just getting into the roasting business

[CoffeeLadyWA]

I don't know where to start...

Dirty Dave is right. Frank, but right. There is absolutely not one single thing that is "normal" or "straight forward" about the coffee industry. The grocery industry is loaded with nepotism, bribery, foul-play, and down-right scams. I recommed something safe, like sky-diving. At least then, you will have financial security and your livlihood and ability to pay your bills aren't dependent on the "mood" of grocery buyers.
You have to know what you are going into. I HIGHLY recommed starting small scale and asking around for other local roasters to roast for you, or get a small home-roaster. When you start small and grow, you can always chuck it without declaring bankruptsy.
Another option (also better than starting on your own) is purchasing a pre-existing coffee roasting company so that you have the income, and the clients of the existing business and you aren't starting from scratch.
For sure, to launch a business that will be able to turn a profit in the first five years, you are looking at needing to spend at least six figures within the first two years. This is for advertising, patents and trademarks, setting up, equipment, legal fees, memberships, shipping, raw materials, office supplies, employees, distributors, product demonstrators, etc. Again, purchasing a business is something I would highly encourage. The cost will be around 300K but at least you will have a client list, established memberships and trademarks, and something to work with.
Unless you are the only guy in town, are able to purchase, ship, roast, and have your margins low enough to compete with the national brands on the shelf, then think highly before stepping into this business. Coffee prices are never set for more than a few months. If supply in demand get's off kilter, you will go from a 40% margin to a 5% margin just to keep your place in a store.
I wish I was kidding. I wish that I could say it was a fun, and easy business to get into, but it would be a big, costly lie. Of course, I wish you luck. I hope that you can find a niche and fill it.

 

[expat]

What a great thread!

My Euros worth . . . (I'll give you a whole Euro because it is getting to be worth less and less every day)

I started a coffee roasting business in Ireland 11 months ago (I'm an American living over here) with no experience beyond drinking a lot of, and everyone's, coffee. We did spend some time in the U.S. getting some schooling with an acquaintance who, at the very least, proved to us that we could roast coffee. It isn't rocket science, but it is a science and even more of an art. We learn every day and it is a steep learning curve.

The biggest thing I have learned is that the coffee roasting part is easy (let me qualify that -- roasting coffee is not easy but considering all the other things that go along with a coffee business it is . . . what, the simplest?, most enjoyable?, something like that).

Thankfully my wife does the roasting. She could have been a perfume blender her nose is that good. She could have been a taster of some sort (coffee maybe?), her taste buds are that good. And she should have been a labratory scientist because she enjoys the day-in-day-out of trying to do it exactly as she did the day before. To me those personality and physical traits would be key elements of a good coffee roaster. Do you have them? I don't.

I wish I would have been able to work a year or two with a roaster but circumstances forced me quickly into the business (it's a long story). I am thankful I am in Ireland because while the coffee we roast is definitely better than the retail coffee it would have a hard time, I think, winning in American with all the great small batch roasters out there. Coffee is a very small segment of the beverage market here. Tea is king, and on the coffee side of things instant is 80% so it is easy for people to appreciate a better (much better) cup of coffee. Would I make it in the U.S.? I don't know. It would certainly be much more challenging.

As was said earlier CONSISTENCY is the key and VERY HARD to achieve. You mentioned 5 coffees you'd do. I'd suggest two, three at the most. And roast them, roast them, roast them. Don't start trying to add more because each bean requires a different roast. Get those down pat. I can get away with being a bit off target between roasts here in Ireland but in America I'd say it is a different story (especially selling via grocery stores).

As to recipes I just don't understand why so many people are so tight fisted with their recipes (well I do on the really complex ones they've spent tons of time working on) but I can give you basic recipes, you can find good recipes at Sweet Marias website. You can find them at HasBean dot co dot uk website. You can find them at Java Republic website in Ireland. But they won't tell you how to roast the beans. And if they did you've got a different roaster, a different ear, a different nose, so you'll have to find your own way there (Java and Has Bean publish a spreadsheet where they tell you exactly what they purchased and how much they paid! A good resource. If you're in the U.S. adjust the costs for freight as the U.S. is closer to the Central and South American markets).

Now with all that said the biggest question you've got to answer, which hasn't been addressed too much, if at all in this thread, is who is going to buy your coffee? No buyers, no business. So can you sell? Do you want to sell? Will you do school fund raisers? Sell at farmer's markets? Build a mail order business? Sell to coffee shops (those that aren't locked into buying beans from their machinery suppliers). Go door-to-door? Sell to the supermarkets? You might want to get out and knock on some doors before you even begin. Oh, and 50% of the people who tell you now that they'd be happy to support you, when it comes time for them to actually reach into their pocket, they won't follow through so don't start counting your chickens.

If you sell to supermarkets do you have the time to do tastings at the markets and make a connection with people buying coffee? And then come back next month and do it again? If you don't you're just another bag on the shelf. And let's not even talk about the politics and green handshakes involved in big supermarkets. And the back end computer whiz stuff you've got to do to present invoices and get paid.

How will you package? Where will you get your labels? Who's going to design them?

If you're doing Internet sales who's building the website, who's managing the Facebook page, who's doing the REGULAR blogging, who's your shopping cart expert when payments don't go through? What are you shipping in? Have you figured out postage?

How much money do you have to lose is another question and how long can you lose it for? And if you do sell to chain stores, what are their payment terms. Usually you can figure a 45 day average. Deliver May 1 and get paid June 30. Deliver May 30 and get paid June 30. Can you afford to be their bank? And do you have the time and inclination to chase the money when the check isn't in the mail?

As to the roaster that said you'd spend $300k maybe so. I don't know. Thankfully I'm in a much less competitive environment here but she sounds like she's talking from experience, like most all the posters, so I'd reread all the posts, make a list of my strengths and weaknesses and figure out who's going to help you where you're weak. And be realistic if there isn't anyone.

If you get an order for 160 bags of coffee like I just did, how are you going to get all those bags labeled, the coffee roasted, ground, weighed, bagged, the bags sealed, and delivered? If the stores are far away and gas costs $4 in the U.S. (double here) can you afford to deliver? Do you have time if you're doing all those other things? Do you have (free) help, like your family members? And if you've got a 1/2kg roaster or a 1kg roaster, AND you roast your beans (in a blend) separately, how long is that going to take? Maybe your field research will help you size your roaster. I'm glad I got a 10kg roaster here but in the U.S. I think I'd have probably started with a 5kg as I don't think I'd have achieved "lift off" as quickly in the U.S. But think about it. You roast 5kg. You lose let's say 16% in shrinkage as you boil off the moisture in the beans. Now you've got about 18, 250g bags of coffee. Is that enough? Too much?

And back to roasting. You say I can roast 4 batches an hour so that 74 bags of coffee. But as new roasters we found that beans roast differently in a cold machine than they do in a hot machine. So whoosh, you burn up a couple batches of beans before you start to figure out how to manage the roast. And talk about trying to make that consistent. Thank goodness for my wife!!!

And besides what size, what brand? As a new roaster I bought a Chevrolet. In other words it starts and runs every day. It is simple. I can fix it if need be (can you fix stuff?). And the people that made it have been around for about 60 years so they are reliable. It is a Turkish Ozturk roaster by the way. Other Turkish brands are Topher and Has Garanti. I also looked at Dutch, German, Spainsh, and Portugese roaster manufacturers and for me the Ozturk fit the bill with the best balance of price and service (mainly price).

So I mention all this because it is all stuff I've been up against since we started our business. Lots of it is trial and error. Like my friend in New York has a great business as a coffee roaster mainly doing fund raisers through the schools. What a great idea I thought so I called on 100 schools here in Ireland and guess what? It is an idea whose time has NOT come over here. Do you have that kind of time? Well I think you can see from my post and all the others that you've got a lot to think about and figure out. I do wish you the VERY BEST. And don't take everyone's cautionary advice as a negative. I wish I had a lot of the insights that I've read in this thread before I'd started the business. I would have still done it but I'd have been a bit better armed and more realistic about what I was getting into.

Again, best wishes. And don't give up!

P.S. A really simple coffee recipe that we consistently get complements on: 33% Ethiopian Yirga Cheffe / 66% Sumatra Lintong. Drop when you hit second crack. My wife has found this "Mocha-Java" easy to get consistency with because it is so easy to hear the beans going through the roast stages. And she can smell it exactly at the spot where she wants it.

 

[eldub]

Great post, expat.

I've been obsessing over many of the details you outline above for the last four months....

Packaging sources have been contacted and samples procured. bean sources and samples have been readied. Today I mask off everything we don't want to get painted. Tomorrow and Sunday I paint the roastery. New flooring gets put in next week. The graphic artist completed our label/logo design a couple of weeks back. Organic certification hoops are being jumped through as we speak. The city has been satisfied. Carpenter friend is sharpening saw blades. I'll head down to OK City for training on the machine. Farmer's markets have been contacted. Web site is being developed. Retail inventory ready to be ordered. Production and storage equipment has been sourced. The new roaster should be ready in a couple of weeks. Then its time to fire up the roaster and hit the streets.

 

[harryh]

First, great post Expat. How have things gone since your last post? Any more insight.

Eldub - you have posted quite a bit too and probably benefited quite a bit from others. How have things been going? Any more tidbits of advice?
Thanks,

 

[smksignals]

This is a great thread with great information. I am in the same position as the OP.
Being this thread was started well over a year ago, how are those that have posted on here been doing?

Thx.

 

[Seth]

thanks for keeping it real

 

[clifrollins]

I am interested. Please forward me some info if its still available and you dont mind. Thank you.

I think that is an awesome goal that you have set for yourself. I have a better suggestion, why not become a coffee distributer for a Coffee Company, yes, that's right, you can own your own coffee business. I will Inbox you some information if you are interested. Good Luck with whatever your endeavors.