No business can be sustainable if it doesn’t offer superior products. While this may seem obvious, it is arguably the most important part of owning a coffee business. If your coffee is unappetising, you won’t last long.
In recent years, product perspectives have shifted. Consumers have higher expectations and access to more information than before. Therefore, they want to know more about the coffee, such as where the beans come from and how communities are treated along the supply chain.
More importantly, consumers have become highly concerned about the environmental impact of their purchasing decisions.
When deciding how to grow or scale your coffee business, it’s important to keep the above factors in mind. That said, it can make the prospect of expanding a daunting one.
Why your coffee business needs a long-term growth strategy
Growth is a typical measure of success for any business: the larger a business becomes, the more successful it is considered to be.
However, a more important indicator of success is creating scalable growth. As a business grows in size, its sales volume increases. Effective scaling is when revenue increases without adding to resources or costs.
Generally, when a business grows, the additional revenue it gains is evened out by the costs incurred to enable that growth. Additionally, scaling allows a business to generate greater revenue while maintaining or even lowering costs. Essentially, scaling helps set the stage for a business to grow more efficiently – if the right strategy is in place from the start.
“A long-term growth strategy is essential for any business for two reasons,” explains Miranda, who is also a coffee business coach. “First, there’s often a temptation to focus solely on the daily runnings of the business and getting product out the door.
“But staying buried in the business without a growth strategy means when you finally come up for air, the industry will look completely different. You’ll no longer have a competitive advantage.”
Second, Miranda says it is essential that the growth strategy is communicated throughout the business. “This helps everyone on the team push in the same direction.
“For example, you don’t want your operations manager to create plans for a new product if the growth strategy is to pursue franchised retail. For efficiency’s sake, build a strategy and communicate it as often as you can.”
Specialty coffee brands: What should your growth strategy involve?
Put simply, a growth strategy is a plan businesses implement to increase sales for their products or services. This can be achieved by expanding product lines, adding locations, or investing in customer acquisition.
Within the specialty coffee industry, Miranda believes growth strategies should focus on differentiation. “It’s important to understand that if you’re trying to speak to everyone, you ultimately speak to no one.
“When coming up with an effective strategy, you must decide what you care about as a business, and be honest about your capabilities. Beyond this, you must be crystal clear on what you offer and to whom.”
She encourages roasters and cafe owners to find their “most powerful direction. Consider the ‘whitespace’ you want the business to own while you consider market trends and how they tie into your capabilities.”
She adds that getting an outside perspective can be highly beneficial for this. “For instance, cold brew coffee is currently dominating as Gen Z favours a fun drink. Alternatively, in-home coffee is also still a preference. Do your best to take these trends seriously while owning your unique slice of the pie.”
Understanding how growth strategies will differ
One of the most important factors to consider is that the growth strategy for a coffee roastery will differ from that of a cafe. Therefore, if you are running these two businesses simultaneously, you will have to compile very different plans.
“Roasting is a manufacturing operation, so efficiency and quality are almost always the goal,” Miranda explains. “Therefore, collecting data at the beginning of your growth journey, or ideally before, is key to understanding where your current bottlenecks lie.
Miranda also points out that bottlenecks tend to shift. “You’ll always have one. The most important thing is that it doesn’t slow the operation down to where you’re no longer reaching your business goals.”
She encourages coffee roasters to build a growth strategy from the start. “This will help determine the size and capability of your equipment, based on the growth and sales plan. Then you can decide on trigger points for when you’ll invest in the next efficiency. Tying operations into both the business strategy and the budget makes for more cohesive transitions.”
When it comes to scaling a cafe, on the other hand, Miranda urges caution. “Real estate, equipment, and staffing are incredibly expensive, so I recommend that those looking to grow their café sales start with what they have.”
For instance, she encourages cafe owners to ask themselves whether they’ve optimised their current location. “Have you fully exploited the amount of traffic you can get? Or is there an opportunity to draw more customers into your location? If you already have long wait times or feel maxed out operationally, is there a way to automate steps in the process to add more capacity?”
Essentially, consumers are looking for an easy and enjoyable experience. “Spending money on key pieces of equipment is much cheaper than building out a new space. In fact, building your own ordering app can even be cheaper. Start with what your consumers want first, then work backwards from there. You may end up with a micro-location on every corner, or you may end up with a seamless buying experience for a single location.”
Overall, Miranda says growth requires a keen understanding of coffee drinkers and rigorous honesty about the business’s capabilities and interests.
“Knowing your ‘most powerful direction’ will help you stand out and communicate clearly both internally and externally. An essential part of clarity, however, is editing. Parts of your business may feel precious, but if they aren’t working, there’s nothing wrong with simplifying. In fact, keeping it simple is the best way to be clear and be understood.
One thing you won’t have to worry about is high-quality coffee packaging that is completely sustainable. At MTPak Coffee, we can help you deal with the logistics of packaging your coffee products so that you focus on growing your business.