Brisbane’s coffee king on the city’s new cafe scene

Welcome to CityChats, where Brisbane Times meets our city’s most interesting characters on our most iconic form of transport. This week, Merlo Coffee founder Dean Merlo tells us about growing up in a cafe and the changing hospitality scene across the city.

We meet Merlo at Sydney Street ferry terminal, the first time in this series we’ve visited the stop. It’s near Merlo’s home, as well as his beloved New Farm Bowls Club, and a short drive from the Merlo Coffee Cafe at Bowen Hills.

What’s your controversial Brisbane opinion?

I’d like to see more help for small business. We don’t seem to get a lot of that. And small business does run the country.

I’d also like to see more money getting to the community clubs out there. For my sins, I’m president of New Farm Bowls Club, and have been for about 10 years. I can’t get out!

But I love that club, I love the sense of community, I love the fact that it’s a real place for people when they’re on the older side of things and they’re losing friends. They all rally around that club and the game of bowls, and they find real friendship there. And I think it’s so important that we harness that club and community feel. I think we’re losing that a bit.

That’s interesting you bring that up, because I had someone say the other day that down south has pub culture and we have bowls culture.

[Merlo laughs.]

Like more and more young people are going to their local bowls.

Well, I will say the barefoot bowls is helping to support our club, and it’s great to see all the young people out there. And they have so much fun playing bowls and having a beer, you know, it’s great. But I think that there should be more money to those clubs, you know, ’cause it’s hard to keep the doors open.

I’ve been out there for 10 years trying to get money. It’s not easy. It’s really tough to get grant money. But we’re still out there trying. So, that’s good.

What do you love about Brisbane?

I love the coffee culture! Who couldn’t love it? It’s a morning place, and we love the fact that people love their coffee. We love foodies, and we love people who talk to you about extraction rates, things like that. I love talking coffee with people. We go to so much trouble at Merlo to make that coffee in the cup served to you as good as it could possibly be. So when people appreciate that, I’m stoked with that.

Can you tell me a bit about how you got into the hospitality industry?

My dad had the Milano restaurant. It was a big restaurant, we had the best wine cellar in the country for many years, and it was always in the top five restaurants nationally. So I was brought up in that environment. But I also saw how destructive it can be to your own personal life and your family life. We never saw our dad, he was always working. And it took its toll on him.

So when I finished school and did my travelling around, I always had an idea that I thought I’d be in business. And then when I saw these fantastic coffee shops in America, I thought, “You know what? That could be us. Coffee shops at the bottom of city buildings.”

It had never been done here. Coffee was only a leisure thing, it wasn’t ever a base of a city building thing, never. And so, we did that, first one at Queen Street and it went gangbusters and so, really, business never looked back since then.

That shop on Queen Street is iconic. Obviously you’ve seen the city change so much since then. How do you think the hospitality industry has changed in Brisbane?

I think hospitality is hard today. But some things never change, like service and quality, that doesn’t change. If you’ve got a business where you’re looking after your customer with a quality product, you’ll always do well. It’s when you try to cut corners, and sometimes you have to try and cut corners, that’s when you’re under pressure. Hospitality is tricky.

There’s always going to be an upper echelon, and there’s always going to be a lower-quality echelon. It’s everyone in the middle playing and fighting, it’s very hard. So you’ve got to be on it all the time. It’s hard work, that’s what it is. I mean, everyone says, “Oh, cafe, that’s what I want to do, I want to retire and open a coffee shop.”

And I’m going to say, “Well, understand that that sandwich that you put in the counter or in your fridge, you have to buy that bread, you have to cut that bread, you have to butter that bread, you have to buy the ham, you have to slice the ham, you have to get the cheese, you have to cut the cheese, you have to get the tomatoes, buy the right ones.”

I said, “All of those things are decisions you have to make. Then you’ve got to pay rent, then you’ve got to pay wages, then you’ve got to hope that you sell enough of those sandwiches to cover.”

When I talk to people like that, they decide that it’s going to be twice as much work for half as much money as they’ve ever had, you know? So, that’s pretty tough.

But I’ve loved hospitality because to me, how could you not like a business where you can stand behind a counter, put love and real talent into a cup of coffee, give it to somebody, they smile at you, and they give you money?

I’ve heard people say that we’ve moved from a sit-down breakfast to a baked good and a coffee. But coffee’s always been the constant. Do you think those add-ons have changed?

Well, I think I’ll tell you what’s happened. Since the commodity of coffee went up so high recently, and it’s forced everyone to put their prices up – which is really still below Europe and still below America – but it’s considerably more than it was a couple of years ago. We’ve noticed, when people would always have two coffees, now they’re not having the second one. And you can see them almost tap their pocket when you say, “Would you like another cappuccino?” and they go, “Oh, no, I’m OK.” It’s a subtle thing.

In all of our stores we sell fresh-roasted beans, which we roast every day, so they’re very fresh, and we see that’s going up. So people are buying a lot more beans in store, they’re buying a lot more beans online, but that means they’re enjoying their coffee at home, trying to save a few dollars, and that’s kind of sad because I think one of the greatest joys you can do in life is catch up with a good friend and have a cup of coffee. That’s the greatest thing, you know? So, that’s kind of sad.

You fairly recently opened Milano Bakehouse. Do you think that the demand for baked goods as well is becoming a really big part of Brisbane coffee culture?

I think so. To be honest, we had some space in our factory, but we also wanted to increase our offering, increase the quality of it, you know? I didn’t want to be buying frozen bread from someone else. So we decided to bake our own, get all of our own bread out there beautifully fresh, straight out of ovens and make a really quality, authentic Italian sandwich.

We’ve had a go at doing a restaurant, too, at Bowen Hills, and that’s gone great, and people are there, they’re pumping the place for morning and morning tea. We’re just trying to get them to understand that they can have lunch there, too! Because our lunches are off-the-hook good, and authentic, and I think that’s what people are looking for. And actually quite good value.

One thing I read about while I was prepping for this that I didn’t know about was Grounds for Discussion? Is that still operating?

Grounds for Discussion we haven’t done for a while, but we did do it a couple times. Last year we invited our wholesale customers, so other cafes, to all sit around a table and discuss the things that were troubling them.

And our biggest one was about social media. I know you guys are absolute queens of it, but most hospitality people, they’re so busy, and they’re so flat out, and they see social media as the be-all and end-all for their business. But they don’t know where to start, and I don’t blame them, because I don’t really either. But we have some fantastic marketing people who do, so we gave a bit of a lecture on that.

I think people are influenced by what they see online. Unfortunately, I’m not a massive fan, but I know people who are. My children are, for sure.

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