Starting a coffee roasting business

[eldub]

There are high quality organic beans on the market, but there are many more non organic offerings to choose from. There are also many growers utilizing organic farming practices who aren't certified.

 

[Kbeans]

Is a hottop roaster better than the Behmore 1600 that I have? I jus don't like the fact that I can't preheat it. I sometimes wonder If I'm baking the beans instead of roasting. I am thinking of converting a 10x10 shed that is attached to my house into a roasting room. It has a 220v line already installed. I will install a window unit and insulate the walls. I do like the idea of two rosters. What do you think about buying a used 5 kilo roster to start out with?

 

[eldub]

That sounds like a better idea than the upstairs gig. I think a 5kg is big enough to start with.

 

[sae]

Is a hottop roaster better than the Behmore 1600 that I have? I jus don't like the fact that I can't preheat it. I sometimes wonder If I'm baking the beans instead of roasting. I am thinking of converting a 10x10 shed that is attached to my house into a roasting room. It has a 220v line already installed. I will install a window unit and insulate the walls. I do like the idea of two rosters. What do you think about buying a used 5 kilo roster to start out with?

This sounds like a much better idea.

 

[coffeem]

drop temps on 5kilo roaster

Makes sense to me senor shave.

Btw, one can purchase a 5kg shop roaster from US Roaster Corp for around $14,500.

i just purchased my 5 kilo from US Roaster. I have a question since you own one. for 1lb to 2lb roast what temp do you drop the beans into drum. Same question for 6lb and 12lb batches?

 

[eldub]

The more small batches you roast in a session, the lower you will want your drop temp, imo. I'll drop a 12 lb batch at 370-380*. A six pound batch at 360-370*. The smallest batches are the trickiest, ime. 340-350* might be a good starting point for you. But I'm on a 12 lb roaster.

You should be able to go at a higher temp on your five Kg, maybe. I'd ask Dan for clarification. My guess is that you would drop a 12 lb batch at 420* and a six lb batch at 380*.

lw

 

[harryh]

Customer Flow

Eldub,

I have just discovered this site as I am considering going into the roasting business.
I have been trading green coffee for 8 years form Mexico to Costa Rica to Brazil, but
am thinking about moving back to the states. I know a lot about quality, but less about
retail.

Can you give me an idea about the amount of business you do on a daily business? I dont
plan to do this any where near Des Moines (parents grew up in Grinnel actually), so I am not
competition. But I would love to know how many cups a day or lbs..etc you were able to sell
initially. I plan to focus on very top end coffees.

Cheers,

 

[CoffeeJunky]

Harryh<

Welcome aboard.
I have couple of questions.
What do you mean by high end beans?
If you are selling the high end beans, what are you planning on charging for them? 20? 30? 40? per pound?
How is the bean trading business? I heard the coffee farms are in danger down South America. Do you expect the huge price jump on coffee anytime soon?

Thanks

 

[harryh]

Harryh<

Welcome aboard.
I have couple of questions.
What do you mean by high end beans?
If you are selling the high end beans, what are you planning on charging for them? 20? 30? 40? per pound?
How is the bean trading business? I heard the coffee farms are in danger down South America. Do you expect the huge price jump on coffee anytime soon?

Thanks

Gm,

The quality I will look for are micro lots / cup of excellence type / single estate. I think the price range would be the above range (15 to 30).
I would love for it to be an price range that people could enjoy comfortably on a daily basis. But I do not want to compromise the quality to that end.

Coffee mkt has gone to hell. There will be a carry over in Brazil of 10 million + bags. Roasters have been "dumbing" down their blends with cheaper and cheaper coffee.
Coffee farms in Central America are in danger from "roya" and it's probably worse than most imagine. Both old and new plants have been affected and the money and incentive
to replant, with current prices is not there. One more reason to pay up for quality. i dont expect that to have too much of a price impact on global prices (it may only represent a loss of 3 million bags).
It will impact CentAm cash prices (it has already). Mkt may and probably will have a technical correction, but forward looking picture is for surpluss. Brazil will probably produce 60 million bags next year.

So, back to my question. I would like to use the coffee shop to support the roasting business. But, I dont really have a good idea about costs and how many cups / day one might reasonable expect?
I have a few links now that say anywhere from 60 to 500 day. If you have any good links/sites that might help better understand that, I'd appreciate it.

Cheers,

on

 

[eldub]

I can't help you with cups per day estimates, as we really only focus on the retail/wholesale coffee by the bag bidness. And I'm guessing the amount of coffee we currently sell would be on the low side of any estimates you would make for yourself. (I've been concentrating more on my roasting skills this past year and less on developing new wholesale accounts.)

 

[ColaBoy]

Hi All, also new here, no competition to any on this thread anyway, I am from south Africa. On the roasters, why is no one mentioning the Artisan from Coffee Crafters. I am definately considering this machine. It is super affordable, small (compact) and just seems simple enough to get roasting. Anny comments will be appreciated. No mention of grinders here, are there any preferences in make and batch/hopper capacity?

 

[VENGECOFFEETIME]

we start with 10kg roaster as a new small size business and i suggest it to start with this capacity. Venge Kahve Zamani

 

[wwcove]

Can I continue this discussion about start up with a question of my own: I have been home roasting both fluid & drum method and I like both. But want a drum roaster to start. I don't have much cash so can't afford $10 grand or more on a machine. Today I ran into a nice gentleman that has been both growing coffee in Guatemala and roasting for decades. He is living in the states but getting ready to move back home. He has a custom made 10 lb. unit made by a company in Guatemala about 7-8 years ago. Photos are attached. It is mostly cast iron and all manual. Do you think it's worth $3 grand?
the thing is a tank! My biggest concern is finding a safe place here in AZ to roast without starting a fire

 

[BBdude]

I'd buy smaller quantities if roasting on that small unit.

We made the final payment the day I picked up the roaster. Total bill was $24,500.

Profitability depends a lot on fixed costs. We have low overhead and that has allowed us to get into the black quickly. I figured the wholesale end of business would be our bread and butter, but I really haven't had time to bring in accounts while watching the shop at the same time. I'd be happy (in the short term) to retail 400 lbs/month and wholesale 400 lbs./month. That would roughly leave us $45,000 after paying fixed and variable expenses, allowing me to hire a part-time person and a draw for myself. I'm hoping to get to this level in the next six months. That would be just over a year after opening for business.

I know this is an older thread, but wanted to recognize eldub for his/her contributions. As someone teetering on the coffee roasting business, I thought eldub's contributions were detailed and quite helpful. Eldub articulates how roasting is not as easy as it seems and capital expenses, if you wish to be successful, are pretty high initially. Thank you so much!

I quoted this paragraph as I felt it was most interesting / beneficial as it's rare someone outlines their margins. However, I was curious if $45,000 is a typo and you meant $4,500 as the former would be a margin of ~$56/lb whereas the later would seem more reasonable at ~$5.6/lb. I am basing this off your rate of 800/lb sold per month.

For what it's worth, if this taxes into account roaster amortization, rent, utilities, website/marketing, packaging, etc. your margins are higher than I expected. I assume the $4,500/month does not include wages?

I realize eldub hasn't posted since 2015 and sold his business, but wanted to chime in anyway since it was so helpful to me.

 

[Music_Geek]

Since you're resurrecting this behemoth, I might as well chime in.

I was discussing this stuff 3 years ago in this thread, but about 6 months ago, we finally opened up shop. A year ago we took delivery of our roaster (we opted for a USRC 5Kilo. 5 kilo seemed like the ideal size, and I theorize that many people feel this way, because they basically NEVER come up for sale... we watched for about 8 months, trying to find a used roaster... until we decided that not making a move was more expensive than what we'd incur by going new.)

We roasted an enormous amount of coffee on a Quest M3 with data. We read a lot. We cupped a lot. We networked (with roasters) a lot. That all turned out to be totally crucial.

We're a group of 5 friends who did this, and the motto regarding the risk was "Imagine you bought a Jet Ski, and crashed it, but walked away clean." Split 5 ways, the expenses have been reasonable. Opening a tiny coffee shop and roastery, it cost about $50K at this point. We financed nothing. We just scraped together capital. Did not take investors (but had many local offers.) To date, we've recouped about 60% of that investment, so we expect to break even before the end of the year. Our products are improving, because our technical skill is improving and our ability to read our region's interest has been right on the money. I think that having the right region has been crucial. We have no competition, and as first to market in our area, I am convinced that competition will now HELP our bottom line, if it ever arises. We're in a heavily populated area that is just totally under-served.

That is what I would look for, if I were trying this somewhere else. I would specifically look for an area with a lot of families, and craft/connoisseur (beer, foodie, etc) tastes, that doesn't already have a local roastery. I think we would not have decided to do this if there was good coffee in our area... and I think I would not want to start out as "the competition."

The warnings that others have offered ring very true. No one is getting rich here. We're all giving up weekends, except one friend who has agreed to work the shop for an hourly rate + health care. It's a sacrifice. I do not think it will be easy to hire people on and not have the quality take a hit. I do not think this is a business you can manage from at home, and just hire help. I think, from what I've seen so far, you have to be able to make every drink (if you do extraction) and you have to understand the roasting process. You have to do work, actively, as opposed to just throwing money at a problem. This is an easy, easy, low-paid job for anyone who obsesses over coffee, and a really bad, very difficult job for anyone who just sees dollar signs.

If anyone is thinking about getting into the roasting thing, hey, as long as you can handle the risk and can put in the hours--AND love coffee, I say go for it.