Cafe Owners -gotta ask you guys something

plantation_coffee · March 2012

Just doing some market research
and i thaught id kindly ask-
-Id like to know what are the top ten reasons you would change coffee suppliers?

-would you rather be approached by a sales rep and take action then
or - would you rather approach a particular supplier yourself?

-what do you think of machine/grinder & umbrella + supply offers and being
contracted to it?

and any other comments welcome

much appreciated
shaf

Koffee_Kosmo · March 2012

We need to establish a few facts first Why do you want to change ? Are your staff or customers complaining ? In the end - You need to do what's best for your business Speak to member askthecoffeeguy - For his cafe, he developed his own blend KK

plantation_coffee · March 2012

Thanks KK Just doing some field work for a marketing project -which i should have mentioned earlier

derrilex · March 2012

If one was going into business with limited funds I can see how the contract thing could be benificial. They supply the machine, grinder, product and propaganda. A good operater could make that work. For a existing and competant business I would approach whoever I felt had the product that suited my needs and would never be contractually bound to them.

FreshCoffee2 · March 2012

At a rough guess I'd say 90% of cafe people looking for a new supplier themselves "demand" the equipment and all manner of "freebies" be given up front almost before they even intorduce themselves to you, so that puts them straight into contract zone, and most of them will sign without a problem despite the indignation of what is really only a small number of vocal outsiders that only look at the academics of the discussion and are not actually involved. And after that, a surprising number of suppliers we hear of that apparently say they dont do contracts and will "give" the equipment without obligation from the client......end up having contracts. It seems the "we dont do contracts because we hold you with our high level of service and expertise" crowd are selective with who they do and dont get to sign contracts. Its the same as in the other thread where the "we hire and fire our clients" idea was being discussed, there is more BS in the market than you can poke half a dozen sticks at, so you never know the truth unless you are one of the protagonists. For the rest of it you are asking several questions. a) top ten reasons to change a supplier...(any supplier not just coffee)....some kind of irreconcilable difference which is really only known to the individuals and is pertinent only to their situation. The truth is then somewhere in the middle Just one eg, client sends out a message the product was not up to scratch....possible ACTUAL reason.....they werent paying their accounts on time or not at all, the supplier got serious about asking for the money, client got indignant (despite they sold the coffee on but have not paid the supplier). I am afraid this question cant be answered as if its some kind of top ten quiz. b) Would you rather be approached or do you want to do the approaching.....Again, an individual circumstance depending on the real / private reason for wanting to change. c) Equipment "freebies" and contracts : answered first above

Any other comments, Yeah as already stated, sorry but this cant be answered as if it were some kind of marketing quiz. At the moment the market I believe, is slowing quickly and its going to be a bloodbath out there with cafe's going out the back door and taking their suppliers with them. Suppliers that cut off credit will have all sorts of crap levelled at them most of it actually untrue, and when someone says you do what is best for your business, the same goes for the suppliers. Cafe clients are very very and did I say very demanding, many of them for a very very and did I say very small nett worth. The demand for "instant" service of any kind is out of control, they demand instant attention as if they are the only client in the world, but in the main they pay slowly and well past 30 days, when they are not refusing to pay something over some perceived grievance. When a client gets to that level, you find their suppliers back off and the client goes elsewhere because "the supplier couldnt deliver service and product to my standard". I sense there is always some undertone of roaster / supplier bashing in (all) these sites, and cafes are often portrayed (indirectly if not directly) as the "little ausie battlers" that are at the mercy of "the big guys" that want them to sign contracts and whatever. Sorry but that's more than one sided, this topic has kinda got under my nose, and there is always more to everything than meets the eye of outsiders looking in on something where they dont know the machinations of what's actually going on. And by the way, by and large this site is very fair to suppliers so dont take all this the wrong way please but at a guess, I'd say the market research is going to be flawed if you dont get opinions from both sides. I think I will finish with a very pertinent example for the "I wont sign a contract" crowd: True story. A high profile business goes through the motions of investigating to purchase some very very expensive pieces of equipment. They can see these are going to be of great benefit to their business and they are going to buy outright. Investing in the equipment will help them save real dollars in higher efficiency in their operation. Negotiations and trials in their business take some months. At the end, they start procrastinating and backing away from the deal. The reason they are procrastinating, is because now miraculously, they've changed their mind, are no longer prepared to buy and want the equipment placed "on loan" by the supplier. However they want the equipment, eventually sign a contract, and on the basis of that contract, the supplier then buys the equipment in AND LEASES BACK from a finance company or bank. The deal takes months to come to a conclusion.....how much wasted money in time while playing games? If the client renigs on the supply contract some time during the term, the supplier then wears the rest of the lease payments for equipment that he cant reuse straight up and / or is not bringing him the return to make the repayments. These shenanigans on the part of clients are quite common. If the supplier doesnt sell to and LEASE BACK all these pieces of "free equipment" from a lending institution (on the basis of an approval due to having a contract with the client), he ends up paying for them out of his working overdraft, on which he is paying interest. Also, he ends up tying up and making unusable a huge chunk of his available working capital ie, he wouldnt have the money to trade and pay his bills. And then, where would all these cafe's get their "free equipment" from? Hope that helps.

mycuppa · March 2012

I think FC has summed it up pretty well. Plant. C., I understand you are already engaged as a coffee supplier the cafe industry and I can recall you asked an identical question in previous posts either on this forum or the other place around 12 months ago (although I have not checked to be 100% sure) Care to share your perspectives learned over the last 12 months ?

Ronin · March 2012

If you invest in a scheme that hints at 25% return or 3% plus every month... Then its a good chance its a scam and chasing the quick buck is self harm... Have to disagree with this part AM. Australia is a little backward thinking in the mutual & managed fund market. And with this mindset taught from parents to child, and Aus oh being about 1-2% of the worlds investing money, the big funds won't bother with ASIC as its too expensive. Capital guaranteed funds that also guarantee 2% per mth are readily availible, just not in Aus. Can be accesed through the correct legal channels though

UNM · March 2012

on 1332122590:

Capital guaranteed funds that also guarantee 2% per mth are readily availible, just not in Aus. Can be accesed through the correct legal channels though

So why aren't we all borrowing against the equity in our homes to invest in these funds? There is always a catch.

Brett H · March 2012

on 1332137501:

So why aren't we all borrowing against the equity in our homes to invest in these funds? There is always a catch.

We did. We used our homes as ATM's and we smugly invested our negatively geared equity in CDO's, LIC's and small caps with big promises. And a grand time was had by all!

Ronin · March 2012

Some are dodgy dealers but I can confirm that they are not all dodgy, and some can be very profitable. Due diligence is a necessity. Can be tricky to get to some funds if you don't know who to go to.

on 1332137501:

So why aren't we all borrowing against the equity in our homes to invest in these funds? There is always a catch.

Not always, but I wouldn't do it myself with borrowed cash, or any mutual fund or stock for that matter. Cash on the other hand........ And you also need to keep in mind the currency exchange.

on 1332138722:

We did. We used our homes as ATM's and we smugly invested our negatively geared equity in CDO's, LIC's and small caps with big promises.

Negatively geared is not my style

on 1332138722:

And a grand time was had by all!

Not all, but did they understand what they were doing? Just my experience, others have different ones

beanflying · March 2012

From a sometimes end user/cart (currently) point of view some of my criteria are as follows. This is based on I own more gear than most cafes outright. The "free" gear really isn't but if cashflow is tight to start off then it certainly is attractive. I know of a local shop that went second tier rubbish for free gear when they are better baristas than that coffee deserves to their detriment. Much as I try a large range of different blends each year for my own consumption these are what is important to me commercially. Milk Blend decision 1 - Broad customer appeal, this is not what us coffee nerds might like but what the average drinker will be having nice lingering thoughts about 30 minutes later. Smooth balanced by the milk and a nice pleasant after taste. 2 - Roaster reliability and the ability to deliver consistent product over the medium to long term. This includes roasted on dates and or ability to deliver coffee in time for use to an order schedule. No coffee or coffee to fresh or stale are like the pub with no beer and is really uncool.

3 - Usability with your equipment. Some blends simply don't work well with brand or type X of gear. Changes to setup or pressure etc can help but that comes at a cost for most. 4 - Price, for a lot this is the first and only decision to make but at the end of the day the difference between some of the best blends and the worst swill is under $0.15 per shot. For anyone vaguely considering putting up better than average coffee this should be low on the list. Other coffees or a Espresso/LB blend. For these drinkers generally a little more developed consumers of coffee than the average so you can go a little more wild and wacky. *** Most milk blends do not go that well without so if possible offer another option. Depending on your roaster then S/O make for a nice talking point for the 5% of customers in the know and done properly will be your best walking adverts for other potential customers. 5 and LAST - Slick company pamphlets, websites or "Salesmen" I really don't care about any of them! If they care about the coffee is all I want and if they don't the door will be shown.

Jonty · March 2012

So when you see a pod system offering $3.50 coffee's at the local Brumby's Bakery you gotta ask who in their right mind would purchase dishwater or the local chippery which has 3 month old beans sitting in a rossi grinder and offers espresso :head:

mycuppa · March 2012

OK, I just can't help myself...........was going to refrain from commenting. :-X It has been well reported previously that coffee is seen by the rest of the world as a commodity product - albeit an essential one. For cafe owners, the selection of coffee provider is not an emotional purchase - it's not like buying a house, car or hooking up with your other-half. It's part "great deal" and part "promise". On a given day, any coffee company can perform well, so you need to take on-board the fact you are just NOT going to create an offer that is remarkably differentiated from the others. Try as you might, close your eyes and think of a world where you believe you are fresher, cheaper, more focused and providing superior value, but the wake-up call is that you are exactly the same and cafes will view you that way. Competing on price is a race to the bottom and only attracts the wrong sort of clients - they are the ones who don't pay bills, deliberately under-order supplies and then scream at a supplier when they have run out of something. Creating a wonderful set of collateral is also of limited use. Most cafe owners are over-worked, tired and rarely have the time to surf the internet or read glossies offering hollow promises. Many are quite skeptical. Just about everything in traditional product marketing will not work.......... Putting aside for a moment the large companies with lazy balance sheets that can afford the $500K in capex to fund the FOL-lock-in solution as a pipeline to protect supply of their budget-driven beans. There are 2 primary pathways - relationships & equipment solution. Relationships are contacts, referrals, etc. Relationships are what makes a saturated me-too commodity market revolve. You basically have to *buy* contacts, and I'm not talking about freebies, I'm talking about reps who have large lists of cafe owners that can enter a cafe and have casual conversations to build awareness and create opportunity. The second pathway is via equipment. It comes as no surprise to discover that most cafe owners think more about the equipment than the beans. It is a way you might be able to differentiate if you have exclusive rights on certain equipment. Example being many Melbourne cafes think they need Brand X espresso machine or they will never produce a decent cup and subsequently what follows is they end up using the Brand X suppliers beans in a high proportion of cases. That's where great marketing works well. Best advice - stop looking on the internet, get off your butt and get out and talk to cafe owners.

FreshCoffee2 · March 2012

Spent the better part of yesterday at Cafe Biz. Very profitable day and all credit to Sean. So I wasnt able to check into this topic until now. And in view of Jeff's very good response above especially quote "....Best advice - stop looking on the internet, get off your butt and get out and talk to cafe owners...." Perhaps you will all allow me to inject a final point of reality. These topics are never representative and can never gain a representative response. The greatest majority of real coffee business is done in what I call "food outlets with a coffee machine". Most of you call them "cafe's", but they are an eatery with a coffee machine. While everyone in these forums seems to think that the core business of such eateries is coffee I am afraid that is not correct. The core business is to turn a legitimate income from offering food and beverage of which one of them is coffee. The responses gleaned in these sites are from the smallest proportion of people, most of whom are not in those kinds of business, and if you structure your coffee supply shop on the basis of marketing data gleaned from responses here, your coffee supply business would starve. And as I am an avid "conspiracy theorist", I am always left wondering what line of thinking is really behind placement of the topic, given the same topics always get the same types of replies in cyberland (ie simply pointing out the lack of balance in discussion coming from mostly non industry people). It's as if the topic is deliberately placed to elicit a certain web response or to keep it going round and round. If you want a representative sample for your marketing research, as already well stated "Best advice - stop looking on the internet, get off your butt and get out and talk to cafe (food outlet with a coffee machine) owners...."..........where the real bread and butter (or coffee) business is. Hope that helps.

Koffee_Kosmo · March 2012

I have mentioned the same thing on many occasions Shops known in Australia as cafes are primarily food outlets with coffee available from a host of other beverages KK

Ronin · March 2012

My Cuppa and Fresh Coffee. You guys post excellent information, I enjoy reading your posts and find them informative and factual (and amusing at times :stir) Most refreshing on a public forum, Thanks guys

plantation_coffee · March 2012

What wonderful replies guys and i thank you all for sharing some knowledge there My Cuppa - yes you're right 12 months ago i did open my business and also did pose a similar question , which i didnt quite get such a juicy response in. I put a bit of thaught before going out there and the last 12months have been a blast ,albeit lots of hard work and still chipping away at it. Ive found that the best way to do business as a supplier is to get off my butt and be out there canvasing and networking, which has been quite fruitful with regular customers enabling us to go from strength to strength and i am going to continue this as i believe this is the heart of gaining new customers. As mentioned before i totaly agree that most cafe owners have very little time , the last thing they want to do is go and have a look at your website or contact you via email - its either the phone or you in person. Price is a huge factor in determining a sale , but once they understand that the low end stuff could be limiting their resale value per customer then they automatically want something else and really dont mind paying more/kg. Ive experienced a couple of cafe's whove flaked away because their held on to the view that they could get a better price in which i made mention that your getting what you pay for , if you want something dirt cheap thats their perogative but i wont allow you to mix my supply with supermarket crap of which i have no regrets telling them so. I am not prepared to sell myself short -just aint worth it. 12months in and i think we're ready for this next phase of establishment , Id like to introduce equiptment into our supply offers but without having to give it away as a freebie , and also to promote this company with some eye catching posters & windbreakers. Website is probably a little while away , but most certainly something id like to have work with our posters and windbreakers. MyCuppa - you make a very important point about the fact that most cafe owners see all coffee as just the same kinda had a lightbulb moment when i read that and definately will keep that at the back of my mind.

Brett H · March 2012

on 1332274487:

What gets me though is the number of small cafe owners and or people looking at getting into coffee that have little or no experience, see and read all the marketing. I truly think coffee is a simple cash cow.

The same was being said for restaurants a few years ago. We may even se a resurgence courtesy of Masterchef but most will end up going the way of The Biggest Looser! In 10 years time will we see Master Barista and My Boutique Roastery Rules on the Telly?? Cycles have a funny way of repeating and conspiracies aside, people will always want to "live the dream.". Scenario: A merchant banker miserable with the changes of fortune of the economy, has amid-life crisis and recall his happiest life's moments were dining in great restaurants and cafes. This vocation change is an all too common story and I worked as a student for a number of these bosses who were out of their depth, stressed and did not last. You wouldn't decide to become a plumber, electrician or a neuro-surgeon overnight and with little to no experience. How is hospitality management any different? Looking forward to hearing more about your journey Plantation. Like the other guys here it sounds like you are working hard but smart. MC and FC's posts could easily be great additions to any journal.

plantation_coffee · March 2012

Absolutely Brett H!! MC's n FC's comments are definately going into my journal This next phase is going to take it outa me i think.... Juggling everything will be one hell of a circus act. On the whole i reckon this industry while it is volatile is showing some sereous momentum and potential too. The big guys will always be there and their budget beans too, just have to work smart about offering better service and lightly educate them into begining their journey into our world of coffee as we see it

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