Cof­fee start-up sees the fu­ture brew­ing in new prod­uct

The Washington Post Sunday - - TECHNOLOGY & INNOVATION -

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 cap­biznews@wash­post.com.

TONY RICHARDS/ROBERT H. SMITH SCHOOL OF BUSI­NESS

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.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.