Building a premium coffee market

Cherish the beans; respect the brew; teach others how to love it, too.
Devotion to excellent coffee and the drive to teach others how to brew it properly are the twin engines that have allowed Rik Kleinfeldt to rapidly grow his business, New Harvest Coffee Roasters, since he founded it in 2000.
New Harvest, which recently moved its operations into the Hope Artiste Village at 1005 Main St., Pawtucket, grew its sales from $361,000 in 2004 to $551,000 last year and expects to hit $800,000 this year, Kleinfeldt said.
Kleinfeldt is a coffee elitist, and he is growing his business by educating consumers to appreciate fine coffee.
“We primarily exist to roast high-quality coffee and to make sure our customers can brew it effectively,” Kleinfeldt said. A good customer for us is someone who cares about the coffee.”
Two-thirds of New Harvest’s sales are wholesale – mostly to bakeries, coffeehouses, and natural food markets – and the remaining one-third is national retail sales, largely through the Web. The company has substantial competition, most notably from Vermont’s Green Mountain Coffee Roasters, which reported sales of more than $137 million in 2004, but also from Equal Exchange in Massachusetts – as well as Excellent Coffee in Pawtucket, and Mills Coffee in Providence.
Kleinfeldt’s expertise comes in part from working from 1991 to 2000 as barista and manager at The Coffee Exchange on Wickenden Street in Providence. He said that although specialty coffee was available at retail, in 2000 he saw an opening for a company that would roast specialty coffee and do wholesale sales, supported by lots of training. He worked alone for a year and a half, and the company now employs seven people.
Educating customers has been crucial to New Harvest’s success.
“It takes an incredible amount of attention to detail to produce good espresso drinks,” he said. “Before our customers became our customers they did not have the knowledge to pull a great shot of espresso. Once they know how to do that, it is a win-win situation for both of us.”
Kleinfeldt said the business has also grown because of his willingness to invest and wait for a slow payoff. For example, he has bought ads in The New Yorker magazine, and while they were expensive, he is seeing them yield national sales. Tenacity has helped, too.
“You have to be willing to build a relationship with customers over time,” Kleinfeldt said. “It takes a lot of time and follow-up.”
Kleinfeldt made cold sales calls when the business was in its infancy, but no longer. For the most part, prospects come to New Harvest through its associations – like membership in the Barista Guild of America – advertising, and Google, where New Harvest comes up high in searches for organic and fair-trade coffee.
Kleinfeldt supports fair trade, in which grower cooperatives receive a minimum price for products, adhere to labor rules and environmental standards, and sell directly to importers. But he considers fair trade rules to be a minimum standard.
Judged against the well-known, middlebrow brands on supermarket shelves, New Harvest coffee is expensive – in the range of $9 to $13 a pound. But the quality has been recognized, and many local restaurants and coffee shops feature it.
Asked whether he thinks high-priced specialty coffees may be a fad that people eventually abandon, Kleinfeldt said the greater danger is that Americans will abandon coffee-drinking altogether. Over the past 20 years, he said, Americans have reduced their coffee consumption overall.
Kleinfeldt likens coffee’s potential status to that of cheese and wine. These products present a huge range of quality, and the general public is slowly cultivating knowledge, discernment, and appreciation for the range of pleasures that they offer.
Kleinfeldt believes if Americans bail out of coffee drinking, the big food producers will follow the dollars and switch to offering other caffeinated beverages.
“If we leave the legacy of coffee up to mainstream coffee, it could disappear,” he says. “We are trying to raise consciousness about what coffee can taste like and maybe help save the beverage.”