Knook #20: Coffee Supreme
Coffee is a great leveller - aside from being delicious, it’s part of most people’s daily routines and it’s an excellent medium for people to connect.
Coffee Supreme is one of New Zealand’s most iconic coffee companies. Coffee Supreme’s CEO, Al Keating, says the company is driven by making better coffee for all.
“Coffee is at the centre of what we do, and it’s at the centre of what a lot of others do.
“We want to provide something better for everyone. The idea of that is, whatever you do, however you drink coffee, we have something for you. If you're into instant, we've got a great option for you, if you'd like to have coffee in a plunger, we've got something great for you, and we might even introduce you to something different like filter coffee. Which is why we say better coffee for all.”
I asked Al how Coffee Supreme got started.
“Coffee Supreme was founded in 1993 by Chris Dillon and Maggie Wells. They both found themselves needing new job opportunities, so they started Reds Cafe on Willis Street in Wellington. They were one of the early cafes in Wellington, and were hugely popular,” says Al.
“They quickly outgrew their roast supplier which was very mum and pop and was struggling a bit financially. They acquired the roaster, and renamed the company Coffee Supreme. So Maggie ended up running Reds, and Chris walked around Wellington with a grinder and a bag of beans under his arm, selling to other Wellington cafes, saying, ‘hey, we've got something better than what you’re using now.’
“The company grew from Wellington to the South Island and then to Melbourne in the early 2000s. We were seen as definite outsiders because Melbourne is very influenced by Italian and Greek culture, especially around hospitality. We were roasting very differently - our roast is quite light - to what people were used to. People were accusing us of terrible tasting coffee but it's flipped now. What we were doing then is now the new norm, so you might argue that we pioneered lighter roasts in Melbourne, but we were definitely part of a community that was pioneering it together.
“I came onboard to sell Auckland on Coffee Supreme in 2005 and since then we’ve pushed into Brisbane, Japan and New South Wales.
“I was at Atomic Roasters at the time - I got to know Chris Dillon through the industry and he asked me to come onboard at Supreme to push some doors open in Auckland. We didn’t have a business plan, it was all pretty low spec. Auckland was really just very Auckland-centric so it was a few years of hard slog.
“And then we started Good One in 2008 - it was a very pivotal moment for us because it gave us credibility in Auckland. It was very different to the Auckland scene at the time, which was polished surfaces and stainless steel and chrome and browns. We used lots of colour, we had a light open space, it was very accessible. It was a warehouse, it was down a back street, our front door was a roller door. I had pressure to not do it that way, with people saying ‘you're mad opening down there because nobody will ever come down and visit you from parts of the road.’ That simply wasn't true. People sought us out, and they were really rewarded when they found us.
“But the point of it was really as a tool to get cafe owners to sit at our table, win them over, and then have them say ‘your coffee is delicious, your people are great, and you've got a brand that we think we want to partner with’.
“It became the catalyst for our wholesale business to grow - now we roast 2.5 tons of coffee and have 8 full time staff based here in Auckland.
“And it’s also kicked the door down for other roasters to sell into Auckland. As a result, Allpress really lost their grip on Auckland as their stronghold. A measure of success I've used for years is the Metro Mag Top 50 Cafes as a good marker for how we’re doing. I think it started in 2007 and Allpress had about half of the cafes there - I always said we’d get to 25 - I think we’ve got to about 17 but Allpress have dropped down to 7 as other players have come into Auckland. It’s a neat illustration of how we’ve grown.
“Now we supply 350 cafes in New Zealand, 230 in Australia and 15 to 20 in Japan. We’ve also got our direct to consumer channel online, and a bit in supermarkets.”
I asked Al what some of the challenges are in running the business.
“There’s a few things. First is geographic spread - we’re in 7 cities and there’s one of me. It’s a struggle to maintain consistency and the feeling of a team across our different locations,” says Al.
“Second is the economic shift that’s going on around coffee - it’s a pretty hard slog for the coffee growers. Fair Trade and all of those types of things have done a good work but it’s getting a bit complicated and a bit murky. So we’ve realised that you can’t beat jumping on a plane and shaking hands with the growers themselves and we’ve invested a lot of time in that. We also buy our coffee in USD so the exchange rate is a nightmare and we have to do a lot of work trying to manage reserves.
“We’re really challenged to lessen our footprint. Our sustainability report shows we’re not as good as we wanted to be. We’re very open about the fact that we fly on planes, we put things on container ships and burn fossil fuels to bring coffee halfway around the world, we use coffee roasters that burn gas, we put the coffee into plastic bags and we use courier drivers to get our product to our customers. So we’re thinking about how we lessen our footprint when we’re doing something that requires travel and a great amount of energy.
“And competition is a huge challenge. If you have 100 customers in a cafe, and a second one opens in their neighbourhood, we don’t end up with 200 customers - we have two cafes serving 50 people each. It becomes a question of how thinly are we spreading the butter on the toast. A few years ago it was very normal for our average cafe to be serving 40-50 kilos per week, and now it would be closer to 25 kilos. So it’s become a massive challenge for all of us in the industry to stay profitable.
“For our business model, we’re very hands on with our customers - we don’t just drop coffee at the backdoor: we do barista training, we look after their equipment, we help them run their business. Because we aim to focus on all of our customers evenly, regardless of size, Supreme is a resource-heavy company. It’s meant we’ve gotten better at saying no more often than we say yes - but it’s a challenge not to be exclusive when our mission is ‘better coffee for all’.”
I asked Al what factors he sees as key to Coffee Supreme’s ongoing success.
“When we launched into Auckland, I realised that it was going to be really difficult. If we wanted to win the city and reproduce this in other cities we’ve gone to, and talk only to cafe owners who are seemingly the most influential person in that business, then you limit your market to say 100 people.
“So I thought, ‘right, I'm not having a lot of success with cafe owners. I should target baristas and key staff because they have huge influence in the business as well.’ They are big drivers in cafes, and there’s more of them than one cafe owner - say for every cafe owner is five key staff. So I thought ‘wow, that hundred people just went to 500 people’ and then we realized, ‘hang on a minute, Good One is not just influencing cafe owners and coffee makers, that's influencing coffee drinkers’. And then I thought, ‘if I target coffee drinkers, I've got an overwhelming army’, and people like you and me go into cafes and say, ‘Hey, we really love Supreme or we really love Almighty Juice, could you switch to them?’
“So I started making friends with coffee drinkers and coffee makers, and that built an army that would definitely have a huge influence for us. Yeah. After a time, the business owner says, ‘Okay, let's get them in to see us.’
“You know, we made the socks, because when you give the socks to somebody, it gets conversation going. It keeps you front of mind - it's brand awareness. And I don't think the owners saw us coming - we sort of blindsided them. So we had cafes supplied by competitors, who’s staff were wearing our socks and drinking our coffee at home.
“We've always been a very design-led business, and the founders have always seen the fortunes of investing in design. We know other coffee companies who have fantastic coffee but don't invest in design. And of course we all know other companies who are all fluff and post beautiful things on Instagram, but the quality is average. So you've got to have both.”
I asked Al what advice he’d give to others running businesses or wanting to.
“One thing that's become very apparent to us is focusing on what's important,” Al says.
“What's going on now is forcing us to not only focus on the top paddock, but protect it and water it as well, because we're in a storm where all of the surplus and the stuff that we think is important will be cut loose.
“It’s like when Peter Blake joined New Zealand’s America’s Cup Campaign. He went through the entire team as the new captain of the team, and asked everyone what they were working on. Any time somebody said hey, we've got this idea for innovation or we think we should develop this and whatever, he responded with a simple question: “Will it make the boat go faster?” That's all he said. He responded to every proposal or case or whatever, with “But will it make the boat go faster?”.
“That's really amazing when you're spending lots of time on marketing, when you're spending time on innovation, or lots of other things that may not be helping at a crucial moment. The slower you move, the harder you’re hit. We have to make the business faster so we can win. And if we can win, we can come back next year, and the year after and that's what sustainability is.”
For more info, visit https://www.coffeesupreme.com/.