Editor’s Note: This article originally appeared in the summer edition of Business Leader, a quarterly magazine produced by the Leader-Telegram. To view an electronic copy of that and other special publications, go to leadertelegram.com/magazines.
Tired of missing out on his young children’s activities while he was out on the road selling feed and seed, Eric Nelson sought out a new line of work that would keep him closer to home in Eau Claire.
This was the early ‘90s and two business ventures appealed to him: running a local franchise of Nevada Bob’s Golf or opening what was still a rarity at the time, a gourmet coffee shop.
Back then, coffee was a simple staple beverage found at greasy-spoon diners and pretty much any other restaurant that would keep a pot warm for however long it would take to run out.
This was long before Starbucks and other chains spread the gospel of gourmet coffee drinks across the U.S.
“When we opened there were 10 coffee shops in the state,” Nelson said. “Now there’s 10 coffee shops within a mile of here.”
Nelson got a taste for coffee while studying dairy science at UW-Madison. The bustling city was home to a couple Victor Allen’s locations — one of the few coffee shop chains at the time — including one near campus that Nelson frequented.
Nelson decided to sell coffee instead of golf clubs and opened The Coffee Grounds on April 2, 1991 in the now defunct London Square Mall on Eau Claire’s south side. (He was ready to open on April 1 — April Fool’s Day — but didn’t want people thinking that a shop that just sells coffee was some kind of elaborate practical joke.)
“We put our life savings into the coffee shop,” Nelson said.
From a 1,200-square-foot storefront and then pushed into a 900-square-foot spot, Nelson introduced mall shoppers to gourmet coffee for a little over five years.
Toward the latter part of the store’s stint in the mall, its selection grew to include fine wines in the small space.
The Coffee Grounds needed to grow with Nelson’s ambition to add more categories of food, drinks and merchandise to its offerings.
• • •
Less than a mile from the mall, The Coffee Grounds made its new home in a building along Highway 93.
The larger space allowed the business to add cigars, beer, kitchen equipment, cheeses, specialty food items and fresh seafood to its offerings. About a decade ago, the shop started making sandwiches and other freshly prepared meals to eat in the limited seating in the store or taken home.
“All of the things we’ve added through the years were things we felt the market needed, things we could handle and things we enjoy,” Nelson said.
For example, he’s personally tasted more than 90 percent of the wines in the store’s extensive selection. And for some of them, he’s been to the wineries that produce them and the vineyards where the grapes are grown. A frequent traveler, Nelson said he’s been to all the major wine-making countries save for one — Portugal.
The Coffee Grounds had three additional locations for a while when the main store was along Highway 93. There were stores in Lake Hallie and Alma, plus the small coffee shop at Marshfield Clinic on Craig Road.
While he recalls it being fun to run multiple locations, Nelson also remembers the downsides. It meant frequently going from one store to another, making it a struggle for customers and employees to get a hold of him. The Lake Hallie store also struggled in part because many customers would opt to go to the main Eau Claire store instead, Nelson said.
He shut down the satellite locations as the Eau Claire store made its latest move to allow the business to grow again.
• • •
About five years ago, The Coffee Grounds moved into the building at 4212 Southtowne Drive, which used to house Chippewa Valley Orthopedics and Sports Medicine and Northwoods Therapy Associates.
Previously a tenant, The Coffee Grounds became its own landlord in its new building, giving it flexibility to rent out space or make major changes as it needed.
“I couldn’t ask for anything better for how this worked out,” Nelson said.
A former gymnasium used for physical therapy became the K Point microbrewery — a line of beer the store started in 2014. In May 2016, the microbrewery’s taproom opened to the public to create a relaxing environment to grab a beer and enjoy the view of a nearby pond.
Nelson intends to keep the brewery small with most of its beer sold there, though a few kegs occasionally show up in local bars.
Unlike the other small breweries in Eau Claire, K Point has an alcohol license that allows selling cocktails in addition to beer.
Nelson said that selling point works well with Friday fish fries, where he opts to cook up walleye instead of the usual cod.
Fresh fish is one of The Coffee Grounds’ specialty services that regular customers know about, but Nelson admits he hasn’t been especially aggressive about marketing on the store’s website.
Every week he’ll call five fresh fish suppliers to see what they have available and then places orders for what he believes will sell to people in the Chippewa Valley. His regular customers quickly reserve what they want while whatever isn’t taken will be for sale on Thursdays at the store. But it’s gone quickly, Nelson said, noting it’s never there long enough for the store to get that “fresh fish” smell.
Another service the store has for customers is ordering wine and cookware.
“That’s a big part of our business,” Nelson said, adding that it’s spread primarily by word-of-mouth.
A customer in search of something special for his 25th wedding anniversary recently asked Nelson what he could come up with.
In a storeroom that only he and a couple others have keys to, the shop owner pulled out a 25-year-old bottle of wine.
Not a vintage bottle recently purchased from a wine distributor, but a bottle that had been with the store since it was in the old mall and had saved for a special request.
• • •
On a typical noon hour, The Coffee Grounds is bustling with patrons eating lunch.
For its fresh-made meals, the shop puts in some extra effort that’s uncommon to see at many restaurants.
The French fries are hand-cut. Meats are smoked in-house. Salad dressings and even the ketchup are all made from their own recipes.
“Generally I try to do whatever I can homemade,” said Will Martin, Nelson’s son-in-law and a leader in the store’s kitchen.
While the cold Wisconsin climate makes getting some ingredients tough in winter, much of what goes into their fresh food is bought within a 100-mile radius.
Meats, cheeses and breads are locally made. Eggs and chicken are delivered fresh weekly by farmers that produce them.
“I really like trying to support the local farmers,” said Nelson, who grew up on a farm and had considered following in his father’s footsteps after college.
One of the store’s longtime customers nominated The Coffee Grounds for an annual award presented by the Eau Claire Area Chamber of Commerce.
Curt Van Auken, president of the Eau Claire market at Security Financial Bank, has been a customer for about two decades and got to know Nelson and his wife, Julie, by going to the shop.
“I’ve known them for many years,” he said.
Usually getting coffee at the shop each day, Van Auken has also brought prospective employees and clients there to get out of the office.
“The atmosphere is just outstanding,” he said of the coffee shop.
While he recognizes that many of the weekday customers come from nearby south side businesses like his, Van Auken said the clientele also includes families and seniors out to get coffee or lunch as well.
In April, the chamber bestowed its Small Business of the Year (25 employees or less) award to The Coffee Grounds.
• • •
Part of the store is devoted to an array of kitchen gadgets and gifts. It’s here where changing shopping habits — including the rise of online retail — has changed the store’s selection.
With a whole rainbow of colors, brands and sizes of coffee makers easily available through Amazon and other websites, The Coffee Grounds has pared back its inventory to some essentials.
Only one drip coffee maker is sold there to avoid the cost involved with stocking multiple models. There are several Chemex pour-over coffee makers and French presses. However, the store has stopped carrying espresso makers entirely.
Like other brick-and-mortar stores, Nelson has seen some “showrooming” — customers getting a close look, sometimes even snapping a photo of merchandise they will buy online later — at The Coffee Grounds.
“I see it less now than I did five years ago,” he said.
With prices in the store not far off from what online retailers charge, Nelson said consumers have been realizing not only that it is convenient and a negligible cost difference to buy from shops, plus they are contributing to the local economy.
While it has grown to offer much more, the business still prides itself on its coffee.
But with so many other gourmet coffee shops around now, Nelson said his strategy is not to try a head-to-head battle.
“We don’t try to compete with them anymore,” Nelson said.
The Coffee Grounds still has a full menu of coffee drinks, but don’t expect a drive-through to sprout from the building anytime soon to hand lattes and cappuccinos to people on their way to work.
Instead he looks for rarer varieties of coffee beans that can’t be found elsewhere as a reason to patronize his business. In his travels, Nelson has even bought coffee beans where only a few bags are headed to the U.S.
Though Nelson has traveled the world to source wine, coffee and other goods sold at the store, he noted that the vast majority — 75 percent he estimates — is domestic.
• • •
Nelson is handing an increasing amount of the business over to his daughter and son-in-law.
“It’s going to be their place,” he said.
Nelson credits them for bringing new energy into the business and planning for its future.
“There are always ideas for the business,” said Nelson’s daughter, Megan Kremer.
She’s hoping to make the business more environmentally sustainable and pursue a program to employ people who may have a blemish on their records.
Kremer and Martin moved from Minneapolis a little over five years ago to join the family business in Eau Claire.
“We both had a passion for food and cooking,” Martin said.
Kremer brought her experience working in restaurants and retail in the Twin Cities, while her husband saw the chance to pursue his dream of being a chef.
“Will has done a real excellent job of renovating the food menu here and being cognizant of local food producers,” Kremer said.
Comfortable the store he spent so long building is in good hands, Nelson anticipates scaling back his hours but expects he’ll continue working at The Coffee Grounds alongside his wife for a long time.
“We’re enjoying what we do, that’s the biggest thing,” he said. “We’re never going to retire.”