Why are drive-thru only coffee shops suddenly popping up all over Louisville?

If it feels like small-footprint coffee shops have been opening left and right lately, it’s not your imagination.

At least six drive-thru only coffee shops have opened in Louisville since 2021, with a handful more set to open.

"Quick service specialty coffee and tea outlets are growing like crazy across the country," said David Portalatin, food industry advisor with market research company, Circana.

Partially fueled by pandemic-influenced consumer trends toward carry-out and mobile ordering and partially a mirroring of a culture looking for convenience, drive-thru only coffee shops are gaining in popularity in markets across the country, Louisville included.

These storefronts serve up all the coffeehouse favorites such as lattes and cold brew but are doing so in a fraction of the space, typically in stands under 600 square feet. And small physical footprints typically translate to lower operational costs.

Without an interior public space, these drive-thru establishments usually have less real estate investment, lower overhead costs and may even have less staffing, Portalatin told the Courier Journal.

“It’s an opportunity to have a more efficient, and in a lot of cases, a more profitable operation that still taps into a very on-trend category,” he said.

The trend doesn't appear to be stopping. Coffee giants like Starbucks, and local chains like Heine Brothers' Coffee, are also emphasizing drive-thru operations, even shuttering local stores that do not have that feature.

“There’s consumer demand,” Portalatin added. “It’s on trend. It’s a growing category…so that’s why you’re seeing what you’re seeing.”

Out-of-town companies enter the Louisville coffee market

Two out-of-town coffee companies using the drive-thru only model, 7 Brew Coffee and Scooter's Coffee, have expanded into the Louisville area in just the last couple of years.

7 Brew Coffee opened its first shop in the greater Louisville area in Jeffersonville, Indiana, in October 2022 with plans to open two more this year. Franchise co-owner Ralph Cole, director of operations for Kentucky and Southern Indiana 7 Brew locations, said he has a vision for 10-15, two-lane stands across the region.

“We’re really trying to change the way a customer views the drive-thru experience and also the way the employee views the workplace,” he said, adding employees are focused on efficiency and "cultivating kindness."

The beverage-focused business was founded in 2017 in Arkansas. Two years ago, the company started franchising, growing from about a dozen stores to more than 100, Cole said.

Once clearing the zoning and permitting process, shops are set up within eight to 10 weeks.

“That’s accomplished pretty easy because we build the stands off-site,” said Cole, a Southern Indiana native. “We can move very fast and grow at a very rapid pace.”

A first Jefferson County location is planned for Middletown at 12525 Shelbyville Road (set to open in October) and a second Jeffersonville location on Veteran’s Parkway is scheduled to open by year’s end.

Another location at 2651 S. Hurstbourne Parkway is set for the first quarter of 2024 with three others to follow at 5000 Maple Spring Drive, 7609 Bardstown Road and 7700 Laurel Ridge Road, according to city planning and zoning records.

Cole owns two locations in Lexington, one in Bowling Green and a soon-to-open location in Versailles.

Another growing coffee company, Omaha, Nebraska-based Scooter’s Coffee, entered the Louisville market in 2021 and quickly set up shop.

There are now five Scooter’s locations across Jefferson County, with at least four more in development, city records show.

"We have this idea that a coffee shop is a place to sit by the fireplace and drink a cappuccino and think big thoughts, but the reality is, most Americans drink coffee on the go," Scooter’s Vice President Tim Arpin previously told the Courier Journal. "Our drive-thru kiosks are perfectly positioned to serve our customers. Our customer service is all centered around that speed of service through that window."

When picking locations, the company looks for "coffee corridors," heavily-trafficked roads with property easily visible from the roadway.

And it’s not just out-of-town companies getting in on the action. Two drive-thru coffee shops have opened since the start of the pandemic in Buckner (Elevate Coffee Co.) and La Grange (Revival Coffee Company) in Oldham County.

Why are these concepts popular with operators?

Emphasis on consumer transactions outside of the traditional sit-down coffeehouse experience is not unique to these drive-thru only concepts.

Starbucks has said a growing share of its business is through mobile ordering, drive-thru and delivery. In its second quarter earning call earlier this year, these transactions represented 74% of the company’s U.S. revenue.

The company has said it plans to invest $450 million this year to modernize existing stores and add 2,000 net new U.S. stores by 2025, “diversifying” its lineup of stores with a focus on pick-up stores as well as drive thru- and delivery-only locations.

Right here in Louisville, locally-owned chain Heine Brothers opened its first drive-thru only store at 7701 Bardstown Road in January 2023.

"We can bring our coffee to more communities when we can fit into smaller real estate parcels,” co-founder and president Mike Mays previously said about the drive-thru only concept, adding the pandemic-era emphasized the importance of drive-thru sales.

In October 2022, the company closed its location at 2200 Bardstown Road, saying it was transitioning to drive-thru shops and the Douglass Loop shop didn’t have that feature.

Do drive-thrus mean the loss of the 'third space'?

So what does the spread of drive-thru only coffee shops mean for traditional coffeehouses? That remains to be seen.

Louisville boasts numerous locally owned coffee shops that offer gathering space, from chains such as Heine Brothers Coffee, Quills Coffee, Please & Thank You and Sunergos Coffee to single location shops including Fante’s Coffee House, Day’s Espresso and Coffee, Blak Koffee, Bean, and Old Louisville Coffee Co-op — just to name a few.

These businesses provide a “third space,” a location that isn’t home and isn’t work meant to facilitate gathering.

“There’ll always be a demand for that space, that place to meet, that place to do other things besides just consume coffee,” Portalatin said.

There's space in the market for both traditional coffee houses with sit-down cafes to exist with grab-and-go or drive-thru only operations, Portalatin said, especially given the popularity of the beverage.

Even in times of inflation, as people are rationalizing spending across their expenses, coffee seems to be justified as an affordable luxury, a treat or reward.

“There’s room for growth across the board,” Portalatin said. “But at some point, your ability to grow to some degree means taking that volume away from somebody else.”

The Honey Depot and Coffee House in Jeffersontown recently announced the upcoming closure of its shop on Watterson Trail, citing news of an impeding Scooter’s Coffee opening a half-mile away as a factor behind the decision.

“There are plenty of opportunities for operators to differentiate themselves around a set of consumer needs, whether that’s the on-the-go, convenience driver consumer or whether it’s creating that sense of community or that place to work or that place to get away," Portalatin said. "There are opportunities for operators to wow their customers and grow in the marketplace.”

Business reporter Matthew Glowicki can be reached at mglowicki@courier-journal.com, 502-582-4000 or on Twitter @mattglo.

This article originally appeared on Louisville Courier Journal: Drive-thru only coffee shops in Louisville part of large national trend