Learn How to Grow Your Wholesale Coffee Business from Metropolis Coffee Company
It’s not every day that a linguistics and Indonesian professor decides to open a coffee roastery, but Jeff Dreyfuss isn’t your average coffee shop owner. Jeff and his son, Tony, opened Metropolis Coffee Company in 2003, with a simple goal of buying, roasting and selling great coffee. Despite the growing trend among third wave coffee companies to have large retail presences, Metropolis chose to expand through their wholesale business while running just one cafe.
We sat down with Jeff Dreyfuss, co-owner of Metropolis Coffee Company, at their cafe in Chicago’s Edgewater neighborhood. During our talk, which took place over Metropolis brewed coffee, naturally, and included a unique opportunity to visit their roastery, Jeff explained what goes into their wholesale process.
Jeff discusses why Metropolis focused on expanding their wholesale coffee business while retail took a backseat, elaborates on why quality and consistency are the cornerstones of Metropolis Coffee Company, and shares key takeaways for other business owners.
A Focus on Wholesale
While spending time as a professor at the University of Washington in Seattle, Jeff became a regular at Caffe Vita, a local coffee shop. It was there that Jeff began learning about coffee roasting. He joined the roaster every morning at 5am to do what’s called cupping coffee; the process of observing the tastes and aromas of brewed coffee.
Around the same time, Jeff’s son, Tony Dreyfuss, had taken a job working for Peet’s Coffee in Portland. A few years down the road, Jeff and Tony decided to try their hand at roasting coffee back home in Chicago. The Metropolis Coffee Company retail cafe opened in 2003, designed in large part as a portal for their wholesale business.
“We were going to just be a wholesaler of coffee, but then the brilliant thought occurred to us, why would anybody buy our coffee if they’ve never tasted it?” Jeff asks. “So we decided to open a cafe. We figured it would be much better in our situation to have a portal to try us out, see if they like the coffee, ask us questions and begin a conversation, since we did not have active sales.”
This is rather the exception to the rule. Most third wave coffee companies that do well tend to grow their retail footprint first, by opening multiple cafe locations. The alternative path to growth, which is pretty invisible to the general public, is being a wholesaler. Furthering the exception even more, Metropolis does not employ a sales force for their wholesale business, even now in their 12th year in business.
“People asking ‘do you sell your coffee?’ was how we got our first customers,” Jeff explains. “And by their questions we learned what they wanted and why they were interested in us.”
While the Metropolis model is unique, it is also successful, with wholesale coffee sales greatly outpacing retail sales. The focus on wholesale also allows Metropolis to better focus on product quality.
“While this store makes some money, you never get rich off of one cafe,” Jeff states. “I’d say the most important function our cafe serves for us is as a portal to wholesale.”
There are only a few roasters that focus on wholesale; most do not have retail locations but do have multiple roasting facilities, which Metropolis does not. And without a sales team, Metropolis drifted further away from the wholesale model followed by other popular brands.
For example, one of the biggest wholesalers in the third wave of coffee is Counter Culture. In business since the early ‘90s, they have sales offices, or training centers, in many cities, including Chicago, but mostly along the east coast. At the training centers, they sell their coffee and hold events for cafe owners, allowing them to become familiar with their coffee without actually having a retail presence.
“I don’t think there’s any intrinsic starting point of wholesale or retail. It’s just one way of starting, it’s the way we chose,” Jeff explains.
Investing in a Quality Coffee Experience
“Quality increments come with experience. It’s experiential, most of it,” Jeff explains.
One of the most frequent themes Jeff touched on relates to providing as much quality as possible. When Metropolis was first starting out, Jeff traveled to coffee countries to not only source beans but speak with people who lived in the villages to get a sense of the community and the area.
“Why?” Jeff asked. “Mostly, to have a sense of how sustainable a community was.”
Coffee is grown in the tropics, and if it’s good coffee it’s grown very high up. It’s also grown in areas that are generally poor, with few exceptions. In order to keep workers in the villages, the coffee industry has to pay enough and the related industries — like milling coffee — have to be attractive enough to support a population. If the industry isn’t providing enough to workers, including building clinics and schools, you can end up with new workers every year who will face a large learning curve.
But, if you work with coffee farmers that have been there for several years, their workers get better and better at picking the best cherries (the part of the tree where the coffee bean is found). If you’re able to see firsthand that a community is stable and has a strong workforce, you can be more confident that you’ll be able to receive a quality product consistently. Visiting the coffee farmers that Metropolis worked with helped Jeff ensure they were sourcing the highest quality coffee they could. It also helped humanize the brand by understanding exactly where their product comes from, a quality Metropolis strives to pass on to its consumers.
In keeping with their strong quality standard, Metropolis also evaluates all potential wholesale customers to ensure they are a good fit for the brand.
“As we are approached by a different category [of wholesalers] our most important question is not just to make the sale, but whether we want to sell to that person because it can denigrate our brand,” Jeff explains.
Coffee is a perishable product, if wholesale customers don’t change out bagged coffee or respect the product in various ways in can change the integrity of Metropolis’ brand.
“We turn down a lot of cafes because they don’t take care of their machinery,” Jeff continues. “It seems to be pragmatic, hopefully, to be as selective as you can without being arrogant.”
Knowing that it isn’t simply the taste of the coffee that convinces people to choose one brand over another, Metropolis competes on quality, price and customer service.
“The idea was to get as good as we could at the craft of doing coffee, having a cafe that was seen or perceived, hopefully, as warm and accepting of a very, very diverse community,” Jeff explains. “Also, we didn’t want to have arrogance. A lot of the third wave of coffee is very, very arrogant in its presentation. And I’ve never believed that.”
“There are multiple ways of getting somewhere”
There are many ways to be successful; what works for one person does not always work for another. Jeff took this concept to heart, and continues to focus on the quality of their product before any other aspect of the business.
In addition to high quality standards, Jeff also credits the growth of Metropolis to a commitment to reinvesting in the business. For many years, Jeff roasted the coffee, fielded inquiries on wholesale and delivered packages. Within a few years, they hired a full-time roaster and moved the operation out of the cafe to a larger roastery in order to create a production and roasting platform that exceeded what they needed at the time. As business continued to grow, they added two additional roasting machines and two additional roasters to operate them.
Eventually, they hired staff to handle the wholesale orders by phone, fax and email. Metropolis has over 500 wholesale customers currently, but they still do not employ a traditional sales team. Their customer base is made up mostly of cafes around the country, with a large proportion in the Chicago region as well as Canada. They can also be found in specialty grocery stores, like Whole Foods and Mariano’s.
Metropolis is changing and evolving, but one thing you’ll always be able to count on is their commitment to providing a quality cup of coffee for anyone who wants it.
“We wanted to make a buck but have our coffee be as affordable as possible, to as many people as possible,” concludes Jeff. “Try to make a difference in the world, that’s a very grandiose statement, but the tool would be coffee.”