Developing a great product is one thing, but ensuring that product and your whole company is eco-friendly from the start can be a huge challenge. However there are startups who, from the beginning, keep it at the core of their business. One of those companies is CRU Kafe, a coffee company with a difference.
I caught up with Colin Pyle, CRU Kafe founder and CEO, to understand how he founded the company, and why eco-credentials are so important to the business plan.
What inspired you to start CRU Kafe?
I was always drawn to the idea of starting my own business from the ground up. Certainly in hindsight my decision to start CRU Kafe has been justified and I have thoroughly enjoyed creating something that makes a difference to people’s everyday lives.
After spending four years building a currency company I didn’t want to go back into the world of finance. I was looking for my next opportunity when I met with co-founders John Quilter and Bodil Blain. We very quickly established an understanding and we realised that there was an opportunity to exploit a gap in the coffee market. The most important aspects for me were that I was working with people who I both respected and admired and that I was aiming to solve a problem that millions of people have. We loved the convenience of the Nespresso® machine but hated the quality of the coffee, and the competition did the same. We sought to disrupt this market with a product that was traceable, organic, environmentally friendly, and sourced exclusively from speciality graded coffee. Despite the fact that this was a 5.5 billion CHF ($5.5bn) market, nobody was offering these three aspects.
What sets CRU Kafe apart from the competition?
We know how vital it is to offer something unique and we were the first in the U.K. to take a third wave coffee approach to the capsule industry in an ethical and eco-friendly manner. Two years on from launch, we are still the only company in the UK that puts specialty-grade, organic coffee into a Nespresso®-compatible capsule. I believe that points of differentiation are essential and that, as a brand, we must stand out from the competition.
Why it is so important for businesses to provide eco-friendly choices to their consumers?
I don’t believe businesses need a strategy or plan to be environmentally friendly – it should be part of your DNA as a socially responsible business. It can be difficult for a startup to opt for the longer route to market with an eco-friendly product, but it is ultimately good for businesses to think in the long-term. Moreover, it is increasingly important to consumers that the products they purchase do not negatively impact the environment; so it is essential that companies are transparent with their business and provide eco-friendly options. It will future-proof any company in the long run.
How did you find the funding process when you first began setting up the business?
Funding is by far the thing I hate most about my job! However, the reality is that raising initial funds of a few hundred thousand pounds is actually relatively easy in London. The tax incentives of the Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) make it extremely attractive for angel investors. That’s not to say there aren’t challenges, however. Finding the right investors that will help your business can be difficult, while raising funds from super angels or institutions can also be problematic. It is important to have confidence in what you’re doing during this process. I found that there is a lot of good advice available out there, but there is also a great deal of useless advice – identifying the good is essential.
What was the most useful thing you learnt as an entrepreneur?
It is vital to be aware of what you know and what you don’t know – never underestimate how little you know and how different your view can be to your customers. To combat this, it is important to test everything and to be sure that any ideas go through proper scrutiny and risk analysis so that you can more accurately target the needs of the customers.
What is the most important piece of advice you would give to someone who is trying to start a business?
Get amazing co-founders. It’s a tough ride and having someone beside you that feels all the bumps and success with you is comforting, it’s a lonely ride otherwise. Also, do as much as you can before you take on fixed costs, a high monthly burn rate before you’re ready will force you into decisions that are not necessarily correct.
Where do you hope to see the company in five years?
We’re creating a global ethical organic coffee company and in five years I would like to see a global brand that people trust and seek out for great coffee. This year, we’re expanding our product lines into beans and grounds and are looking to expand our single-serve range to include the K-cup for the U.S. market. We’re also opening a pop-up coffee shop in Holland Park with Summerill and Bishop and in talks to potentially open a roaster with the Soho House group. We will continue to evaluate opportunities as they come in and help steer our strategy.
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Source: Power More Business