Revival of US coffee icon Horn & Hardart

Albert Mazzone was a six year old when he was first introduced to Horn & Hardart in 1954. By that time, the then-booming business had expanded well beyond its original coffee shop on Chestnut Street in downtown Philadelphia. The brand, which had 157 locations across Philadelphia and New York City at its peak, had become ubiquitous with high-quality coffee and fast food. Horn & Hardart was serving nearly 500,000 patrons and 275,000 cups of coffee every day. Fast forward to today and the coffee-shop-turned-full-service-restaurant has a stronger presence in museums. After a rocky road that included several bankruptcies, all the locations were shut down. The only active real estate of the now-130-year-old brand is an e-commerce website run by none other than Mazzone. He and his wife Dawn own 70 per cent; their business partners Dan Lievens and John Tooher each own 10 per cent, with the remainder scattered among other stakeholders. Over the decades, Mazzone became more than just a customer and fan of the popular venue; he became part owner of various iterations. In the past six to seven years, Mazzone started buying back all remaining assets of the near-dead company. “I didn’t want the name to die out because it was an emotional attachment for me,” he says. “But while I was working hard to keep the name alive, I was suffering [personally] and it had become an expensive hobby.” It was Dawn who pushed him to “do something about it or stop complaining”, Mazzone tells Global Coffee Report. “So we came up with a compromise: I can keep complaining, but I would do something about it.” That “something” was to fully commit to relaunching the iconic brand. Because Mazzone had always been more interested and invested in Horn & Hardart’s coffee, that would be the focus of the relaunch. From patron to President Although Mazzone had fallen in love with Horn & Hardart decades prior, it was sheer chance that he arrived at the opportunity to be a part of the business. Horn & Hardart had just entered bankruptcy for the third time and its new owner, serial entrepreneur Aaron Katz, was struggling to raise sufficient capital to reorganise and pull it out of bankruptcy. Through a restaurateur friend, Loi Tram, Mazzone was introduced to and ended up partnering with Katz, earning himself 49 per cent of the business and a position as its president. Even then, the coffee was Mazzone’s obsession. He dedicated extensive resources to recreating the signature Horn & Hardart blend. Through anecdotal evidence, meticulous research, access to shipping records and a long process of experimenting and taste-testing, Mazzone was able to reverse engineer and then replicate the original blend. “I got really close and was on the verge of releasing it, but then the price of green coffee nearly quadrupled,” he says, referencing the coffee boom of 1994-95. “There was no way I could buy, roast and package my coffee and then expect to sell it reasonably priced. I just had to postpone my plans.” Meanwhile, Tram had joined the pair in the hope of opening a chain of coffee shops under the strong brand. Of course Mazzone stood by Horn & Hardart’s coffee, but he and Katz were apprehensive about investing in their own retail space. Nonetheless, the partners relented and Tram opened the first coffee shop. Tram had big plans to open a dozen stores in the coming years, but unrestrained zeal and greed got in the way. Mazzone ended up stepping down and Katz and Tram eventually fully exited the business. Horn & Hardart met its demise once again. America’s first fast food
  Despite its years spent in bankruptcy and changing hands, there’s something about the iconic brand that keeps its heart pumping. Perhaps it’s the dedication that originated with Joseph Horn and Frank Hardart Jr. in 1888 when they opened that first coffee shop on Chestnut Street. From the first pot of coffee to their eventual extensive menu, the entrepreneurs were dedicated to quality. At that time, however, high-quality coffee was unheard of. In fact, coffee was often so bitter that eggshells were typically added during brewing to balance the harsh taste. But rather than settle for the status quo, Horn and Hardart committed many years and thousands of cups of coffee to finding the perfect combination of beans and the perfect roast. According to records, the partners paid a premium to secure a continuous supply of high-quality Arabicas from Brazil, Colombia and Costa Rica to create their signature blend. Says Mazzone, “Horn and Hardart had to leverage blends because they couldn’t ensure consistency or quality by focusing on one origin. They could better maintain their high standards and quality through blends” – a detail he learned through his own painstaking research and cupping experiments. Influenced by his years living in New Orleans, Hardart leaned heavily toward a New Orleans-style brew and also implemented a French-drip method that had yet to be introduced to the northeast. These early experiments and dedication to quality, which resulted in a four-page “bible” of sorts, enabled the founders to continuously refine their process and consistently deliver high-quality coffee every day. After a decade of moderate success and expansion, they shifted gears to focus even more on food service, made possible through another innovation Hardart brought to the business. He was inspired by a “waiterless restaurant” concept he encountered while in his homeland Bavaria: the Automat. The technology consisted of coin-operated vending machines that gave diners access to a number of hot dishes behind locked chrome and glass doors. The European technology required significant refinement for the American market, and was finally ready for debut by 1902. Another decade later, Horn & Hardart opened its first New York City Automat, in Times Square. Although the concept expanded rapidly throughout Philadelphia, it was even more popular in New York. Of the 157 locations in the company’s heyday, more than 100 were in New York. Its largest was located in Midtown Manhattan and sat 1100 people. Mazzone compares the status of Horn & Hardart Automats to how coffee drinkers today think about Starbucks, “You think about it as the local Starbucks that you walk to,” he tells GCR. “It was the same way with Horn & Hardart. People associated with the coffee shop that was down the street. They had no idea how huge the company actually was.” When food and Automats came along, Horn and Hardart leveraged a commissary system. In Philadelphia and then in New York City, they built massive central commissaries where the majority of the food was prepared fresh before being distributed throughout the cities. “The idea of the Automats was to feed a lot of people quickly with consistent, high-quality food. So the commissary system, which no one outside of the business was really aware of, allowed them to maintain quality, keep costs low, and buy top-quality ingredients.” Even throughout its growth and foray into fast food, Horn & Hardart was always focused on quality coffee. Its fresh drip-brewed coffee was served out of ornate brass spigots shaped as dolphin and lion heads. Restaurant staff members were held to strict standards outlined in that aforementioned bible. As such, “one of the few ways you could get fired from the company [back then] was not doing the coffee correctly”, says Mazzone. “If you were in charge of coffee for the day, you had to manage all the time sheets. Their policy dictated that after 20 minutes, any coffee left in the pot was discarded and a new pot was brewed.” Fifth time a charm
  Although Mazzone wasn’t able to release his reverse-engineered Horn & Hardart coffee in the early ’90s, the longstanding relationships he made at that time have finally come into play. The company uses the facilities of two fellow roasters who have been around since the Automat days. Not too different from his apprehension in the 1990s, Mazzone is not interested in taking on the cost and requirements that come with owning the infrastructure. “I’ve looked into what it would take and we just don’t have the necessary funds or manpower,” he tells GCR. “But this way allows us to concentrate the resources we do have on research, improvements, marketing, the brand, our customers and more.” On the marketing front, the team is taking a two-pronged approach: they’re targeting both an older demographic that grew up loving the brand and a younger demographic that simply loves high-quality coffee. “The name connection is still so strong that we get a certain amount of publicity just because of the name,” Mazzone admits. “We get a gratuitous sales spike whenever our name gets some publicity. [When that happens] our conversion rate for people to the website is 25 per cent.” Those sales have come from all 50 states, representing the older demographic’s move away from the East Coast after retirement, in addition to younger customers they’ve garnered through recent marketing initiatives. “A lot of people just want a high-quality coffee they don’t have to think about, so here’s a name that people have trusted for 130 years and we’ve never let customers down,” says Mazzone. “It’s priced as a premium coffee, but we’re at the lower end of the range because we want it to be accessible to everyone” – to that older demographic who is used to paying a nickel for coffee at the local Automat and to the younger demographic who doesn’t mind paying a little more for unique, premium roasts. “We found that our average customer in face-to-face settings is 30-something,” says Mazzone. “They don’t have any knowledge of the company or its history, so they’re there just because of the taste. These are people who are interested in coffee and appreciate the high quality.” This second group is the majority of today’s Third Wave coffee drinkers. And so Horn & Hardart are making equal efforts to appeal to this segment. Mazzone’s wife, who also grew up in the Automat era, worked in corporate marketing for 20 years and has a background in sustainability. “She is our conscience and ensures we’re doing everything as socially and environmentally responsible as possible,” Mazzone tells GCR. On the product front, they created Horn & Hardart K-cups for the single-serving market and a whiskey-infused batch to cater to Americans’ current obsession with all things craft. The #18 Prohibition Series, made with a Dad’s Hat Rye oak whiskey barrel, sold out in 10 days at US$24 per 10-ounce bag simply via word of mouth. The name of the limited release harkens back to the Prohibition and Depression eras when Horn & Hardart coffee was a staple in daily East Coast life. “As caretakers of an iconic brand, we wanted to connect to that era in American history and capitalise on the current popularity of craft spirits,” says Mazzone. The Horn & Hardart team hopes to release additional limited-edition batches in the future, as well as explore single-origin coffee. They also see potential for it to finally become a nationally recognised brand. “We’re ecstatic about re­igniting a beloved brand that is a part of Americana,” says Mazzone. Still, he is careful not to get ahead of himself the way his former partners did nearly 30 years ago. For now, he is focused on breathing life into this resilient brand once again.