PRESS RELEASE: Indie Coffee Project Disrupts Wholesale Coffee Supply Model to Cafes
SYDNEY, Australia, February 2, 2019. – David Rosa founder and CEO of the Indie Coffee Project has set out to disrupt the traditional wholesale coffee supply model by helping established high volume cafe owners go independent of the major coffee brands and save thousands of dollars each year in the process.
“I owned my own coffee roastery and coffee shop for close to 20 years,” David explains, “and I know the margins that are required by both cafes and the major brand coffee wholesalers need to maintain their profit levels. Believe me, wholesale coffee is big business. The volumes are huge, and so are the dollar profits. As for the retail cafes themselves, not so much.”
After selling his coffee company two years ago, David saw a clear opportunity to disrupt the traditional wholesale coffee supply model with his next venture. He explains that the traditional model costs everything that is supplied to cafes – the espresso equipment, the maintenance, the time required to service the account, marketing, wages and overheads into the coffee’s kilo price. “I’m not sure if you’ve seen some of the head offices of the larger coffee companies? You can clearly see where your money is going.”
Having worked for twenty years in the coffee industry David understands how the current model works and he thinks it’s broken. He knows that his new venture will get coffee industry noses out of joint but he is unapologetic.
“The thing is it’s all about balancing risk. The coffee company takes a (considered) punt on a new cafe working out. There is a break-even point (usually about 15-20kg of coffee purchases per week) and thereafter you make money from that cafe. Having also been on the “other side” as a café operator I know how tough it can be for cafes to turn a profit after rent and wages.”
“Start-ups also require a lot of love and attention in the early days, sucking up resources and cost. Once they start motoring and know what they’re doing, it’s money for jam for the coffee companies. Why? Because you are still paying a rate for your coffee that has all the services you now hardly use in your weekly coffee bill (plus a healthy margin on top).”
How Indie’s model differs is that the coffee price only includes the costs related to product development, the coffee roasting process and, most importantly David explains, ongoing quality assurance. Everything else is Pay As You Need, and clearly priced and provided as a separate service. So you only pay for services such as machine servicing, blend development or barista training if and when you need them – not every week costed in your coffee price.
Bo Chan operates two Lize & Bath branded cafes in Elizabeth St and Bridge St in Sydney and is very satisfied with his results since making the switch a few months ago. Bo estimates that he will save about $40,000 for the year ahead based on his coffee price savings.
“Nothing has suffered without the big coffee brand offering. In fact, things have improved considerably. Our coffee sales, the quality of our product and its consistency, the service levels – all these things have improved measurably. The bottom line savings especially has made a huge difference to our profitability. As far as I’m concerned it’s a no-brainer!” Bo explains.
So what’s next for David and his Indie Coffee Project?
“Just help one café owner at a time go Indie and make all the hard work of running a café financially worthwhile.”
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Media Contact for Indie Coffee Company:
David Rosa – 0407 665 250
[email protected]
www.indiecoffeeproject.com.au