Coffee business in the black, strong, sweet


In an election year, it may be hard to find common ground with fellow Americans. But if you start your day with a cup o’ joe, you’re among the 100 million Americans who do, too. The coffee industry around Lake Norman and Cabarrus is claiming quite a share of that market.

Whether it’s a small hometown coffee shop or a national provider, coffee is a hot prospect. During the past several years, a number of successful independent coffee providers have opened their doors, while the region is also home to one of the largest coffee manufacturers in the entire nation.

S&D Coffee & Tea in Concord, which opened in 1927, is a national supplier of coffee, iced tea, and extracts. Located on Concord Parkway South, they are the largest custom coffee roaster and the largest blender of food-service iced tea in America.

CEO Ron Hinson says the firm now serves over 100,000 customers through national distribution or direct store delivery. He’s all business. “Our primary goal is to make products which will help businesses achieve greater profitability,” Hinson said.

In addition to their distribution network, S&D has opened a retail market center where local customers can purchase a wide variety of coffee, tea and beverage products.

The U.S. has approximately 15,000 coffee bars, which may be good news for manufacturers, but start-ups on the retail side might balk at the amount of competition.

According to the American Barista and Coffee School, located in Portland, Ore., a.k.a. “Coffee Mecca,” the demand for specialty coffee continues to grow, even in mature markets.

They cite as an example Italy, where a population of 60 million has 200,000 coffee bars.

Concord itself boasts at least a half dozen local coffee shops, which energetically compete with major retailers such as Starbucks and Dunkin’ Donuts.

Dilworth Coffee, which first opened in 1989, has one of its five regional coffee shops on Poplar Tent Road in Concord. The firm was founded by Alyene and Don Keen. “After traveling around the world and enjoying some of the world’s best coffees, we decided it was time for a better quality coffee in the US,” Keen said.

Tony Vo, owner of Waterbean Coffee in Cornelius and Huntersville, is successfully competing with the ‘big boys’ such as Starbucks.

“We strive to be unique and different from everyone else” said Vo. “We were the first specialty coffee shop in the Lake Norman area to offer cold-brewed coffee, pour-over coffee, and cold-brewed tea. Even though both of our locations are next to big franchises, it hasn’t affected our business because we focus on each and every customer who walks through our doors. We treat all of our customers like family because we understand that we wouldn’t exist without them.”

Vo has opened one location in Cornelius just off Jetton Road and a second in Huntersville on Sam Furr Road just east of Highway 21. “We’ve created a place where everyone feels welcome, whether they are here to hold a business meeting, to go over school work, or to just hang out with their friends or family.”

Vo has hit upon one of the keys to coffee success: Understanding that customers are after more than a cup of coffee.

“A friend and customer of ours is affiliated with the building, and he led us to the open unit. It fits our needs perfectly in that we have plenty of space for production growth, and also room to build out a state-of-the-art coffee training lab.”

– Brian Helfrich

“There is the escape from a stressful office, the chance to maintain or grow a relationship, a place to get away and to do some reflective work, a chance to engage with familiar coffee shop staff at a particularly lonely time, or as a place to do business and reach an agreement,” said Peter Baskerville, founder of 20 cafes and food businesses in Australia, in a post for Forbes.

Baskerville concedes that serving “the finest espresso” is vital, but equally important are ergonomics, line-by-line pricing, and multiple products.

Summit Coffee of Davidson expanded their operations into Cornelius with a pop-cafe and tours of the roasting warehouse. While owner Brian Helfrich says it may take a few years to recover his investment, he views the expansion as a challenging foray into the competitive field of specialized coffee.

“We launched this new venture in a space in Cornelius, off Bailey Road on Star Creek Drive,” Helfrich said. “A friend and customer of ours is affiliated with the building, and he led us to the open unit. It fits our needs perfectly in that we have plenty of space for production growth, and also room to build out a state-of-the-art coffee training lab.”

The new Cornelius building, which Helfrich rents, is slightly larger than 2,000 square feet, a combination of office and education space, and a warehouse for production.

Helfrich says he spent “in the low six figures to buy the necessary roasting equipment, and build out the facility.”

Helfrich, who has owned Summit since 2011, knows it may take a while to break even, but he’s optimistic. “Without significant wholesale growth, we expect our return on investments to take approximately two years, based on the volume of coffee we sell an hour to cafés. It is our intention, however, to monetize this more through wholesale distribution and on-site sales.”

Despite the growth of the coffee providers, profits aren’t necessarily as strong as one might imagine. According to Ric Rhinehart, executive director of the Specialty Coffee Association of America, the profit margin is not just the difference between a pound of green coffee and a pound of roasted coffee. There are lots of imbedded costs in between, including farm expenses, transportation from farms to harvesters, processing, roasters, packaging and sales. And that’s all before the overhead costs experienced at the cafe level for items such as utilities, rent and labor.

Still, there appears to be a significant amount of money to be made if the cafe owner, such as Waterbean’s Vo, is a prudent business operator. “We are a quality-driven coffee shop and not a high volume producing one. Think of us as fine dining instead of fast food.”

There is no one secret to success, said Baskerville. Instead, a combination of hard work, extensive experience, and luck will brew a great coffee business.

– Erica Batten and Dave Vieser


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