Coffee is a tough business. Here’s how one owner pivoted after closing his café
KUALA LUMPUR, Dec 29 — Coffee is a tough business. The margins are razor-thin; the competition fierce, with new cafés popping up all the time despite almost an equal number appearing to shut down just as fast.
Gone are the dreamy early days of specialty coffee in Malaysia when regular appearances at barista competitions, Instagram-friendly café décor and intricate latte art would get you a stream of customers.
Been there, done that. Now is time to actually run a business.
Just ask Michael Tan.
The 30-year-old started his career at Starbucks before joining RAWCoffee (since shuttered), one of the first cafés serving specialty coffee in KL, in 2012.
He then moved to Singapore to join Forty Hands Coffee and Common Man Coffee Roasters, before returning to KL in 2016 to set up his own café, Alpha Brew Coffee.
It was a dream come true, one shared by many an aspiring barista.
Tan closed Alpha Brew Coffee last April, after a couple years of decent but not highly profitable business. What went wrong?
He shares, “It was a humbling experience. I thought I knew how to run a café but it takes more than simply making coffee. It’s one thing to run a café as a manager vs. running it as a business owner. The numbers — rental, electricity and other expenses — brought me down to earth real fast.”
Tan learned his ambition of serving high quality specialty coffee was unviable due to the market demand. He explains, “It’s quality vs. pricing. To serve the sort of coffee I want but at the price the customers want is not realistic — I’d be losing money.”
What was required was identifying the sweet spot of what the customers would be happy paying and serving coffee that is still good.
Tan says, “This is where my skills as a barista and my understanding of the industry helped: I realised I could still serve a good cuppa by using beans that are better than commodity coffee but not as expensive as specialty coffee.”
Using his hard-earned knowledge, Tan calibrated his brewing process so that he obtained only the sweetness from the beans. As far as the casual customer is concerned, it tasted like good coffee but without a hefty price tag.
Though it seems that Tan had cracked the code, he was also burnt out by the daily running of the café and made the decision to close shop.
Serendipitously, he sold his equipment — espresso machine and coffee grinders — to Thomas Ooi, the founder of Owls Café who was expanding his business.
Besides seven outlets around the country, Ooi was also growing his coffee roasting business, Ghostbird Coffee Company.
Previously, Ghostbird only supplied beans to Ooi’s own cafés. To expand Ghostbird’s reach, someone with the right industry knowledge, experience as a café owner and network of contacts would be needed.
Enter Michael Tan. What seemed at first to be a setback proved to be a blessing in disguise. Everything he had experienced led him to his current role today as Ghostbird’s Wholesale Director handling wholesale distribution, marketing and training.
A perfect fit, given his background and skill set: Tan is all about connecting the dots where coffee is concerned.
The most immediate task upon joining was to revamp staff development at the various Owls Café outlets. In his first three months, Tan trained 18 baristas, who previously were unable to calibrate coffee properly after six months on the job.
“Now they only need two weeks to learn how to calibrate,” says Tan. “Based on what I learned when at Starbucks, I also set up a deployment map: debriefed staff on positions available, how to fit and complement other positions — especially when the café is busy.”
This was to create consistency across the group of outlets. He recalls, “During our busiest time when I was running Alpha Brew, we had six people working so it was not possible to operate without an S.O.P. (Standing Operating Procedures) — everyone needs to know where they stand on shifts, bar flow and customer service; who is front of house and back of house.”
Using a buddy system, Tan would pair new hires with the most senior barista. This also created a hierarchy of baristas. He says, “This modifies behaviour so the staff become accountable: they now understand who their supervisor is. If a customer complains about coffee, they know who to approach to diagnose the problem.”
One nifty practice he picked up during his days at Common Man is to get the baristas engaged in a filter coffee exercise: “We brew once every hour and give samples to customers. It’s an opportunity for the barista to practise as well as build confidence as they walk around and initiate conversations with customers.”
Tan’s own stint as a café owner came into play when he shifted his attention to Ghostbird’s wholesale business after the barista training system was well established.
He says, “It’s all about relationships. I wanted a wholesale programme that’s more than ‘Hi, I’m here to sell you beans’ then ‘See you again in two months!’ and instead show we understand what our customers needed.”
This meant shifting the focus to merely selling beans in the typical B2B (business to business) manner and treating every customer as someone in need of a solution they are uniquely positioned to provide.
Tan says, “We have to show that we mean it when we say ‘I am here to help you’ — such as training the café owner’s baristas through our Academy on how to get the best from our blend. It’s asking ‘What areas you are lacking in?’ If you need suppliers, contacts, machines, we try to help. We have been through this so we understand the challenges you face.”
The numbers speak for themselves. Prior to Tan joining, Ghostbird had four wholesale customers. Within one and a half years, that has grown to 68 wholesale accounts. Something is definitely working.
Life is full of ups and downs. Some say it’s cyclical, even. It’s what we make of these peaks and valleys that define us.
It’s clear that Michael Tan has found a new role for himself — beyond barista and café owner, he’s now a true coffee connector.
Ghostbird Coffee Company
9, Jalan Seputeh, Seputeh, Kuala LumpurTel: 011-1638 8939www.instagram.com/ghostbirdcoffee/
Related Articles White, no sugar: Dr M on how he takes his morning coffee and what keeps him up at night Iggy Pop releases his own signature coffee brew Two cups of coffee a day could help you live longer, study shows9, Jalan Seputeh, Seputeh, Kuala LumpurTel: 011-1638 8939www.instagram.com/ghostbirdcoffee/
Comments