On Sunday March 25th Ferg Brown and his wife were watching the news. Up until then, the developing news on the coronavirus had been more from the viewpoint of an outsider. As Ferg mentioned to his friend the previous evening, people will always need to drink coffee. He may have been right about the coffee consumption but he had not envisioned the where people drank coffee. He watched in horror on that Sunday night as café after café announced they were closing down for health and safety reasons – even before the Government shut down.
“By Monday morning we were out of business.”
COVID19 business impacts – Coffee Roaster Innovates Supply Chain
Ferg is a specialist coffee roaster. He imports the highest quality beans and roasts them, serving a number of cafes, about 30 in total. In one fell swoop his business was gone as all his customers closed their doors. He also had an online shop which did quite well but he needed to figure out what next.
The what next was an inspired piece of innovative marketing. Coming as he does from a business that sources not only the highest quality coffee, but also the most ethical, he felt a need to support his customers. When I say to him that this is a pretty unusual thought process he is very modest. “If I help my customers – the cafes – survive then when the crisis is over the hope is that they will still be there.”
What Ferg came up with was a ‘Our shop is their Shop’. Essentially if people came online to shop at roastedbrown.com they would be offered an opportunity to nominate the café they normally frequently. In the beginning, Ferg offered a sale – giving 10% off the price of the beans and giving all the profit to the nominated café. This lasted for two weeks and proved it could work.
“We needed to make an income too, so once we proved this was viable, we moved into a longterm process. Customers come online, chose their coffee and nominate their café. We collect the money, ship the coffee directly to the customer, take our regular wholesale margin and remit the retail margin directly to the café.”
The beauty of this re-thinking is that the customer gets to buy coffee at a regular price – cheaper of course than if they bought it at the café. The Café gets to earn money from the coffee purchased as if the customer was in their café. Indeed now that the cafes can see how this works they are very active telling their customers about the deal – which drives more sales. And Ferg gets to sell his coffee at a regular price.
Ferg has been in the coffee business for some time – and over the years he has built up many contacts when purchasing green beans, the unroasted coffee. He buys from coffee importers in Norway and direct from farmers in Ethiopia. The importer in Norway still has his mortgage to pay and the Ethiopian farmer desperately needs to still sell her coffee.
“I have been thinking of ways to still honour those contracts so now I am reaching out the other boutique coffee roasters – they might not have enough money to buy a full pallet of green beans, but they might be able to afford a bag or even half a bag. So, our new concept for fellow coffee roasters is ‘Our Green is your Green’ and already we are getting some traction.”
It might seem strange to live in a world when a coffee drinker supports their local café by being beans direct from the wholesaler but we live in strange times. By supporting their local cafes, there is a greater chance when this is all over, the cafes may reopen – buoyed up by the credit earned by their loyal coffee drinkers.
And Ferg has some other equally interesting ideas up his sleeve – not as yet ready for publication but equally inspiring I am sure.
As he says: “Every fortnight we have a staff meeting and one of the items is how to tell our cafes how important they are to us – in the past it may have taken the form of donuts, but the Our Shop is Their Shop really rang true for us. Who knows what the world will look like post COVID19 but we will do our best to make sure we – and our customers – are still there serving great coffee.”
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