Nathan Toleman on hospitality and giving people what they want

Nathan Toleman of The Mulberry Group

Founder and Executive Chairman of The Mulberry Group Nathan Toleman is a pioneer of the Melbourne café scene. He talks about hotel robberies, cutting costs, and the art of giving people what they want.

Nathan Toleman can’t help himself. Before taking a seat for this interview, he springs into action, greeting a guest, clearing a few tables, and helping wait staff prepare for the busy mid-week lunch rush that the city of Melbourne so desperately craves.

“I still love it. It’s just the waiter in me,” Nathan says. “If I see a table that has a plate or glass on it, I’ve got to clear it.”

Nathan ushers over a latte at Square One Rialto and takes a rare moment to pause. He reflects on his busy week and that he’s flying on the red-eye to China tomorrow to assess a supplier fit-out deal that seems almost too good to be true.

The zeros at the end of the price tag are still eye-watering, yet Nathan says it’s a far cry from the first venue he recalls building, designing, and fitting out for $50,000 with his chef wife Sarah Foletta.

“We borrowed all the money we had. We bought the chairs at auction for $1. We even built the tables. My mum and dad helped me do the garden and painting. All our equipment was second-hand,” says Nathan of Apte, a former milk bar-turned restaurant in Alphington, Victoria.

“Within a few months, it was a raging success with queues out the door. [Renowned food critics] Matt Preston and Dani Valent reviewed it early on, and in our first year we won the Delicious Café of the Year Award.”

Nathan single-handedly designed and built the next five or so venues, but over time, he has come to understand the value of using a good architect. The reality, he says, is that it still costs between $5000 to $6000 per square metre to design and fit out a café.

“Unfortunately, a lot of the money you just don’t see. It’s in consultants, service engineers, town planners, or building surveyors. The mechanical expenses can often cost upwards of $100,000, things the customer may not notice but definitely affects them,” Nathan says.

“We opened Lilac Wine in Cremorne last year on a really tight fit-out budget of around $1200 per square metre, way less than the industry average. We bought all the tables, chairs, and sofas second-hand, and my son and I painted the floors ourselves. We went back to basics to show it can still be done.

“People want to be in a nice, comfortable, welcoming space, and often that comes with lighting, music, and the people in it. The reality is, the more you spend on fit out, the more pressure there is on the business from the start, and ultimately, the customer is going to have to pay for that.”

To curb costs, Nathan says working within a budget and sticking to it is key. He recommends cost-effective ideas like giving a venue a fresh coat of paint, buying second-hand equipment and furniture at auctions, and only spending an affordable amount on new lighting, tables, and chairs.

“We buy a lot of plates from the op shop. That’s what we did for [restaurants] Hazel and Dessous. They cost $1 each and tell a story,” he says.

Mulberry Group
Image: The Mulberry Group

Nathan’s foray into hospitality was met with intrigue and excitement at eight years of age when he and his sister visited the now closed Marysville Hotel with their parents. It was five o’clock on a wintry Friday afternoon. Inside the venue, Nathan recalls a beautiful warm atmosphere with a real sense of energy. The owner provided a backstage pass for Nathan to see “where all the magic happens” before an unusual turn of events.

“My sister and I went exploring by ourselves in the basement and saw these guys taking all the money out of the pool table pockets, filling up their bags, and we helped them do it,” Nathan describes.

When he eventually went back to his parents and chatted to the owner about helping the staff do their job, the owner had a puzzled look on his face. He eventually informed Nathan that the men were not staff but actually thieves.

“We had inadvertently helped rob the Marysville Hotel. But we managed to point the guys out in the bar and got them arrested. It just added to the excitement of this world of hospitality I was experiencing,” Nathan says.

“From that moment, when people asked me what I wanted to do when I grew up, I’d say ‘I want to be a hotel manager’.”

Nathan took his first steps towards that dream at age 15 when he started working in a pizza restaurant after school. When he finished Year 12, he went to William Angliss Institute to study hotel management and, one year later, landed a job at the newly refurbished Victoria Hotel on Little Collins Street. On opening night, there was a sea of mature-age wait staff, and 19-year-old Nathan.

“I learned so much from the experienced people – professional hospitality veterans – and I threw myself into it. I loved it,” Nathan says.

He worked his way up the hospitality chain, starting as a junior manager at The Victoria Hotel before taking the same role in a Cairns venue after graduating.

A few years later at age 23, Nathan went to Japan for six years to teach English and came back a little disinterested in hospitality. He grappled with the idea of becoming an architect and took a job as a design consultant working with a shop fitting company. This opportunity allowed Nathan to learn about metal work, joinery, design, and construction. He says it wasn’t until the opening of Apte at age 33 that he finally found the fire in his belly to create an inviting space from a blank canvas.

“All the energy in the room from the staff and customers helped create a life that really fuelled me,” he says.

Not long after, Nathan fitted out an old abandoned art gallery in Kinkora Road, Hawthorn, on a similarly low budget and opened his first café, Liar Liar, with original owners Nolan Hirte of Proud Mary, and Diamond Rozakeas. It was well received.

Two years later in 2010, Nathan sold both venues to start Three Bags Full Café in Abbotsford. That’s when things “really took off”.

“That was the point when we went from being a little café to a serious café. At that time, there were lots of big and great restaurants and lots of good coffee houses, but there were no big, serious cafés with a serious kitchen. We noticed a real gap in the market. Imagine if you could merge the two,” Nathan says.

And that’s what he did. By adding six commercial chefs to the kitchen, producing restaurant quality food at a café price point, customers started queuing 45 minutes for a seat. Three Bags Full “moved the dial” and influenced a wave of other venues making quality food and coffee more accessible.

Nathan’s choice of roaster has also been an evolution, starting with Atomica Coffee at Apte before Three Bags Full became Five Senses’ first Melbourne account, which Nathan says “lifted our coffee game”. The Perth-based roaster went on to fuel Nathan’s other venues including Two Birds One Stone in South Yarra, Top Paddock in Richmond, The Kettle Black in South Melbourne, and Higher Ground in the CBD. The next natural progression was to start roasting his own coffee.

Nathan launched Square One Coffee Roasters in 2015, just a few years before selling his café portfolio to Darling Group.
“We felt like we’d achieved everything we could in the café space. For me personally, [opening cafés] was no longer as fulfilling or rewarding as it used to be. Personally, I felt like something was missing,” Nathan says.

“As a hospitality operator or restaurateur, I realised I needed to look after not just the chefs in the industry, but also the food system, because without food we’re in trouble. That’s where Common Ground Project started.”

Profits from Square One Coffee, and all Mulberry Group venues, go to Common Ground Project, a regenerative agricultural farm and social enterprise which also creates employment pathways for asylum seekers.

Nathan stepped away from café operations for a few years to focus on Common Ground Project before coming back to his roots and opening Heide Kitchen, Liminal, and Square One Rialto to break the mould and prove he and his team could manage bars, restaurants, and cafés simultaneously.

“A bar is just a coffee shop with alcohol,” Nathan says. “Both are just as hard in many ways. It still takes really good produce and really good people to make it work.”

In mid-June, Nathan will open Molli, a neighbourhood wine bar in Abbotsford, and Little Molli next door, a sandwich shop and deli.

The one venue remaining on Nathan’s bucket list is to start a hotel.

“The idea of having a few rooms above a restaurant would be pretty cool. There’s nothing on the table yet but maybe one day,” he says.

The past few years have been a hard slog for Melbourne’s hospitality businesses, with multiple lockdowns, declining city workers, and inflation rises putting more pressure of venues to deliver experiences where customers feel they’ve received not only a great meal, but more bang for buck.

“As an organisation, now more than ever, we need to find ways to offer guests more value, and then it’s about creating ‘hot towel’ moments, delivering unexpected, above and beyond surprises. They create moments where you can really connect with the customer and hopefully win them over for life,” Nathan says, noting examples of gifting a bag of Square One coffee to Danish tourists after bemoaning they hadn’t had time to visit a Melbourne café during their trip, or sourcing a Carlton Draught longneck that wasn’t on the menu for a customer while dining at Hazel.

“Fundamentally, hospitality is about giving people what they want, and welcoming them into your place. If you don’t, they’ll just go somewhere else,” he says.

The Mulberry Group
Image: The Mulberry Group

Equally, Nathan says venues need to find ways to cut costs with food prices rising.

This could mean sourcing different cuts of meat, using seconds vegetables rejected on the basis of appearance, and utilising product oversupply that would otherwise go to landfill.

Ultimately, he says costs have to be shared in order for venues to remain sustainably viable.

“Melbourne is by far the cheapest [in terms of coffee prices]. When you think about it, coffee beans travel the furthest distance to get here, and our staff costs are higher than anywhere else in the world. It’s got to change. It’s about being honest with customers and making small incremental changes that don’t affect people too much because they’re already stretched financially,” he says.

In today’s climate Nathan anticipates further consolidation of the café market. While it is harder to enter, he says there’s still great opportunities for independent operators to make their mark with strong demand for quality food and access to great producers.

“It’s an exciting time. I’m really proud of Melbourne’s food scene,” Nathan says. “Fundamentally, people are hardwired for connection. Things are changing, but we still love to get out, enjoy a meal, and be around other people. We say food brings people together, and I think coffee does the same thing. From our perspective as a business, we see [hospitality] as a way to support our communities, and build a better world. How lucky are we to do just that.”

This article appears in the June 2024 edition of BeanScene. Subscribe HERE.

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