The sales pitch a startup that's invented a high-tech coffee brewer used to raise $1.6 million and get cafes to buy its product

  • In 2013, Eli Salomon and Josh Avins invented Ground Control, a high-tech coffee batch brewer.
  • Voga Coffee’s raised $1.6 million in its mission to get into coffee shops around the world.
  • Its pitch to clients focuses on convenience, style, and necessity, its head of sales said.
  • Visit the Business section of Insider for more stories.

At least one habit wasn’t upended by the pandemic: We’re still sipping coffee in the mornings and during the workday, albeit at home.

But according to a 2020 survey by the National Coffee Association (NCA), which represents companies across the coffee supply chain, over a third of us miss visiting coffee shops. Between the pleasure of a better brew and the chance to socialize, coffee shops often provide certain comforts we just can’t replicate on our own. 

Unfortunately, the industry has taken quite a hit, with one research firm reporting the pandemic wiped out a quarter of coffee shop’s sales in 2020. Sales at US-branded retailers, which include Starbucks, Peet’s, and Dunkin’, fell 24% last year to $36 billion, and will only grow to $40 billion this year, still below 2019 levels. For the first time in nine years, the total number of coffee shops in the US is on the decline, according to Bloomberg.

Voga Coffee, a startup based in California, thinks it has the answers to keeping our favorite cafés open. Its invention, called Ground Control, is a high-tech batch brewer that aims to produce a more consistently delicious cup of coffee. Adopting the technology, the company argues, would allow cafés to brew coffee at a faster clip and charge a higher price for a top-notch brew.

Humble beginnings

In 2013, Eli Salomon and Josh Avins, longtime friends and college buddies, were obsessed with the idea that they could improve upon siphon technology, which uses steam pressure and multiple chambers to produce coffee. 

Theirs was the scrappiest of beginnings: The pair worked in Salomon’s kitchen to get their idea up and running. Avins, who has a PhD in chemistry, bought equipment on Amazon, and they used a spare air-mattress pump to test extraction methods.

While they perfected their first machine, Salomon and Avins kept their day jobs — Salomon worked at a pharmaceutical startup, while Avins was a chemistry tutor. Eventually, they raised a small amount of money from friends and family before pulling in a bigger round of funding from private investors. In all, the team raised $1.6 million. It was two and a half years before they were ready to unveil their machine at a local café in San Francisco.

According to industry publications Sprudge, Daily Coffee News, and Barista Magazine, Ground Control is one of the best batch brew machines being made — even better than a pour-over, a ritual that highlights to customers that it’s well worth the wait. 

Not all are convinced. James Freeman, founder of Blue Bottle Coffee, told the Wall Street Journal in 2018 he’d consider serving batch-brewed coffee “when hell freezes over and there is a skating party.” When Insider checked back in with Freeman, he said he still stands by that quote. “My interest in coffee was always more about the possibility of transcendence over the convenience of consistency,” he said.

How it works

Ground Control’s process starts with the grounds being immersed in fresh, hot water and agitated. A vacuum pump then pulls out the brewed liquid, lifts it to a glass bulb at the top, and dries the grounds. This happens two more times. It may sound time intensive, but it can make 20 cups in about eight minutes. In 2018, the futuristic-looking machine won “Best New Product” award from the Specialty Coffee Association (SCA).

Tell anyone in the coffee world that you’re reusing coffee grounds, and you’ll be laughed out of the room. “Our brewing method on paper sounds really stupid,” Salomon told Insider.

But it works. And it’s why the team filed for patents. To date, three have been awarded.

During this period, they were joined by Jason Sarley, a third cofounder and sensory analyst.

Selling to small businesses

One roadblock for small business owners? The Ground Control machine costs about $7,000.

So the cofounders had to convince buyers that drip is exactly where cafés should focus. In a study by Square and SCA, the popularity of black coffee had eclipsed lattés in 2020. Along with it, prices jumped from $2.47 in 2018 to $3.13 in 2019. Lattés in turn had only gone up by six cents.

When the three launched Ground Control, buzz for the product was good, but sales were slow. Its first two customers were roasters with excellent reputations: Highwire Coffee Roasters in Berkeley and Equator Coffees in Mill Valley. After that, the cofounders were able to sell machines through word of mouth, stellar reviews, and exposure at coffee expos. 

Salomon said they were inundated at trade shows. “We served about 1,500 to 2,000 cups of coffee,” he said. 

Eager to pick up the momentum, they put the machine in a van and drove around asking owners to sample their drink. In the first two years, they sold only 18 machines. “It’s a challenge as a young company — to sell a quality machine that people can’t try,” Salomon said. By 2019, they’d begun making progress with about 50 machines in the US and a few abroad in China, Taiwan, and Saudi Arabia.

Looks are hard to ignore, and a key reason Voga garnered attention beyond small businesses. Equator Coffees initially showcased its machine inside the training lab at its San Rafael HQ. A spot for both wholesale clients and a staff training hub, it’s where chefs Dominique Crenn and Tyler Florence spied the eye-catching design. Both chefs hope to purchase machines for new restaurants they’re planning in San Francisco.

Pulling through the pandemic

“This is cool, but I don’t need it,” is what Jeff Garon, Voga’s head of sales, usually hears. It’s his job to convince owners that what they’re doing is broken, even when it’s not. He also must create urgency to close the deal — not an easy feat when businesses are barely scraping by and may not have the funds to purchase new equipment. 

Orders for Ground Control essentially stopped from March through May 2020. “When COVID hit, the team quickly realized we needed to completely change our business focus from selling high-end coffee brewers to focusing on the aspects of our system that would allow our customers to weather the storm,” Salomon said. He applied for a PPP loan in April, and followed that up with a small business loan, both totaling $75,000.

Eventually, the business restarted, and in the back half of 2020 Voga’s monthly sales picked up. “In my experience, a lot of hard problems resolve themselves, and answers become apparent through a combination of patience and serendipity,” Salomon said. Clients include Intelligentsia Coffee in Venice Beach, Founding Farmers in the Washington, DC area, Sump Coffee in Nashville, Tennessee, and St. Louis, Missouri, and Black & White Roasters in North Carolina.

Each sale has “a lot of touchpoints,” Garon said. He focuses on the operational selling points: It’s more versatile and efficient, it’s consistent, and it can reduce equipment needs. His winning pitch is that owners can be more reactive to business rather than proactive. Making cold brew the day before a snow day serves no one. With a Ground Control machine, employees can make it on demand.

Much is said about where beans are from and how they’re roasted, but little time is spent ensuring the actual drink is as perfect. In addition to accessing caramel notes that often go missed because of over extraction, shops can dial in endless recipes to create unique, single-origin cups of coffee.

“We’re giving them the capacity to highlight their coffee that they can’t get through another solution,” Garon said.

While offices continue to undergo a sea change, corporate accounts are installing machines, too, the cofounders said. Bill Billenstein, senior director of food excellence at ISS-Guckenheimer, which operates cafes in offices around the world, said his high-level clients are “always looking for innovation.” Billenstein has placed several Ground Control machines in Bay Area offices. His selling points are consistency, sustainability, and speed of brew. Cold brew, he said, “has become king in the corporate, tech, and pharma environment.” 

Bon Appétit Management Company, which also provides food-service management to corporations, has purchased and installed machines at four of its clients. 

Salomon is convinced that 2021 will be the year Ground Control breaks out — in December alone, the company sold 19 machines. The company is hiring new assemblers to keep up with demand, they’ve leased a bigger warehouse in Oakland, California, and they’re investing in infrastructure and hardware to support growth.

Source: Read Full Article