How to start selling your own brand of coffee
Summary
- Differences between white-label, third-party coffee and private-label
- How to choose a white-label coffee supplier?
- The aspects to be agreed upon with the third-party coffee-supplier
- Defining the pricing model when reselling coffee
- What can Mokabar do for those looking for white label, private label or third-party coffee?
The coffee business is characterized by strong demand that remains constant throughout the year and whose formats and methods of consumption have undergone a profound transformation in recent years.
If the revolution of single-serving capsules for domestic use at the expense of the moka pot is by now an incontrovertible and hardly reversible fact, during the years of the pandemic there has been an increase in the consumption of home coffee, which penalized commercial activities.
At the same time, coffee enthusiasts welcomed the introduction of automated home coffee machines that allow coffee to be prepared directly from the beans, as they can thus enjoy a fresh coffee without having to grind it beforehand.
In such a multicoloured and high-demand market, with many consumers attentive to quality and many others focused on price, it is possible to enter with various strategies that we will discover in the following paragraphs.
Differences between white-label, third-party coffee and private-label
Several business models are available for those who want to enter coffee industry and their main differences depend on three factors:
- the initial capital needed to start the business;
- the type of product strategy one wants to pursue;
- the desired profit margin.
In particular, three paths can thus be chosen:
- resell third-party coffee, in other words act as a distributor;
- rely on a white-label coffee production
- rely on a private-label coffee production.
Choosing a third-party coffee resale strategy provides for low start-up costs and no product strategy (as we simply inherit the brand of the manufacturer we represent) and will probably have fairly low margins, as the competition on well-known brands is very high.
Now, let's take a look at the other two options, which may be more interesting for an entrepreneur.
Who needs a white-label coffee production?
While-label production involves purchasing the product from a factory that sells pre-packaged coffee ready to be branded and sold.
Therefore, with reference to the three previous factors, this methodology provides for a rather low entry capital, as it is not necessary to set up the entire production chain.
The marketing management and therefore the product strategy remains in our hands, and in fact, it becomes the main feature of our business. Finally, this production method guarantees good margins, directly proportional to the effectiveness and pervasiveness of the marketing strategy.
Who needs private-label coffee production?
Private-label production involves the creation of a production and packaging structure which is then resold under the brand usually decided upon by the distributor. A typical example of this operating mode is the product line under the supermarket brand.
In this case, there will be a significant initial investment, since the entire chain of supply, production, packaging and logistics will have to be created and the whole marketing strategy, i.e. product promotion, will have to be developed.
How to choose a white-label coffee supplier?
After analyzing the various market opportunities and business models, it is clear that for a coffee start-up, the white-label solution is the one that allows entry quickly and with a fairly low investment.
The next step is to identify the right producer who can offer:
- excellent coffee quality and considerable variety so that brand diversification strategies can also be explored;
- an excellent price/quality ratio;
- the ability to handle variable production batches, from small initial batches to launch the brand to possible large batches when demand increases;
You can have the best marketing and communication strategy, but if you turn to a company that is unreliable, delays on deliveries, or forces capricious and inflexible contracts, you risk foundering.
The aspects to be agreed upon with the third-party coffee-supplier
The main aspects that must be evaluated together with the manufacturer essentially concern:
- the coffee blend we want to bring to the market: in this case, the producer's experience and willingness to support us is essential because, as entrepreneurs, we are certainly aware of how we like coffee but perhaps we are not aware of what the market likes. You can start with a blend that is already available and tested and then make small adjustments if necessary, also in the face of customer feedback,;
- the coffee format: the choice here is whether to favor a specific market, perhaps the one that has the greatest demand, such as the coffee pod market, or to offer a varied range and also cover coffee beans, ground coffee for moka pots and coffee pods for home machines;
- the packaging, opting for a neutral packaging on which we will apply the brand independently or by asking the manufacturer directly, realizing an out-and-out full outsourcing;
- the shipping logistics of a finished good, whether in a single warehouse or distributed over several centres or warehouses according to need.
Defining the pricing model when reselling coffee
The pricing model is also critical in the relationship with the white-label manufacturer, as it will fundamentally determine the financial exposure you will have at the business launch and during its continuation.
The possibility of foreseeing small production batches allows you to follow the pace of demand and define the pricing strategy to apply to the customer based solely on the defined market positioning strategy, without necessarily having to incorporate huge costs for the storage and custody of large production batches.
What can Mokabar do for those looking for white label, private label or third-party coffee?
For over 70 years, Mokabar has been producing and distributing its own brand of coffee, appreciated and awarded alongside the best coffees in the world for the quality of the blends, the artisan roasting and the care taken to preserve the aroma of the coffee right up to the cup.
Mokabar offers its consultancy services to all entrepreneurs who want to launch their own white-label or private label brand, as well as the study, selection and preparation of customized blends.
Furthermore, the available production line allows for the production of both coffee beans, ground coffee, capsules and pods, thus ensuring the utmost versatility in accordance with your needs.
Finally, the logistics used by Mokabar guarantees shipments all over the world, with batches of agreed sizes also for fast-tracking models, starting with small batches and then growing over time, swiftly meeting demand. In short, a complete and reliable solution that will allow you to unleash your entrepreneurship in a short time and with minimal capital exposure.