Making Your Coffee Count in 2019

 

I enjoy this time of year: we feel the pull towards new beginnings, and in our imaginations we can picture the energy that is brought forth by new possibilities. As a young business owner going into the new year, while the new outcomes excite me, I need to grasp the direction that has brought us this far, and ask myself: "Are we staying true to our roots?".

Regalia's mission (at least in my mind) is to get people to think about coffee differently.  In 2018, under the Regalia Company name we opened two projects: the Regalia Roasting Collective, and REGALIA - a producer/small lot focused menu of coffees available for retail and wholesale purchase. I will go into detail at some point in the future, but for now here is an idea I'd like to share:

Regalia Roasting Collective: Re-thinking our Margins from our Coffees

Ideally, the price of coffee has to move as a system:  if we are willing to reward producers for excellent green, willing to pay roasting companies for roasting these coffees with care, ideally we should equivocally be compensated on the retail level for brewing and presenting these coffees as professionally as possible.  Retail operators will know that the formula isn't as simple as that, and will often find themselves under-pricing these fantastic coffees, or worse: giving it out for free. 

The elephant in the room is not so hard to see:  retail operators and their clientele will always experience a lag in the transfer of value. Espresso-based offerings generally fare better, but if you are a lover of filter coffee (like I am) it's more than likely being viewed as a commodity by the majority of your clientele.

Now, rather than advising you to price your offerings higher than you are comfortable with to make better margins, I propose another solution.  This solution will allow you to cut your cost of roasted coffee close to half, allow you to offer the coffees you want to offer, and develop your staff further than you thought possible.

Roast your own.

The roasting collective offers clients the chance to rent out a roaster hours at a time to roast their own offerings. We guide you through choosing your green offerings, at the price you want to pay, to how to roast it consistently.

Not sure if it's for you?  We offer a complimentary guided roast session that has you roasting consistently by the end of the session.

Here's a scenario: let's say you currently purchase coffee from a wholesale roasting company, and are interested in roasting 50% of your weekly inventory. I will assume that the roasting company is charging you an average of $10/lb, and that you go through 100lbs of coffee a week.

Yearly Coffee Cost: $52,000

We break the total cost of roasting at the collective into three parts:

The cost of the rental,

The cost of your labor,

The cost of your green,

We can convert these individual costs by the lb, to make the math simpler:

The cost of the rental ($150 for 2hrs by the lb) = $.94/lb

The cost of your labor (assuming 2 people at $15/hr) = $.38/lb

The cost of your green (assuming $3.50/lb green*) = $3.50/lb

Total Cost of Roasting = $4.82/lb

So if we revisit the yearly coffee cost:
Yearly Coffee Cost: $26,000 ($10/lb) + $12,532 ($4.82/lb) = $38,532

Savings: $13,468 (if you roasted 50% of your weekly inventory)

If the numbers don't get you, just know this: your staff will be grateful.  The baristas I know that have become roasters walk away better tasters, and offer much more comprehensive service towards their clients and their peers.  Armed with their newfound knowledge, they can express their coffees more thoroughly, and possess more ownership towards their craft.

Simply, the roasting collective is a system that offers everyone equal opportunity, and allows us to grow and profit as a system. 

It is our hope that you'll come by in the new year and let us share our passion of roasting coffee with you.  We hope it will add value to your business, and be something for both your staff and your clientele will enjoy.

Happy New Year.

— pm