Paul Lovegreen ’87

by Bonnie Eissner

Making Bread from Beans

Most entrepreneurship courses and books advise aspiring business owners to develop detailed business and marketing plans before launching into a new enterprise. Paul Lovegreen ’87, owner of Tunnel City Coffee in Williamstown, Massachusetts, had a different approach. “I went on gut; that was my marketing approach,” says the former Adelphi School of Business accounting major, only half joking.

Mr. Lovegreen opened Tunnel City in 1992 before Starbucks brought the coffeehouse craze to the Northeast. For the residents of picturesque Williamstown, a rural community nestled in the Berkshire Mountains, drinking a cup of cappuccino was about as familiar as eating kimchi. “I’d have people coming in wanting, you know, eggs and bacon with toast,” Mr. Lovegreen says. “They really didn’t know what an espresso bar was or what a coffeehouse was.”

Williamstown, though, is hardly a backwater, and Mr. Lovegreen knew it. The town is home to the highly regarded Sterling and Francine Clark Art Institute, the celebrity-studded Williamstown Theatre Festival and, most important, Williams College. Besides having a strong desire to live in the Berkshires, Mr. Lovegreen says, “I knew I just wanted to be in a college community because I just felt like college kids need coffee.”

He was right. From the outset, the students kept his business afloat. “I had this core group of kids who went to Williams from California, and they really helped me stay in business my first few years,” Mr. Lovegreen says.

Influenced by the book, Marketing Without Advertising, Mr. Lovegreen chose to invest in the customer experience. “I built my business with [an] essentially minimal…budget for advertising; it was all built on location and servicing the customer,” he says. He also made sure to pay the bills on time. “That helped me build solid relationships with my suppliers and my landlords,” he says.

The first store, which Mr. Lovegreen opened by maxing out on three credit cards, consisted of four or five tables stuffed into 500 square feet. “We would just cram as many people as we could into the place,” Mr. Lovegreen says.

In 1996, Mr. Lovegreen took out his first bank loan and tripled the size of the store. He hired a professional pastry chef in 2000—a pivotal move that, according to Mr. Lovegreen, changed the business. Four years later, Williams College constructed a building in town with retail space tailormade for Tunnel City Coffee.

Today, Tunnel City has seven-digit sales figures. Mr. Lovegreen opened the store with one part-time employee. Now, he employs 24 people, including 10 full-time workers. His head pastry chef has four assistants. Mr. Lovegreen even met his wife in the shop. She was a regular, he says. Now, she also works in the business.

While local residents and students are the store’s “bread and butter,” according to Mr. Lovegreen, it has benefited from the tourists and celebrities who come to town. A few who have been to Tunnel City include Gwyneth Paltrow, Bebe Neuwirth, Joan Woodward, New York Times columnist Thomas Friedman (whose daughter attended Williams) and former New Jersey Senator Bill Bradley.

For Mr. Lovegreen, running Tunnel City is a labor of love. A longtime coffee and coffeehouse connoisseur, he enjoys being able to select and roast his own coffee. A veteran of the retail business (he was a department store manager before he opened Tunnel City), he’s undaunted by the long hours, including weekends, and the hands-on nature of the business. He likes that he has created a social space for his community.

“If you have a passion for something, that’s what your worth is,” Mr. Lovegreen says. “That’s how you enjoy what you do.”