Business Update

Starting a business is not a small feat. Finding solutions to business problems can mean the difference between continuing, or putting the plan on the shelf.

So we need to celebrate each breakthrough!

We have already overcome a few challenges, made some mistakes, and earned the right to continue.

So, shipping things is expensive.

The largest issue we have encountered so far is SHIPPING. If done incorrectly, shipping can kill a small business!

The cost to move coffee from Colombia to California ranges from pennies to dollars. The supply chain massively favors two factors: volume and observing the existing infrastructure.

For Soil to Sip our cost to ship air freight was $2 per pound. Although this was the easy option and got the coffee to California in a few days, it is not scalable and combined with other startup costs brings our revenue into the red. Add to this around $9 for shipping the final product to the customer and you’ve got a problem.

How Starbucks does it.

As I mentioned above, the supply chain favors scale, so shipping coffee via sea can be a massively cheaper endeavor IF you have scale (100k kilos) or are buying through the supply chain.

The Starbucks Math:

- A 20 foot shipping container can hold 42k lbs of coffee. 250 bags, 150 lbs each.

- A shipping container costs around $3k to send.

- 42,000 lbs / $3,000. That’s $0.14 per lb.

Awesome! So we need to ship more coffee! This is a problem.

Our Solution

After our first shipment proved that fresh coffee directly from our farm was feasible, we needed to locate a scalable shipping method. We contacted local business that engage with the supply chain in Colombia and California and received standard feedback, use air freight and try and squeak out a margin. This has been going on for months.

Then last week, we had a breakthrough, we found a cooperative exporter! They work with dozens of smaller shippers to load a container. The result if 80% reduction of shipping cost. The trade off is timing, we’ll need to wait for enough other small shippers to send our coffee.

Good news & bad news.

The good news is Soil to Sip has found a way to continue selling the freshest coffee in California! The bad news is, we a few months away from resupplying our green coffee. 😭

We’ll post an update when the coffee is on it’s way! In the mean time we have a lot to say about green coffee grading! We’ll post soon!