Street coffee stalls appeared in Melbourne in the 1850s, providing cheap breakfasts or night-time refreshment for city workers. Street sales declined in the early 20th century, and while in the 1920s Melbourne had only a dozen or so Continental-style coffee lounges, by the late 1930s about 200 of the 450 registered cafés were coffee or tea lounges. The standard style of preparation was still the percolation method. Espresso had been invented in 1901 by Luigi Bezzera of Milan, and after World War II Achille Gaggia began manufacturing a commercial piston machine which generated more pressure. New York had its first espresso machine installed in the late 1920s, and early units could be found in Melbourne by the 1930s, though generally confined to restaurant kitchens (at Florentino) or small Italian grocers.
In 1953 Henry Cyril Bancroft and his son Peter, having visited London's first espresso bar, secured the agency and manufacturing rights to Gaggia machines, opening Il Capuccino (sic) in St Kilda the following year. They successfully set the demand for machines, which were soon purchased by the University Café in Lygon Street and Pellegrini's in Bourke Street. Older-style tea-houses were converted into coffee lounges and the vogue for espresso spread to milk bars and suburban shopping centres. An early espresso coffee lounge opened in the Federal guesthouse at Mornington in the late 1950s, and Melbourne's first kerbside café was inaugurated at the Oriental in Collins Street in 1958.
In the 1960s, though regarded suspiciously by some as centres for gambling and other illicit activities, espresso bars provided a focus for ethnic communities, the rise of coffee's popularity and the introduction of espresso machines attributable partly to the influence of European immigration. Even before the Olympic Games, contemporary observers saw in it a mellow influence on national culture, a stimulant to human encounter, and a civilising antidote to Melbourne's perceived stodgy way of life.