Coffee start-up sees the future brewing in new product
BusinessRx first caught up with this coffee start-up nearly two years ago. Here’s what’s brewing now with Javazen.
The entrepreneur: Eric Golman started combining coffee, tea and superfoods while in college, using his concoctions to launch Javazen, a College Park, Md.-based coffee company. In the past two years, the company has grown from selling its blends in about 30 regional stores to more than 200, including in locations of national chains Whole Foods and Wegmans, as well as online through the company website, DrinkJavazen.com, and Amazon.com. (Amazon chief executive Jeffrey P. Bezos owns The Washington Post).
Golman says that through its push to grow, the Javazen team is always interviewing customers for feedback while offering samples and conducting demonstrations in grocery stores. The same request kept coming up: Will Javazen be available in a K-Cup, Keurig’s single-serve brewing pod?
“We decided to no longer ignore that request,” Golman says. “But we didn’t want to sacrifice on our values of having something sustainable, and we wanted to keep with the integrity of the health of our product.” So Golman and his co-founders decided to develop their own single-serve solution.
The pitch, Eric Golman, founder and CEO of Javazen: “We developed a single-serve, compostable tea-bag solution for brewing Javazen. That allowed us to avoid the plastic waste created by K-Cups but brew our coffee blend in a way that develops its full flavor profile and health benefits. We worked with overseas scientists and suppliers to develop a custom material that uses a compostable plant-based starch to create the Brew Bags.
“The Brew Bags make it very easy to make a single cup of Javazen — you just submerge the single-serve bag in hot water for four minutes for a full-flavored brew. While we still sell larger bags of loose ground Javazen, we see this single-serve option as the future of Javazen. It opens up a lot more of the market for us because you don’t need any special equipment to brew the coffee.
“We just launched the Brew Bags online in March. We are now planning to kick off a sales strategy where we focus mainly on selling into offices. That’s where we see this product really adding the most value. We’d like to displace K-Cups in offices and provide a healthier option. Is this the right sales strategy?”
The advice, Elana Fine, executive director of the Dingman Center for Entrepreneurship at the University of Maryland: “Selling to offices can be very time-consuming. Most coffee and tea products make their way into offices through indirect distribution channels. Companies usually sell direct to businesses, instead of through a third party, when they either have a high price point to justify a long sales process or a complex product that requires a knowledgeable sales representative (and also a high price point).
It’s often too time-consuming to sell a low-price-point product for not enough return. You need to think about how much coffee you’d need to sell into a single business to justify the amount of time it could take to close that deal. In other words, make sure the lifetime value of the customer justifies the in-person selling costs. For that reason, aim for the bigger accounts.
“Also think about the types of companies that best align with your brand when figuring out which companies to pursue. Your superfoods story and compostable Brew Bags will likely resonate most with companies whose brand identities include healthy lifestyles and sustainability.”
The reaction, Golman: “We know selling direct to small offices is a smaller payoff for the effort. We’ ll be focusing on working with distributors who serve large office complexes with many office managers who are placing coffee orders for offices throughout several buildings. Those accounts have a much higher lifetime value, so we’ll focus on pursuing those. A distributor often serves thousands of accounts and can even include us on their sales calls to offer taste-tests of Javazen. This is a much more scalable strategy for us.” Looking for some advice on a new business, or need help fixing an existing one? Contact us at email@example.com.
Eric Golman began combining coffee, tea and superfoods in college. Then came Javazen, a coffee company in College Park. In two years, it has grown from selling in about 30 stores to more than 200.