How bodegas led to the Yemeni coffeehouse explosion

This is Planet Money, from NPR. The other day, we invited an entrepreneur named Hakeem Soleimani to come into our studios. Hello, can you hear me? Is that okay? Mic check. We wanted to talk to him about a new trend that we had noticed in the world of coffee. Now, I did offer him tea or coffee before we went into the studio. Hakeem politely declined both. He showed me his travel mug. I always stay prepared, you know? You never know when you might run into a curing machine at an office. Ours isn't even that. So you basically brought your own coffee because you thought our coffee would be bad? No, no. I keep coffee with me more than I keep my phone with me. Like, when I leave my house, it's mug, keys, wallet. It's never phone, wallet, keys. How many cups of coffee are you drinking a day? I think like six, seven maybe, eight. How are you this chill and also on six cups of coffee? And super caffeinated. I think it stops affecting you after a while. Yeah, I think the caffeine just gives up. Amanda, I actually think that is scientifically what happens. The caffeine just gives up. I do not think that is possible. But anyway, the reason we asked Hakeem to come to our offices was not to reject our coffee, but to help us understand this thing that we had been noticing. A bunch of new Yemeni coffee houses opening all over the country. And if you've never been to one, a lot of these Yemeni coffee houses, they stay open really late, they sell fancy snacks like this honeycomb pastry with cheese inside. Delicious. And you can usually buy a pot of coffee and sit there for hours. Hakeem opened one of the first. It's called Yaffa Cafe in Brooklyn back in 2019. But now Yemeni coffee houses are all over the country. How did this happen so fast? I think it's the demand for it. People saw a genuine demand for late night eating and drinking. And Yemenis were in a. It's a good place to kind of pick that up because of their role in coffee historically. Yeah. Yemen is considered one of the birthplaces of the coffee trade. And in the past nine years, a couple hundred Yemeni coffee houses have opened up. A lot of these are big chains with names like Kawa House and Haraz Coffee House. One of the original ideas was to create a kind of third space for the growing Muslim and Arab American population in the United States. They want a place that they can sit that's family friendly. A place that doesn't feel like, oh, I have to get a drink here or there's a bunch of drunk rowdy people here. I can't bring my kid or I'm a mom and I just want to hang out with other moms. And they've never had a place before like this. Yemeni coffee houses have also become popular near colleges. And yeah, they're playing the role that Starbucks once did. And Yemeni Americans do have a long history of entrepreneurship in the U.S. But for decades, they largely concentrated in a different kind of business. The corner store, the deli, you know, the neighborhood bodega, which is kind of where Hakeem grew up, watching his father at work. When we first came to this country, he was working like 12, 15 hour work days. And yeah, the only times we got the same as if like we begged him, hey, can you take us to the deli with you today? And we'd hang out and he'd let us behind the register, let us run around and hang out with the bodega cat. Hakeem and maybe the cat, too. Think that the success of the Yemeni coffee house. Being built on his community's years of experience running all those bodegas. Hello and welcome to Planet Money. I'm Amanda Aranchik. And I'm Jeff Guo. So what's happening with the Yemeni coffee houses is the latest twist on a longstanding tradition of different immigrant communities arriving in the U.S. and specializing in one particular type of business. Think like nail salons run by people from Vietnam or immigrants from this one part of India owning motels and hotels. Or going further back, diners run by Greek immigrants. Today on the show, how this surge in new Yemeni coffee houses fits into that story. How a new generation can take their parents' playbook and make it their own. The first of the two coffee shops Hakeem owns is in Brooklyn in a neighborhood called Sunset Park. This is your cafe. This is my shop. That's right. Nice. Good job. Appreciate it. The block where his cafe is located kind of tells the story. It tells the whole story of his family's entrepreneurial history. So picture this. There's the coffee shop, Yaffa Cafe, which opened in 2019. And then just three doors down at the corner is Yaffa Deli, which is his dad's store since 1995. And both are right by the subway. We have both entries of the train. It's true. You do. We got that end and this end. So it doesn't matter where you come out from, you're going to see Yaffa. And in fact, if you come out of the subway on the other side. On the other side of the street, there's another Yemeni bodega run by Hakeem's uncle. That one is their family's original store, which they've been running since 1993. Now, Hakeem, he sells a spiced cold brew for $6 and a cardamom brown sugar latte for $7. His father also sells coffee at his bodega, but it is nowhere near as fancy or as expensive. He still thinks he's the best barista, even though he only dabbles in drip. He'll still tell me, like, I make the best coffee. That's why. Customers have been coming to me for 30 years. All you do is mix in some sugar and milk, but I think he just has a magic touch. You know, I can't. He does make a good cup of coffee. Hakeem and I head over to the store to find his dad. Hello. Hello. How you doing? I thought you were across the street today. To get the story. That's the man of the hour. of how he started working in the bodega business. You want to interview him behind the counter? Maybe. Behind the counter. I've never been behind the counter at a deli. I'm going back there! In this bodega, they sell all the essentials. There's an assortment of cereal in the back, paper towels, takis, and chips. But in the front, it is taken up by the deli counter. It's a big counter, too. There's so many things I could do. I could wrap muffins. I could fry things. I could make a sandwich. We'll put you to work, for sure. If I'm back there for three minutes, I'm going to be put to work? My dad will put you to work, definitely. Hakeem is not kidding, except when I finally get around the giant counter and Tarek sizes me up. He's like, uh, yeah, no. I wouldn't think you're going to last long. You don't think I would last long? I mean, it's really hard. You know, most of it is standard. Like, I do 12 hours, 13 hours sometimes. I never sit. And it's not like there's nowhere to sit. There is a wood stool near the cash register. Tarek looks at it with disdain. You have a stool, but you don't sit on it. No, I don't use it. You don't use it? No. I mean, I don't like to sit. I like to keep moving. If not, you know, serving a customer, I'm doing something else. Tarek left Yemen in the mid-1990s. At the time, there was a civil war going on. The economy was collapsing. Back in the days, I was working for my father. My father forced me to leave. You know, you had to leave. He forced you to leave? Yeah. I mean, he was seeing, like, a better future for us just to go. When you were leaving Yemen, did you know what kind of business you could run here? Yeah, I do. Because my brother was, like, two years ahead of me. He was here already. He started doing the business, and I came and joined him. Before you even leave Yemen, someone's like, I think I have a way for you to work immediately when you get to the U.S. Yes. And that's what was happening a lot back then. Yemeni fathers, fathers-in-law, cousins, all helping each other learn how to work in an American corner store. I wasn't a world-speaking English at that time. So I had, you know, people come and ask me for things, and I don't know what they asked me for. So did you learn English on the job? It was most of it in the job. After a couple of years of also learning how to do the work, Tarek was ready to go out on his own. But he didn't have enough money to start his own store. And he didn't think he'd be able to get a loan from a bank. I don't have a credit history to go to the bank. I mean, as a new person in the country. You know, even if you go to the bank, open and just check an account, they didn't take me at that time. It was hard. So Tarek did what a lot of people in his community did back then. He got informal loans from family and friends. I had a lot of help from them. You know, my father-in-law, my brother, and other cousins that helped me to put that money down. And, he said, as Muslims, they followed a custom of interest-free loans, which was really helpful. According to the Yemeni American Merchants Association, today, people from Yemen run nearly half of all the bodegas in New York City, around 5,000 altogether. I see everywhere there's a Yemeni guy, all over the city. So if you're traveling around the city and you're like, I don't know, you need to. use a bathroom, or you need a coffee, or something like. will you go in and will you be like, "Hey, I'm also from Yemen?" I didn't even introduce myself. They wouldn't know me. You don't even need to introduce yourself? While you start talking to them. And you can find Yemeni Americans running small grocery stores all across the U.S. in Detroit, in Buffalo, Fresno, Oakland, thousands of stores. Even though, according to the last census, Yemenis make up just 1/40th of 1% of the U.S. population. Now, if you've ever lived in a city, you might have noticed something just like this happening, a particular immigrant group specializing in one kind of business. But for years, economists and sociologists debated why some immigrant groups concentrate in one industry, while others spread out and go work in all sorts of jobs. One economist who's looked into this is Bill Kerr. There was not a very clear reason as to why Vietnamese should be particularly skilled or concentrated in nail care salons. And yet, they were. over a quarter of the U.S. nail care salon industry. Or, Bill says, why Indian Americans from the state of Gujarat have focused so much on running motels and hotels. Bill teaches at Harvard Business School, where he researches and writes a lot about migration and labor. And he says sometimes immigrant groups end up in an industry for kind of arbitrary reasons. So in the Vietnamese nail care example, that began in 1975 with an amazing story about Tippi Hendren going to a Vietnamese refugee camp. She was an actress, well known in that time. Tippi Hendren was most famous for starring in Alfred Hitchcock's The Birds. She was also a humanitarian who cared a lot about refugees. And back in the 1970s, when she was visiting a Vietnamese refugee camp in California, her nails were very well manicured. And apparently some of the women there were quite impressed. So Tippi Hendren, she brings her manicurist to the camp and she teaches a group of women the art of the manicure. The start of this industry is kind of random. Now, while some immigrant groups do cluster around an industry like nail salons or motels, other immigrants arrive in the U.S. and they don't. They spread out. So along with a co-author, Bill decided to find out why that happens. They pulled nearly 40 years worth of census data that tracks where people were born, what industries they work in, and he develops a methodology to rank 131 different groups. At the bottom of the list were people from Cuba, Canada, Germany, and Poland. They were the least likely to cluster around one type of industry. At the top of the list were people from Nepal, Senegal, Zimbabwe, and Yemen. People from those countries were most likely to cluster around an industry. So why is this happening with some groups and not others? Bill finds there are two main factors. First of all, you tend to see more clustering among immigrant groups with smaller populations. And second, there is more clustering among groups that tend to stick together more socially. The term we use is social isolation, but that doesn't need to be a negative term. Sounds so sad. Yeah, no connotation about that. One way of saying it is like it's an inherent strength of the community to want to do things together. In the paper, Bill uses the rate at which immigrants marry within their community as kind of a proxy for this. And more broadly, they mean things like people speaking the same language, going to the same parties, maybe spending their weekends together. I'm married to a Finn. My wife is from Finland. And we, for many years, took our kids every Saturday morning to Sumikolu, which was the local Finnish school, so that they would work on learning the language. And all the Finns from, you know, three or four states around New England, you know, came and met at one place. And while they are sitting there waiting for their kids, you could imagine that they might talk about, you know, work. So let's say two of them are entrepreneurs who run hair salons. Maybe they're discussing what products they like, which distributors are reliable, or how to deal with the city's rules and regulations. This is information you can't necessarily learn at school or even on the job. Those Saturday morning classes could be reinforcing entrepreneurial clustering, giving our imaginary hair salon owners a huge advantage. I am Canadian, and so we always used to joke that we would send our kids to, like, Saturday morning Canadian classes. It doesn't exist. I take it back because it does exist. It's called, like, hockey practice, but that's a different story. Yeah, well, you're joking. But, you know, I think that's kind of a wonderful test of our theory. So when you look at things like the ethnic specialization of entrepreneurship, Canada was among the three lowest specialized communities in the United States. So it's very dispersed, very big, you know, very socially integrated on all aspects. What I'm interpreting this. What I'm interpreting this to mean is that basically my fellow Canadians are not going to help me at all when I start my business. Is that, that's how I'm to interpret this? That's fair. It's pretty fair. Or not, let me frame it this, they're not going to help you any more than anyone else would help you. Got it. You know, like, you could get some help, but. The hell, Canadians. But, you know, there's so many Canadians that your likelihood of running into somebody who's doing the same thing as you is not very high. And likewise, since you only have hockey as the thing that's bonding you together. There's a lot of hockey. So the likelihood that you're going to the same hockey game is not very high. Oh, okay. Right. Okay, Amanda, enough about Canada. Going back to the groups where we really do see a lot of clustering around a particular industry. One interpretation of why that's happening is that these immigrants don't have really other great options. They can't find any other better job, or maybe they face discrimination. Bill found that also, according to the data, immigrants were able to make a living. more money by working in these clustered industries. By being a part of your ethnicity's self-employment cluster, you are doing better financially, earning higher incomes and wages than if you had been self-employed in another space, or if you've been in the wage work. Yeah, it seems like there's an economic advantage to joining your community's industry, even if it involves a job with long hours in an industry with thin margins and maybe, like, no time to sit down on a stool even. Like, say, working at a grocery store or a bodega. Back at Yaffa Deli in Brooklyn, Hakeem and I watch as the original entrepreneur, his father, Tarek, makes his signature coffee. His father is putting on a show. You see his very sorry connection. Tarek pours some sugar into a cup. See the flick of the wrist. He has the hot coffee, so the sugar melts faster. He swirls. He's swirling the coffee with the sugar. Adds the ice. Tops it off with milk, a lid, and then for good measure, he gives it this upside-down swirl to mix it together. Doesn't leak. Handed with love and care to the customer. I mean, that was a technique, by the way. It's impressive, right? It was impressive. Hakeem learned to love coffee at his father's deli. But even though his dad's technique is very impressive, Hakeem is part of a newer generation, one that enjoys. Specialty coffee, fancy syrups, a variety of non-dairy milks, a generation that maybe doesn't want to work such a grueling job. Coming up after the break, the very particular problems Hakeem faces in the fancy coffee business. Problems he never ran into while working at his dad's bodega. Up until now, we've mostly been talking about first-generation immigrants who cluster, in a particular industry. But what about their kids? In studies written about what second-generation immigrants do for work, there are a bunch of different stories. In the example of immigrants from Vietnam working in nail salons, most of the kids seem to go work in other, less punishing professions. You can see something similar with the Gujarati Indian immigrants working in the motel industry. But there you also see examples of many people building on their parents' work, expanding into hotel chains or moving into boutique hotels, but by and large, the second generation leaves their parents' business behind. Of course, the way everyone's individual story plays out, that is very different. When Hakeem was a teenager, he worked after school at his father's bodega, and he continued to pick up shifts when he was in college. So did you think when you were younger, like, oh, I guess I'll just take over the bodega from my dad? No, no, I was working in photography. So I thought photography was going to be sort of my out. Like a lot of kids of first-generation immigrants, Hakeem did not want to work in the family business his whole life. So after college, he started working as a freelance photographer. And it's really freelancing that led him to the coffee business. Because every time he needed to do some photo editing, you know, sit on his laptop, he just couldn't find a good place in his neighborhood to do it. Somewhere where he could go work and, I guess, get some of those eight cups of coffee he drinks a day. And he's like, what if I open that place? What if I open that cool coffee shop in my neighborhood? Hakeem, along with his cousin, start meeting up after work to dream up some plans. We would sit on PlayStation, we'd play NBA 2K, and we'd just talk about Yemeni coffee. And I'm like, dude, I really want to do this. I really want to do this. The year before, a best-selling book called The Monk of Mocha by Dave Eggers came out. And it's the story of a Yemeni-American guy who was obsessed with the history and tradition of coffee in Yemen, which goes back hundreds of years. He eventually figures out how to import this high-end coffee to the U.S. Hakeem loves the idea of selling a product that's actually from Yemen. And he brings up this book repeatedly with his cousin. I read it, and then I gave it to him. I was like, OK, this is a mandatory reading. They read it. They learn about coffee. They learn how to do a pour-over. This coffee shop idea starts to seem possible. They get serious and start looking for a place. Now, this whole time, Hakeem, of course, is talking to his father about his business plan. But his father can't really picture it. A bodega has been the. Sure thing for their family. A new coffee shop? Eh. Tarek is not so convinced. My father was very skeptical about the business. Like, he doesn't go to coffee shops. He doesn't see them around. He doesn't hang out and, you know, with the baristas to know how busy they are. Like, why would anyone spend more than $2 on a cup of coffee? He does not think customers are going to buy that. But Hakeem plowed ahead anyway. And after a few weeks of looking for spaces, he found a place he liked. And he was about to sign the lease when he got a call from his father. A local landlord had just walked into the deli with an offer. A Chinese takeout place nearby was closing. was Hakeem's father possibly interested in renting out the space? Tarek said he wasn't, but his son might be. And my dad called me the same day and I was like, is he still there? And I was like, yeah, I was like, shake his hand, please, just tell him, like, yeah, it's a deal. The place was exactly what Hakeem was looking for. The subway entrance was right there, lots of foot traffic, and it was just three stores down from his father's corner store. So Hakeem finally found his spot and signed the lease. And in many ways, he was building right on his father's success at the deli. He was tapping into the same community, many of whom had watched him grow up working in the bodega. And, you know, he even got the lease by using his father's business connections with the local landlord. And when it was time to get coffee beans, his family back in Yemen was able to help out. I called a few of my cousins back home in Yemen, and we started to get this group going of people who would go out to all farms in the area and rent out the space for them. And we started to get this group going of people who would go out to all farms in the area and rent out the space for them. They would inspect the fields. They would speak with the owners. It was basically research and development of the locale. The skills he learned from his dad at the bodega didn't cover everything he ran into in his new business, like when he wanted to start getting all those coffee beans out of Yemen. In the beginning, we started shipping coffee in suitcases. So I believe our first shipment was my father. He went to go see his father, and he packed a 50-pound suitcase. And he brought it over, and it was gone within the first month. This wasn't sustainable. They couldn't keep shipping Hakeem's father in a suitcase back and forth. They needed to find a way to regularly import more beans. But in 2019, Yemen was at war. The main airport and a bunch of ports were shut down. There was no way to kind of ship it out of Yemen at the time. So we had to hire somebody to kind of take the coffee all the way up to the northern border. And from there, there's smugglers who. who specialize in getting things into Saudi Arabia. There were also sanctions on Yemen at the time. And the banking system was kind of a mess, which made it really hard for Hakeem to pay the coffee farmers. We tried to pay with PayPal one time, and that got shut down. In the end, they used Western Union. Now, Hakeem has figured out how to make his coffee business profitable. And he's expanding. He has the two shops now, and he's adding a full kitchen and dinner menu to the original location. Of course, they are still serving fancy coffee, even to their once most skeptical customer, Hakeem's father, Tarek. Does he ever come and buy coffee at your store? Oh, every day. He passes by for his cappuccino. Yeah. Sometimes we'll have someone go over, he'll give me a call, like, hey, can you run me a coffee to the corner? I'm like, I got you. Hakeem says, for his dad, the coffee is always free. Want more big ideas in economics? You know what you will love? You will love our newsletter. We do all sorts of things. Greg, who writes the newsletter, he's amazing. He is very thoughtful. He's very smart. He puts a lot of effort into the newsletter. It's brilliant. Read it. Sign up. You can do that at npr.org slash planetmoneynewsletter. You will not regret it. Smart thoughts in your inbox every week. Today's episode of Planet Money was presented by. Produced by James Sneed and edited by Keith Romer. It was fact-checked by Dania Suleiman and engineered by Seema Lafredo and Travis Hagan. Alex Goldmark is Planet Money's executive producer. Thanks to Peter Salisbury and to Mokhtar Al-Khashali. The book The Monk of Mocha is based on his story, and he was very helpful with the research for this show. I'm Amanda Aranchik. I'm Jeff Guo. This is NPR. Thanks for listening. Thanks also to. to that cute, adorable bodega cat.