Today, coffee shops and roasters have many tools and tech options they can choose from to run their businesses. Almost too many. From point-of-sale providers, loyalty systems, and task trackers to inventory managers, roasting logs, and HR tools, putting it all together can be a complicated puzzle.
Last month, Fresh Cup hosted a Live Session exploring how the modern coffee shop tech stack—or the collection of software tools a business uses to run—is changing. With more options out there than ever, we wanted to learn how growing cafes and roasters can make savvy choices about the tools they use. We were joined by two guest speakers for the session:
- Mary Lozada, senior product manager for cafes at Cropster, a software provider whose set of tools helps coffee shops manage quality. Lozada grew up on her family’s Hacienda El Recreo, an award-winning specialty coffee farm in Venezuela, and owned a roastery and cafe before joining the Cropster team.
- Dane Atkinson, founder and CEO of Odeko, a distributor and operations partner for thousands of independent cafes. Atkinson is a bar owner turned entrepreneur who has spent three decades building tools for small businesses.
We took away so many invaluable insights from this discussion, including three we’ll highlight below. But we recommend checking out the full discussion: You can access the replay of the Live Session here.
The Live Session was presented by Cropster.
1. Where Coffee Companies Waste Money and Energy With the Wrong Tech Tools
Technology can make coffee businesses more efficient when the right tools and processes are put in place—but when they’re not, it can be an impediment. Lozada and Atkinson broke down the most common ways coffee businesses lose time and money because of inefficient technology.
Data Duplication and Conflict
Let’s say you sell a bag of coffee for $18.50. You likely store that price in a variety of places: your point-of-sale system, your e-commerce store, your inventory tool, your marketing materials. But the more places you store the price of that bag of coffee, the more places you have to update when that pricing changes—then, the more likely you are to forget to update all of the places, and the more likely there are to be upset customers who thought it was going to cost them $18.50 even though you changed the price to $20.50.
This is the problem with data duplication: It increases the likelihood that errors get introduced. It’s bad enough when it’s a single customer who thinks they’re being unfairly charged—it’s far worse when you’re shipping pallets of coffee to the wrong address, and when the invoice for all that coffee is off by thousands of dollars.
Lozada talks to customers who experience errors like this frequently: “The duplication of information becomes quite overwhelming,” she said. “And then the errors that come through that—going back and checking what you’re doing, what you’re selling, or what you’re forecasting” creates lots of delays in day-to-day operations, and limits how efficiently and accurately your team can work.
Cost of Goods Blind Spots
Atkinson said that cafes without specialized tools for planning inventory struggle to understand their supply-and-demand needs, and pay higher amounts for their cost of goods sold as a result. He claimed Starbucks pays roughly 26% of revenue for cost of goods sold, while the average independent cafe pays closer to 37–40%.
“That is a death knell, right? You’re in a direct fashion selling this cup for almost 50–70 cents more than the person across the street,” he said. “It’s really hard to compete.”
2. Local Businesses Live and Die by Google Reviews
According to Atkinson, 60% of a coffee shop’s new customers find them by searching phrases like “coffee near me.” He said Google, both in search and maps interfaces, prioritizes businesses with high ratings in the search results.
Ranking high in search results is clearly essential to generating new business, then, and getting customers to leave positive reviews is critical to ranking. According to Odeko’s research, a 4.5-star rating keeps you from being buried in the search results, and moving from 4.0 to 4.5 can nearly double your visibility.
“If you look up, ‘Where’s coffee near me’ on an incognito browser, you won’t find yourself unless you have recent reviews and a high score,” Atkinson said. “You’re actually invisible.”
3. Tech Choices Change As You Grow
Tech isn’t stagnant, and neither are the needs of businesses. Both Lozada and Atkinson argued that cafes and roasters need to reevaluate their tech stacks as their businesses grow and become more complex.
Espresso Machine Data for Quality Control
Lozada talked about Cropster Cafes’ telemetry capabilities: Its software connects directly to a cafe’s espresso machines to track how shots are pulled. Cafes can use this data to actively manage quality control across locations.
“Once you hit five locations, the one person that used to calibrate and do the trainings and do your QC—they’re at full capacity,” she said. “That’s where tech comes in. The remote viewing of what’s actually happening allows them to take a step back” while still keeping an eye on quality at each shop.
Choose Your ‘Grown-Up’ Tools Wisely
Atkinson suggested staying focused on the parts of the tech stack that make the biggest difference, and avoiding obsessing about your competitors’ tools. “A lot of companies when they start succeeding get a momentary bit of FOMO,” he said.
His advice: “Sometimes if it’s working, it’s working. When you’re running into actual line production problems, then focus on a place and put in that investment.”
These learnings represent just a fraction of what Atkinson and Lozada revealed during the Live Session. The two also went deep on best practices for onboarding, integrating different tools, smartly adding new machinery in a roastery, and more.
To see the full discussion, you can access the full replay of the Live Session here.
