


Do you want to learn more about what it takes to roast excellent coffee? Are you thinking of adding craft roasting to your coffee bar, or want to take your coffee education to the next level? The Coffee Roasting Overview + Concepts Workshop at the American Barista & Coffee School is the perfect introduction to the world of coffee roasting and will provide you with a great overview and theory of what is involved in micro-roasting coffees from around the world. A great entry-level workshop for coffee retailers, barista, enthusiasts and home roasters.
Workshop Overview
Roasting Equipment
About the Instructors
Justin Johnson is the former green coffee buyer and head roaster of World Cup Roasters in Portland, Oregon. While with World Cup, he applied his passion for roasting and his love of espresso blending and won Karnataka Plantation Indian Coffees 2007 Espresso Blending Challenge. He is actively involved with the planning of Northwest Roasters Groups educational courses and does on-site roasting consultation for both air and drum roasters.
Brandon Smyth first worked at a small roastery 12 years ago and has been in the specialty coffee industry ever since, traversing the West Coast while working at the most prestigious cafes, coffee importers and small batch craft roasters, including Stumptown Coffee Roasters in Portland, Oregon. He is accomplished roaster who has roasted several of the most expensive and unique coffee varietals in the world. Brandon has continued his pursuit of roasting knowledge through the rebuilding and installation of several vintage coffee roasting machines. He is an owner, head roaster and coffee buyer for Water Avenue Coffee Roasters in Portland, Oregon.
Café Finance: Making Money Starts with Catering to your Customers
by Chris Legler
Developer of the Ultimate Coffee Profitability Seminar
Driving revenue is the single most important activity for growing profitability. Revenue allows us to pay for our cost of materials, labor, rent and all other expenses. Oftentimes when companies face difficult situations, they stop focusing on revenue and start focusing on cost containment. While keeping an eye on expense optimization is critical, losing site of your revenue is a recipe for disaster. Once you lose a customer it is extremely difficult to regain that customer’s trust.
Depending on which research you read, it costs five to 10 times as much to acquire a new customer as it does to maintain an existing one. Most of us have heard this, but what does it really mean to coffee shop owners? If we take the more conservative approach that it costs five times as much to acquire a new customer, let’s think about the things that we spend money onto maintain one customer.
There is an expectation that you will provide your customer with high-quality ingredients. Let’s assume that you have the opportunity to decrease your cost of coffee by 40 percent by going with a cheaper coffee. If the majority of your coffee sold is espresso based, coffee is probably 25 percent of your total cost of goods sold. This means that by going with a cheaper coffee, it will save you 10 percent of your cost of goods sold (40 percent times 25 percent). If your cost of goods sold is 30 percent of your revenue, this reduction in cost of goods sold is going to be reduced to 27 percent. If the average price of a drink is $3.50, you will save 11 cents with every espresso drink sold. If you sell 200 drinks per day, this savings will amount to $21 per day. Is cheaper always better? What if this new, cheaper coffee is of lower quality? Let’s say that you lose 10 percent of your 200 customers because of this switch. At 20 lost customers per day, this means you’ve lost $70 per day in revenue, or $51 in gross margin profit. By subtracting the $21-per-day savings from the $51 loss in gross margin, you will find that what appeared to be a huge savings in your cost of coffee really results in a gross margin loss of $30 per day. Most likely you have lost those 20 customers per day forever; however, let’s say you want to try to regain their trust. Using the benchmark of five times the cost of maintaining a customer, we can multiply the $21 we saved by five. This means it will cost you $105 per day, or $525 per week, to try to regain those 20 customers.
Understanding your customers’ needs will help you meet their expectations. In the retail coffee industry, we have a very habitual customer base. The majority of our customers can be broken into four categories based on what they usually buy: drip customers; espresso customers (lattes, mochas and cappuccinos); frozen beverage customers; and whole-bean customers. Although customers may not always buy from the same category, the category they fall into helps define their primary objective for coming into your location. By understanding their chief motivation, we can understand how to drive our revenue from our existing customer base.
Drip customers are less loyal than espresso customers. They can get coffee at many locations, and often people have drip coffee available to them at work for free. But there are many advantages in selling to the drip customer. A surprisingly large number of drip customers also brew coffee at home in the morning, so the coffee shop is their second cup of coffee. Selling them coffee beans to brew at home is a great opportunity. They are also more likely to purchase a commuter mug, as it is easier to keep clean if it doesn’t have milk residue in the beverage. Statistics show that an espresso customer is less likely to purchase a pastry or heavy food item than a drip customer.
Espresso customers are traditionally very loyal; they come to a particular coffee shop because they like the way that barista makes their double-vanilla, no-foam latte. They like the theater and the interaction that go into making an espresso drink. Although they are less likely to buy a heavy food item, they may enjoy a piece of chocolate or biscotti to go with their beverage. Similar to a drip customer, an espresso customer probably makes coffee at home as well. Selling them coffee beans is another great way to increase your check average.
Frozen beverage customers are usually not as frequent as drip or espresso customers. They are coming to your store for an afternoon treat. They do, however, purchase a typically high-price-point item that also is the highest-margin dollar item on your menu. Therefore, it is very important not to forget this customer. As the frozen beverage is their treat, it is often difficult to get them to purchase additional food items. A great approach to driving traffic in this category is to provide samples to your morning customers to encourage them to come back in the afternoon. Offering a coupon or a special if an existing customer brings a friend in for a frozen beverage will drive more awareness to this category and get people to try your frozen beverages.
Customers seeking coffee beans only come in two or three times a month. This infrequency may cause you to view them as less important. However, this customer is very valuable. They are extremely loyal, as they are seeking a quality bean that they probably can’t get in the grocery store or elsewhere. They are also a customer that will usually buy other products when they purchase beans. It is often easy to sell them a drink, filters, cups or even a machine. Their average check is usually the highest of all your customer profiles. Even if they come once every other week, they are still accounting for a significant revenue flow.
Your customers come to you for a variety of reasons, the most important being customer experience and quality of product. Treating each customer as someone special will be the best way to retain and grow your customer base. Remember they chose to come to you rather than the competition. In addition, delivering the best perceived value is paramount. Part of that value proposition is exceeding their expectations on quality. If someone pays 50 cents for a cup of coffee, they aren’t necessarily going to expect a quality drink. If that same person is paying $3 to $4 for a cup of coffee, they expect to get a quality beverage. Reducing the quality of product will erode your customer base over time. Delivering on quality and customer experience is the best way to increase your revenue.



