Demand spikes Crimson Cup growth and new investment

 
Being pressed for space is a problem Founder and President Greg Ubert doesn’t mind facing — for too long. His burgeoning coffee business is at that critical moment when expansion becomes necessary, a result of increased demand, and a serious look at supply chain efficiency becomes unavoidable.
Crimson Cup Coffee & Tea has invested $1.1 million in a new facility that will open its doors this month in response to an uptick in demand and the market in general, Ubert says.
In concert with addressing space limitations, the company plans to double its workforce during the next three years. Currently, the workforce hovers around 20.
“This business growth is coming from our different market segments, and certainly with more and more people out there opening independent shops, we know coffee has rebounded from the recession,” Ubert says.

A business model for success

Ubert founded Crimson Cup in a one-room office in 1991 — a unique coffeehouse and distribution concept that today spans 28 states.
He says back then no one was thinking about how to specifically support independent coffee shops with the kind of specialized products, operations guidance and training he developed.
“Part of the consulting we do is to assure everyone gains on the efficiencies we’re putting in place all along the supply chain,” he says. “We work with our customers to help them be great small businesses by coaching on almost every aspect to reach their own success.”
The company functions more as a supplier consultancy and distributor, not as a network of franchises, Ubert says. Independents are responsible for designing their own physical formats, securing their own funding, marketing, etc.
He says many in the business community have suggested he could make more money in that kind of model, but for him, “that’s not a driver.”
“We believe in supporting small businesses across the country because that’s a noble thing to do,” Ubert says. “Our model is attractive to a lot of people because customers respond to the unique feel of each individual coffee shop. You don’t get that flavor, that same flair, with a franchise.”

Creating efficiencies

The company expansion not only allows the business to keep up with its increased demand but also improve operations.
“Ultimately this expansion allows us to touch the product less and for less time, which is the goal to get it out to customers as fast as possible,” Ubert says.
Crimson Cup will unveil its 20,000-square-foot production and warehouse facility in mid-November. The new site is just down the road from the current company headquarters, which now pulls double duty as both office and warehouse/production space.
Ubert credits the city of Columbus with creating the kind of tax incentives that have made expansion possible.
Topping the list of operational improvements will be increased efficiencies, he says, including higher ceilings for his new after burner machine, which eliminates the burn aroma from the roasting process.
“The space will also allow us efficiencies in warehousing, and of course distribution with more dock doors, for example,” Ubert says.
Crimson Cup delivers throughout Central Ohio, and ships anything less than a truckload elsewhere around the country, in addition to hiring a truck delivery service as needed.
Some of the workforce additions will be specialized positions to run the roasting and other technical manufacturing operations, while new shipping and receiving roles will round out the warehouse crew.
On the administrative side, Ubert anticipates hiring a combination of sales and marketing staff, a new internal finance professional, and other roles aimed at addressing “a broad scope of all the internal workings of our business.”

Spurring growth through innovation

Plenty of R&D will be taking place in the company’s new and improved coffee laboratory and test kitchen, from trying out variances in flavor profiles and roasting techniques to developing new beverages Ubert is proud to have launched.
He says Crimson Cup’s latest is phenomenal — a nitrogen-infused coffee laced with hops, which pours cold from a keg and has the look and consistency of a Guinness.
“It may be our best new item since we debuted Hot Chocolate Freeze in 2009,” Ubert says. “We also recently introduced a performance coffee drink with added protein that serves in the meal-replacement segment.”
Crimson Cup coffee products can be found at retail, in the grocery channel, in restaurants across the region, as well as at several universities. Ubert says 50 percent of his business is inside Ohio, and the other half comes from customers outside the state.

“It’s always been about building relationships,” he says, “because I’ve learned just providing great product was not enough to assure others’ success.”