Mokhtar Alkhanshali from Port of Mokha, Andrew Barnett from Linea Coffee, and...
For a while now I have been playing with the idea of writing a book about my experience with starting a coffee roasting business. I did start a successful coffee business, but I am definitely not a business guru with magic tricks up my sleeve. So I asked the coffee roasting community to help me out and let me know are their tips for someone who is just starting a coffee roasting business. I took the liberty of choosing the eight that were closest to my personal experience. I encourage you to add yours in the comments below. THANKS TO EVERYONE who contributed and will contribute.
“Educate yourself before committing to any business, be passionate about your craft, coffee roasting is an art! If it was easy, everyone would do it.” Melissa Davidson , Vice President at Terrelli Coffee, Vancouver, Canada
This is obvious but let’s be honest. This is the Achilles heel of most roasters. Roasting coffee is extremely complex. I have met so many “professional” roasters who could roast coffee from green to a desired color but when it comes to something basic like roast profiling, they have no clue what are they and what are they good for. Let’s point fingers! Me! For 8 years I was roasting on one curve until I decided to invest heavily in roasting training. It made all the difference. Whether you roast specialty grade coffee or Robusta, mastering the theory of roasting gives you full control over your beans. It is essential to start your coffee biz.
“…Don’t start small. A small roaster will kill you before you get going.” Andy Newbom , Director of Coffee & Marketing at IPCoffees, San Diego, California
This was my first mistake and it’s another common one. Specify your goals and buy your equipment accordingly. In 2001 I started to roast on an Alpenrost 250g roaster and I thought this would be a good start. When I was purchasing a 3kg Probat LG3 within a year, I thought the roaster was giant. I was wrong. I was also wrong in 2012 when we started with 5kg roaster and within 2 years we upgraded to a 15kg one. We use both of them, but we did not buy equipment based on our real business goals but on modest estimates.
“… Prior to opening a roastery I would suggest trying to get a few contracts that would ensure immediate sales – just a few bars for the beginning would be a great start. Open an online shop, announce it, spread the word. Growing your customer base, unless you are really deep with your USPs and a safe place under the sun might be quite difficult. Also, perhaps a point to consider – open a “public” roastery with a coffee shop. This combo seems to work well in various markets and you have an immediate tasting place as well as a point of sale.” Tihon Dedic, MBA Chief Financial Officer at ALBA M.S., Zagreb, Croatia
It will not get more basic than this. If you want to start a coffee business, the “most important thing is to find customers”. There is many ways how to do that but for me this means be different than everybody else. Differentiate yourself, stand out!
“Key word: honesty “ Filip Bartelak, Coffee Proficiency, Poland
Most of the coffees offered in Slovakia are budget coffees wrapped in fancy marketing slogans. I was 100% sure there must be other people who realize this. When we re-started Green Plantation, our goal was honesty and openness. We went so far that we started to train our own competition how to roast coffee. You should not do that 🙂 But what you should do is be transparent about your products and also about your mistakes. Mistakes happen. Rather then trying to hide it and lie about them, apologize and fix them. This might cost you some revenue, but in the long term it is a very important strategy. We understand that it is very hard to win the consumers’ trust, and this is why we offer visits to our roastery and let customers examine everything from our machinery to the green beans. This is unique in Slovakia where coffee companies are very secretive. In our case it make us stand out from the competition.
“I am a small micro-roaster and I have only been open a few months. … The other thing I would recommend is staying out of debt. I have boot strapped my company and paid cash for everything. My growth has been slow but I should show profit quicker.” Stephen Pivonka , Owner at Barkeater Coffee Roasters, East Greenbush, New York
Stay out of debt. Personally I could not agree more. In Green Plantation we raised capital from our own sources. We put in our money and asked our families to help us follow our dreams. The initial investment was around 10.000 EUR and 60% went to our first pallet of coffee. We started very humble. We bought cheap Turkish roasters, used grinders, we found very cheap rental space in a hidden corner of our town, used basic packaging equipment, underutilized and very affordable marketing channels, etc. We did not take out any loans or outside investors, because we wanted to own our company and we did not want to pay our profits to banks. After the first year we could afford to employ one of our partners and after 3 years we were ready to share some revenues but our main goal is growth. I understand that not everybody agrees about this strategy and many of you believe in loans. Perhaps you could share your opinions about the advantages of loans or investors.
Learn how to cup Kim Ossenblok, Barista Kim, Barcelona, Spain
Those 4 words are extremely powerful. Whether you are thinking of starting a specialty coffee company, cheap budget coffees or even an instant coffee brand you have to understand your own product and you have to be able to convey the information without the “mystic BS” to other coffee professionals. The only way how to do so is to learn how to evaluate quality of your coffee via cupping. If you are into specialty coffee make sure you teach your customers how to cup. They should know to how to evaluate your coffee.
“… discover if starting a roaster company is what you really want. If all the investment is done there is no way back, because you need to pay back this investment. Today it seems like everybody wants to start a roastery, but don’t know what all is involved in this (environment, permits, price calculations and 10.000 things more)” Jan Schuitemaker, CoffeeXperts Tastes of the World, Enkhuizen, Holland
Roasting coffee is fun! In the US, the most progressive coffee roasters were started by former home roasters. To work with coffee is one of the most rewarding businesses you could be in. Or is it? You have to focus on the word BUSINESS, because that’s what are you going to do. A lot of roasters do not realize that creating a product and roasting is a smaller part of running a a coffee roasting business. Price negotiations, chasing sales, marketing, paper pushing is what you are going to do most of the time. Cruel but true and if you do not like this get a job as roaster at some established roastery or roast at home and enjoy yourself…
“…Do your market research first. Identify your regional competition, check what kind of line they carry.” Denis Marquette, Specialty Coffee Roaster at Café Eureka
When I started my first business in Slovakia 14 years ago there were two micro roasters in Slovakia. When we re-focused in 2012, there were over 15 roasting companies. In 2001 when everybody was focusing on cheap coffee, we were the first company who started with dark roast and in 2012 when everybody was doing dark roast we were the first company who started specialty grade light roasts. This is how I enjoy finding customers — by being different and bringing some sort of change from the old style. To be different you must know what is out there and you must figure out how to improve on what’s already available. Without a good market research you won’t be able to do that.
There is much more than these 8 tips. Check out other excellent tips on these Facebook and LinkedIn groups. If the group requires membership, feel free to apply.
Coffee Roasters Forum (check posts by me in beginning of Dec 2014)
Coffee Roasters and Manufacturers
Coffee Retailers Allied Suppliers
Specialty Coffee Professionals
Baristas a subgroup of Specialty Coffee Professionals