Sean Scott owns Subculture Coffee, with locations in West Palm Beach and Delray Beach in Florida. Scott recently spoke about everything from the trust and relationships formed between coffee buyers and the farmers they source their beans from, to the risks of bad weather harming coffee bean crops, to the trial and error of the craft of roasting great coffee, to the importance of having six or more months of working capital when you open your doors, to how everything takes longer than you plan and costs more than you budgeted when you are starting your first location. This is a very wide-ranging conversation, and Scott offers tons of wisdom and advice for anybody interested not just in coffee, but in the mentality it takes to succeed in the restaurant business.
How did Subculture Coffee come together?
I’ve been a coffee lover for a while. I’d never worked in a coffee shop but I’ve played a lot of music. When you travel and you play music, you spend a lot of your downtime in coffee shops. I’d always dreamed of doing that one day when I decided it was time to settle down. About six years ago, I did a space share with my brother just to limit startup costs. He had an art gallery, so I figured it would work well if we shared space. I opened up a little coffee stand in the gallery, just me and my wife, a bare bones approach, just outside of Washington DC. That’s where it all started. That was my first coffee job. I’d never worked in coffee before I opened the shop. I don’t know if that was the smartest thing, but it’s worked out so far.
You don’t find a lot of independent coffee shops in southern Florida.
South Florida is what I call a wasteland of good coffee, so I figured it’s a good opportunity for me because I think everyone can appreciate good coffee—they just need to be exposed to it. I think in cities where it’s developed it would actually be harder to get into the market and make a living doing it, whereas down here, I figured the product would sell itself and it’d be easy to get my foot in the door with minimal cost. It was just me and my wife, the overhead was really low and we could run it super-efficiently.
And that was the case. Though in the past two years, there have been quite a few other coffee shops and roasters pop up. Panther Coffee in Miami started about the same time I did down here, about three years ago, and now they’re pretty big, along with a few other places. We’re creeping on the scene, finally.
Tell me about roasting your own beans.
We roast all our own stuff. That was a new thing for me. I had worked with Counterculture when I first opened the coffee shop six years ago. I was a customer of theirs for about four years. We switched over to roasting our own when we rebranded as Subculture, because I teamed up with another guy here and we thought it would be a good idea to give that a go. We both really wanted to have a story from start to finish. It’s kind of popular now to say direct-trade relationships. But if you’re looking at a business, it’s really nice to be able to know, farm-to-cup, what’s going on with your product. A large part of why we started roasting was just so that we could have pretty good control and personal relationships with the people in our supply chain.
How do you find high-quality beans?
It’s difficult. That’s definitely the hardest part. Coffee is the second-most traded commodity in the world – it’s huge. There’s just an endless stream of sources. But the grading and the quality control and shipping in Third World countries aren’t that rigorous. It’s getting better, but we started with Cafe Imports, a super reputable importer for specialty coffee. We have a farm in Honduras and two farms in Brazil that we’re talking to directly right now. I just got a call from the farmer himself—it’s pretty cool to have that accessibility in the 21st century—just to be able to literally talk to the guy in Brazil who’s sending you coffee.
It’s one of those things. Your sourcing takes time. It takes talking to people, getting referrals. We didn’t go into it blind; we asked the guys at Crema in Nashville who they used for sourcing, because they’re the ones who trained us how to roast. So for us it was just all referral.
Then it’s just finding the bean that you like for the style that you want and just whittling it down and kind of refining it, year after year. It’s a long-term approach. If you’re going to roast, it’s not a quick process. Anyone who thinks it is doesn’t know, because it’s a true craft. I call it an old world craft, because there’s not any quick way to do it. Coffee’s slow. The crops are slow, the shipping’s slow. It’s a slow industry that requires quick execution. It’s quick at the retail end but everything from farm to cup is actually a really slow process that requires patience and a really good palette and trust. Old school trust in that what the farmer said he’s sending you is what it is, and it’s this year’s crop and not last year’s crop, and it’s this grade and not that grade. There’s just a whole lot to it. It’s been interesting.
How climate affects coffee
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Does climate play a role in this? That’s a huge variable that’s pretty unpredictable.
Oh, for sure. That’s the thing. It’s sad but there’s a lot of risk to the farmer because there’s many variables out of their control. Brazil got crushed this past year (2015) because they had a disease run through a lot of their crops. Something like a third of their normal production was cut, which is massive because Brazil’s the number one producer of coffee. That kind of fuels the coffee market into a frenzy because of supply and demand.
A lot of people do origin trips. You have to get to know fundamental agriculture. A lot of people, going back to Counterculture and some of those guys, have active people year-round who help the farmers produce the best crops, institute better growing practices—whether it be technology or knowledge we have in the States—that they might not have access to down there. Sometimes they’re not going to have a good crop and a lot of times smaller guys like us don’t have multiyear contracts for that very reason, because we can’t undertake the risk of having a bad crop arrive and then we’re stuck with it. National roasters can do that because they have the control. But there are too many variables out of our control to do multiyear contracts.
But just like the other guys, we’ll help mitigate as many of those factors as possible so that we can have consistent crops from the same farmer each year without saying, “Ah, this year we’re in, this year we’re out.” Because then it’s just difficult for them. They have bills to pay, too, and families and communities they’re trying to support. We’re going to do our best on our end, but it is risky.
You’re a “microroaster.” What does that mean?
That’s one of those words. I don’t know when you go from micro to macro. I don’t know where exactly that cuts off. In my opinion there’s definitely a tipping of scales. You’ll see some roasters doing mail order, and then all of a sudden, they’ll give you the option to grind the coffee before it ships. To me, they’re a macroroaster now because they’ll pregrind coffee. That’s just a no-no. You just don’t pregrind coffee because it ages so quickly. For me that correlates to massive volume, too, because the demand is so high.
A lot of them get outside investment—millions of dollars. Quite a few microroasters have scaled up dramatically in the past years, especially on the West Coast, where they’ve had huge investments. When you get that you have to have returns. So your whole business model changes from small batch to all of a sudden you’re doing 20-pound batches, and then you go to a 150-pound, 300-pound roasts, which is a big difference. It’s just like anything. I don’t know if you can maintain the same level of care and specificity on batches when you start having hundreds of pounds in the roaster, compared to tens. I think that’s subjective. There’s not a definitive answer.
Which brewing methods do you like?
Coffee is definitely trial and error. There are parameters you can find that give you a baseline - then it’s figuring out what brew methods you prefer. Then you just taste and taste and taste and tweak and taste. Over time you refine your style through trial and error.
I think that’s where a really good staff, a trained staff, comes into play. Because an Ethiopian bean might be great through a Bonmac slow pour but might taste really rough through a French press. That’s where we stress going through and making sure that we know how each coffee tastes best. We’re guiding people with which way they may want it, and which way they won’t. Some coffees cool really horribly, so I’ll say, “You want to drink this coffee fast because it’s delicious hot, but when it gets a little cooler the acid turns on you and it’s not that great.”
But that’s what people aren’t used to. We’re used to big box retailers, we’re used to consistency. A lot of people think the craft is sexy, but with craft, stuff changes weekly. That’s the fun part about it. That’s the live part about it. That’s where you can keep people on their toes. But that’s also where the struggle is. You find that people almost like homogenization, and they get a little frustrated - “Why can’t I just have that same coffee, month after month?” I’m like, “Because it’s seasonal and we only have 10 bags of it.” So that’s been a challenge. People like that for a little bit but they want their consistency year-round. But that all comes with us educating them through our day-in and day-out trial and error. There’s not a lock-and-load approach. It’s just going about it every day and being surprised.
We are different from a lot of the third wave shops. There’s kind of a knee-jerk reaction, in my opinion, to Starbucks and those guys where it’s, like, no syrups are allowed in third wave shops, and only one size is allowed, and it’s a very purist approach.
I’m not like that. We suggest and our proportions are all correct. But we have a regular and a large. We have four syrups on hand. We do mochas. We have seasonal drinks. And that’s me kind of conceding the fact I can still serve great coffee but if they want hazelnut in it, cool. I’m not going to make them feel bad about it. Especially in our environment, it’s really cool to watch people start pulling the extras out of their coffee and they’re like, “Ah, this is great.” Their palette gets refined. You’ll see a lot of people do that. They’ll switch from whatever their go-to was at Starbucks to just a straight cappuccino here. I don’t need to put much cinnamon and whip on it because it’s just good as it is. That’s where I’m much more subtle in my approach. I think it’s necessary to know your market. If you go in with a self-righteous attitude, I think you may not be around for too long. You’ll alienate a demographic or a large part of the demographic that you really don’t necessarily need to. I am a relationship guy. I’m much more about having a community space than I am about maintaining the integrity of the cup of coffee. I just want people to gather. I want to serve great coffee, but I want to be a community spot first and foremost. That’s just kind of our ethos.
How did you transition from one location to two?
It is a big change. We have 13 employees at our West Palm shop and we have about 17 in Delray. Different vibe. On the management side it’s just difficult because you’re just managing people a lot. When you have 30 people that’s almost more of a challenge than the logistics of the actual business. Coffee is coffee and I know what the margins should be and what the numbers should be every day. Opening a second one isn’t that difficult business-wise, it’s just it can be more of my time and energy is spent on the people side, which can detract from focus on other things in the business.
I think two is going to be manageable because my business partner is really amped about this. If we do more than two, we’ll definitely have to develop leadership that can take more of that off the plate so I can maintain the feel, the vibe, and the quality of the coffee. That’ll be hard. I’m not quite there because we’re kind of new in the second one. But, those are the current challenges.
Location and finances
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How do you know when you’ve found the right location?
Coffee has to be on people’s way to wherever they’re going. It has to have walk-by traffic. A lot of coffee shops find a really cool spot, and it’s just a block or two out of the way, but that block or two can kill you. It can mean 500 people aren’t walking past you each day. Your rent might be $500 less a month, but the impact is dramatically more than that. We’re on the main strip in downtown West Palm Beach, and we’re on the main strip in Delray. That’s essential. It has to be on people’s way, and it has to have really easy, available parking.
It can’t be a destination. Too many people think their place is going to be the place that everyone will go to, a destination. I think that’s a bad move. We’re pretty deliberate on having available parking and pretty heavy walk-by traffic, not just drive-by. People tend to just keep on driving. They’re just not very focused and they don’t really want to pull over. Being in a downtown area, that’s why we picked these two, because people are coming here or they’re staying here, they’re not driving through here. That’s what I think is important, at least for what we’re doing.
What are some lessons you learned when starting that you hadn’t thought of before you got started?
I think a lot of people, me included, underestimate just the liquid cash you should have accessible when you start. You think, “Alright, so I have the buildout paid for” and you tend to spend everything before you open. You think, “Well, we’ll make money once we’re open.” I think that’s a bad move. If I had to do it all over again, I’d have more money in the bank just because you’re going to have to do a lot of promo. You’re going to waste a lot of products. You aren’t going to make as much money as you thought you were, because things might happen slower, things break, etc. Usually opening is delayed a lot longer than you thought. There’s way more permits that you have to pay for than you had anticipated. There’s way more licenses that are a $150 here, a few hundred there. A lot of people just focus on paying for the buildout, but they don’t really pad their account. I understand because a lot of people don’t have access to the capital to cover all that. But I think it’s really important. That can make or break it, especially in the first year.
How much capital should you have?
I would say six months is good for us. I would also advise that if your personal finances are a mess, you probably shouldn’t go into business. A really good litmus test is when I’m talking to people who are considering this, I ask, “How are your personal finances?” Not the specifics, but if you have a hard time managing your personal finances, and if you can’t figure out ways to save money, then business might not be the place for you. You have to be able to do that. We price out per cup of coffee, lids, cups, coffee, milk, sugar—I know exactly where everything’s going. The same thing applies in your personal life. If you don’t know where everything’s going, then there are going to be a lot of holes in your boat and you may be losing a lot of money. I was always very conscious about accessing my own checking account when I was 12 and had to start buying my own clothes and all that stuff at a very young age. Accounting has always been something that I’ve had a focus on and been aware of. It’s almost natural. But I found that for a lot of people—like my wife—it wasn’t like that at all.
We moved in with my brother before we opened the first coffee shop and we just shared rent with him. We had one car instead of two cars. We minimized our lifestyle before we opened the shop. Don’t expect to maintain your same lifestyle. Minimize it on purpose so that you require the least amount of money when you’re starting up. Then, expand it as you can afford to as you grow. I would almost put more emphasis on your personal life before you open than I would on your vision of the business, because there’s a definite correlation to how you run both and the ability that you’ll have to navigate rough waters and make it through and survive.
It seems like you’ve taken the long view of your business… “Coffee is slow,” “Building relationships with farmers,” etc.
I think a lot of people believe they have to grab the lightning. In different industries that may be the case, like the tech world, because it changes so quickly. I think those challenges are completely different.
I had a problem with my partner with this perspective with Bulletproof Coffee, which is a blend of hot coffee with unsalted butter and MCT oil. My partner said, “Shouldn’t we serve Bulletproof Coffee?” I said, “Well, that’s a fad.” Even during the recession six years ago, the coffee industry didn’t dip. We just provide a really good cup down here and do a solid job.
The trends will distract you. You have to have a clear focus and mission. Don’t chase the wind. For us it’s crucial to stick to that, because the temptation’s there. You’ll think, “Oh, this guy is selling bottled cold brew like crazy.” But, nobody will be talking about it in a year. Or, it’ll have such a small impact on your business that it’s not worth all the energy and time you’re putting into it. Stay the course and know why you’re doing what you’re doing. And just do it well. Do it in the time that is best, not right now out of a sense of urgency. If you have an urgent approach, you’ll set yourself up to make poor decisions.
Wil Brawley is a partner at Schedulefly, a company that provides restaurants with Web-based staff-scheduling and communication software. He is the author of Restaurant Owners Uncorked: Twenty Owners Share Their Recipes for Success.