' But I was stubborn," he said.

Mr Terkalas is part of a growing breed of young, hip, caffeine-fuelled owner-operators, driving the cafe industry at a time when other major parts of the food business, including restaurants, are in decline.

Over the next five years, the total revenue of the national cafe industry is projected to increase by 19 per cent to $6.3 billion. According to a report by business researchers IBISWorld, the number of employees will jump by 11 per cent to 94,512.

The cafe industry has added 3000 cafes and nearly 30,000 employees over the past decade, while in stark contrast, the restaurant industry has shed 18,000 employees.

Other food sectors have struggled with the high Australian dollar, labour costs and increasing international competition, with Restaurant and Catering Association lobbying the federal government last week to scale back penalty rates. The food and beverage, grocery and fresh produce industry lost 1000 workers and 170 businesses in the past year.

The head chef of the Public Dining Room at Balmoral Beach, Anthony Telford, said cafes thrived during the global financial crisis while many eateries struggled and closed shop.

''We noticed people weren't affording to go out to high end restaurants but they still wanted to go out. Cafes offered fresh food and good coffee and continue to do well,'' Mr Telford said. ''When you compare high-end dining - the overheads, the number of staff to produce food at that level, it's hard.''


IBISWorld analyst Ryan Lin said: ''Consumers became vigilant in their spending by choosing to cook at home rather than eat out, and by seeking value for money.

''[But] the cafe industry owes its success to the nation's love for quality gourmet coffee.''

Jill Dupleix, the editor of the Good Cafe Guide, pointed to a generational change, with many restaurants still running on an old business model, an inflexible format that suited them more than the customer. ''Younger people don't want to eat out the way their parents did, they want their own spaces,'' she said. ''What this means is a breakdown of the 'Surry Hills or Bust' syndrome. More cafes are opening in previously 'uncool' areas back in their own neighbourhoods, such as Parramatta, Castle Hill, Sutherland, and Cronulla.''

Mr Terkalas is riding high, with dreams of opening five cafes by the time he is 25. "I've got one at 20, so I'm cruising," he said with a laugh.

Charles Cameron, 27, will open Brewtown in Newtown in three weeks, with the help of an investor. Running his own cafe has been a goal since his days as an arts student at Sydney University.

''Coffee is part of so many people's everyday lifestyle, such a staple. That's why it's growing,'' he said. ''Cafe owners are like pub owners - when times are good, people drink, when times are bad, people drink."