Lessons from a Coffee Entrepreneur That Nearly Gave Away the Goose Trying to Protect It
Updated: 4 days ago
As the world’s 7th largest agricultural export Coffee offers both unique challenges and opportunities. The opportunity is the roughly $100 billion dollar market value. The challenge, however, is how to become a viable player in an ever crowded field of coffee producers that live or die by the few cent differences between their business strategies in sourcing, processing, packaging, and marketing. That’s the reality Chris Bostwick faced in his moderately sized coffee business of 300 employees in the city of Boulder, Co.
Doing Everything Right
Chris built this brand from the ground up, making sacrifices and working long hours, weekends, and holidays to make things work. And he was proud of the coffee he produced, often bragging that it had the highest quality per price ratio of any of the brands in the market. From his perspective the quality of his product was something that needed to be protected at all costs. After all, the quickest way to ruin his business, he thought, was to have an incident that caused his customers to lose confidence in the quality of his product.
What Chris Didn’t Know
The unfortunate reality is that, whether he knew it or not, Chris had competing interests in the thorough quality control of his coffee (which he should rightly want) and keeping costs low (which he should also want). Every time Chris added an aspect to his quality control regime or increased its frequency it cost him money, and instead of merely protecting his brand from bad outcomes in the form of quality issues he was cutting into his profit margins. In a perfect world he would be rewarded for such efforts to maintain a high quality product, but that isn’t how it works. Or does it?
The problem Chris faced is real, but modern problems often have modern solutions and this is a case in point. If Chris had a quality control option that didn’t have an associated cost per test, but instead had a flat-cost for a high-rate of testing, he wouldn’t have a problem at all. And one day in March 2018 he was given that option. Chris learned about a sensor-based quality control system called an AI-HSI (Artificial Intelligence aided Hyper Spectral Imaging) that sold Chris on his first demo. That’s because AI-HSI allowed him to:
Do all his quality control tests with one solution
Add other tests to the lineup and increase their frequency without it costing him more money.
Decrease the hold-time in his production lines
Allowed testing by employees of all experience levels
Allowed him to skip any and all sample prep
Didn’t require costly reagents or consumables
Allowed customized chemical analyses e.g. caffeine and trigonelline content, fermentation index, and infusion time
Where He is Now
Chris has experienced tremendous success since those rocky early days. One factor he attributes to that success is his decision when at that cross-roads between diligence in quality control and operating costs to stay true to his commitment to a high quality product and avoid letting it hit him in the wallet by using hyperspectral imaging. Now he runs an AI-HSI system to monitor nearly a dozen parameters simultaneously, replacing nearly as many chemical tests and eliminating the cost of their reagents and supplies. On average he has tripled the frequency of these tests, and because each test has negligible cost, he was able to do all this while at the same time slashing his QC budget by 70%. In the end Chris was rewarded for his rigorous commitment to the quality control of his coffee which serves as an example of how with a little ingenuity you don’t need to cut corners or sacrifice your morals to maintain viable profit margins.