Wholesale Coffee: A comprehensive guide for coffee roasters

Wholesale Coffee: Introduction

Outside of our homes, we consume most coffee in restaurants, coffee shops, at work, and other public places. This widespread consumption makes the wholesale coffee market a substantial and lucrative opportunity for coffee roasters & other coffee solution providers. However, mastering the art of selling coffee wholesale is a challenge that only a few roasters have truly conquered.

The primary reason lies in how they structure their wholesale programs and the accompanying services they provide. With the right approach, wholesale coffee can transform from a daunting task to an easy and profitable avenue for growth. In this article, we will explore the challenges and opportunities that come with wholesale coffee, and provide actionable insights to help coffee roasters grow their business effectively.

Let’s dive into the challenges and opportunities of wholesale coffee with the following topics:

Learn to navigate the wholesale coffee market, seizing opportunities and understanding program structures.
Uncover the potential of wholesale coffee through global consumption trends and market segmentation insights.
Master client relationships by tailoring offerings to different client types and understanding supplier approaches.
Overcome challenges in selling wholesale coffee, from price resistance to client acquisition and service efficiency.
Embrace innovation with the Remote Barista Program, offering remote machine control and maintenance oversight.
Prepare for the future of wholesale coffee by anticipating shifts towards quality-focused solutions and provider-controlled processes.

Wholesale Coffee Market Potential

Global Wholesale Coffee Consumption Statistics and Trends

Coffee is one of the most consumed beverages worldwide, with an astonishing 2.25 billion cups consumed daily. This widespread popularity is reflected in the habits of Americans for example, where three out of four people drink coffee every day, and a third of them consume three or more cups daily. These statistics highlight the immense global demand for coffee, presenting a significant market opportunity for coffee roasters.

Since the pandemic, there has been a noticeable shift in consumer behavior. With more people investing in equipment, knowledge and beans to make great coffee at home, expectations have risen when they visit coffee shops, restaurants, or other public venues. This shift signifies a critical trend: consumers now seek high-quality coffee experiences both at home and outside, pushing businesses to elevate their coffee offerings to meet these heightened standards.

Key Wholesale Coffee Segments: Retail vs. HoReCa and Offices

Wholesale Coffee Retail

Retail involves reselling coffee directly to consumers through supermarkets, specialty stores, and online platforms. While this segment can be profitable, it often poses challenges for roasters looking to scale strategically. The retail market is highly competitive, and securing deals with acceptable margins and high volumes can be difficult without strong connections. For many roasters, retail may not be the most strategic focus unless they have established relationships and can navigate the complexities of this market effectively.

Wholesale Coffee HoReCa (Hotels, Restaurants, Cafés, and Catering) and Offices

The HoReCa and office segments, on the other hand, present enormous potential for growth and profitability. Essentially, any coffee consumed outside of the home falls into these categories, encompassing a vast array of businesses and institutions.

Hotels: High demand for quality coffee as part of their guest experience.
Restaurants and Cafés: Coffee is a significant part of their daily operations, influencing customer satisfaction and loyalty.
Catering: Events and functions often require large quantities of coffee, offering substantial order volumes.
Offices: Providing quality coffee can enhance employee satisfaction and productivity, making it a valuable investment for businesses.

For coffee roasters, tapping into the HoReCa and office markets means accessing a consistent and high-volume demand for coffee. These segments are less saturated compared to retail, offering better margins and opportunities for long-term partnerships. By focusing on these areas, roasters can build a stable and profitable wholesale business, catering to the evolving needs of businesses and their coffee-drinking clientele.

Understanding Client Types and Their Needs from a Wholesale Coffee Supplier

Differentiating Client Types

When considering wholesale coffee clients, it is essential to distinguish between those who sell the coffee they brew and those who provide it as a complimentary service. This distinction significantly impacts their needs and expectations from a wholesale coffee supplier.

Clients Who Sell Coffee

Examples: Restaurants, coffee shops, and cafés.

For these clients, coffee is a revenue-generating product. They brew coffee to sell directly to customers, and their success hinges on the quality and appeal of their coffee offerings. Here’s what this means for their needs:

Quality Focus: These businesses often seek high-quality coffee beans to ensure exceptional in-cup quality, which can justify higher prices.
Brand Reputation: Serving top-tier coffee can enhance their brand image, attract more guests, and encourage repeat business.
Revenue and Profit: By offering superior coffee, they can charge premium prices, fill downtime with loyal customers, and ultimately boost their revenues and profits.

For coffee shops and restaurants, the wholesale coffee supplier must provide beans that meet these high standards and support the business’s efforts to stand out in a competitive market.

Clients Who Offer Coffee as a Perk

Examples: Offices, some hotels, and other guest-centric establishments.

These clients provide coffee as a complimentary service to employees, guests, or clients. While the coffee itself does not generate direct revenue, it plays a crucial role in enhancing the overall experience. Their needs include:

Cost-Effectiveness: While quality is important, these clients often look for a balance between cost and quality, as they provide the coffee for free.
Experience and Satisfaction: High-quality coffee can significantly improve guest and employee satisfaction, contributing to a positive environment and better reviews.
Perks and Benefits: Offering great coffee as a perk can enhance the perceived value of their services (e.g., a hotel providing exceptional coffee can enhance the guest experience).

For offices and hotels, a wholesale coffee supplier must provide a product that is cost-effective yet high enough in quality to enhance the overall experience of employees and guests.

How Different Wholesale Coffee Suppliers Address Client Needs

Types of Wholesale Coffee Suppliers

Understanding the various types of wholesale coffee suppliers is crucial for coffee roasters aiming to meet the diverse needs of their clients. Different suppliers offer different levels of service, quality, and focus, which can significantly impact a client’s satisfaction and business success.

Commodity Roasters

Characteristics:

Simple Wholesale Program: Commodity roasters typically offer straightforward, no-frills wholesale programs focused on delivering large volumes of coffee at the lowest possible cost.
Cheap Beans: The primary selling point is the affordability of the coffee beans, often at the expense of quality.
Equipment Partnerships: These suppliers may collaborate with specific equipment suppliers, but the equipment is usually not top-notch and is selected to keep costs down.
Focus: The emphasis is on providing a cheap solution, appealing to clients who prioritize cost savings over quality.

Client Fit:

Best For: Offices or establishments where cost is the primary concern and coffee quality is a secondary consideration.
Benefits: Low cost, bulk purchasing options.

Specialty / Boutique Roasters

Characteristics:

Exceptional Beans: Specialty roasters pride themselves on offering high-quality, carefully sourced beans that deliver superior taste and aroma.
Simple Wholesale Program: While the program may be simple, it focuses on delivering exceptional coffee.
High-End Equipment: These suppliers often collaborate with high-end equipment suppliers to ensure that the brewing process matches the quality of the beans.
Focus: The main focus is on quality rather than cost.

Client Fit:

Best For: Coffee shops with skilled baristas where in-cup quality is crucial for attracting and retaining customers.
Benefits: High-quality coffee, premium equipment, potential for higher sales and customer loyalty.

(Office) Solution Providers – Efficiency

Characteristics:

Comprehensive One-Stop Shop: These suppliers offer a full range of services and products aimed at maximizing efficiency in handling and serving coffee.
Efficiency Focus: The primary concern is operational efficiency rather than in-cup quality, ensuring that coffee service is seamless and easy to manage.
Equipment: Equipment provided is chosen for its reliability and ease of use, rather than for delivering top-tier coffee quality.

Client Fit:

Best For: Large offices and institutions where efficient handling of large quantities of coffee is more important than the quality of each cup.
Benefits: Streamlined operations, reliable equipment, minimal hassle for clients.

Solution Providers – Quality

Characteristics:

Comprehensive One-Stop Shop: These suppliers also offer a wide range of services and products, but with a strong emphasis on quality.
Quality Focus: While they strive for efficiency, the foremost concern is the quality of the coffee served.
Balanced Approach: They aim to balance efficiency and quality, providing high-end equipment and exceptional beans while ensuring the process remains manageable.

Client Fit:

Best For: Hotels, premium offices, and high-end cafés or restaurants that need to provide top-quality coffee but also value efficiency in service.
Benefits: Exceptional coffee quality, high-end equipment, and efficient service solutions.

Conclusion

Different types of wholesale coffee suppliers cater to varying client needs based on their focus areas—be it cost, quality, or efficiency. Commodity roasters offer budget-friendly options, specialty roasters provide premium coffee experiences, and solution providers balance efficiency and quality. By understanding these distinctions, coffee roasters can better align their offerings with the specific needs of their clients, ensuring satisfaction and fostering long-term business relationships.

The Challenges of Selling Wholesale Coffee

Client Reluctance to Pay Standard Prices

Many coffee roasters and businesses encounter significant challenges when it comes to pricing their wholesale coffee. Clients frequently resist paying the standard price, citing various reasons:

Perceived Value: Clients often do not perceive enough value in the higher-priced options to justify the cost.
Cost Sensitivity: Price is a primary concern, especially when clients are not fully convinced of the added benefits of premium coffee.
Quality Control Demands: While clients may demand high-quality control and exceptional service, they are often unwilling to pay for these additional features, placing the financial burden on the supplier.

Client Retention and Acquisition Difficulties

Hard to Acquire

Acquiring new wholesale clients is inherently challenging. Most businesses already have a coffee solution in place, making it difficult for new suppliers to convince them to switch. Roasters and providers must offer compelling reasons and clear benefits to persuade potential clients to change their current setup.

Low Lifetime Value

For suppliers who only provide coffee beans, client retention is a significant issue. The low switching cost for clients means they can easily change suppliers, leading to short-term relationships. It is typically impossible to secure multi-year contracts with guaranteed volumes, resulting in unstable revenue streams for the suppliers.

High Effort to Serve Clients

Serving wholesale clients requires considerable effort, as they often lack the expertise needed to manage their coffee operations independently. This creates several challenges:

Expertise Gap: Clients frequently seek assistance because they do not have skilled baristas or technicians on staff.
Blame and Accountability: When issues arise, clients often blame the coffee supplier or the equipment supplier, leading to friction and frustration.

Challenges for Non-One-Stop Solution Providers

Suppliers who do not offer a comprehensive solution often find themselves caught in a difficult position, having to mediate between the wholesale client and the equipment supplier. This juggling act can lead to inefficiencies and dissatisfaction on all ends, as clients expect seamless support and quick resolutions to their problems.

Challenges for One-Stop Solution Providers

While one-stop solution providers can mitigate some of these issues by offering comprehensive services, they face their own set of challenges. These providers often need to send experienced technicians to client sites for machine calibration, maintenance, and service, which is labor-intensive and costly. Keeping up with client needs requires a significant investment in skilled personnel and logistics.

Reluctance to Pay Extra for Additional Services

Clients are generally only willing to pay extra if they clearly perceive additional value from the services offered. In a highly competitive market with many similar solutions available, it can be difficult to differentiate offerings sufficiently to justify higher prices. This situation often leads to price wars, with suppliers competing primarily on cost rather than quality or service.

The Core Issue: Lack of Skilled Baristas

A fundamental challenge in the wholesale coffee industry is the lack of skilled baristas among the majority of clients. More than 95% of wholesale clients do not have the necessary skills to consistently brew excellent coffee. This skill gap creates a significant barrier to achieving high in-cup quality, even when using exceptional beans and top-notch equipment. Consequently, clients often fail to see the value in more expensive solutions, opting instead for the cheapest available option.

Conclusion

The challenges in selling wholesale coffee are multifaceted, involving issues of pricing, client retention, service demands, and competition. Understanding these challenges is crucial for suppliers to develop effective strategies that address client needs while ensuring sustainable business growth. By recognizing the importance of skill development, comprehensive service offerings, and clear value communication, coffee roasters can better navigate the complexities of the wholesale market.

Best Practice Example in Wholesale Coffee: The Remote Barista Wholesale Program from Blum Kaffee

Innovative Approaches to Wholesale Coffee Challenges

In recent years, enabled by state-of-the-art equipment innovative solutions have emerged to address the persistent challenges faced by wholesale coffee suppliers. One such approach is the Remote Barista Wholesale Program from Blum Kaffee. This program exemplifies a comprehensive, one-stop solution that leverages technology to provide exceptional specialty coffee beans along with remote barista skills and maintenance capabilities. This innovative model offers significant improvements in efficiency and quality control.

Learn more about the Remote Barista Model

Key Features of the Remote Barista Wholesale Program

Remote Overview & Control of Machines

One of the standout features of Blum Kaffee’s program is the ability to remotely monitor and control coffee machines. This capability addresses several common issues faced by wholesale coffee suppliers and their clients like for example:

Recipe Configuration: When a client wants to change a recipe or adjust an existing one due to new cup sizes or other requirements, the adjustments can be made remotely within minutes. This quick response time enhances client satisfaction while keeping costs los by providing immediate support without the need for an on-site visit.
Maintenance and Cleaning Overview: The program allows coffee roasters to monitor the maintenance and cleaning schedules of their clients’ machines. This ensures that clients follow the correct procedures and that issues are identified and addressed promptly. By knowing exactly which parts need attention, coffee roasters can provide precise and timely maintenance services, reducing downtime and extending the lifespan of the equipment.
Bean Stock Control: Managing bean stock is crucial for maintaining optimal freshness and ensuring that clients never run out of coffee beans. The Remote Barista program tracks consumption patterns and delivery schedules, allowing suppliers to automatically replenish stock at the right moment. This proactive approach eliminates the hassle for clients and guarantees a consistent supply of fresh beans.

Benefits of the Remote Barista Wholesale Program

The Remote Barista Wholesale Program offers numerous benefits that help overcome the typical challenges of the wholesale coffee industry:

Efficiency: Remote control and monitoring streamline operations, reducing the need for frequent on-site visits and minimizing downtime. This efficiency translates to cost savings for both suppliers and clients.
Quality Assurance: By maintaining strict oversight of recipes, cleaning routines, and maintenance schedules, the program ensures consistent in-cup quality. This focus on quality helps clients deliver a superior coffee experience to their customers or employees without the need for skilled baristas.
Client Satisfaction: The ability to quickly address client needs and ensure a steady supply of fresh beans enhances overall client satisfaction. The program’s proactive approach to maintenance and stock control also reduces client stress and effort, making it an attractive option for businesses.
Scalability: The remote capabilities of the program make it scalable, allowing even small coffee roasters to manage hundreds of clients efficiently. This scalability is crucial for growing a wholesale coffee business without compromising on service quality.

Conclusion

The Remote Barista Wholesale Program from Blum Kaffee represents a best practice example in the wholesale coffee industry. By integrating exceptional specialty coffee beans with advanced remote monitoring and control capabilities, the program addresses the key challenges faced by wholesale coffee roasters. This innovative approach not only improves efficiency and quality but also enhances client satisfaction and loyalty. As technology continues to evolve, such comprehensive solutions are likely to become the standard in the industry, setting a new benchmark for excellence in wholesale coffee supply.

If you want to learn more about how the Remote Barista wholesale program helped Blum Kaffee to grow, have a look at this case study.

A Look into the Future of Wholesale Coffee

The Enduring Presence of Cheap Solutions

The market for cheap coffee solutions will persist, fulfilling the needs of businesses that prioritize cost over quality. These solutions, which do not master the three core ingredients for a great cup of coffee—beans, equipment, and skills—will continue to occupy their space. For some businesses, the focus is not on providing exceptional quality coffee, and that’s perfectly acceptable in their context.

Market Position: Cheap solutions will remain relevant for businesses that do not prioritize coffee quality as a key aspect of their service.
Operational Efficiency: To thrive in this space, coffee roasters need either strong industry connections or the ability to operate on a highly efficient scale.

However, for businesses aiming to provide high-quality coffee, this approach is not viable. Failing to control the core ingredients of coffee quality can lead to a poor brand reputation, which can be detrimental in the long run.

The Future of Quality-Focused Coffee Solutions

For those committed to delivering high-quality coffee, the landscape is evolving. Here are the likely developments we foresee:

Traditional vs. Fully Automatic Machines

Traditional Machines: While many businesses currently favor traditional barista machines for their aesthetic and perceived craftsmanship, these machines come with significant challenges. They are less efficient and place a burden on providers, who often lose control over the brewing process, leading to inconsistent quality and unhappy clients.
- Exception: Specialty coffee shops, where skilled baristas are part of the brand experience, will continue to use traditional machines. These shops engage customers with conversations about calibration parameters, milk steaming temperature, and other intricate details of the coffee-making process. For these businesses, traditional machines remain the right tool.
Super Fully Automatic Machines: For the vast majority of wholesale clients aiming for quality, the future points towards super fully automatic machines. These machines offer numerous benefits:
- Efficiency: They are more efficient to operate, reducing the need for constant monitoring and adjustment.
- Consistency: They ensure consistent quality, which is crucial for client satisfaction.
- Control: Coffee Roasters can maintain better control over the brewing process, leading to fewer client complaints and a better reputation.

The Shift to Provider-Controlled Barista Processes

Given the high fluctuation in personnel, shift work, and the impracticality of training each client’s staff, it is more effective for coffee roasters to take direct control of barista processes through remote access to the machines. This approach ensures consistent quality and reduces the operational burden on clients.

Remote Control and Monitoring: By leveraging technology, coffee providers can remotely manage and adjust the machines to maintain optimal performance. Amongst other features, this includes:
- Recipe Adjustments: Providers can remotely update and configure recipes based on client needs, ensuring consistency and quality without requiring on-site expertise.
- Maintenance Alerts: Providers can monitor machine maintenance schedules and alert clients when servicing is needed, preventing breakdowns and ensuring smooth operation.
- Cleaning Schedules: Ensuring that cleaning routines are followed correctly, maintaining hygiene and machine performance.
- Stock Management: Monitoring bean usage and automatically scheduling deliveries to ensure clients never run out of fresh beans.

Conclusion

The future of wholesale coffee will see a clear divide between those who opt for cheap solutions and those who strive for high quality. While cheap solutions will always have a place, quality-focused providers must adapt to changing technologies and the increasing importance of provider-controlled barista processes. The shift towards super fully automatic machines seems inevitable for the majority, offering a balance of efficiency and quality control that traditional machines struggle to match. By taking charge of the barista processes through remote machine access, coffee providers can ensure their clients perceive the true value of exceptional beans and equipment, securing their place in the competitive landscape of wholesale coffee.