Starting a roastery goes far beyond roasting coffee every day. Transforming green beans into delicious roasted coffee is no easy task, but the bulk of the work will involve marketing and sales. To be successful, customers need to buy the product. For some, white label coffee can help reach new audiences and increase sales.
Derived from the music industry, “white label” was the term used to describe records that were yet to be released to the public. Radio stations would receive promotional copies under a white label to prevent anyone from knowing the source of the music.
When applied in business today, companies follow the same principles by hiding the source and delivering the product in mass.
Discover the ways white label coffee can help roasters expand their business.
What is white label coffee?
Ultimately, white label coffee is produced by one roaster as a generic product that is distributed across several retailers. These retailers then sell the coffee under their own brand, and the product bears no connection to the original roaster.
Notably, white label coffee differs from private-label coffee. While one roaster also produces private-label coffee, it is exclusively for a specific customer. Beyond this, private-label coffee clients can request different roast profiles or blends to make their selection more unique.
White label coffee can be a practical avenue for both retailers and roasters. For retailers, it is a cost-effective option compared to private-label coffee. This is because the manufacturer doesn’t have to build an entirely new process to create and develop the products. Instead, they can repeatedly create the same coffee and distribute it to retailers who will simply sell it under different labels.
For roasters, white label coffee offers a consistent and reliable source of income without having to worry about branding costs. However, it does have its downsides. For instance, once a retailer finds a coffee they like, it limits the capacity of the roaster to change and experiment. They can then become restricted to only roasting coffee in a certain way, which can become repetitive and dull.
What are the benefits of offering white label coffee?
Setting up a coffee business requires a large initial investment in premises, equipment, stock, and packaging. Furthermore, the production side should take less time to allow the owners to focus on acquiring customers.
Instead of seeing these smaller businesses as a threat, existing roasters should consider them to be an opportunity. By offering to white-label roast for them, the business can immediately reduce their startup costs by ordering directly from you and selling under their brand. This can allow them to focus time on building a customer base before investing in their own equipment.
As an experienced roaster, these large-volume orders will be easy for you to fill. Once the coffee origins and packaging details are confirmed, your only concern is roasting the beans, packaging them, and sending them on.
That said, you may have to sell your coffee with less margin per kilo to allow the smaller business to make a profit. However, they have to worry about the end consumer, marketing, and sales. If your business has a large roaster, you could also consider reaching out to smaller businesses, offering a roasting service, or to white label their larger orders.
Why would roasters offer a white label service?
It is common for a start-up roasting business to have limited funds. Many can only afford a 5kg to 10kg roaster. Picking up large contracts and orders can mean reaching capacity quickly without having the capital or investment required to purchase a larger roaster.
By offering these businesses a white label service with a cost per kilo of coffee roasted, you could also benefit from their large volume orders. The businesses can use the existing coffee you have, or choose to ship their green coffee to you for roasting. This helps save time and money while allowing them to focus on growing the business and offering great customer service.
Another way to expand these services is to offer your roaster as a contingency plan for surrounding coffee businesses. Every coffee roaster is completely dependent on their equipment. When it breaks or needs servicing, roasters must have a plan in place for a back-up roaster to ensure there is no disruption to orders.
While this is unlikely to be a consistent request, it can help strengthen the trust in your brand. It also allows relationships to be built between coffee businesses, which could later lead to recommendations and referrals.
Before you start white label roasting, it is important to consider the costs involved and determine a price per kg for the end product. It is essential you understand the gas and electricity costs, the staff wages involved, and any expenses regarding packaging and rent. Then you can have a realistic idea that allows you to make smart decisions when expanding your business.
You will also need to consider what coffees you have available and which you would offer for white label options. Having cheaper options for stock blends can allow you to remain competitive. Alternatively, offering micro lot specialty coffee can allow you to have a range of different unique options to offer end consumers.
You must consider whether you have the space to store green coffee on the customers’ behalf, should they want you to roast it. Beyond this, you must consider what it would cost you to fill that space with their product over yours.
Essentially, communication and a good understanding of your customers’ needs are essential. You have to know whether they are comfortable with coffee changing in line with seasons, stock, and pricing.
At MTPak Coffee, we understand the logistics of starting a coffee business and scaling a brand. This is why we offer a range of low minimum order quantity (MOQ) stock bags for specialty roasters looking to offer private or white label coffee.
Our plain stock bags are the perfect option for those after a simple yet effective way of packaging their coffee, ready for distribution. We can help you find the perfect recyclable stock coffee bags. Available in a range of shapes and sizes, including side gusset and stand-up pouches, our stock bags are not only recyclable but also high barrier.