This is part of a larger guide on how to sell private label coffee.
One of the most important parts of crafting a new private label coffee brand is sourcing the right kind of wholesale coffee.
While much of your focus will turn to marketing and successfully retailing another roaster's coffee beans, initially you'll need to devote a significant amount of time to finding the right place to purchase wholesale coffee from.
Before embarking on the process to source the coffee, you'll need to give some thought to the extact type of coffee and flavour profile you're looking for. More specifically, this guide will walk you though how to make the following needed decisions:
1. What kind of coffee to purchase (whole bean, pre-ground, pre-roasted).
2. How to choose your coffee origin.
3. What to look for in coffee roast types.
4. What flavour profile you'll want your coffee to have.
5. What pricing / volume will work best for you.
This walkthrough is intended for those who want to learn more about the ins and outs of buying coffee wholesale so that they can retail the coffee through their own café or website.
What Kind of Coffee Should I Purchase Wholesale?
You have a few options when it comes to purchasing coffee in bulk.
You can buy the coffee either pre-roasted or pre-ground OR you can purchase whole coffee beans.
Pre-roasted coffee has obvious advantages in terms of commitment Learning how to roast coffee and purchasing / maintaining the needed equipment and space is a much bigger investment, and may not be ideal for those whose primary focus is on marketing or retailing the coffee.
Buying pre-ground coffee beans offer you the ability to sell the coffee in a format that is (nearly) ready to consume, which could make it more appealing to a broader consumer base.
The principal disadvantage of both these more convenient options is the same: flavour.
The coffee beans will lose their freshness and in turn their flavour after they are roasted.
Even roasters like Sweetwater Organic Coffee encourage their customers to purchase whole beans.
Ordering whole bean coffee is by far the best option, but is only possible if you can tolerate all the overhead with processing it.
If having your own roastery is not an option than ordering the coffee pre-roasted (or even pre-ground) is possible, but you'll need to be very careful about your ordering and fulfillment times and processes. In other words, you'll need to make sure you deliver the coffee you source to the end customer with as minimal a delay as possible.
What Coffee Origin Should I Look For?
There's a few different ways to consider this, but the best approach is to ask yourself, "what will my target customer enjoy most?"
The coffee origin will be a significant factor in the taste and characteristics of the coffee. So your choice of origin depends on what you are selling. Certain regions lend themselves best to espresso or darker roasts, for instance. Other regions will produce sweeter coffees, or coffees with distinct "chocolatey" flavour profiles.
Here's a quick rundown of major regions and their corresponding flavour profiles:
Complex, fruity flavours.
Acidic and sweet, with notes of berry.
Smooth and Creamy.
Chocolatey / Nutty.
Wider variety, ranges from dark and chocolatey to bright and fruity.
Clean and light.
Rich, often sweet.
Hopefully this illustrates why it's best to have a specific flavour profile in mind, and work your way backwards to decide on the country of origin.
What Should I Look For in Coffee Roast Types?
Roast "types" are generally considered to be either light, medium, or dark.
The type of roast is determined by the type of roasting process used, and has a pretty big impact on the flavour. For instance, the darker a roast gets, the more it will lose the core flavour of the bean and instead take on more flavor from the actual roasting process.
Light roasted cofee is not roasted for as long as the other types of roasts. When roasted long enough coffee beans beans will start to expand in size until they eventually pop or crack. They will continue to crack more than once as they are roasted. But a light roast will stop "after the first crack".
Because the beans aren't roasted as long as other types, the coffee will generally come out as more caffeinated and with a milder flavour.
Medium roasts are more universally available (in cafés and grocery stores). They tend to have a stronger flavour than light roast, but are also very well balanced. The roasting process usually stops between the end of the "first crack" and the beginning of the "second crack".
Dark roast coffee is roasted even longer than the medium roast, and tend to create a really full cuop of coffee with rich flavour. These roasts are typically used for espresso coffees.
Similar to coffee origins, you want to decide on the roast types in advance based on what kind of flavour profile you want your coffee to have, and how many varieties of coffee you want to offer. If you are beginning by specializing in espresso, for examples, you may just want to begin with sourcing coffee that is dark roasted.
What Flavour Profile Should my Coffee Have?
This is a crucial decision you will need to at least start thinking about prior to contacting any coffee wholesalers.
You desired flavour profile will influence a number of other decisions like the roast type and even the form of coffee you order (whole bean etc..).
You can think of the taste or flavour spectrum as cutting across four basic categories: Sour, Sweet, Salty, Bitter.
Within these categories, you'll find descriptions that are more nuanced and evocative flavour "notes". For instance,
Vanilla, Brown Sugar, Caramel notes etc..
Chocolate, lemon, citrus notes etc..
And so on..
This will be a key point to workout with your coffee wholesaler of choice and fortunately many will help you decide what makes the most sense in terms of balance and popularity.
How do I Make Pricing and Volume Decisions?
The only way to access cheaper wholesale prices IS to purchase in high volume. Coffee roasters and wholesalers won't be able to supply you with coffee at wholesale pricing just because you have registered an LLC.
So you'll want to make sure you have whatever you need in place (like inventory storage space and fulfillment processes) before ironing out wholesale volumes and prices.
When you feel you have the infrastructure and investment needed to make a commitment in purchasing wholesale coffee, your first step will be determining what you ultimately want to pay per unit of coffee.
To figure that out, you'll likely need to first tally up all the costs of operating your coffee business (advertising, shipping, packaging, storage etc..) and work backwords to determine how much it will cost you to sell each bag of coffee (before you've even purchased it).
Once you have all that, you subtract that amount from your ideal sales price. That number is how much profit you'll make per bag. The number should be pretty high since you haven't even accounted for purchasing the coffee wholesale yet.
Once you have some sense of your tentative "profit margin" before coffee is bought, you'll have a sense of what price you need to look to purchase your coffee for.
For instance you might determine:
After accounting for how much it will cost me to package and ship each bag of coffee to a customer my costs come to roughly $5 per coffee bag.
After accounting for some rough overhead estimates (cost of storage, cost of website, cost of advertising etc..) and dividing them by the number of bags of coffee I expect to sell I end up with total costs of $6 per coffee bag I sell.
To keep my pricing competitive, I know I can't really expect to sell the coffee for more than $13 per bag.
$13 minues $6 leaves me with a $7 profit margin per coffee sold.
So doing this math I know when sourcing coffee I'll need to purchase it for under $7 per bag, and the further under I can go the higher my profit margin will remain.
All that said, the reality if you are starting out is that you likely won't be able to purchase in very large quantities.
Furthermore, it would be unadvisable to do so because there's no sense spending a ton of money on an untested coffee roast.
So it might be practical and worthwhile to consider purchasing in the lowest possible volume you can *initially*, even if that means cutting into your ultimate profit margin by more then would be sustainable in the longterm.
Ultimately many of these questions can't be answered and decisions can't be made until you begin a partnership (or at least a conversation) with a coffee roaster.
However, understanding that these are all factors to consider in advance of any of those conversations will help ensure that the coffee "buying" part of your business is well optimized for your overall retail or eCommerce strategy.