I must be crazy. But I can't think of anything else to do, or anything I'd like to do more.
After numerous false starts of resuming my former marketing career, a brother's death and other challenges, I find myself well down the road to a relaunch of Aldo Coffee as a micro (nano) roaster.
It's not going to be a cafe in any commonly-accepted defnition of such. The focus will be on roasting and home brewing. Much as I'd love to go out and get a Probat 12k, that's not going to happen, at least for a few years. We're going to start small and nimble. Perhaps even portable. Given a 220v outlet, it could even be a temporary pop-up. Depending if I go 5lb electric I can start in my garage. For gas, I'll need to go find a place. I've got $20K dedicated to a roaster/venting/utilities in the bank, although I'll need double that to really get going - there's other equipment needed, along with graphics for bags, bags, a new website for online sales and some spare change to survive the first year.
I've been through the numbers a few dozen times now. I'd need to roast at least 10,000 lbs/year to make this worthwhile at a sustainable level. That's not very much even by standards of tiny roasting operations. Which is why keeping buildout and overhead to an absolute minimum is key.
And 10,000 lbs/year isn't even guaranteed. Pittsburgh isn't an ideal market to be launching something like this. All but a handful of cafes buy their coffee based on price over seasonality/sustainability/cupping scores.
Despite the image of Pittsburgh's coffee scene being progressive, the same half dozen players from 2009 are still the only ones actively promoting progressive coffee in 2013, with Orbis having replaced us and Coffee Buddha being the lone true addition (while Blue Horse is no more). For the most part it's still 21st Street, Tazza d'Oro, Espresso a Mano and Commonplace (which now owns Voluto) that operate exclusively in the 85+ point coffee stratosphere. There are some others on the fringe, but would not be considered "third-wavish" by the commonly accepted definition of such.
Each of those cafes has preferred suppliers. At best I might be able to crack 2 or 3 of them as a guest coffee with maybe 5-10 lbs/week. I know two of them are no-gos from the get-go (one roasts and serves only their own, another uses only coffees from "rockstar" roasters). As I'm not planning on selling or servicing equipment, I'm not going to be helping to open new cafes. So the wholesale potential at the cafe level is extremely limited.
I can do restaurants. I've already got established credentials there. But again, there aren't that many exceptional restaurants who would carry us. Maybe a dozen, of which I might get 3 or 4, again at 5-10 lbs/week.
Let's say our starting point is 40 lbs/week for wholesale. That's about 20% of the 200 lbs/week I'll need to be sustainable.
So where's that other 80% coming from?
Here's what we're thinking:
1. Farmers markets. We've been selling at the top farmer's market in Pittsburgh for four years getting great reviews and developing regular customers despite roasting on a $300 home rig that can only handle 12-13oz per roast cycle. Stepping up to a larger shop roaster with vastly improved control will only make our coffees better while allowing us to increase production so that we can support multiple farmers markets - and the higher retail margins associated with those. My target market doesn't drink Zeke's, who seems to be at every farmer's market within 50 miles - and even squatted right outside the one I currently do.
2. Subscriptions. Monthly coffee subscriptions have worked for others. The challenge to me is that most of those "others" are industry rockstars. Which I'm not. But Aldo Coffee does have a pretty decent reputation around here that might allow me to get a few monthly subs, including ones outside the Pittsburgh metro.
3. Catering. OK, it's not really doing much to increase roasting volume, but we used to make a few thousand a year on espresso catering at Aldo and I still have my Cimbali and 200 ceramic cups. Whatever helps to pay the bills. And we happen to be really good at it.
4. Supermarket. I'd offer regional exclusivity here for a guaranteed volume. The margins will be terrible and I know they'll undercut prices at both my farmers market whatever cafes I do manage to recruit. The one I'm thinking of is currently selling 12oz bags of Intelli and CCC for $12.99. But it's solid marketing/branding if I get in the 'right' supermarket(s). Unlike the national/super-regional roasters on the shelves I can actually stop by weekly, inspect the coffees, pull whatever needs to be pulled and keep the stock fresh. Come to think of it, I might not want to do more than one.
5. Out of the box. I can't discuss the ideas here. Let's just say they're a bit ambitious and perhaps a little crazy. But I have identified and explored some models that work in other markets that don't exist here in Pittsburgh.
6. Direct retail. If I can find the right place for the right price, I'll leave my garage. Seems there are always rental opportunities in non-central neighborhoods around $500/month. Which means I'd need around $2500/month in additional revenue to offset that cost. That's about 40lbs/week retail (54x12oz). It's a reach, but doable. And if I do that, I can think about retail sales of select brewing equipment as well as making a few bucks serving small drinks and drip.
As it's just me to start, I can't max out roasting time. Need to leave time for sample roasting, cupping, selling, marketing, etc. I'm about half funded at present, so will need to go Kickstarter for the other half. Soon as I can secure a decent video camera, I'll take care of that step.
If I can get to that magical 10,000 lbs/year, I can start thinking of expanding and starting up an interesting new cafe as well as some buying trips. But for now, I just want to concentrate on roasting using the sources I've had success with. I know there's a niche for the kind of quality sourcing and roasting I do and what I can bring to the table, the question is how big is that niche. That's not a knock on any roasters currently operating around here, it just is.
It's an exciting time. And scary as hell.
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