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Dean Philip’s Running For Office While Running Penny’s

Dean Phillips is running a business he’s growing, Penny’s, as well as running for public office.

Dean Phillips is into premium conversations. That’s what Penny’s, the coffee chain he started with Ben Hertz, is advocating by serving high-end coffee and crepes in a highbrow décor. And meaningful dialogue is what he’s hoping to spark when he parks his 1960 “government repair” van at gatherings such as art and music festivals or the ultimate fair, The Great Minnesota Get Together. 

“I open the door, make coffee and put out a couple of chairs and talk,” the businessman-turned politician says. 

Phillips is running for the 3rd District Congressional seat currently held by Republican Erik Paulsen, who may be vulnerable this time around. In light of the country's more divisiveness after the presidential election, Phillips wants to get both sides working together. The political process, he says, has become less about progress and more about winning. “These are not two teams,” he says about Republicans and Democrats. “It’s one team wearing different jerseys.”

Phillips believes he’s up to the challenge. He’s got an Ivy League education and comes from a wealthy and philanthropic family. He graduated from Brown University in 1991 with a degree in urban studies. He joined the family business, Phillips Distilling Company, and became CEO in the early 2000s. Bartenders will be familiar with their Prairie Vodka, an organic product in cooperation with local corn growers. They were also responsible for launching the Belvedere luxury brand. 

In 2011 Phillips left the family business to invest in a small gelato company, Talenti Gelato, which he and his partners Josh Hochschuler and Steve Gill grew into a best-selling brand, before selling it to Unilever for an undisclosed amount.

Dean Phillips, right, with employees Ashley Muscatell and Will Goveli in the Washington Avenue Penny’s. 

When he sold the gelato company, he says, he started looking around for something that would be a people business. Like ice cream, coffee has two major national players, Starbucks and Caribou, he says, and he decided that he could gain market share by offering a premium product much like he did in the ice cream and spirits worlds. “I thought there was a way to trade people up and coffee seemed obvious,” he says.

Penny’s brand promise is conversations and escapism, he says, aided and abetted by “great music and compelling magazines.” His coffee costs a few more pennies more than what’s poured in the chains down the road, but it’s higher quality, he says. While Starbucks has  struggled over the years with its food offerings, Phillips thinks Penny’s lives up to that premium offering with its made-to-order sweet and savory crepes and lovely pastries from Patisserie 46.

There are currently two locations open: one in the former IBM building on Washington Avenue in downtown Minneapolis and a second in a converted car dealer in Linden Hills. Both have their own personalities: lots of marble and lush outdoor seating in Minneapolis and a hipster vibe in Linden Hills. A third store is in the works. 

While the change he’s making at Penny’s hopefully goes into the tip jar, the change he’s talking about in his political campaign has even greater impact on the hospitality business. As a businessman who pays a livable wage to his employees, he’s advocating that the minimum wage hike is the right thing to do. But, he cautions, it can’t be done hit or miss. “It should be regional mandates, not just one city,” he says. “You’re at a disadvantage when your neighbor doesn’t have to do it.”

Phillips doesn’t mind conversations starting on opposite ends, as long as they end near the middle. Solving people’s problems comes naturally to him. After all, his grandmother is the famous advice columnist, Dear Abby. 

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