I think the problem is one of scale. Roasting part time (say a 1 or 2 kg roaster) but as soon as you start running as a business, extra costs creep in to make roasting on a small scale relatively uneconomic. This means a transition from a 1 or 2 kilo roaster to a 20+Kilo roaster to make it an economic proposition.
The trouble then is finding enough customers to keep a 20+g roaster busy enough and of course the problem of 20kg minimum batch sizes.
Then of course comes the other problem...wheras before you might have been happy packing 250g bags and selling small batches, with a bigger roaster, it becomes pretty mind numbing to do that and you want to start packing 1kg bags for businesses..........they then want cheaper prices, which cuts profit so you start looking for bigger roasters etc.
Also roasting a bit on the side casually is fine with no need for specialist chaff collection, destoners or afterburners....but once you start roasting a LOT of coffee regularily in BIG roasters, you have to shell out on a decent chaff cyclone stack, a good destoner and an afterburner, non of which come cheap, especially when coupled with 3 phase power and bulk grinders, complying with government regulations ( you call it code) etc...
I think it's the transition that can kill you, because the last problem is making the leap from 30 small but regular 250g customers to 300 big 20kg per time customers
Don't let any of this put you off trying though :-D
We had to expand beyond just roasted coffee to make a living. i.e green bean sales and Home coffee roaster sales, then we went into home espresso equipment pretty heavily and we have since backed off home espresso equipment sales. We are trying to target "niche" coffee equipment markets for home use. In short we had to diversify but still stay in the coffee field to make our web site my wifes full time job and I still just roast coffee 3 times a week during the evenings as my second job. We are into our 5th year now and getting ready for our biggest time of the year! Holiday Sales!
I'm not trying to scare anyone out of the coffee industry, but you have to LOVE coffee to stay with it!
I have a question about this subject. i live in a small town with a few swanky resturuants and no real good coffee. They all buy the run of the mill stuff from their food suppliers. My question is other then the customer I know I already have who is a salon that serves complimentery coffee how do I drum up their business. Short of a good sales pitch which I can do what else needs to be done along with the great customer service?
I know what you mean, the shops where i live focus more on the eats obviously. Thats my line of thinking so far, great food followed by garbage coffee? I figure if I could get them to do just 5 lbs a week x the 5 places in town plus some sales on the side I could do ok. I dont want to set the world on fire, just get some decent coffee in town
After 4 years of hobby roasting, I have just gone to the business side part-time. I think Davec made some legitimate observations in his post. I purchased a small roaster (YM2) simply to extend my hobby. Then I started thinking (dangerous!), “Since I have a place right here on my property that can be approved as a commercial kitchen, why not go legit and try to get my money back?” So that is what I have done knowing full well that a 2-kilo roaster is too small to be economical in much of a business sense.
In my case, I have no real aspirations of growing large and going full-time. Not that it would be terrible, but I have my reasons. What I really want is controlled success. In other words, I want to make enough money to pay for my investment and then purchase a nice espresso machine.
I am so newly formed, or I should say…I have waited for the delivery of my roaster for so long now…that I have not even approached any retail outlets yet. I am not even sure how many I want to approach. What I have done is approach some schools & churches for fund raising efforts. I have some slated to begin next month. I like this approach because it does not tie me up all the time. I have a full-time job, am a full-time student and like to travel, so time is important to me. I also have a web site that is not quite prepared for selling yet, but close. And I took on the coffee for someone else’s coffee site and it is about ready to launch. I will also be providing the coffee for that person’s fund raising efforts. I guess you could say I am trying to form a part-time venture that is mobile if I decide to move in a few years (something I do plan on).
I can see how things could get out of control quickly. Or, in a relatively small town like mine, how everyone could turn you down and then where do you go? Unfortunately coffee is just not the focus of most restaurants these days. I do have people asking me regularly where to buy my coffee so I am going to have to get an outlet established. Also, there is another new roaster in the neighboring county who is selling here because his county is pretty rural. He is a nice guy with a good product and got a head start on me. Sometimes I find myself wanting to answer the call to “compete,” but I keep telling myself, “controlled-success.”
Finally, let me give you this to ponder: you may already be selling your wares on occasion. Maybe 5-20 lbs a week. After you start a business you might decide you liked it better that way when things were less complicated and you did not “have” to sell.
A very good read Shep. You make some very valid points. I finally got my dream job in law enforcement, graduated from the academy last Feb. and am now realizing th pay sucks for the work I do. I too want what you refer to as controlled success. I love my job but we are going to a 12 hour shift in Jan. which means I will be off 15 days a month. Oh the ways to fill my time! Why not do something I enjoy. Even if it inly amounts to 20 lbs week, I will save on shipping due to the fact I live about a 1/2 hour from a roaster I have already been in contact with and have prices from. There is a local farmers market where I can get a table for $30.00 for the day and no one sells there. I figure if I put in enough time it might be profitable, the gift basket thing and whatnot for the holidays .
Absolutely. I say give it a try. My post was not meant to discourage, only to offer a sense of reality from someone who is there also. One of the reasons I decided to give it a try is that I felt like I would have always regretted it if I had not. Frankly, I am more afraid of regrets than I am failure. I failed publicly many years ago, so it has no hold on me anymore. Life is short and meant to be lived...do it your way and do not worry about what anyone else thinks or says, including me!
We have a very healthy farmer's market also and I may make an occasional appearance with my YM2 to do some demonstration roasts. Good luck with your venture.
Thanks for the encouragement. I know what you mean about regrets. I have quite a few what woulda beens in my life. I wouldnt trade what I have now, ie. daughter and a P.I.T.A. wife for it but its kinda like I need to know I can succeed. I hope your venture works out for you, I will keep you posted as to how mine is progressing