MONTPELIER — Capitol Grounds, a well-known coffee shop in the Capital City, celebrates its 20th anniversary on Monday.
Owner Bob Watson has survived a few setbacks, but also made shrewd entrepreneurial moves to expand and diversify the business through clever branding and a socially conscious business plan.
Capitol Grounds opened in the former Chittenden Bank building on the corner of State and Elm streets on Nov. 12, 1998. Unable to renegotiate an affordable lease with the landlord, Watson decided to move the business a few doors down to the former Country Camera building, owned by Steve Everett, where it remains today.
Signature steps to success for the business include roasting their own coffee, market branding that included promoting Bernie’s Beans during Sen. Bernie Sanders’ presidential bid in 2016, a new 802 Coffee brand that took off with out-of-state sales, and launching the Ceres Coffee brand that celebrates and financially rewards women farmers who supply his prime product in Latin American countries.
Watson spoke plainly about his humble beginnings and some of the challenges that threatened to sink his ship on more than one occasion.
He said he started out as a bartender at Charlie O’s on Main Street when Jeff Jacobs opened the bar in the 1970s. He went on to work in restaurants and sell advertising for a local radio station, WNCS The Point, and worked for a while for the state tax department while taking business classes at Community College of Vermont.
“But I was looking to get into business,” Watson said, and decided his experience in the restaurant trade was something to build on.
Through a mutual friend, Watson met his former business partner, Bob Plante, who would subsequently take his own life in May 2000 after struggling with depression. Watson also noted the support of his wife, who worked full-time to support the family — the couple have two daughters, Julia and Liz — while getting the business started.
“She was very committed and critical to the success of our business,” Watson said.
However, when Watson was forced to relocate the business, the stress resulted in their separation, although they remain good friends and both firmly supportive of their daughters, he said.
Watson said he and Plante decided they wanted to open a coffee shop.
“We looked at the idea of a coffee shop which evolved into a coffee house,” Watson said. “We wanted to go a little farther and have a hook, which was having our own coffee, which meant that we would have to roast our own beans.
“A critical part of that plan as finding a great location, which we found in the old Chittenden Bank building. So, everything looked pretty good on paper, so we proceeded and got a loan,” he added.
The conversion of the old bank building included a major renovation of the interior to restore original ceiling plaster moldings and expose ceiling beams, sandblasting brick walls and restoring mahogany radiator covers that had been painted over. It almost bankrupted the business partners to do so, “but it was beautiful,” Watson said.
The key attraction for customers, Watson said, was roasting their coffee beans in-house, adding to the aroma and atmosphere, along with local artists’ artwork on the walls and ambient music.
All went well for the first few years before Watson was unable to renegotiate an affordable lease.
“We decided a better opportunity lay in a move to our current location,” Watson said, which occurred in 2006. “I think we have the best location in town.”
Ironically, Watson was already familiar with the location. His uncle, Dr. Arthur Watson, was an osteopath who had an office upstairs in the building that Watson remembers visiting as a child.
Watson said the new location required a complete refit to install a kitchen to improve food service, and the installation of windows to provide river views of the North Branch.
However, there wasn’t room for the coffee roasting machine, which Watson moved to an East Montpelier location. The move would lead to an expansion of coffee roasting production for sale to co-ops and supermarkets in Vermont, and the launch of Bernie’s Beans. Watson has raised $27,000 from the sale of Bernie’s Beans for the Vermont Veterans Fund.
Two years ago, Watson launched the 802 branch of Capitol Grounds coffee, initially to design a new bag for bulk sales, with the help of JAR Design, of Charlotte.
“It’s been very successful,” Watson said, noting that it increased sales by 50 to 60 percent. “There’s a lot more potential with this new image we have.”
The new Ceres Blend, launched in October, features coffee grown exclusively by women coffee producers in Central and South America. Watson contributes 20 percent of all proceeds from the blend to Food 4 Farmers to support food security and economic autonomy for women in coffee-growing regions.
It’s not all work for Watson. An inveterate lover of music, he plays harmonica in the Vincent Flats Blues Band.
Most of all, Watson is grateful to his customers and the loyalty of the “Grounds Crew” that offers high-quality service.
“There are people that came in the first week we opened, and they continue to come into Capitol Grounds, and I’m so happy about that,” Watson said.
One of those customers is Newton Baker.
“I’ve come here since it started across the river and when it moved, I continued to come. I’m 13 years retired and I come in every day,” Baker said.
On Monday, Watson is planning to offer a cake for customers to celebrate the 20th anniversary.