How Small Roasteries Can Manage Costs And Be More Profitable
In our previous article, we went over why coffee shops should consider roasting their own coffee. For those who have taken that step and set up a roastery in their coffee shop, or for small and micro-roasters in general, it is important to manage costs well in order to stay a sustainable business. If not managed carefully, the costs of running a coffee roastery can quickly add up and deplete your profit margins. In this article, we give you clever tips to reduce costs for smaller coffee roasters so you can aim for long-term success with a wider room for growth without compromising quality.
What can make coffee roasting expensive?
Setting up a coffee roastery, even a small one, takes up a considerable initial investment. In addition to the high cost of a coffee roaster machine itself, there are numerous other costs to take into account, such as rent, renovations, permit, storage, and inventory, to name a few. The overhead costs can also be significant, such as staff salary and training, marketing, packaging, utilities, insurance, and so on.
Fierce competition in the market makes it harder to increase prices without losing customers. Without the buying power or a large production scale that commercial roasters rely on, it is relatively harder for smaller roasters to make a sustainable profit or grow their businesses. The key is to look for ways to manage costs and keep them to a minimum in the coffee roasting business.
How to manage costs and save money when roasting coffee
From a business perspective, the coffee roasting process involves certain expenses. Managing costs means keeping these expenses under control, so the roasteries can increase their profit and be flexible enough to grow the business. Below are some things small roasteries can do to cut down costs:
1. Ensure you have an efficient roaster machine
An efficient roaster machine that has been set up properly has less energy loss, takes less time to roast, and produces less waste. This also means saving costs on utility and green coffee beans, which translates to higher profit.
Berto offers a range of coffee roaster machines that focus on work efficiency, quality, and safety. Berto roaster machines have all the right features so you can focus on growing your business.
2. Less roaster personnel
A smart roasting machine with an automated profile playback and safety features means you need less staff to operate it, and the roasted coffee beans quality is guaranteed to be consistent no matter who operates the machine. Also, a machine that requires low maintenance and cleaning will save you time and money.
3. Use green coffee blends
Sourcing high-quality green coffee comes at a high price, and may not be a smart way to grow your business. Instead, give your brand its unique identity by creating a signature blend. A lot of coffee blends consist of lower-scoring, more affordable green coffee beans that may not stand out on their own, but they add complexity and depth when combined with other coffee bean varieties.
In an article for BeanScene Magazine, coffee expert Andrew Low suggests roasters be prudent when developing their blends to get the most out of their coffee. “If you start with more modestly priced Brazilians or Colombians, then blend in some higher graded African, Costa Rican, or Guatemalan centrals, you can get a really nice blend at a sustainable price,” Andrew says.
4. Toll roasting and shared roasting
For those who are starting out with a limited budget, might want to consider toll roasting (buying their own green coffee and then sending the beans to roast at a specific roast profile to an established roaster, for a fee) or shared roasting (renting time on a co-op style roaster for a daily fee) to avoid the purchase and set-up costs of their own roastery. Those who already have a coffee roasting machine in place might want to consider offering these services so this additional income can offset their operating costs.
5. Get clever with packaging
Coffee packaging is one of the most important marketing tools for a roastery. It showcased the brand’s identity as well as being the first point of contact with the customers. Use a smart packaging design with fewer colors to keep printing costs down, and find a printing company that does not require a high minimum quantities.
6. Save on delivery costs
For regular customers, you can offer a small discount for a refill if they bring your brand’s empty pouch in good condition. This way you can reduce delivery costs as well as use less packaging, and also increase customer loyalty at the same time. You can also partner up with a logistics company to offer a special deal on online orders.
Roasting your own coffee definitely gives you more control of your product and brand identity, but there are a lot of challenges that may inadvertently result in increased costs. It is important for smaller coffee roasters and business owners to find a way to solve these challenges and manage costs as they move forward as profitable enterprises.
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