The Business of Coffee: Café Rica Founders Interview – Small Business Show 187

The Small business show episode 187 for Wednesday, September 5, 2018. Greetings, folks, and welcome to the Small Business show here at BusinessShow Co, the show that is by, for and about small business owners. Sponsors for this episode include Gusto Gusto.com SPS and TexTexpander. TexTexpander.com podcast. We'll tell you more about what you're going to find at those links a little bit later. For now, here in Durham, New Hampshire, I'm Dave Hamilton.

And out on the west coast, I'm Shannon Jean. I'm excited to be here. You know, after 187 times, you've got that intro figured out pretty well, man.

Yeah, you know, sometimes I start overthinking and then I catch myself. But that's okay, you know, we'll get there. Yeah, 188 will be even better.

That's right. We're rolling up to 200. That's awesome. Did you have, did you have your coffee today?

You know, I don't drink coffee, man.

You're not a coffee guy.

I never know. I mean, occasionally I'll have caffeine, but. But you don't want to. Look, here's the thing. Caffeine is fine for me as long as I'm alone. But for me, caffeine, as I like to say, further reduces my tolerance of humanity. And it's not so good when I'm in mixed company.

So I gotcha. Well, I've had, I've had my, you know, good trying to, trying to help out, you know, the, the, this is my, this is my subtle segue. I'm with you, our guest today, and.

I'm totally ruining it.

Yeah, that's right. Go along with your man. So, you know, 400 million cups of coffee get, you know, drank every day in the, in the US Every day. And you know, there's a lot of folks that jump in, think it's a great opportunity for a small business. When I started learning about a little about this, I thought, well, gee, it's also pretty crowded market that might be challenging to get your name out there. So, you know, we've got some, a couple of guys here today. They're going to talk about how they've grown their company Cafe Rica and focusing on Costa Rican grown coffee beans. And we're really happy to have them on the show today, talk about how they've succeeded. And thanks for joining us today, Tristan and Jackson. And you're going to pronounce your last name for me. Thanks, guys for coming on the show.

Thank you guys for having us.

That's cool. Hey, so tell us a little bit about Cafe Rica. You know, what your focus is, what you do, basically, and how you guys got started. What was the impetus to get things going?

All right. Yeah. So we're a coffee company that's based out of Battle Creek, Michigan. And we really started this about 2016. We started out as E Commerce, but really it started out a couple years prior. I'll let Jackson tell us the story that we like to tell people.

Yeah, so our mother is from Costa Rica, born and raised. And when her and my. Our dad got married, every time they go down there, he would try out a new coffee held on the kind that we sell. It's called Cafe Naranjo. And so over the years, my parents just bring back suitcases full of it.

Nice.

Sold in the US and so, I don't know, about two and a half years ago, we just kind of started throwing around a little, I guess, family inside joke that, hey, maybe we should just, you know, start a website and start selling this stuff ourselves. And then we not. So we did.

Yeah. It's interesting when it. When a joke people down there.

Yeah, it really is. And so we just got a hold of the people down there and went from there.

And let me ask you a little bit more about that. I mean, was. Were they happy to. I mean, did you have to kind of pound on their door for a while to get them to listen to you, or did they know your dad and thought he was so cool that they opened the door? How did that work.

Originally? I think our mom was down there seeing some family and stuff, and she brought us, I guess what we would say is our first supply. It was a couple suitcases.

Yeah.

And she just went down to the facility and bought it and brought it back here and told them what our intentions were, and they were just kind.

Of like, okay, yeah, they kind of just brushed us off because. Yeah, I mean, sure. We're not the first.

Yeah. A couple of gringos wanting to sell some coffee in the U.S. got it.

Yeah.

That's awesome. So what I love about that is nobody waited around for permission. You guys just said, well, just, you know, start with a couple of suitcases. And we, we do shows about taking action all the time. And I think that's. That's really awesome. I commend you guys both. So what went on next? Did they. Did your sales pick up and you got their attention and then they came on board or how did that work?

About the first I don't know, six months. I was still going to school at Michigan State University, and it kind of just didn't do much. And then December 2016, I graduated, and it really started my brain how to pick this up. And so that's kind of when we started going, I guess, more towards full time. We were getting mostly sales from people that had gone down to Costa Rica, had tried this particular brand out and wanted to get it in the United States and would just Google it at the time, selling it on Amazon, but relationship. So they didn't renew their contract or whatever it is. And so it was just us that was selling it. And so that's what we started out with.

Nice. That's awesome. So, okay, let me ask you. You guys are brothers. We talk on the show all the time about working with your spouse and pros and cons and all that stuff, but we don't talk about siblings very much. So here's your chance. Now you can hammer each other a little bit. What challenges and benef you like how I worded that? Have you found, you know, working with your. With your bro? How's it give me the spiel and. Or, you know, share with us? Because I'm sure we had other. Other sibling, you know, run businesses out there. What have you guys found?

Oh, I think one of the, I would say the biggest, I don't want to say challenge, challenge hurdle is we're eight years apart. So I'm. I'm 31 and he's about to turn 23. So I mean, we kind of have a. A little bit of a generational.

Sure.

Kind of like, you know, all my life he's been my big brother and like, I've, you know, kind of follow behind him and kind of now that we're kind of equals, I guess, challenges. Yeah, I get a little bit sometimes, so that. That could be a little bit of a challenge sometimes. But honestly, that turns more into our benefit just because we weren't that close in age that we actually were better at communicating with each other anyway. And so that kind of is our benefit as well. So that really is from being siblings and running a business together.

I mean, like, one of the biggest things is like, I guess really when we started getting closer was when we were both adults.

That makes sense. Yeah. Well, I mean, growing up eight years apart, it almost like separate childhoods. Right. As you said. So that maybe that's a benefit here. Right. That. That gap.

So, yeah, I mean, we. We were, you know, I guess for all intents and purposes, two Only children.

Yeah. When you went off to college, I, you know, that's when I was starting to grow up as a person and like getting molded and so I really was like an only child. Yeah, yeah, yeah. He was just.

Yeah.

So.

And do you guys keeping on this theme here? Do you guys have, you know, clear separate duties? Has that as. As that helped to kind of keep things? Hey, I, I handle this part of the business. You handle this part. I mean, or do you kind of mix and match? You know how it works?

Oh, I guess. Funny that got brought up. We just, I was what, last week, two weeks ago, we started really defining that because we found ourselves, you know, or not answering emails because we just assume the other one is going to do it.

So, yeah, we started to put those clear divisions. But I mean, like, there are certain things that, I mean, in my eyes, like, he always handled financials. He went to college for more of a. I went to school for political science. And so he was always more the business side of things. And I did the more like day to day people and like things online in the past couple years about marketing using social media. So like, I kind of took head on that and like, I kind of grew up more in that generation anyway, so it kind of was a natural fit there.

That's. That's really interesting. Right? Yeah, the, the, the older guy takes care of the money. The. The younger one joins Facebook. Right. I mean, I know I'm oversimplifying, but, but like that's, that's kind of interesting. Yeah. This is fascinating because it, it, it really is. Like you have two different perspectives on the world, but yet you have the one thing that business partners absolutely need, which is trust. Right. You've got that family trust that totally like transcends everything else. So that's. I like this. That's pretty good.

Yeah.

I mean, no matter how much we argue or do whatever, I mean, we're still brothers and it's still going to work out.

Right.

We don't get to. I mean, we just. They're just like, you know, sibling arguments, not like real.

Yeah. You know, one of the things we talk about on the show often is, you know, even with one person companies, is to create like an organizational chart listing all the duties that you do, even if you put your name in every single box. And I could see that, you know, doing that with you guys would be helpful. Okay. You know, Tristan handles this, Jackson handles that. You know, that. That would be great. So looking at the coffee market from the outside, you know, it seems Pretty crowded to me. But you guys have seemed to carve out a, you know, a nice niche. You know, they always say the riches are in the niches. You know, what have you guys done to get your voice heard kind of above the noise of every other coffee, you know, place out there? And to promote Cafe Rica to coffee drinkers?

There's two things that really stand out. So first it's where we get our beans. We get it from a co op of 2,400 family owned farms where like 40% of them are female owned and operated. And they really stress being financially stable for the family farms as well as being more environmentally conscious and forward. So that kind of differentiates us a little bit from the market because we are the only ones that actually import it in the United States. So we have the US Market as of right now. And also we kind of have been focusing more on, oh, we kind of saw that cold brew has been coming up and that no one's really in the, you know, driver's seat in cold brew. It's kind of still like in the wild, wild west stages where new ones are popping up and there's different types and no one's really, you know, been the leader in that, in that market. So that kind of helps us differentiate ourselves in the local market. We're really the only coffee shop in Battle Creek.

Nice.

Wow. Oh, so you got multiple niches going on.

Yeah, I would say. I mean there's obviously other franchise coffee shops. There's a cut, you know, there's like a, obviously there's Starbucks and stuff like that. But we're the, I would say the only craft local coffee shop.

And does that resonate with people locally that, that you've got that going on?

We've seen it. I mean what we have, a huge percentage of our customers are repeat customers that just don't want to go to those franchise stores anymore.

Like the local one closed I think two years ago. And so like there's been a big hole in that market. And so like the first month that we were open, some people were coming up and saying, I'm so glad there's a, you know, local coffee shop that isn't Starbucks and like another one that is in the Midwest is Bigby and they really are happy that we're there, kind of fulfilling this need and want. And so it's, it's been huge for us.

Yeah, that's killer. So would you say more of your business is local now than E Commerce or you can't, you know, still split it up pretty good.

We were talking about that earlier. I'd say it's about 15 to 20% of our business is E commerce now, and the rest of it is local.

Nice. And so looking at your, you know, your social media and Instagram posts, I see that your local store, your shop there, is built out of shipping containers, you know, bright blue and yellow, and I love that. So it's a bit off topic, but I'm really fascinated with this. And tell us how that came about and how you've used that to differentiate yourself as well.

Well, it started because my friend Kayla got a new job at the Battle Creek Chamber of Commerce, and I went down there to say congrats to her. And her boss was like, hey, you're the coffee guy, right? Coming out here the next few months, I think they'd be perfect for you guys. And so we got some. Some more info on that, and it was run through the small Business development fund in Battle Creek. Kind of rolled with it that way. They decided they were going to buy seven cargo units, a little marketplace called BC Cargo.

Yeah. And like our whole plan for the summer of 2018 was to really go to farmers markets and sell our bottled culbers. And since this popped up, we kind of just pivoted our whole idea for the summer and just kind of went with it. And it's. It's been. Turned out really well for us.

It's.

It's been crazy how different our business model has been. You know, I quit both my jobs that I was working to do this full time.

That's great.

So are you both full time on this now?

Tristan me is more full time at the shop, but yeah, and I still have my.

I still have my nine to five that I work, but I come in before, before I got to go to work and then help close down afterwards right after work.

That's awesome, man. Yeah, it's really great. It's that hustle that will lift you guys up above everybody else, man.

And Jackson actually really started this project for us because he took a loan out of his retirement. And so without him doing that and still working, this wouldn't be possible.

So that's great.

Well, you're never going to retire anyway, so you're going to be hustling building this company up.

You started a business, there's no retirement. That's right.

You got it.

Hey, I want to take a quick minute here and talk about our two sponsors for this episode. Our first sponsor will help a company like Cafe Rica. And that is Gusto, right So Gusto is your payroll, HR everything solution for that side of your business, right? Because here's the thing, payroll and benefits are hard, especially when you're a small business and you don't have time to be an expert in all these things, especially if you're doing your hustle in the morning, in the evening, and you got a daytime job in the middle, right? So Gusto makes payroll, benefits, and HR super easy for small business. Modern tech does all the heavy lifting, so it's totally easy for you to get it right. You no longer have to be a big company to get great technology, great benefits, and great service for your team. And here's the way it works, right? To help support the show, Gusto is offering everyone, not just Tristan and Jackson, but all of you, an exclusive limited time deal. Sign up today@gusto.com SBS and you'll get three months for free once you run your first payroll Again, that's Gusto. Gusto.comSBS you get three months for free. Our thanks to Gusto for sponsoring this episode. Our second sponsor is textexpander. You know that this is a favorite for Shannon and I here at Small Business show. Textexpander allows us to take the time, carefully, craft all of the emails and things that we have to type and need to get accurate, but do over and over again. We only have to do them once. Then we put them in textexpander and boom, anytime that customer service email comes in where somebody says, hey, I'm having trouble. How do I do this? You say, ah, I will invoke the snippet that answers that question. I've already crafted the answer. I don't have to recall it from memory. I don't have to guess. Boom, the snippet's there. Not only did I get it right for my customer, I saved time. And there's other things that you can put in there too, right? Because you can put addresses and phone numbers, email addresses. You ever filling out web forms? And it's like, I need all this information and I just put all that stuff right in textexpander. I don't have to think about it. I just type and boom, it comes out. Especially those forms that want you to type your email address twice. That's a pain in the neck. Not anymore. So you gotta check this out. Visit textexpander.com podcast. Yeah, that's right. Textexpander.com podcast. You get 20% off your first year. And make sure you choose Small Business show on the checkout where they ask you where you heard about it because that's how this helps. Our thanks to textexpander for sponsoring this episode. All right, Shannon, what's the next question?

Cool. Hey, so you guys have been, you know, I was gonna start this question out, you know, as young business owners, but you guys are making some great decisions and really differentiating yourself. It's excellent. But you know, since you're a couple years into this thing and you know, getting started, where and or who have you turned to for help when you were getting rolling or you know, when you need a question answered? Is there anything in particular or any person that's, that's assisted you guys?

Well, so we started our like, I.

Guess our cold brew journey.

We partnered up with a kitchen incubator called the Can Do Kitchen and they had a lot of good info for us. We had like a 12 week put us through and they had all sorts of information from labeling needs and all that stuff. So we got hooked up with a few people from there, applied for some free help with score. Yeah, Got an advisor helping us quite a bit. We lean on her quite a lot. And it just so actually happens to be that she's helping run the BC Cargo effort.

So that's.

That was just a little happy accident there.

That's great.

Valerie's been huge help for us and we. She has kind of like a. I don't say vested interest, but her project is kind of leaning on our. She's been there helping us even more lately and it's been awesome. And we really like to thank her for things that are kind of like outside that kind of influence us. We've kind of turned to some that kind of helped us and kind of molded how we think and things like that. So those are kind of our influences and who we turn to for help.

Cool.

That's great. Yeah. We've had a lot of people recently especially mentioning score as a great resource. So that's score.org folks. If you are looking for something like that seems.

Yeah, it's free.

Yeah.

Yeah, that's killer. Tell make sure you share the show with Valerie and then mention to her and have her, we'll have her come on and talk about all the great stuff they do for businesses like yourself.

Yeah, absolutely.

Yeah, that'd be cool. So what would you say has been the biggest struggle, you know, for Cafe Rica and what steps have you guys, you know, put in place to overcome it?

Well, I think one of our, our initial struggles was we were branding the coffee more than we were branding ourselves and Once we went through that boot camp, we. One of the mentor sessions was with a local kind of branding or listen, guys, you two are. You're two cool guys. You need to focus on that. People will buy your product because of you.

Yeah, we told her the story and she was like, that's your brand.

Nice.

You have family connection. You. Even though we're eight years apart, people think we're twins. So that's awesome.

Every day. Every single day.

That's cool, man. That's great. And that is so true. Everybody wants us to. I go to your website when I was first trying to learn about you. First link I clicked on what's our story and then into your blog and that kind of stuff. So that's phenomenal.

Second kind of challenge is right now out of the shipping container. We have some limitations with like power and space and so we're not able to do everything we want to do. But it's definitely a good start to jumpstart us to the next level.

That's great.

When they said 160 square feet, I was like, okay, that's a lot of room.

Not. It's not. We've pretty much maxed out the space and power in that thing.

So that's another good sign, fellas. You know, you just keep pushing and pushing and pushing and that keeping yourself from being satisfied. That'll just keep you, you know, moving forward to get you where you want to be most.

Definitely.

Yeah. That's cool. So I was looking at your website and I see you're doing subscription coffee delivery. Is that something you've done all along or that you got started and seems like a great idea to get that long term relationship with your customer. How's that working out for you so far?

We've been kind of going back and forth with this for months, probably close to 10 months now. And we've, you know, kind of just pushed it back. You know, something else that we could use our brain power on that at that moment kind of arose. And so we kind of kept pushing it back. And then we started seeing trends in people that were buying regularly, monthly, and not just one bag, but like four, five, six. And so we contacted those people first and kind of tested the waters with them and, you know, see if it's a viable option. And then recently, as of like two weeks ago, we moved forward into making it full scale and offering it. So it's brand new. That whole subscription part of our page actually went live, I think Saturday. So brand new.

Well, that's cool.

I mean, this Goes back to the customer relationships. We had about five to 10 that we were like, okay, I think we're comfortable pitching them saying, hey, let's try this off website, just person to person, and we'll do it that way. And we had about three or four us that they let us do, that we tested it out and.

That it.

Was a viable option that we should expand.

Nice. That's awesome. And reaching out to those existing customers and getting their feedback is just another excellent move. And to test the water, and I'd commend you guys. We've talked a lot about your success and all the stuff you're doing right. But of course, we want to hear about the juicy mistakes as well. And we're big fans of mistakes here because, you know, I've made so many in my life. I know Dave's maybe made one or two. And we learn so much from them and they teach us so much. So what would you guys say has been the best mistake that you've made with your business that really stands out that you've learned from?

The best mistake probably would be at first, not branding ourselves and seeing. Bringing this new product to market that no one's ever heard of kind of just didn't take off as we thought it would. We had full confidence in our product, and new is way better than a lot of coffee on the market. But for some reason, and then like Jackson said earlier, we started branding ourselves, putting ourselves on our Facebook videos, on our Instagram, and after that, it was. It's changed so much. A bunch more people started following us, buying our stuff, started picking up before we got our coffee shop. And that's been probably the best mistake, was not braiding ourselves and failing at first.

Yeah, you're gonna remember that one. That's really great. And it's true. People want to see what you guys are doing, and that's that human connection.

Connect to people, not brands.

Yeah, I love it. I think that's great. So we've got. There's thousands of small business owners that are listening, are going to be listening to this show when we push it out live. If you could offer one bit of advice, especially for folks that are just getting started and maybe struggling and haven't achieved all of the success that you have. What would you tell them?

My first thing would. I mean, I know it sounds cliche, but just go out there and if you have an idea, do it.

Yeah.

I mean, if you fail, you fail. It's. It's whatever. Like, I mean, more things will come up.

Yeah. Like, our first week open, we had a customer come up and like, commend us so much that, oh, I'm so happy that you guys are actually doing. I don't know, what is your. As a advice, like, what is your secret? And he went into this story about how he wanted to open a brewery and, like, just things weren't happening. He just was like, well, like, how did you guys get it going? And we were. We really looked at each other and didn't really know what to say, but it was, you know, we just did it. You know, we had an idea and kind of just took small steps that were obtainable to just keep on expanding after we hit our goals.

Yeah, that's great advice, man. It's fantastic. So good. You know, I know what I'm going to be doing after the show. I'm going to go order some. Some of that. Your coffee there. And what's the. What's the best way for people to learn more about, hear your story and to, you know, follow what's going on with Cafe Rica?

I mean, I would say probably the best thing that we're most active on is our Facebook page and that that is the portal to all the rest of our stuff. It's got our website on there. It's got our Instagram. I mean, we post multiple videos a week on there, sometimes together, a lot of times apart. But yeah, that'd probably be the best.

Yeah. And then our website to order us. And there's a little bit of our story on that page as well.

That's great. We'll be sure we put those links in the show notes up on our website and we push this out to all of our social stuff, too. You guys, it's such a great story. I'm really excited to see your continued success and I'd love to have you come back on the show sometime and check in with you. And when you've got 30, 40 shipping containers stacked up and you're killing it out there, we'd love to just kind of follow along and enjoy your success. So thank you again for coming on the show, both of you guys.

Thanks for having us.

Yeah, no, great story, man. I love it. It's like this. Yeah, you've got this perfect family business core here and it's gonna grow. I like it.

It's great.

Thanks so much, guys. Thanks, everyone, for listening. Here we are at BusinessShow co. You can find us on Facebook, too. BusinessShow co. Facebook. Keep living that charmed life. See you next time.