Update: How We Reached A Turnover Of €1.2M In 2021 [With Plans To Grow 25% YoY]
This is a follow up story for Kalve Coffee Roasters. If you're interested in reading how they got started, published over 4 years ago, check it out here.
Hello again! Remind us who you are and what business you started.
Hello! My name is Raimonds Selga, and I am one of the co-founders and head of coffee at Kalve Coffee Roasters. We once had the pleasure to be featured by Starter Story before, check it out here.
At our core, we are a coffee roasting company - we work by sourcing our green coffee responsibly and directly, we skillfully roast it for either our brand or a private label customer, and also make sure it’s enjoyed by the end customer at either one of our three coffee shops, with our growing B2C sector!
Despite the obvious risks and difficulties of the pandemic, we have grown to have a 1.2 million EUR turnover in 2021, and we expect to continue growth by a minimum of 25% every year for the next couple of years.
Tell us about what you’ve been up to. Has the business been growing?
Since we last talked, the business has grown substantially, reaching a team of 35 great people we work with daily!
We now have 3 coffee shops as well as a wholesale bakery, to cover our growing B2C part of the company, and each of these coffee shops generates revenue of 1000-1500 EUR daily.
As for the B2B part, at the beginning of 2022, we moved to new production premises of 720m2 and installed a 120kg roasting machine which allows us to produce 50 tons of roasted coffee monthly. Currently, we are growing our sales to reach this capacity, but even at our current volumes, we are not a micro-roastery anymore and have the production potential of being the largest producer in the Baltics.
Because of our B2C growth, we have grown from a team of 12 in 2019 to a team of 35 people, as each coffee shop requires separate service staff, however, in the roastery part of the operation we’re still a small team of 5 because we invested in equipment to increase capacity with the same amount of staff.
To further progress our business, we have invited a marketing manager to our team that takes care of all daily marketing needs, as well as communicates everything the company does to the larger public. We felt that we reached a size where this was necessary, and we’re very happy to have found a person who we can completely trust with communications and marketing.
We’ve also launched a new webpage to support our e-commerce growth, which is one of the good things that came out of the pandemic. Of course, right now the volumes are not pandemic level, as people do enjoy getting their coffee out of home, but it is still a 5-time increase from pre-pandemic quantities.
Additionally, we have also expanded our customer base in both segments, by opening another two coffee shops for B2C, as well as working on local sales for B2C.
What have been your biggest challenges in the last year?
We’ve been very focused on keeping up with the growth of our company and retaining our values within it. So far with great success, and I think it’s because both I and my partner Gatis keep an open mind to growth - while we do have a set image of the “big picture” milestones we want to achieve, we are also very flexible towards new opportunities.
Furthermore, we’ve also delegated a lot of our responsibilities to our amazing team, and we see that everyone benefits from this. The amount of staff in middle management positions has grown (from within the company, not externally), which means Gatis can focus on the bigger picture, and our wonderful team can take care of almost all daily operations without our involvement.
Unfortunately, we somewhat dreaded what will happen in autumn and winter. The growing energy prices and inflation affect us very directly, and we see that they will be an even bigger challenge than the pandemic was. Hard to comment on exactly how, but it’s just a bad feeling that we can do very little about.
What have been your biggest lessons learned in the last year?
I believe we’ve learned that adaptability is key to survival. Because of the pandemic, we had to create new systems, shift priorities, and work longer hours ourselves to ensure the survival of the company.
While no one from the team was let go, we had to ask people to take some time away from work because there was much less to do initially, which meant that myself and Gatis had to take over (back) a lot of core responsibilities from them and take the extra hours on ourselves.
The good lesson that came out of this is that we should both know how daily procedures are led in the company, so we can replace any member of staff in case something goes wrong.
When things got back to our usual volumes, I believe a good decision was to recruit and promote people to middle management positions. The amount of work kept growing, and for me and Gatis to be able to focus on developing the company, we had to trust others with tasks such as cafe management, production management, bookkeeping, marketing, and sales.
I’m very pleased that we have such a strong middle management team that keeps things going even if we’re not around.
What’s in the plans for the upcoming year, and the next 5 years?
We plan to expand our B2C section quite strongly, as we see that it is a sector with rather fast ROI and that we have a good recipe for success in it. Potentially outside of Latvia, but sticking to the nearby countries, such as Lithuania, Estonia, and Poland.
In the B2B sector, however, see a lot of potential in the office segment.
I believe after the pandemic, even though a hybrid work structure was normalized, people still enjoy working in offices - but with the market becoming more knowledgeable about coffee, the importance of taste quality grows. So we’re slowly moving into the office segment with both machines and coffee, potentially with more focus on this segment in 2024.
While we do not have a set 5-year plan, we have a big picture plan we want to achieve as quickly as possible:
- CO2 Neutral company by 2028
- Completely integrated LEAN production principles in the roastery with maximum automation
- Become one of the top 10 specialty coffee brands in Europe in terms of recognisability
- Open more KALVE coffee shops in surrounding areas.
As for the short term - we wish to stabilize cash flow and work through autumn and winter, which we see to be challenging. Even though it is just one goal, it is somewhat difficult to achieve but very important for a small company.
What’s the best thing you read in the last year?
Since lately I have been more focused on health and personal wellbeing, I have started listening to Andrew Huberman’s podcasts. I can recommend these to anyone who wishes to know more about how the body works.
Advice for other entrepreneurs who might be struggling to grow their business?
I really cannot stress enough how important it is to delegate. It is so beneficial to both sides. But at the same time, it matters who you delegate to, and here I have experienced that delegation works best with people who haven’t had experience in the processes you are delegating, but you know that they can manage it.
As an example, we had to let go of our head roaster, which meant that I had to start roasting coffee again - as I did when we started the company. However, now the volumes were much bigger, so I found myself roasting 3-4 days a week, meaning I had very little time for developing the company. When I knew that it was too much, we started recruiting for a roaster and production manager who can take care of these responsibilities - and luckily, we ended up promoting internally.
One of our warehouse staff now takes care of all production planning and processes, and one of our baristas from the coffee shops now roasts all our coffee - these are things these people had not done until now, but we knew they had it in them, and they are constantly proving themselves to be the right people for the job, and myself, in return, can work on growing the company again.
Are you looking to hire for certain positions right now?
While we are not currently hiring right now, we are very open to ideas and opportunities, so definitely get in touch with us if you see that KALVE could be a company you could work in.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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