Replies to This Discussion

Permalink Reply by Alun Evans on January 17, 2010 at 12:08am

Hi Mike, I like the way you are thinking- reminds me of me about a decade ago! There are obviously a tonne of pros and cons to your idea and yiou need to weigh these up in your own mind before deciding which way to go. I would say that the biggest difficulty would be establishing a longterm working relationship of parity between you and your roasting partner. What I mean by this is you would essentially be tying yourselves together at the shoelaces. The roaster, if experienced and already succesful may or maynot want to take a punt on a new startup- pressuming that his/her brand would help you build your startup...or conversely if your start up was slower than anticipated then there may be a risk having his product, being roasted obviously in your store, garnering some negatives. Another issue might revolve around risk: what hapens if the roaster you work with pulls the plug? Are your customers going to be looking at an empty space where once a roaster stood??

I am still pretty firmly of the belief that you initially can no e a Jack of all trades. Most successful roastery/cafes I know of, or have been associated with, started as roasteries then beame a hybrid oif both overtme. All the roastery/cafes I know of back i NZ that have been very succesful, with the exception of 1, started this way. I would say go the cafe route first sans instore roasey, then as you build the business experiment and when ready do your own thing- not with a partner from another roasting company. Its my view, I am sure others will put their own thoughts in.

Actually as a foot note Merdeka Coffee, my company, started as a wholesale roastery- only 4 years ago did we branch into cafe opperation. The way we did it I like, t has worked very well. The coffe was well known before we opened our first cafes doorsand itfor sure helped us open more cafes since then.

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Permalink Reply by Mike M on January 17, 2010 at 1:42am

Thank you for the input Alun!

I think the viability of this idea is going to be determined to a great extend by the relationship with the roaster, as you said in your message.

Ideally, I'd like the 'roasting' to be done per diem, that is, I'll pay a solid hourly wage for the amount of hours the roaster works in the store. Perhaps this is a poor comparison, but I would like to have a contracted agreement similar to having a janitor or cleaning crew that will come by periodically to give the store a professional cleaning in addition to daily efforts. How often the roaster will come will be determined by the need once the store is up and running.

If the roaster would be open to this sort of partnership, perhaps I could source green beans from the roaster who receives them from their supplier at a price that allows them to capture some profits from the volume purchased. This way, quality roasting/quality coffee products would lead to more customers, leading to more demand, leading to increased profits for the roaster.

I like the idea of a planned transition from such a partnership to being able to do it on my own. If I'm able to hire a strong barista who would like to stay with the shop for a number of years, perhaps I could foot the bill for some training and/or an internship at a roaster's business.

As a consumer, I love the idea of being able to SEE the coffee being roasted. It's a sharp contrast to other shops that do not have such a service and highlights the committment to fresh, quality coffee.

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Permalink Reply by Eric Hammond on January 17, 2010 at 7:02am

Ideally, I would suggest opening a roastery yourself. Get that established and then open a shop later. Advantages of that way have to do with finances. A new roaster (35 kilo or so) would cost you less that 60K installed. The build out of the building would be very little (Putting in a bathroom or something), and the rent could be cheap because it's not a store front and traffic does not matter. Everything else could be bought at Target or something (food safe containers, coffee makers, etc.) Then buy coffee, a green order could be 2K or 3K, just to get you started. Roast a few loads and then go visit every place you can find that has coffee: Offices, stores, churches, local grocery stores (chains too), farmers markets, food outlets, and coffee shops. Price it so it's attractive. So for the investemnt of say 75K and lots of sweat and work, you could be paying yourself in a few months. A shop done right will cost much much more. A roaster would cost about the same, buildout could cost another 100K, equipment 30K, and all the toys you need along with an attractive place to open doors. I hope not, but it could end up in the hundreds of thousands just to get ready and stay open for a year. And no profit for that year and thus nothing to show for it.

Now, that is not what I did. It was the plan, but a better deal came up. And be willing to consider all sorts of deals as they appear. Find the perfect used roaster for a great price? go for it! Find a guy who wants someone to buy him out for pennies? Sure.

Simply put, Think and plan well. You'll be fine.

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Permalink Reply by Mike M on January 17, 2010 at 7:33am

Eric, you and Alun both recommended opening a roastery before opening a shop. That's really interesting! From my reading thus far, opening a shop first with space planned for a roaster was the recommendation.

The only problem I see is with the location. Wouldn't the location for a roastery and the location for a coffee shop be opposite one another? I would imagine the roastery would want to minimize costs and being in a high traffic area (with high rent costs) is hardly a requirement from what I understand.

I'm not sure how everything is going to play out, but it's going to be a fun ride!

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Permalink Reply by Alun Evans on January 17, 2010 at 4:39pm

Its a good discussion and for sure something you need to think about and decide upon well before taking any concrete steps. You know the old saying, "A Jack of all Trades...a Master of none". It is kind of the way you need to look at things at least initially. I think chosing one path early on and sticking to it until you have that discipline downpat is the right way to go. In our case retail came as a natural progression well after the roastery got setup. You are right- we roast in an area where we get very few visitors, which suits. The Cafes run seperately. However from my Kiwi experience there seems to be something about roasteries that have cafes attached that does draw people in, even if they are located in lower traffic areas.

Lets see how the other BXers feel. Will be interesting to read comments.

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Permalink Reply by Eddie on January 17, 2010 at 8:07pm

Mike;

FWIW my "NZ$0.02 worth" :-)

My company, Machiatto Espresso, started as a pair of guys who shared a passion for good freshly-roasted espresso beans, who experimented with all the methods described in the coffeefaq, and learnt the process intimately using the HGDB method (VERY smokey!!).

Between us we then devised (& I built) a gas fired drum roaster, which in the end only (half) roasted one batch of green beans before purchasing a NZ -designed and -built fluid-bed hot air roaster from a fellow altie on the alt.coffee newsgroup. My partner subsequently emigrated to Japan, leaving myself and wife to run and develop the company, which now roasts for friends, relatives, & wholesale and retail customers.

One opportunity/commitment that presented to us, (in order to 'get the taste out there' & give us the opportunity to educate the local community to the flavour of those beans) was to set up (and for the last 3 years, operate every Saturday, rain or shine!) a mobile espresso trailer at the Wairarapa Farmers' Market, where our gas-fired San Marino 2 group turns out "Coffee Without COmpromise", and supports beans sales as "The Original Wairarapa Roasters".

Your experience and motivations may well vary (& I'm sure they will somehow) but we find that the uncompromising commitment and passion to creating the best products possible are a good basis to start a business on. I'm sure Alun, with his more extensive experience, and business acumen, will add that there are obviously other considerations (ie the business aspects) that are essential too.

I look forward to hearing which way your life path takes you...

Reagrds,

Eddie
Machiatto Espresso Roasters
Wairarapa NZ


Mike Morand said:

Eric, you and Alun both recommended opening a roastery before opening a shop. That's really interesting! From my reading thus far, opening a shop first with space planned for a roaster was the recommendation.

The only problem I see is with the location. Wouldn't the location for a roastery and the location for a coffee shop be opposite one another? I would imagine the roastery would want to minimize costs and being in a high traffic area (with high rent costs) is hardly a requirement from what I understand.

I'm not sure how everything is going to play out, but it's going to be a fun ride!

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Permalink Reply by Alun Evans on January 17, 2010 at 10:49pm

Interesting to hear Eddie...your partner would not be Kupa Hokianga by any chance would it? He is a Kiwi living in Japan that I connected with on Twitter the other day.

Eddie said:

Mike;

FWIW my "NZ$0.02 worth" :-)

My company, Machiatto Espresso, started as a pair of guys who shared a passion for good freshly-roasted espresso beans, who experimented with all the methods described in the coffeefaq, and learnt the process intimately using the HGDB method (VERY smokey!!).

Between us we then devised (& I built) a gas fired drum roaster, which in the end only (half) roasted one batch of green beans before purchasing a NZ -designed and -built fluid-bed hot air roaster from a fellow altie on the alt.coffee newsgroup. My partner subsequently emigrated to Japan, leaving myself and wife to run and develop the company, which now roasts for friends, relatives, & wholesale and retail customers.

One opportunity/commitment that presented to us, (in order to 'get the taste out there' & give us the opportunity to educate the local community to the flavour of those beans) was to set up (and for the last 3 years, operate every Saturday, rain or shine!) a mobile espresso trailer at the Wairarapa Farmers' Market, where our gas-fired San Marino 2 group turns out "Coffee Without COmpromise", and supports beans sales as "The Original Wairarapa Roasters".

Your experience and motivations may well vary (& I'm sure they will somehow) but we find that the uncompromising commitment and passion to creating the best products possible are a good basis to start a business on. I'm sure Alun, with his more extensive experience, and business acumen, will add that there are obviously other considerations (ie the business aspects) that are essential too.

I look forward to hearing which way your life path takes you...

Reagrds,

Eddie
Machiatto Espresso Roasters
Wairarapa NZ


Mike Morand said:

Eric, you and Alun both recommended opening a roastery before opening a shop. That's really interesting! From my reading thus far, opening a shop first with space planned for a roaster was the recommendation.

The only problem I see is with the location. Wouldn't the location for a roastery and the location for a coffee shop be opposite one another? I would imagine the roastery would want to minimize costs and being in a high traffic area (with high rent costs) is hardly a requirement from what I understand.

I'm not sure how everything is going to play out, but it's going to be a fun ride!

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Permalink Reply by Matt B on January 18, 2010 at 8:59am

Mike,

Here's my candid take. I doubt that you will find a roaster who will provide you with a wage employee to run your own equipment. Why?

1. Unless they are pretty large, roasting companies don't usually have a second roaster person to spare. And if it's a small business, the roaster person (who may or may not be the owner) would be better off putting their time into growing their own business, rather than yours.
2. The principles behind roasting are universal, but the details usually do not translate perfectly. Even if you had the exact same machine as your "partner," the differences in installation would end up affecting profiles and the like. In short, the borrowed roaster person would be starting from the ground up in your facility, which brings me to
3. You are not paying just for the act of roasting, but for expertise. Roasting isn't rocket science, but the work and risk that goes into getting established and getting good at it is worth something--and certainly more than a small per lb profit on green, which brings me to
4. You would essentially be asking your roaster partner to act as a free consultant and set you up so that you would compete directly with his or her business in the future. I'm not sure why any roasting company would be interested in doing that.

As for the concept of shop/roastery itself, a couple of things to think about:
--The best retail locations have high traffic; the best roastery locations have no traffic. Different states and municipalities have different codes, of course, but generally speaking, installations in densely populated areas are either more expensive (afterburners, high/long runs, etc.), or more risky: one complaint about emissions can put you behind the proverbial eight ball. People and smoke do not mix well.
--Rent in retail locations is obviously more expensive than in industrial ones. This means that your roasting facility footprint is going to be relatively cramped--it will not lend itself to expansion of the wholesale business you hope to pick up--and/or very expensive.

Finally, I'd reiterate what Alun said about trying to do too much at once. Sourcing/roasting and retail are two very different businesses. There can be great synergy in doing both, but the money saved by roasting your own--especially if you are really trying to produce excellent product--is not as easy to come by as you might think, and running a retail shop is exceptionally demanding.

You can do really cool stuff when you pursue excellence on the retail side of things, and truly partner with a wholesale roasters. That's the kind of customer that we really, really want. And you can always transition into roasting your own down the line. We know folks get the bug. That's cool.

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Permalink Reply by Steve Belt on January 18, 2010 at 12:35pm

Mike-

I personally considered a very similar approach in my early stages of planning. I knew the marketing benefits that having a physical roaster inside the shop provides (instant reputability that the coffee is fresh roasted), while at the same time having no specific expertise in roasting.

Then I found a roaster "on the cheap", configured it to run on propane and started roasting out of my garage. I realized that "making beans sing" really isn't _that_ hard. If you study roasting a while, take the time to do it wrong on purpose, just to see what the result is, you'll find out, like I did, that putting a quality roast on a bean is reasonably forgiving, as well as reasonably easy. Under roast, the beans can be too wild or bitter tasting. Over roast, and the beans lose their origin flavor (which may be the only way to save crummy beans). Roast too fast and the roast will likely be uneven. Roast too slow and they will taste baked. You get the picture.

You'll need to understand a bit about bean density and bean moisture content, and how that affects the result. Fortunately, I live in super dry Arizona, so bean moisture content is reasonably stable from day to day, making the variable that can be problematic for many roasters less of a problem for me.

It's taken me a few months to get to where I honestly like the result I'm getting. I roast every week, but rarely for more than 4 hrs a week. I then taste, refine, and roast again. I take notes. Lots of notes, since I don't have a data logging system for my roaster.

Recently, I took what I considered my best result to the local roaster/importer that I get my green from. We cupped my espresso blend with his #1 espresso and a 3rd new roastery's espresso. All 3 were different. 2 of the 3, I liked, with mine being my preference, but only marginally over this local roaster's #1 espresso blend, and here the difference was truly personal preference. I prefer more acidity (or what I call "brightness" in my blend).

Funny enough, I looked at the beans of the other new roastery and what I saw was amateur hour. Beans roasted clearly too fast (I was later told they were doing them in 9 minutes...sheesh!), which resulted in an uneven roast throughout the batch. The under roasted beans added bitterness to the blend, which the roastery liked, but was added via accident, and I question whether this roastery really knows what they are doing.

At any rate, if you choose to pursue roasting in your shop, I say go for it. But the advice of getting experience in roasting, BEFORE, you open the shop doors is good advice, however you do it.

Going back to a conversation I had with my local green supplier, he mentioned how difficult it will be to find time to cup beans year to year, season to season, once the shop opens. He said most people just get lazy (or busy) after a time, and they call up Royal or Cafe Imports, etc., and just order whatever's cheapest from the region they expect to have a certain flavor profile. rather than order 30 beans from the region, cupping each, and really focusing on the flavor. After all, cupping takes time.

Keep the ideas rolling...

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Permalink Reply by Mike M on January 19, 2010 at 11:27pm

Thank you everyone for your comments.

Eddie - It's always interesting to hear about how people got to where they are today, the trials and triumphs, and it's inspiring especially seeing others go from humble beginnings to where they dreamed they'd be someday.

I couldn't agree more with what you said about having passion for the products and allowing that to be the stand-out factor through every endeavor. Very well said.

Matt B - You made some excellent points about the conflicts of interest when it comes to seeking assistance from a roaster in terms of personnel/expertise. Though I would imagine an agreement could be worked out with the roaster so that both businesses would benefit from the experience. Or perhaps I could seek out some sort of training/development partnership.

The question then becomes, what kind of relationship/agreement would benefit the roaster?

Another alternative would be to hire someone with roasting experience, though I would imagine such people are few and far between.

In terms of the zoning and such, of course it's going to be a challenge finding a premium location in terms of traffic with the added challenge of getting the local officials to sign off on having a roaster. There's no getting around that. But aren't there different options for roasters that would be more environmentally/customer-friendly? Also worth noting is that I am not envisioning a roaster with an incredible capacity/throughput ability. I was thinking more about something like the Probat L5 (5-11 lbs per batch, up to 44 lbs/hour).

But if having a large roaster is going to be a no go due to zoning or permits or what-have-you, then what about going micro? What about a couple of Probat Probatinos (1.75-2.5 lbs per batch, up to 11 lbs/hour)? Note: Probat Burns is the only roasting equipment maker who I've contacted thus far and spoken with a sales rep.

Steve - Also great feedback, thank you. I absolutely agree with what you said about learning the craft before trying to make a business of it. Makes sense to me!

Do you have any recommendations for coffee roasting information sources (books, dvds, etc)? If not to ultimately incorporate it into business plans, I'd like to learn more for the sake of understanding the coffee industry better.

It sounds as though you've been quite successful with your roasting experience in terms of creating a quality roasted bean. What have you done to incorporate it into your business plans?

Again, thank you all for the feedback!

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