Like so many social enterprises, Roosevelt Coffee Roasters is working hard to build the long-term sales pipeline that will empower the organization to create significant social change. But long before the organization can break through the barriers of social injustice, the quest to break even and make good on the loans borrowed to start up the venture remain top-of-mind for Kenny Sipes, founder, The Roosevelt Coffeehouse and Roosevelt Coffee Roasters, and Frank Wright, lead roaster at Roosevelt Coffee Roasters.
Roosevelt closed its funding round in July 2018, with the organization leveraging a combination of grants and loans, including one from Social Ventures Fund, LLC, a fund specifically for social enterprises that is managed by Central Ohio’s social enterprise hub, SocialVentures. In August and September that same year, Roosevelt Coffee Roasters was up and running, and had already sold 200 gift boxes containing samples of various trial roasts.
Since its launch, Roosevelt Roasters has picked up more than 18 corporate accounts. From Paper City Coffee and Third Way Café, to Root Insurance, and fulfilling a 350-pound order to be used as CoverMyMeds’ holiday gift for its clients, the roaster has primarily built on the success of its existing Roosevelt Coffeehouse and existing relationships to achieve its growth organically. In May 2019, Roosevelt will open two additional café locations, one within a corporate office, the other within Franklinton’s new mixed-use space, Gravity. All of this momentum puts the organization on course to break even this quarter.
“Although we had the experience of starting The Roosevelt Coffeehouse from scratch under our belts, we basically started that enterprise with zero debt,” said Sipes. “Roosevelt Coffee Roasters has required a completely different mindset on our part, because we needed to make a significant investment in equipment, a facility, and many other components that were essential to our day-to-day operations.”
While the roasting equipment took the bulk of the start-up capital needed to launch this second enterprise, beyond the hard costs came many other on-the-job learnings that required significant investments of time. For Wright, honing each aspect of the roasting business – from buying green coffee, mastering production roasting and fine-tuning roasts, to managing the warehouse – has been time-intensive.
“It’s always been my dream to be on this side of the business,” said Wright. “The biggest learning curve for me has been understanding how to get the timing right, from getting shipments of green coffee in to getting the labels designed and produced—we can now predictably have everything come together according to plan.”
Wright started as The Roosevelt Coffeehouse manager, and continues to help out in the café while also working to increase production on the roasting side. He adds that although he knew the café’s customers well, he’s grown in terms of his ability to develop a more nuanced approach to the organization’s business-to-business relationships that he now manages.
“We’ve also learned more about precisely what our customers want from the roasting side,” said Sipes. “While our initial plan was to release eight coffees all at once, then work up to releasing eight more a couple of months later, our customers expressed some fatigue. We learned that what they really wanted was a much slower approach—releasing new coffees more systematically to sustain their interest over time. Today, we release only up to three at a time.”
With Roosevelt Roasters breaking even in 2019, the primary goal for 2020 will be to accelerate repayments on the loans. On the operations side, Wright will also shift his role to focus more on managing the corporate accounts, and along with that, helping to expand coffee education he provides to the corporate customers.
The social impact areas of Roosevelt—to fight the local and global injustices of unclean water, hunger, and human trafficking—are what continue to drive the organization. Sipes and Wright are working on many new initiatives, opportunities and accounts in negotiation.
Fortunately, the roaster is currently operating at a small fraction of its total capacity, leaving loads of room for growth to meet the pending future market demand. Even in its infancy, the organization has already made donations to a Franklinton initiative that cares for women caught in the cycle of prostitution and to Franklinton Farms. So it won’t be long before the organization can move beyond break even and making good on loans, to making significant investments in organizations working to break down the barriers that cause social injustice.
Founded in 2014, SocialVentures is a nonprofit organization that advances remarkably good businesses—businesses that intentionally integrate social impact as a non-negotiable component of their business model. To learn more about organizations like Roosevelt Roasters, visit SocialVentures’ online Marketplace. The Marketplace features profiles of more than 100 local social enterprises. To contact SocialVentures, send an email to [email protected].