Article by Abbie Napier, 9 July 2016 - www.stuff.co.nz
Christchurch cafe owner Bink Bowler has cut the cost of making a flat white in half. In the last six months, he's watched his coffee costs drop by 50 to 60 per cent under a new system designed by businessman and importer John Robson.
Bowler knows all too well the high price of doing business in the hospitality industry, having watched his first business venture go under in early 2014. Lessons have been learned, and his second effort, Black and White Coffee Cartel is doing so well there are plans to expand to a second site next year.
"It's a hard, hard business," he says. "It's a struggle."
Despite what some consumers may think, top notch cafes typically make very little profit on a cup of coffee. Most of the good ones pay a lease on a premium shopfront site, buy high-end ethically-sourced coffee, pay higher wages for quality staff and put some effort into fitting out the space they use.
As Bowler would no doubt attest, delivering a quality product every single time costs the cafe owner some serious dough.
Robson, with considerable hospitality experience and market knowledge under his belt, says about 80 per cent of cafes don't survive the first three to five years of trade.
He says it's the coffee roasters who are creaming it. As the price per cup of coffee grows, coffee drinkers usually blame the cafe for hiking the price.
Like oil, the price of green coffee beans moves with market predictions. If analysts predict a freak stormy growing season, the price of coffee beans soars. Civil unrest in a major growing region? Yup. Prices go up.
Roasters, faced with higher bean cost, load their roasted beans price and the cafe coughs up more per kilo. The cost of a coffee might go up by 10 cents, but chances are, this only happens now and then as usually cafe owners try and protect the consumer from inflated prices.
When the price of beans comes down, the price of a coffee stays the same as cafe owners scramble to recover their lost profits.
"It's bloody hard at a retail level," Robson says.
In years gone by, finding a quality small scale coffee roasting machine was nigh-on impossible without spending a small fortune.
Bowler, a knowledgeable coffee roaster himself, says the machines were closer to a microwave than a micro-roaster. Equipment inadequacies coupled with restriction of coffee roasters within most city limits in New Zealand meant cafes had no choice but to buy roasted beans from commercial roasters.
In Christchurch, machines roasting 5 kilograms or more per cycle need a costly resource consent and roast far more than a cafe needs.
There was no credible or affordable alternative, making cafes beholden to large companies selling beans at a high price.
Enter, John Robson and his company.
Robson had long been importing coffee equipment to New Zealand. About three years ago, he found some breakthrough technology which turned the micro-roasting industry on its head. The new wave of smaller roasters could easily cater for a cafe, dealing with one kilo of green beans at a time
They were small, affordable, and above all, effective. Cafes now had the potential to roast their own beans, cutting out the huge cost of buying from a roastery.
Robson's model works on collective buying power. The Coffee Workshop buys green beans from a large scale importer, and with 20 cafes on its books now, has the flexibility to make larger purchases, distributing custom green bean orders to their clients.
The roasters are set up in cafes and pre-programmed to roast the perfect batch, every time.
Each cafe can have its own custom blend beans and roasting recipe, setting them apart from the competition, and promoting their own in-house blend of coffee.
IT'S WIN WIN!
Late last year, Black and White Coffee Cartel installed a Coffee Workshop roaster in the cafe, capable of roasting one kilo at a time. It paid for itself in four months.
Bowler no longers pays a roaster for his beans, preferring to turn out the cafe's custom blend. The change means his coffee beans cost has been cut in half.
"It's consistent," he says. "You're roasting really good commercial grade coffee. "I think people are scared that roasting is hard, but it's just a recipe. Making an actual cup of coffee is harder. "Business is hard, so if you can get your head around doing business, you'll be fine roasting."
Robson says his model means cafes have much lower overheads. He charges for the sale of the roaster, then charges a service fee for sourcing the green beans and customising each order. Cafes pay for premium beans which then pays a premium price to coffee farmers. Even then, the bean cost is less than half of what roasteries are charging.
"This is the difference between these cafes being here this time next year, or not," he says.
"The margin on what they're selling across the counter is so much better.
"Our intention is to pay the farmer more and charge the cafe less. If we can cut out the layers to improve either end of the process, the ends that matter, well, that's a good thing."
The Coffee Workshop has about 20 cafes already using their system. At the moment, Robson supplies cafes in Blenheim, Prebbleton, Christchurch, Geraldine, Wellington, Kapiti Coast, Martinborough and Dannevirke. He hopes to announce cafes in Tauranga, Nelson and Auckland very soon.
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We are very pleased to announce that we have a new partner, investor and director at the The Coffee Workshop. You may know Reuben Thorne better his days on the rugby paddock but his passion for coffee has seen Reuben join us in our micro roasting revolution. His joint ownership in one of Christchurch's trending cafes, Black and White Coffee Cartel means he has first hand knowledge of how beneficial micro roasting has been and now wants to spread the word. Welcome to the team Reuben!
Former All Black and Crusader star Reuben Thorne has recently entered the coffee industry with investments in 2 innovative Christchurch businesses. Thorne’s first venture into the industry is as co-owner of Black and White Coffee Cartell, a new Christchurch café that has become one of the leading café destinations in the city. Its success has been largely due to in-house micro roasting on a 1kg batch roaster. The roaster is imported and distributed by another Christchurch company, The Coffee Workshop. Thorne was so impressed with that business that he recently bought into The Coffee Workshop.
The Coffee Workshop was founded in 2014 by John Robson, who recognised that cafés throughout the country could achieve major financial and marketing benefits if they could roast their own coffee onsite. The problem was that existing equipment was typically bulky, costly and difficult to import. It was also challenging to operate without prior knowledge and experience.
The Coffee Workshop investigated a number of options and – thanks to the fact that technology is finally progressing in an industry where roasting equipment has seen little advancement in 100 years – has identified new technology that goes a long way to addressing existing problems. The Coffee Workshop has secured exclusive distribution rights to new generation equipment from Europe, America and Asia.
The Coffee Workshop offers several different roasting equipment options, from traditional drum to the latest fully automated fluid bed roasters – all designed for cafés, mobile coffee businesses, specialist food stores and even supermarkets.
The company also provides roaster and barista training, supply of green coffee beans and coffee machine and grinder equipment. Equipment can be rented or purchased outright. “Cafes can get themselves set up for under $9000 or rent under $80 per week,” Robson says, and adds that “most of our clients save in excess of 50% on their current coffee supply costs and can grow additional revenue by selling prepacked coffee across the counter to regular customers. Our nationwide customer base is growing every week as new cafés come on board.”
The Coffee Workshop is releasing new technology roasters this year, with some of these making their first appearance in New Zealand at Fine Food 2016. Attributes such as software controlled automated roasting, new technology induction heating methods, and even a roaster that talks to its operator, are some of the new features that will make coffee roasting accessible to even the smallest cafés and mobile coffee businesses.