Santa Cruz, California
Single-serve coffee products plus licensing and co-manufacturing
From the French press and Chemex to the siphon, percolator, and single-serve pods, there are dozens of different methods for brewing coffee. Most require one or more pieces of specialized equipment to get right, making them less than convenient when on the go or in need of a quick cup of joe. And while instant coffee checks the convenience box, it leaves a lot to be desired in terms of flavor. Is there a better solution for busy coffee lovers who need that convenience but demand freshness?
This is the question Josh Wilber, founder of STEEPED Coffee, set out to answer. Through years of trial and error, he subsequently invented a way to combine the simplicity of a tea bag with the incomparable quality of French pressed coffee -- and nothing but hot water required.
"One of our creeds is 'Coffee Without Compromise,'" says STEEPED Coffee's Director of Marketing, Nate Appel. "There's no compromise on the flavor or freshness you get out of it. But it's more than that. We also wanted to create a method that avoids all the single-serve plastic waste that you see with coffee pods."
Appel explains that every single-serve STEEPED Coffee bag is made of non-GMO food grade renewable and biodegradable material. The outer packaging is created from compostable and renewable materials, and all of the packaging is BPI certified compostable. The materials used are proprietary and were formulated in house to meet the company’s goals of sustainability.
While STEEPED Coffee produces nearly a half dozen of its own branded coffee blends in its 12,000-square-foot Santa Cruz headquarters, Appel estimates only 25 percent of the company's sales come from its business-to-consumer channels. Three-quarters of STEEPED Coffee's revenues are from its business-to-business verticals including licensing its brewing method to coffee roasters and contract manufacturing the single-serve product for them.
"The way it works with coffee is that once you roast the beans, the clock begins ticking on the freshness," Appel says. "The roasters send us whole beans and then we take care of the grinding using a proprietary process. We grind the coffee on site, let it de-gas for a moment, and then it goes straight into the single-serve packs. Each pack is put in its packaging and flushed with nitrogen. That allows us to basically freeze the freshness and stop the clock for a minute. When someone opens the pack, it smells and tastes as fresh as the day it was ground."
To facilitate this co-packing for roasters on the other side of the country, STEEPED Coffee recently opened a new SQF-certified facility on the East Coast. "It allows us to be on both coasts and be able to be really snappy with fulfillment for our business-to-business customers," Appel says.
Licensed STEEPED Coffee partners range in size from single location roasters to national brands including La Colombe. "We also work with a lot of companies on private label projects," Appel continues. "They can provide us with the coffee, or we select it with their input. Then we put their branding on the packs. Some companies do it for marketing and promotion purposes."
Appel said that although last year was a tough one between COVID-19 and the Santa Cruz fires, which were close to the company's facility, STEEPED Coffee still grew in 2020 and is on track for further growth in 2021. "We're mainly looking to grow our presence on the B-to-B side and work with more great companies," he says. "The product checks so many boxes from employee engagement to hospitality to helping roasters get their coffee out to their customers in a single-serve method that doesn't impact the planet."
Challenges: Appel says that market education is the biggest challenge. "We've been fully embraced by the Specialty Coffee Association, which is the defacto high-end coffee organization. Being accepted by them was huge, and it got us on the radar of many people who know coffee. But it's a new product that uses an old method associated with tea. You have to overcome the skepticism and get people to try the coffee. Once they do, they're in."
Opportunities: Appel says that STEEPED Coffee's single-serve product makes delicious cold brew coffee as well. "That's the next step," he continues, "and a huge opportunity given how many people are drinking cold brew these days." Additionally, he hints that the company's proprietary packaging could have a future elsewhere in the consumer-packaged goods space. "The outer packaging doesn't just work for coffee. That's a huge opportunity for sure just on the packaging side of things."
Needs: "We're always actively hiring," says Appel. "Finding the right people for positions, especially now, has been difficult."