Industry: Food & Beverage
CEO Matthew Alanis says the altruistic coffee producer is brewing up some potent growth.
As any coffee lover will tell you, savoring a hot cup of joe can quickly improve one's morning. But according to the folks at Lanna Coffee Co., it can also change the world.
"The company was inspired by a mission trip to Thailand about a decade ago," Alanis explains. At the time, the Integrated Tribal Development Foundation (ITDF) was encouraging the villagers of Chiang Mai to start planting coffee as a way to improve their economic position. Lanna Coffee Co.'s founders decided to partner with the ITDF through purchase of the villagers' coffee beans.
"The coffee market in the U.S. is enormous relative to that of Thailand," Alanis continues. "By purchasing and importing coffee beans from that area, our founders had the opportunity to not only create an excellent consumer product but also to support economic development in another part of the world."
To this day, Lanna Coffee Co. contributes funds to the ITDF's clean water projects with each bag of coffee purchased. Alanis says they also pay the farmers well above what is considered fair trade prices for their beans. "It's mutually beneficial," he adds. "We might pay a bit more for beans than other roasters do but we have a real relationship with our partners downstream in the supply chain and know that the product we're creating is positively benefiting them economically."
The company's staple products are its whole bean and ground coffees. Lanna Coffee Co. produces several blends -- including French, House, and Artisan -- as well single-origin varieties in both categories. "Our blends always include a Thai coffee," Alanis notes, "because our goal is to move as many Thai beans as we can. But we also incorporate beans from other regions as a way to hit our desired flavor profile."
The single-origin coffees are sourced from specific Thai villages. "For example, our Law Wu Black Honey is sourced from the village of Law Wu," Alanis explains. "This gives consumers an extra layer of traceability. They know exactly where their coffee is coming from."
Quality and consistency are paramount for Lanna Coffee Co. "We have some pretty sophisticated roasting software that helps us maintain a profile for each coffee that we sell," Alanis says. "So, when we're roasting a particular blend, we know exactly where we need to be in terms of temperature and when we should perform certain functions in order to make sure the roast matches that profile. We can hit it every single time."
Challenges: Alanis says the company's biggest challenge has been managing growth. Lanna Coffee Co.'s annual revenues increased 15 percent in 2018 and are on track for another 15 to 20 percent jump this year. "We've been growing at a fast pace and have been trying to make sure that growth doesn't impede us operationally," he continues. "We've been designing systems and leveraging some automation, which has been very helpful. We've continued to ship orders on time and maintain consistent quality -- both things that tend to become problematic if a company grows too quickly."
Pricing is another challenge. "Coffee tends to be pretty volatile from a pricing standpoint," Alanis explains. "Fortunately, we're able to purchase beans well in advance and by the container. The larger quantity allows us to reduce risks and alleviate some of the volatility. We're able to keep our pricing pretty consistent for our customers as a result."
Opportunities: Alanis says that Lanna Coffee Co. is planning to focus on expanding its cold brew production in 2020. "It's a product we've had for some time, but we've struggled with the distribution," he continues. "But we think this product has the ability to increase our growth. And from a production standpoint, we feel like it's not going to completely tax our staff."
Needs: Alanis says the business is in a good place in terms of staffing and efficiency. However, there could be a larger roaster in the company's future. "We just sourced some equipment to help us produce cold brew in larger batches," he adds, "but if cold brew turns out to be a big seller for us, the 12-kilo roaster we're using isn't going to be sufficient. We'll probably have to upgrade to a bigger roaster within the next 12 months."