Covid changed everything for a lot of people. Every individual and organization will end up looking back and seeing how covid changed them, for better and worse. Here's a little glimpse into all of the little and big ways covid has been requiring us to change. And no I'm not going to call it a "pivot"... too buzz-wordy.
One of the biggest changes we've been forced to deal with was the drying up of our income stream through wholesalers... There's a few different routes that retail companies typically go. We'll oversimplify it into 2 routes:
- Direct-to-consumer sales | Companies that want to sell direct to the consumer online or through stores that they own. Companies investing in this sales strategy typically spend a lot of money curating their social media, investing in SEO, paying for ads, etc...
- Wholesale | Companies investing in this sales strategy typically spend a lot of money building relationships with stores and distributors who might have shelf space, a location, or a client base that is valuable to them.
Obviously, in an ideal world you can execute and make money off of both of these well. But realistically, most companies start off focused on one or the other. We have spent the last couple of years building Northern Glasses, our most established retail brand, around our wholesale relationships. We get to work with incredible stores and people across Minnesota and the midwest who see value in our brand and our product and want to share it with their customers. Which is fantastic... Up until all stores are legally forced to close.
An additional bit of uncertainty was injected into the mix when we had to start grappling with the possibility of the MN Christmas Market, an event that we host every holiday season, potentially being in covid's crosshairs (we've recently begun feeling a lot more at ease about the timeline of our November events and how covid could affect them). But at the time we were sweating. Profusely. Not like a middle schooler in gym class kind of sweat. We're talking full blown pitting out our sweatshirts kind of sweat. Hosting the MN Christmas Market is about 30% of our company's annual revenue. So with our wholesale business, and our large event business on the line, we knew we had to diversify our income stream for the coming year to mitigate whatever risks may exist out there.
And all of this hit only a few days after beginning to transition one of our contractors into being our first regular employee. Shoutout to Sophie.
With the reality that our cash flow was being severely limited for the coming months, we had a couple of options.
Option A: Feel bad for ourselves and complain. Full-blown "woe is me" blitz to everyone we know via every channel we have access to.
Option B: Start building the things we wouldn't normally have time to build and try to stay afloat with a brand built around direct-to-consumer sales.
Option A isn't really our style. The reality is, that there are people being so much more negatively effected by this than I am as a small business owner, that any conversations that talking about the challenges and fears of the situation would have felt kind of tone-deaf for lack of a better word?
I've grown up middle class with family that cares about me; my wife is a teacher with a steady job whose pay is unaffected by covid; we own a home with a mortgage that is only 20% of our monthly income; and we don't have kids. The covid shutdown is really discouraging as a small business owner and entrepreneur, no doubt about that. But the reality is that if I couldn't bring home $1 of income for a while, my suga momma and I... I mean wife and I, would be just fine. Certainly not "financially thriving." But fine. Knowing that our situation is infinitely more rosy than a lot of people being affected makes it hard to feel self-pity for very long.
So we went with Option B. Build a new brand and start positioning ourselves to last.
I'd actually been wanting to build a coffee brand for a while but had been assuming it was a few years down the road. The coffee industry has been compelling to me for a handful of reasons, largely it's complexity, influence on global economies, and wide spectrum of ethical implications of the ways that coffee companies do business. The coffee industry is fascinating in the sense that it has become a full-blown staple of the wealthiest countries in the world... but its very existence depends on countries whose economies have historically been exploited and are still developing and emerging. Needless to say, the coffee industry certainly has played its role in exploiting coffee farmers. But it doesn't need to be that way. If we could do away with the "commodity coffees" we find in our grocery stores, and could shift the market towards one where people prefer premium and specialty coffees whose higher prices are partially due to the fact that the coffee farmers are paid better for their crop... we could see some huge swings in the equities of our global economy. It's the same challenge that most industries are facing in an age of price wars: Somebody is always paying for it. When a product seems too cheap... it probably is, and simply means that somewhere along the way someone or something is being exploited in an unsustainable way.
Now with covid barreling in like a freight train, we found ourselves wondering how to fill in the gaps where we'd been previously spending our time. Covid rolled up and said "Hey, you know those 25 hours/week you normally spend working with your retailers listening and meeting with them, stocking them, and supporting them to effectively sell your product...? Well here you go you can have those 25 hours back. Buuuuuut you might want to figure out how you're going to make payroll. Good luck!"
So what was once a "sometime down the road" endeavor became a "how can we get this brand open for business 2 weeks ago?" So as I write this, we're in the throws of getting Emiliani Coffee off the ground. We're trying to expedite a branch launch that would usually have taken 12 months down into a matter of 2 or 3. When we look back on all of the brands we build, Emiliani Coffee will always be the one that was born out of covid.
Covid has been an awful filthy beast in many ways. But one good thing coming out of it is that it forced us to pursue some of the ideas that busyness allowed us to table. It allowed us to see what ideas we're excited and passionate about enough that we really want to do them, and which ones are just ideas.
It's kind of like those home projects during covid that we're all forced to come to terms with that we're never going to do. Before covid, we all had those lingering chores/projects around the house that we just kept telling ourselves "someday when I've got time I will tackle that." But now that we've had more time than we'd ever care for and it still lays there unfinished, we're faced to accept that we just don't care about it that much. And now that we're moving on we can at least be honest with ourselves and stop pretending like we care about the things we don't care about.
That's the silver lining in all of this for us. It's helping us focus on building one brand we've been dreaming of for a while now. Without covid, it'd still be on the backburner.
So here comes Emiliani Coffee... The Brand Born Out of Covid.
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The Other Entrepreneurs is a blog written by Mitch Reaume, a social entrepreneur based out of Minneapolis and his company Fight For Something. The Other Entrepreneurs is a blog for entrepreneurs and people who want to measure the success of their life around the impact they have and not the zeroes in their bank account. The blog centers around social entrepreneurship in a way that is hopefully a bit more honest and transparent... and hopefully less about vanity and a life of excess than the average entrepreneur on the internet. It’s a blog whose content consists of the thoughts and experiences of our own company trying to make a difference, and the things we’re learning along the way. This is a blog for the other entrepreneurs.