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Size does matter: why small roasters are driving innovation in the coffee industry

What is it that small roasters bring to the coffee marketplace? New flavours, new methods, fashionable branding? All of these, all reflecting one thing: innovation. As in the tech world, we’re seeing real success in coffee roasted by small startups, not the big boys with comfortable market share. It’s a shift we need to understand and encourage – because small roasters are the key to innovation and improving quality in our industry.

A changing industry

According to a study by Allegra World Coffee Market, specialty goods are the fastest-growing part of the coffee market, growing at a rate of 13% a year. It’s small, independent roasters and outlets that are driving this market change.

We know because the big high-street players are starting to respond, introducing new lines to meet consumers’ more sophisticated demands –  demand that has been fed by small roasters’ innovation. Starbucks, for one, have introduced a new ‘Reserve Roastery’ online subscription service, through which coffee lovers get premium small-batch coffee delivered each month.

But it’s tricky to be a pioneer when you have shareholders and a large existing customer base, who may have unadventurous tastes, to keep happy. Instead, it’s small roasters that have the flexibility to make experimentation easy.

Experimentation and quality

Increasingly, coffee drinkers are not content to settle for generic high street fare. In particular, younger people for whom coffee is a routinized part of life – and not an indulgence – expect more from their daily cup. Many will have travelled more than previous generations, and have seen and understood the way coffee is made and drunk abroad. It is these coffee drinkers who seek out new blends, new tastes and new experiences. Independent coffee shops now take 32% of UK non-domestic coffee sales, against branded chains’ 31%.

Quality is vital to these consumers. As they work to provide new experiences for their customers, roasters commit to making sure their roasts never produce a dud cup. Alex Tomlins from Brighton’s Small Batch Coffee describes his process:

We always cup, or taste, our coffee on a daily basis to check the roast is working OK. We only work with 2-3 importers who we trust, and from the very start they have been really supportive. All the farms we use produce top-quality coffee, so no corners are cut.”

The agile roaster

If you’ve worked in or around the tech industry, you’ll know about agile project management methods. These allow companies to innovate quickly, work openly and deliver maximum value with minimum fuss. Small roasters’ have a natural tendency to work to agile principles. To get good results on shoestring budgets, they need to be willing to search where others won’t, experiment with new methods and be open to learning.

New roasters like Coaltown often start in a back room or garage. For these roasters, growth means dealing with real change and the chance to explore new flavours. Large chains find it difficult to compete with this agility. To maintain their market share, they diversify; but while this diversification is innovative, they remain dependent on revenue from more traditional products to pay high overheads. Unlike the small roaster, they can never fully commit to innovation.

Small roasteries are free to focus only on coffee, and they’re able to be selective about their customers. They work with baristas and café owners who are willing to be educated, and to educate their own customers in turn. This creates perfect partnerships: a roastery might come up with an exciting new blend, and a barista the perfect food to match it with. The end-consumer buys a product that is both interesting and innovative. In this way, small roasters’ focus on the needs of coffee lovers drives industry change, for the better.

Coffee and tech 

The similarities between coffee and the tech industry go beyond agile project management. The rise and rise of Instagram, Facebook and Uber demonstrates the appeal and importance of fast, flexible innovators, says our technical director, Stephen Howes:

“In technology, surprisingly few new innovations come from the big established companies. In 1943 the President of IBM famously said ‘I think that there is a world market for maybe five computers’. How wrong he was. The head of another giant computer manufacturer said in 1977, ‘There is no reason that anyone would want a computer in their home’, yet by the 1980’s many of us were enjoying playing on our BBC Micros or Sinclair Spectrums.

“Some of the best innovations come out of the blue. Who would have thought that a piece of software developed by an engineer to allow physicists to share research papers would evolve to become the World Wide Web, or that a couple of students who developed a piece of software to link up with their friends at university would become billionaires in a few short years with Facebook?

“So what has this got to do with coffee? Well, there are established ways of roasting and blending coffee, but this doesn’t necessarily mean these are the only ways. I expect there are many new innovations still waiting to be discovered. We just need to find them.”

A tech startup might have an idea for a fantastic new app and be making it the next day. In the same way, small roasters have the freedom to make their ideas happen – and they do. In this way, they have the edge on the big players. Small roasters offer a flexible approach and a commitment to the values their consumers share, that slower, bigger corporates cannot. For these coffee innovators, the future looks bright.

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