We are new startup micro roaster. In our local area (metro area) there is only one other roaster for a population base of about 230, 000. This roaster is fairly large (over 400,000lbs a year roasted). However they are found everywhere you look, grocery stores, gas stations, corner stores, tourist outlet stores, farmers market, online store, they supply other coffee shops and have just opened two coffee shops themselves. They have a good reputation and I actually enjoy their brew as well. My question is... what market should I go after (or concentrate on) given that this company seems to have everything cornered? I am sure there is enough business in our area (I am only estimating around 15,000 lbs this year), but I am unsure where to focus selling. I am not going to have a storefront yet so Wholesale is going to be a major part of my business. Just wondering thoughts...Thanks in advance
Marketing and Competition
- Thread starter con771
- Start date
It looks like we are both in the same boat so I'm hoping others jump in on your post
I've got a couple of solid roasters in my area with a population of a little over 400k. My initial business plan is to focus on drip coffee and approach smaller local restaurants. Mainly ones that do a good breakfast business to start. Personally coming from the restaurant business, I know a lot of them simply buy canned coffee because it is cheap. I believe this provides an opportunity within the market. My goal is to introduce them to fresh roasted coffee and let them know I'm a local business who can deliver them a consistent product each week. I'm also planning to bring with me a free sample bag to leave behind at each location. The smell of fresh roasted coffee goes a long way
Of course, I'll be looking at all the other avenues for distribution as well. I'm personally creating a custom branded logo, custom website, and social outlets (blog, FB, Twitter...etc.) as well. I plan to actively engage all of my social outlets and strongly believe in creating a solid brand image prior to launch. This will help provide me additional credibility once I start approaching potential customers. I'm also working on creating my roast profiles in advance and creating a spreadsheet of potential customers. Sometimes the best business plans in the world don't work but I've created one anyway! I hope this is helpful. Good luck with your new venture...here is to happy roasting days ahead!
I've got a couple of solid roasters in my area with a population of a little over 400k. My initial business plan is to focus on drip coffee and approach smaller local restaurants. Mainly ones that do a good breakfast business to start. Personally coming from the restaurant business, I know a lot of them simply buy canned coffee because it is cheap. I believe this provides an opportunity within the market. My goal is to introduce them to fresh roasted coffee and let them know I'm a local business who can deliver them a consistent product each week. I'm also planning to bring with me a free sample bag to leave behind at each location. The smell of fresh roasted coffee goes a long way Of course, I'll be looking at all the other avenues for distribution as well. I'm personally creating a custom branded logo, custom website, and social outlets (blog, FB, Twitter...etc.) as well. I plan to actively engage all of my social outlets and strongly believe in creating a solid brand image prior to launch. This will help provide me additional credibility once I start approaching potential customers. I'm also working on creating my roast profiles in advance and creating a spreadsheet of potential customers. Sometimes the best business plans in the world don't work but I've created one anyway! I hope this is helpful. Good luck with your new venture...here is to happy roasting days ahead!
- Feb 28, 2008
- 5,227
- 17
Hello "con771"
When you say, "this company seems to have everything cornered" does that mean that they have no competition? Do the grocery stores, corner stores, etc. only carry that company's coffee, or do they also sell other brands? Even though they have a good reputation and product, I find it hard to believe that they've got everything cornered.
You didn't mention restaurants. Do they sell their coffee to the local restaurants too, or just the coffee shops?
People tend to like variety and choices. There obviously is enough business in the area to welcome some friendly competition. As long as you offer great quality, dependability, and prices, you'll have a good chance of grabbing your own corner of the market.
Rose
When you say, "this company seems to have everything cornered" does that mean that they have no competition? Do the grocery stores, corner stores, etc. only carry that company's coffee, or do they also sell other brands? Even though they have a good reputation and product, I find it hard to believe that they've got everything cornered.
You didn't mention restaurants. Do they sell their coffee to the local restaurants too, or just the coffee shops?
People tend to like variety and choices. There obviously is enough business in the area to welcome some friendly competition. As long as you offer great quality, dependability, and prices, you'll have a good chance of grabbing your own corner of the market.
Rose
CavalierCoffee
New member
- Jul 31, 2013
- 22
- 0
Con771
I find it hard to believe that in an area of 230, 000 people there is only one coffee roaster. My guess is that if you dig a little you will find others. I started out roasting for friends and family members, then expanded to my workplace and eventually out into the community. It worked for me.
I find it hard to believe that in an area of 230, 000 people there is only one coffee roaster. My guess is that if you dig a little you will find others. I started out roasting for friends and family members, then expanded to my workplace and eventually out into the community. It worked for me.
expat
Member
- May 1, 2012
- 430
- 3
If there is only one roaster in your area then . . . lucky you!
When they zig you zag.
Be more expensive -- but deliver on the promise of more expensive coffee. Great flavor. Unique coffees.
Wildly different packaging so there is no confusion about who is who.
Be prepared to build your business over time. It won't happen overnight.
Don't waste a lot of time -- in my experience -- on social marketing. The big guys like Coke, Nissan, VISA can't really see that there is any profit tied in to it. And that's what we're here for, right!?! I'm not saying don't, as a matter of fact I FB and Tweet, but as a small business owner there is only so much of you to go around so prioritize on what brings in the dollars (or in my case, euros).
When they zig you zag.
Be more expensive -- but deliver on the promise of more expensive coffee. Great flavor. Unique coffees.
Wildly different packaging so there is no confusion about who is who.
Be prepared to build your business over time. It won't happen overnight.
Don't waste a lot of time -- in my experience -- on social marketing. The big guys like Coke, Nissan, VISA can't really see that there is any profit tied in to it. And that's what we're here for, right!?! I'm not saying don't, as a matter of fact I FB and Tweet, but as a small business owner there is only so much of you to go around so prioritize on what brings in the dollars (or in my case, euros).
Redswing
New member
- May 30, 2013
- 227
- 0
on the topic of pricing...
I just bagged my first bags of coffee that I'm proud of, and am giving them out to a few local businesses and friends. I live in a town of 15,000 1 hour from San Francisco, with no other roasters. This town is known to be frugal, and there aren't any specialty coffee shops in town. Just a starbucks and a local coffee shop geared towards the social scene. So I am having a hard time determining a price. An advisor told me that the temptation is to underprice yourself in order to gain market share. I was thinking about retailing $9 for 12 oz, now I'm leaning towards $10 for 1 lb. Wholesale $8 a lb for 5lb bags. I just don't want to be too expensive, I feel like the odds are more in favor of me having too few customers rather than too many. Since I'm paying around $3 a lb green, add a $1 for other expenses, I'll still make $4 a lb wholesale and $5 a lb to individuals. I don't want to be greedy, it seems like good numbers to me. Ahh, but higher prices do tend to suggest higher quality...I just don't know if my market would support that, and I really want business. Any thoughts?
(ps, poison: i touched your roaster frame a few days ago in fallon nevada...)
I just bagged my first bags of coffee that I'm proud of, and am giving them out to a few local businesses and friends. I live in a town of 15,000 1 hour from San Francisco, with no other roasters. This town is known to be frugal, and there aren't any specialty coffee shops in town. Just a starbucks and a local coffee shop geared towards the social scene. So I am having a hard time determining a price. An advisor told me that the temptation is to underprice yourself in order to gain market share. I was thinking about retailing $9 for 12 oz, now I'm leaning towards $10 for 1 lb. Wholesale $8 a lb for 5lb bags. I just don't want to be too expensive, I feel like the odds are more in favor of me having too few customers rather than too many. Since I'm paying around $3 a lb green, add a $1 for other expenses, I'll still make $4 a lb wholesale and $5 a lb to individuals. I don't want to be greedy, it seems like good numbers to me. Ahh, but higher prices do tend to suggest higher quality...I just don't know if my market would support that, and I really want business. Any thoughts?
(ps, poison: i touched your roaster frame a few days ago in fallon nevada...)
1) Don't try to undercut Starbucks. You're better, right? Fresher, hand-roasted, local, tastier? Go check Peets and SB's prices at the supermarket and SB's, and shoot for that. It shouldn't be hard to justify to people. Use a slightly better bean if you must to help justify, and really prove yourself. You could always introduce a 'budget' or less expensive bean later.
My whole outlook is this: the market is FULL of mediochre > terrible junk. Why should I try to out-underacheive everyone? The high-quality coffee market in LA is finally starting to catch momentum, and I do have competition, but it's not saturated, and I can fill a niche.
In your situation, your market, too, is FULL of crap coffee. Before you came along was there a shortage of Folgers, or Nescafe instnt? Was Starbucks turning people away at the door? No, so how are you going to step into a market full of junk, and compete? By providing more junk? Or providing something better?
Be Porsche, let everyone else make Corollas. In this case, almost EVERYONE can afford the porsche of coffees. The very best from Colombia can be had for $5-6/lb green, and sold for $18/lb. Not everyone will buy it, but I always ask: how much was your latte at Starbucks this morning? $4? For one drink? And you can't afford 25 cups of my killer joe for $18?
Yeah right.
2) Your wholesale pricing structure is kind of weird. $1 off per lb? If you raise prices to $12-$13/lb, then give 25-30% wholesale discount, it makes more sense, I think.
3) Don't forget shrinkage: 100lbs green is 85lbs roasted, approximately, depending on roast level/style.
4) YOU TOUCHED MY ROASTER? I HATE YOU!
lol, damn, I can't wait!
5) Post pics of yours! What color did you get? What options?
6) You need to get the local social cafe buying your beans. MUST. Win them over, get bags of beans for sale on the counter. That's your main competition, take em out at the knees (by roping them into your master plan of complete domination!).
Offer free training, teach them to showcase your beans in the best light possible.
My whole outlook is this: the market is FULL of mediochre > terrible junk. Why should I try to out-underacheive everyone? The high-quality coffee market in LA is finally starting to catch momentum, and I do have competition, but it's not saturated, and I can fill a niche.
In your situation, your market, too, is FULL of crap coffee. Before you came along was there a shortage of Folgers, or Nescafe instnt? Was Starbucks turning people away at the door? No, so how are you going to step into a market full of junk, and compete? By providing more junk? Or providing something better?
Be Porsche, let everyone else make Corollas. In this case, almost EVERYONE can afford the porsche of coffees. The very best from Colombia can be had for $5-6/lb green, and sold for $18/lb. Not everyone will buy it, but I always ask: how much was your latte at Starbucks this morning? $4? For one drink? And you can't afford 25 cups of my killer joe for $18?
Yeah right.
2) Your wholesale pricing structure is kind of weird. $1 off per lb? If you raise prices to $12-$13/lb, then give 25-30% wholesale discount, it makes more sense, I think.
3) Don't forget shrinkage: 100lbs green is 85lbs roasted, approximately, depending on roast level/style.
4) YOU TOUCHED MY ROASTER? I HATE YOU!
lol, damn, I can't wait!5) Post pics of yours! What color did you get? What options?
6) You need to get the local social cafe buying your beans. MUST. Win them over, get bags of beans for sale on the counter. That's your main competition, take em out at the knees (by roping them into your master plan of complete domination!).
Offer free training, teach them to showcase your beans in the best light possible.
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expat
Member
- May 1, 2012
- 430
- 3
Redswing,
My retailers want 30 - 30% here in Ireland
Seems $12 would be better than $10.
Why are you paying so much for coffee? I'm paying for a KILO what you're paying for a pound. And I'm buying grade 1. Super premium, Gold Cup, Cup of Excellence coffee -- the bag I just bought -- was 6.07 euro/kg. I get 11 bags on a pallet and carriage is 185 euro from the U.K. so that adds 0.28 euro/kilo to the price.
Maybe coffee is more expensive in the U.S.? (Doesn't seem likely, especially S. and Central American coffees.) Or maybe you're buying from a middleman instead of someone that is trading direct with the growers?
My retailers want 30 - 30% here in Ireland
Seems $12 would be better than $10.
Why are you paying so much for coffee? I'm paying for a KILO what you're paying for a pound. And I'm buying grade 1. Super premium, Gold Cup, Cup of Excellence coffee -- the bag I just bought -- was 6.07 euro/kg. I get 11 bags on a pallet and carriage is 185 euro from the U.K. so that adds 0.28 euro/kilo to the price.
Maybe coffee is more expensive in the U.S.? (Doesn't seem likely, especially S. and Central American coffees.) Or maybe you're buying from a middleman instead of someone that is trading direct with the growers?
John P
Active member
- Jan 5, 2007
- 1,057
- 4
poison has it right.
Our retail price point is $18-$22 per 312g. I wholesale for $14-$16 per pound, and our clients think it's a bargain.
Remember, you have to account for your skill set as well. The same exact green in the hands of two different roasters will not have the same value. Understand your value in the process, and exceed expectations. Price accordingly
Our retail price point is $18-$22 per 312g. I wholesale for $14-$16 per pound, and our clients think it's a bargain.
Remember, you have to account for your skill set as well. The same exact green in the hands of two different roasters will not have the same value. Understand your value in the process, and exceed expectations. Price accordingly
Redswing
New member
- May 30, 2013
- 227
- 0
i don't mean to ransack the marketing/competition thread, but this conversation is super applicable for me right now. poison, i picked up two bags from royal coffee in oakland, ca, averaging $2.75 a pound (accounting for 15% shrinkage, that's $3.30 a pound, hence my earlier figure). did i choose too inexpensive of beans? the people at royal told me these were great coffee choices, a guat and an ethiopia.
i guess i just don't think people around here would pay $14-$18 a pound...but if they would, how do i find them? by getting the local atmosphere driven coffee shop to use and sell my coffee? (one business in town is brewing and selling retail, looking hard for more, a website is on it's way, and i gave 12 oz bags to pretty much every serious to semi-serious coffee drinker i could think of, introducing my company, asking them to spread the word)
one more consideration is the reality of my skill set. i've only home roasted on a tiny roaster for about 4 years, and now i am on a new machine, with little formal training. i do plan to take the willem boot on-line course soon.
hungry for suggestions...
i guess i just don't think people around here would pay $14-$18 a pound...but if they would, how do i find them? by getting the local atmosphere driven coffee shop to use and sell my coffee? (one business in town is brewing and selling retail, looking hard for more, a website is on it's way, and i gave 12 oz bags to pretty much every serious to semi-serious coffee drinker i could think of, introducing my company, asking them to spread the word)
one more consideration is the reality of my skill set. i've only home roasted on a tiny roaster for about 4 years, and now i am on a new machine, with little formal training. i do plan to take the willem boot on-line course soon.
hungry for suggestions...
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- Thread starter
- #13
I am in a similar boat as Redswnig except my market is a lot larger and I am trying t get my price points down first, before I get into the market. I am estimating purchasing fairly high quality beans at approx. $4 per lb (includes shipping costs) then selling retail $16 per lb and Wholesale 11-$13 per lb. I am going to target as many local coffee shops as possible (there are about 20) with the hopes of hooking just a couple. I then am aiming at higher end restaurants with the same goal, just hooking a couple. If I could get just 2 coffee shops and 2 restaurants that would put me on a good path to achieve bigger things and achieve larger market penetration. There is also a local coffee business who just supplies coffees to local business offices. I was hoping to be able to get on their supply list. That would be great exposure. For me it's about quality. Profit is also a goal of course but in the beginning exposure is just as important. I'll offer coffee at a discount if I think the exposure is great. Then when things really start rolling I can dictate the terms more and more.
John P
Active member
- Jan 5, 2007
- 1,057
- 4
HRC,
You should never lower prices. If you ever lower prices you are admitting to both yourself and your customers that everything prior was not worth what they were paying. This in both perception and reality questions credibility. It is your responsibility to know your value and price accordingly. Underestimating OR overestimating your value is just bad business.
You should never lower prices. If you ever lower prices you are admitting to both yourself and your customers that everything prior was not worth what they were paying. This in both perception and reality questions credibility. It is your responsibility to know your value and price accordingly. Underestimating OR overestimating your value is just bad business.
