Business Tips for Private-Label Coffee Roasters
It comes as no surprise that many entrepreneurs and companies are starting to recognize the potential of coffee business, and specifically coffee capsules business. They turn to Novocapsule for initial advice on the subject. To make things easier and clearer, here are some basic tips for beginners:
Private-label coffee roasting is a great business opportunity for anyone interested in the coffee niche. During 2020-2021, approximately 166.63 million 60-kilogram bags of coffee were consumed worldwide, up from 164 million bags in the year 2019-2020. Consumption of espresso-based drinks (cappuccinos and lattes) has gone up by 50% since 2015. Search terms related to the use of espresso machines has grown by 113% over the past five years (Google Trends).
You must answer three key questions to understand the private-label coffee roasting business.
What is coffee roasting? It involves turning raw, green coffee beans into dry, aromatic, brown seeds by applying heat. The brown seeds are much lighter and softer compared to the green ones.
What is a private label? It’s a business that sells products with its brand on them. However, the product is manufactured by a different entity.
What is private-label coffee roasting? It’s a business model where coffee beans roasted by one company are sold to the consumers by a different company that packs and labels the coffee beans with their brand name.
Below are some tips for running a successful private-label coffee roasting business.
Understand coffee beans
The success of your business depends on how well you know coffee beans. You want to play around with different types of beans to create a fusion of flavors that intrigue your customers. A private-label coffee roaster business that sets itself apart from its competition by creating distinctive products sets itself up for success.
Many factors affect the flavor of coffee beans. For instance, the altitude, weather, variety, and processing method affect the end product’s taste. You want to have as much control as possible over all these processes.
Since it is difficult to grow your coffee, consider sourcing coffee from areas with certain weather conditions, altitudes, and specific varieties of coffee. Additionally, you could only source from countries and farms with fair wages for their laborers or farmers. This information could be incorporated into your product story and shared with your customers.
Get your legal obligations and finances in order.
Finances and legal obligations are at the core of your business. They must be carefully and intentionally managed from the onset. After all, you’re in it for the money, right?
1. Register a legal business
Registering your business with the state is not optional. It helps facilitate transactions with customers and other businesses. You could register your business as one of four types; sole proprietorship, partnership, limited liability company (LLC), or corporation.
Do your research or talk to an expert to help determine which option is best for your business.
2. Permits & Licenses
Do you intend to open a store or roast your beans? The government requires you to have specific permits and licenses to operate certain types of businesses, especially handling food consumed by thousands of people.
To avoid trouble with the state or fines, find and talk to an expert to help figure out which licenses and permits you need to run your business.
3. Taxes, bank account, credit card
From the inception of your business, all finances must diligently be tracked, recorded, and stored. You must pay taxes you owe the government and find convenient ways of accessing company cash.
A huge percentage of businesses around the world crash every year because of a lack of proper financial management. Bookkeeping should be one of your priorities to avoid being a part of this statistic. It is crucial to separate your finances from those of the company by opening a separate bank account.
Sourcing beans for your private-label coffee roasting business
There are two ways to approach this
- Find an established coffee roaster with all the equipment to roast coffee beans.
- Purchase equipment and roast your beans.
Finding a supplier is the best way forward if you are just starting. It is less capital-intensive and saves you the intricacies of roasting coffee beans yourself. To find the right roaster to roast coffee beans to your desired specifications, one needs to conduct intense research and talk to different companies.
While owning coffee roasting equipment has pros, it is better to adopt this method once your business has achieved a certain level of success and is starting to scale.
Packaging your private-label roasted coffee
Packaging is like outfits for products. A good-looking outfit makes a person look attractive. Similarly, well-thought-out packaging is essential to the success of the brand.
Unless you have excellent graphic design skills, this part of your business is better sourced from an expert. Graphic design experts specializing in packaging design can help you develop the right theme and designs for your products by creating mock-ups that help you visualize your ideas.
After creating your designs, you can forward them to a package manufacturing company for printing on your orders.
Market your brand
A great product is only meaningful if the right customer knows about it and can easily access it. Marketing strategies will vary depending on your business model (B2B or B2C). However, you can do a few things to start your marketing campaigns.
1. Build a company ecommerce website
People love stories; a great way to deliver your business story is through a website. A website can showcase your business’s milestones to your customers, the processes involved in producing and delivering their favorite flavor of coffee to their homes, etc.
2. Stay active on social media.
Social media is where customers can directly interact with your business by asking questions, sharing their thoughts, or seeking help regarding your products. It is a powerful way to reach customers because according to Kepios, in October 2022, there were already 4.74 billion social media users all over the world, around 59.3 percent of the total global population, and that number keeps increasing.
3. Run ads
Ads help you reach people who’ve never heard about your business before. Over 53.8% of ecommerce traffic is attributed to paid search marketing, implying that advertising plays a crucial role in generating leads for your business.
Google and Facebook ads are the most common advertising platforms that are beginner friendly and easy to use.
4. Great customer service
Marketing brings people to your website or store, but excellent customer service keeps them there. People buy from and trust other people, not entities. Training personnel on how to interact with customers goes a long way in enhancing the company’s reputation.
Conclusion
Vital to creating a successful private-label coffee roaster business is creating a unique product that caters to the needs of a specific group of people you have identified. A viable product, marketing strategy, discipline, and focus create strong pillars of a successful business.
As a food business, you could guarantee the quality of your product by simulating a customer by making an order and trying a cup of coffee made with your capsule to get a feel of what a real customer would get. Tasting your product and being open about it also instills trust in customers.
