endomatrix

I have a friend who runs a brewery. They distribute a ridiculous amount of their product into stores around the world and have won many awards, yet they make very little margin from all that.

He told me they make an overwhelming amount of money off of the tasting room attached to their physical brewery because the beer itself is effectively water in terms of cost so they make profit by not having to pay any middle men in the tasting room.

My suspicion is that in the coffee world, if you source and roast your own beans and serve them direct in a venue you own you get a similar effect. I think it must be essential to run the roastery yourself to make it work. That work goes well beyond what is required to just open a cafe and serve someone else’s coffee.

Starbucks has simply insane process automation, training, branding, marketing, custom drink labs pushing out new flavors every two weeks, complete control of their global supply chains.

It would be more accurate to ask: “How the F can anyone make any money when Starbucks is on every other street corner and has the advantages of scale they have.”