Cafe and Hospitality Insights with Ed Thomas – Neli Coffee, Redcliffe

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Recorded at Neli Coffee HQ in Redcliffe (QLD), this interview with owner Ed Thomas goes into the changing expectations of the modern cafe and hospitality customer.

Ed spills the (coffee) beans on what owners of cafe and hospitality businesses need to be focusing on to remain competitive in this changing environment.

If you appreciate a good cup of coffee or just need a caffeine fix to get through the work day then this is also worth a listen. Ed takes us behind the scenes and you’ll be able to look at your next cafe experience with a bit more knowledge about what is going on.

Mick: G’day folks. It’s Mick from Redcliffe Marketing Labs and I’m sitting at Neli Coffee in the actual building where they roast Neli Coffee with the owner Ed Thomas. We’re going to be talking all about the coffee, but also the business side for hospitality and cafés, the common issues you’re running up against and what you can actually do to improve your business through those. Ed, how did you actually get into this field around coffee, cafés and hospitality? What was your starting point?

Ed: Mick, the starting point was close on about 15 years ago now owning a café and doing that thing that a lot of people do, which is to quit their jobs and go on buy a café and start with no experience at all. It taught me a lot of things. Some of it was a hard lesson and some of it was very good. Off the back of that, there was a desire to do better at some stage in life. I’ve worked in a lot of different industries.

Mick: Were you in hospitality beforehand? Or what were you doing?

Ed: No, not really. I was actually in aviation before that, so a completely different field altogether. But it was an excellent experience. My wife and I did it together. We spent some years working in different fields afterwards, but always had a passion to come back to it. So we’ve been working again in the industry now for just about six years. We made a lot of mistakes early on, but it gave us an opportunity to learn from those mistakes. In going ahead with our next business, we obviously constructed it from the ground up with the lessons that we’d learned previously.

Mick: Okay. Now set the scene. Could you just describe it, I guess the size of Neli Coffee, sort of how many places you supply and the sort of volume that you do?

Ed: We’re very concentrated in Redcliffe and its surrounds, so most of our wholesale business is in Redcliffe. I think, off the top of my head, we might supply maybe 10 or 15 cafés here and they range in size from very small to a decent size. Probably the biggest proportion of our business is retail customers and also internet customers, so people buy from us online. And we don’t just sell coffee. We sell equipment to them, we service equipment, so basically anything that’s involved with coffee. So it’s quite a broad business and a lot of different areas for us to work in.

Mick: Great. I guess the reason we were going to get together and chat today is really to take other hospitality and sort of café owners through some of the things that you’re seeing happening in the change of customers, how they interact with these types of business and give us some ideas on how they can actually improve their own business. Do you want to talk about the background about what you’re seeing in customer base?

Ed: Absolutely. It’s a changing environment and pretty much all business environments are changing. If you don’t realize they’re changing, then you’ve probably haven’t got a finger on the pulse sort to speak. The environments are always on the move. As businesses they’re involved in the coffee industry, be it a café or a restaurant or anything else, we need to keep an eye on what’s happening and we need to keep an eye on where trends are developing, the way customers are changing, so that we can adapt to those and continue to grow our businesses. So we are seeing changes that are occurring now. It’s a good opportunity for us to talk about them. We don’t just want to push our brand. We want everybody to do well in coffee, because it helps the industry as a whole.

Some of the things, I guess, we can talk about taking a customer that walks in the door today versus a customer that may have walked in five years ago, eight years ago, as an example – first thing is the customer these days has a lot more information at their fingertips, so they can not only go and find you on Urbanspoon or Beanhunter or any of the Smartphone applications or websites that are around to promote businesses, but there are a lot of different opportunities for them to come and find you. And so the first thing that they’re likely to do is to do a bit of research on you to see if you are the sort of place that they want to frequent. In the coffee industry and in particular, and with especially the coffee industry, there are phone applications and internet applications that are targeted to this. There are lots of people that review on there and reviews can make or break you. So customers in general are smarter and they’re going to look for a lot of things that they might not have looked for before.

So if we break a few of these down, one of the big ones these days is equipment, believe it or not. There can be some snobbery with coffee in general and customers are often focused on what sort of equipment you’re using. Some of these applications, they’ll actually list what equipment is being used. People can sometimes make decisions on whether they’ll go somewhere or not based on the type of machine that’s being used. Having said that also, because we service equipment, we know how it works, generally you’ll find that the equipment that’s spoken about the most is usually the better stuff and it’s better to work with and you get better results with it. So pretty much like anything, your tools are your business. So what you put into the machine and what equipment you use is going to invariably determine what comes out of it.

Mick: Okay. We’ll talk about staff training a bit later on, but just on that point because I’m always interested in that sort of stuff, for a coffee there are so many different parts, like the roasting, the equipment and the actual person who actually makes it, is there an industry ratio like how much comes down to the machine, how much comes down to the person who’s actually making the coffee on the day and how much to the actual beans?

Ed: Yeah. Look, there’s lots of talk about it. People often break it down and say “It’s 50% beans, 30% the barista and 20% the machines, something like that. I think it’s very hard to put a ratio on it. The reality is that if you don’t understand how the equipment works, it’s like getting someone who’s going to build a fence and doesn’t know how a nail gun works or something like that, you’re going to get a bad result at the end of the day. The reality is that understanding the equipment gives you a much better scope of success.

Mick: Cool. Sorry I took it off track there. I was just interested.

Ed: That’s okay. So yeah, we focus a lot on equipment, because that’s one that we see being very prominent these days and that’s where we come back to customers being discerning and knowing what sort of gear you have.

The second thing is customers also like to know what coffee you’re using, is it locally roasted, like Australian roasted, or is it a coffee that’s been roasted in Italy and sent out – that’s having a big influence these days also. We’re finding that through word of mouth and through some of these forums that people love focusing a lot on coffees that have been roasted by Australian companies and relatively close to home. That’s probably no different to any business really, sourcing products that are close, because there’s obviously a correlation between freshness and proximity of products, so that’s to a certain degree a given, I guess.
Getting at a very sort of grassroots level, customers like to know that you know them, so be it remembering their name or remembering their order, a lot of research has been done on the interaction between the person serving them and knowing them and remembering what they want. People like to know that they’re known. A good focus on that lends a lot of weight to your business. There are of cafés that make it their aim to remember someone’s name and their coffee within about three or four visits to the café.

Mick: Now, often that can just be a really good staff who just do that naturally, but I’m guessing for most businesses, whether it’s hospitality or something else, for that to happen regularly and in between staff, someone’s actually thought out the process of how it actually works. So are there tips on how to remember people’s names, like how do they even instill that or build that up in a business?

Ed: Some of it I think comes down to natural memory. I think it’s difficult to have a checklist or anything that’s going to do that, so writing orders down at least and trying to focus jotting someone’s name down when they order. At least if you get the name right, you’ll know the order or vice versa. So I think it just comes with skill and with a good memory, I guess. For example, I’ve been to a restaurant where six people would order and the person taking the order went and wrote it down.

Mick: Yeah. When that happens, it’s impressive, because they’re polished…professional.

Ed: It’s very impressive, so someone’s worked hard to do that. It is impressive and it makes you feel straight away “Well, I’m in a good place” before you’ve even tasted the food. So it’s one of those things I guess that if you focus on it and do a good job at it, you’ll get the end result. So that sort of I guess covers that side of it, that early point of greeting the customer, remember their name, getting the coffee for them and hopefully you’ve impressed them with good equipment, and it’s nice and clean and it looks like you’re looking after everything because these are all the important things that people look for.
One of the other big ones these days is how eco or environmentally-friendly are you in what you’re serving or what you’re serving it in. There’s been a lot of focus put on obviously organic and Fairtrade and Rainforest Alliance coffees. People are very savvy these days; they’re very interested in that and so they should be, because these different groups or classifications have had a big impact on the way that we take coffee, but we can relate this to a lot of other things, like cocoa and other raw commodities, but they’ve had a big impact on changing the lives and livelihoods of the people who are producing this stuff that we drink every day, so it’s important. It’s not a fluffy thing that we’re going to forget about in a year. It’s here to stay and it has an impact on what we service. So if I can sort of take an example from our business, we use fully recyclable cups and leaves. They’re made in Australia. We promote Rainforest Alliance. We’re registered with Rainforest Alliance. All our coffee is traceable. People like that and we like it too. We don’t just do it because we want to sell more coffee or we want to resonate with a small demographic. We do it because we genuinely believe in it, but customers believe in it too, so it’s an important one to grab hold of.

We need to also think about – in the whole picture now, we’ve looked at satisfying customers with a good product, the equipment’s good, the café’s nice and clean, we’ve remembered their name – we want to at the end of the day promote a really good image to the customer, so you mentioned staff training before and that’s a really big. The more that your staff understands with regards to what they’re producing and what they’re serving, the better the end result is going to be. So we put a lot of focus in our business on staff training. We have staff that might be here for a year before they go and start working on the coffee machine because we want them to understand how everything else works first and we really think that they can only do a good job when they’ve had lots of experience behind the scenes on everything else. Now that’s not going to work for everyone and I’m the first to understand that all businesses are a little bit different and you’re going to have to staff a multi-skilled in different area, but understanding the coffee and understanding the machine and being able to work on the machine successfully is going to have a big impact on your business at the end of the day.

Mick: Folks, if you’re just joining us, I’m talking with Ed Thomas from Neli Coffee and we just spoke about the importance of having advertising at least if you use a local wholesale supplier. What are the other things you can do, again, as quick wins?

Ed: Actually, getting back to that local supplier, something that’s coming to my mind now is even if you’re saying Milani Milk or something like that, let people know that you’re using it. So we don’t have to just be specific on coffee here. If we can promote things that are coming from a near buyer, I think it has a good win and it resonates with customers.

Some of the other things that are worth looking at – and we’re talking about quick wins here so what can we knock over this week, for example, and hopefully see a bit of a result – maintenance of equipment, making sure that everything is up to date on your gear, like if your water filters have been changed, it’s been regularly serviced, things like that. that’ll have a big impact on the way the machine works and the consistency of the coffee that’s out of it. It’s not a hard one to do, but it’s often forgotten about. That goes back to the equipment side of things. You might not have the best machine in the world and that might come later on, but at least make sure it’s working really well today, so that’s a key one; promoting the fact if you’re using any eco-friendly packaging or if you’re using things like organic coffees or Fairtrade or Rainforest Alliance, again, stick those on an A-frame out in front. I think some of the best ways to promote businesses sometimes are to be visible with it. I’m amazed sometimes if you go somewhere and have a fantastic pie or a great hamburger, but there’s nothing out in front saying “Hey, we make the best hamburgers in southeast Queensland. Pretty easy to do and you’re only going to have someone come in and say “No, you don’t.” What’s the risk in doing it? Self-promotion is a great thing.

One of the things that we probably didn’t talk about too much either is in terms of the marketing of businesses. Look, these days, I think if you’re Facebooking or Instagrammin or Twittering, you’re probably lagging behind, and look, hand on heart, we’ve only really started adopting it recently because we found that some of the other forums for advertising businesses didn’t get the same traction as what you can do on Facebook for nothing. So it’s worthwhile looking at those sorts of things, and even for that matter if you’ve been reviewed already, go and search and see what are people saying about you and what you can do to address it. I heard an interesting thing the other day that Qantas has, I think, four people that work permanently going and looking at what people are saying so that they can address it.

Mick: Yeah, I know. I’ve seen stuff around the Commonwealth Bank saying they’ve got whole teams that just go out and take down dodgy stuff online using their branding.

Ed: Exactly. If you can do that at a small level yourself and be a bit proactive in terms of marketing your business, I think it’s an easy win, it’s a quick one.

Mick: Coffee shops need a website while we’re talking marketing?

Ed: I think they need some sort of a presence. Look, it really depends, I guess, on what sort of shop you’ve got. If you’re a coffee that does some catering too, you’d be mad not too and you’d be mad not to go and hit the businesses in your area and say “Hey, this is what we do.” It really depends, I guess, on the business, but websites are so cheap and easy these days that you can have a presence for a very small amount of money and it doesn’t hurt. You can throw your hours on there, what you do, a pretty quick win.

Mick: Great. Okay. Now, Ed, also if folks have been listening to this and they own this type of business and they want to dive deeper and get some more information, so you’re not only doing Neli Coffee individually, you also are actually doing some consulting service and helping other folks out as a business to buildup the coffee industry and their own individual businesses. So if folks want to get more specific information or if you want to go deeper on their own business with you, what’s the best way they can get in contact with you?

Ed: Probably the easiest way is just to come onto our website, there’s contact information there to get a hold of us, so that’s NeliCoffee.com.au, and there’s a bit of information on there on what we’ve done and what we’re doing now. Look, it’s heavily advised obviously towards Neli Coffee, but, as you said, I do do some consultancy work on the side also for businesses, so I’m more than happy to be involved and to help out where I can.

Mick: Fantastic Ed. Look, thanks very much for sharing the time here today and talking us through that. If you’ve been listening, it’d be fantastic to get your feedback again. Jump over to Neli Coffee Facebook page and say thanks to Ed most of all for sharing his time here. Lets finish it folks. We’ll talk to you again soon. Cheers.

Ed: Thank you.

If you are a Neli Coffee fan let Ed know in the comments below.
What is the biggest mistake that you see cafes and hospitality businesses making?

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  • Nick May

    Good stuff Mick. Interesting that Ed is selling coffee equipment, but also consulting with cafes to build their business. Does he charge for this, or it is part of the service that comes from buying from him?

    • http://redcliffemarketinglabs.com.au/ Mick Cullen

      Nick Ed has a coffee shop at their HQ where they roast the coffee. They sell machines there too. For the coffee shops that Ed supplies I’m sure he gives them some ideas and support too – Ed is also available for consulting for cafes and hospitality businesses regardless of if they use his coffee or not. Just wants to see folks do well.

  • http://www.SmallBusinessBigMarketing.com/ Tim Reid

    Great stuff, Mick. More small business owners should extend themselves in to other revenue streams. I know another cafe owner who posted a YouTube video on how to steam milk and has sold thousands of dollars of coffee beans off the back of it.

    • http://redcliffemarketinglabs.com.au/ Mick Cullen

      Yep seen that one. Also remember one of your interviews way back where the cafe existed pretty much just to retail coffee machines.

  • http://changemadereal.com/ Preeti Helena

    Hey Mick. I just came across this post. Great that yo help raising the profile of good coffee. Being originally from mainland Europe, I do know what good coffee tastes lie and I rather drink no coffee than a bad one.

    • http://www.SmallBusinessBigMarketing.com/ Tim Reid

      I second that, Preeti!

  • http://lukemoulton.co Luke Moulton

    Great content for anyone thinking of starting a cafe. Great stuff Mick.

    • http://redcliffemarketinglabs.com.au/ Mick Cullen

      Thanks Luke! Really appreciate you dropping by.