Fresh Cup Magazine, providing specialty coffee and tea professionals with unique insight into the trends, ideas, products and people that shape their world.
Issue link: http://freshcup.epubxp.com/i/131835
D uring the past 11 years, Cabin Coffee Company has grown from a single store in Clear Lake, Iowa, into a chain of seven shops with locations in Wisconsin and Minnesota. For Brad Barber, who directs Cabin Coffee with his wife, the company's quick evolution has created—perhaps "demanded" is a more appropriate term—an increased focus on business efficiencies and best practices. "The larger you grow, the more complex things can become," Barber says. Such is certainly true of purchasing, a routine business activity that can influence the customer experience, prices, workplace capabilities and, perhaps most importantly, store profitability. "Anything that affects the bottom line is important, and purchasing sits near the top of that list," says Gary Houdek, head of Jitters Coffee and Tea House, a 16-year-old shop based in Duluth, Minn. With few coffee shops wielding the buying power of a 25-unit chain, let alone the heavyweight clout of a Starbucks or Caribou, café operators must watch their purchasing habits carefully to remain competitive, relevant and viable. Finding that balance is no easy task. It demands time and attention to detail, solid strategy, a dash of trust and an understanding of just how much your small decisions can influence the bigger picture. Because selecting beans and leaf is a huge topic in its own right, we'll focus here instead on non-coffee and non-tea goods—not just how to buy them, but how to make smart, cost-effective choices. BUILD TRUST-ROOTED PARTNERSHIPS WITH VENDORS At the 11-year-old, Washington-based Woods Coffee chain, Wes Herman leans on longstanding relationships with trusted distributors to help secure the best possible price on the products needed at his 14 shops. Herman confesses this is something he would struggle to accomplish on his own. For instance, he works with one specific vendor that supplies the company a particular brand-name syrup. Through the years, Herman has repeatedly told the vendor's reps that he expects them to research and acquire the most competitive price. Herman's tactic is a different one than Houdek takes at Jitters; Houdek warns that placing too much trust in a vendor presents some danger. "It's a great thing to establish rapport with vendors, but you have to keep them honest," he says. "The truth is that once a vendor becomes comfortable with you, he may pass on price increases more readily." To Houdek's point, Herman routinely spot-checks prices to make sure that his vendors are indeed landing Woods the best possible number. If Herman sees a better price elsewhere, he'll bring it to the vendor's attention. EARN BUYING POWER WITH SALES When the Barbers opened the original Cabin Coffee store, the couple was unable to purchase enough cups with the shop's branded logo. After nine months using a generic cup, the duo—assisted by a loan—boldly laid out $13,000 to purchase 100,000 cups, which they then stored in the basement under the shop. "After that purchase, both the manufacturer and the distributor became more willing to produce and hold the cups for us," Brad Barber says. "We showed that we weren't a bit player." Barber says increased sales spurs increased buying power. "Volume means a lot to the distributors because they're operating on slim margins," he says. "By showing that we're committed to maximizing our sales potential, the vendors are more willing to work with us." PLAN AND EXECUTE Each Tuesday, Shana Foster heads to The Grind Coffee House in Estacada, Ore., and checks inventory at the seven-year-old establishment she runs alongside her husband. Thereafter, she'll ready a detailed shopping list for Wednesday, a time- and moneysaving exercise aided by staff members who help by highlighting items with shrinking inventory. "Keeping a good inventory list helps us avoid running out of things, gives us the ability to comparison shop and saves me from making multiple trips to the stores," Foster says. COMPARISON SHOP WITH PURPOSE When The Grind first opened, Foster bought nearly all of her non-coffee goods from one distributor. She has since ditched that practice in favor of shopping at three core venues, including a restaurant wholesale company, a local supermarket and Costco. Foster will physically visit these stores each Wednesday with list in hand and, aided by some Internet searching, look for the best prices. But she also seeks to strike a balance between cost savings and time commitment, bypassing hours-long quests to find the best possible deal the world might offer. "There is a point when continued on page 50 Fresh Cup Magazine • freshcup.com 49