For many roasters, adding a café to their roastery is an exciting prospect.
As well as opening up new revenue streams, it is a way of introducing more customers to their coffee and ensuring it’s served in a way that brings out its distinct characteristics.
Despite the economic impact of Covid-19, the global café market is predicted to exceed $201.4 billion by 2027. As such, opening a café allows roasters to share in the spoils of an increasingly lucrative market, bringing greater financial rewards than roasting alone.
However, before opening a café, it’s important to weigh up not only the costs involved in setting up and operating, but also the energy required to juggle two businesses. While it may seem like an attractive prospect on paper, the reality can be a shock if roasters are not adequately prepared.
To find out more about adding a café to your roastery, I spoke with the owner of Kitty Town Coffee, Zanetta Kok.
What do you want to gain from your roastery café?
From greater profits to brand diversification, there are many reasons for adding a café to a roastery.
Zanetta has been running Kitty Town Coffee in Pennsylvania for a number of years – but she only recently added a café to proceedings.
She tells me she made the decision after realising she wasn’t capitalising on the popularity of Kitty Town’s coffee through wholesale distribution.
“We were serving a small, start-up café that hardly sold any coffee,” she says. “Somehow, in the six months since they had opened, their social media following was larger than ours, and we had been operating for almost three years.”
For Zanetta, it didn’t add up as there were more consumers buying coffee directly from Kitty Town Coffee than there were ordering it in the café.
Opening a café has helped establish the roastery, and build stronger trust between customers and clients. It has also helped consumers connect their coffee to its roasting origins.
It can take a lot of effort for wholesale specialty roasters to attract new customers, especially as an e-commerce business. Since opening the café, Zanetta reveals it has been easier to get wholesale accounts because the café “has given them legitimacy as a business.”
In addition, a brick-and-mortar store is something that consumers want to visit. It cements itself as part of the community. Consumers choose to work from cafés, host social events, and go on dates. “Children even come in to do their homework in our café. You can see the space has created value within our community,” Zanetta tells me.
Consumers also tend to spend more time in local, independent cafés compared to regional or national chains. This can correspond with increased consumption and more sales.
It has been shown that consumers are more willing to spend money on coffee from local roasters. By opening a café that serves your coffee, you can expose it to an audience beyond those who are buying it online.
Not only could this help boost your sales, but it also helps establish your brand within your neighbourhood.
What to consider before taking the leap
“A roastery and a café are very different businesses,” Zanetta is careful to point out. “Yes, they’re both in the coffee industry, but they involve different types of operations, transactions, and cost structures.”
A core difference between the two is that a café is more retail-focused and customer-facing.
For some, it may not be practical or feasible to manage your café directly or be on the floor making decisions. Therefore, hiring staff members you can trust is critical.
Although Zanetta was able to start her café with minimal assistance as she had previous retail experience, she advises others that “you may be better off to hire a manager to oversee things if you don’t have service experience.”
Recouping your investment is important, but you should have more goals as it will influence how you run your café. For example, one of Zanetta’s was to create more jobs.
“I’ve been successful in creating an environment that makes my employees happy,” she says. “That has been a very rewarding part of this venture.”
Neglecting employee morale can lead to a negative workplace culture, which can impact your cafés customer service, product quality, and eventually, its profitability.
Customer insights help to measure your success
Profits and turnover are obvious metrics you can use to determine the success of your café.
However, the way you determine the success of your roastery may be different.
For Zanetta, it was important to see how far her coffee is reaching. “I periodically look at how many households are drinking our coffee daily. The café has dramatically increased this volume because we sell hundreds of bags of coffee a month, and every day, we are making hundreds of drinks.”
Tracking the sales of individual coffees is also important, as it can provide you with essential insights on how you can improve in your café and even your roastery.
Insights on how your target market receives your offerings can help you secure their loyalty and your profit margins per item.
“You can speak directly with customers to find out why they like certain offerings,” Zanetta says. “Or you can determine what they prefer based on their requests.
“In a café, you can watch what people select, and see how much consumers like a product based on how quickly it sells.”
She has found this customer feedback to be very helpful going forward with her café.
These kinds of insights are hard to come by when you are exclusively roasting coffee and not directly facing customers. “With roasting, you are not dealing with customers directly, so you don’t know if people like a coffee unless they place a repeat order.”
Zanetta says the only time she gets feedback in online sales is when something is left out of an order, or the wrong product is delivered. “When you have a café, you have to ensure your product is consistent and high quality.”
Opening up an outlet for your coffee can seem like a daunting prospect. However, careful preparation and market research can ease the process and increase your chances of success.
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