Café Barista: More than just a cup of coffee
‘The Coffee Factory’ producer of the Café Barista brand of coffee products, started its production in 2004 in Curaçao. Cedric Sprock is the proud owner. He shared his views with REACH about the company’s lifecycle management, innovation and social responsibility as elements to ensure sustainability of the business.
The first factory and café were located in the area of Mahaai. Sprock looks back at that period. “We started with three employees and one machine to roast the coffee beans that we imported from Colombia”. The coffeeshop was a showcase where Sprock would sell the coffee that they were roasting, combining it with cakes or sandwiches. “The main purpose was to show what could be done with the coffee” Sprock says.
The business continued to develop and later on the production site of the coffee roasting was moved to the industrial park at Ser’i Lora as the production capacity in Mahaai became too small due to the company’s success. Mahaai was actually a residential area and the growth possibilities there were limited. “The neighbors complained about the factory back then, but now most of them are our most loyal customers. They consider the coffee shop, their neighborhood café”. In 2010 The Coffee Factory moved all its production to the industrial site. There they installed the small production base and invested in a larger roaster to increase the production capacity. “I had the luck that I could purchase the coffee roastery from the owners of Mangusa Supermarket who had changed their plans and decided not to install it in their food court.
Growth Strategy & HR Management
The factory reached its maximum capacity in 2016 and it is now time to boost the capacity again. “We must evaluate our growth strategy very careful. The company is still in its growth phase, so we must determine wisely how to finance and manage this”. Sprock emphasizes the importance to maintain the quality of the products and service. With the opening of the food court ‘E Marshe’ in the departure hall of the airport, the company now employs 90 persons. Besides the coffee production, the company has two Café Barista coffee shops, at Mahaai and Sambil Mall, two Delifrance café’s that were acquired recently and the new food court at the airport making the retail and service aspects important elements of the company’s business. “This accentuates the importance of our employees. They carry the Café Barista brand. We must treat them good and motivate them to give a good service. They realize that they have to keep the customers, to be able to conserve their job”.
Sprock explains that the process of doing business in Curaçao is not always easy. That includes the regulations regarding personnel. Our labor laws are complicated. They do not always allow the necessary flexibility to hire and fire as would be in the best interest of the company. At the same time, the labor market does not provide sufficient personnel with the right skills and attitude for jobs in the hospitality related business. This is important for an island that depends heavily on tourism.
Most employees are women. Sprock has a preference for female workers, especially for the single moms. “In many cases, they stand alone at the head of the family. I experience them as better employees. They carry the responsibility of the family and are therefore more determined to do a good job as their family depends on them.” According to Sprock they are more trustful and more dedicated to their job.
They are conscious of their financial needs, and the labor market consists mainly of women. Of the 90 employees, most are female and most have kids. For that reason, his outlets close at 16:00 hours. To give the majority of these mothers the chance to be home on time to dedicate attention to their children. “By closing early, they get more chance to be with their kids and can take care more of the education of their children”, Sprock says. He makes exceptions for the stores in Sambil Mall and at the airport, as these have to stick to the opening hours of the mall and the airport.
Being a local manufacturer in Curaçao
Sprock experienced the 14 years of the company’s existence as very positive but at the same time very challenging. From its initial phase, the local market has supported the business. The customers enjoy the product and service but are at the same time very demanding as they have high expectations. It seems that they would accept faults and mistakes from a foreign company that they would not accept from ‘The Coffee Factory’ as a local company. This created a bit of frustration. At the same time, the high expectations of the customers challenged him to keep improving.
Sprock looks at this in a positive manner and says that there is always room for improvement. “When you start a new business, there are always a lot of hurdles along the way. If you are not strong and determined, you will not succeed. You will encounter a lot of resistance from companies with more capital or influence”. The Coffee Factory constantly offers specials and new products in their coffeeshops and last year also introduced the Café Barista instant coffee, which became a big success. Sprock continually tries to promote pride for local products. He even has a promotion campaign featuring a famous local songwriter Oswing (Chin) Behilia. The name of the airport food court ‘E Marshe’ is dedicated to the old market in downtown Punda, which was the first food court in Curaçao.
Although the local market still offers possibilities for growth for The Coffee Factory, Sprock explains that he can also raise its production capacity to increase exports. The factory is currently producing 40 hours per week. He could introduce production shifts and increase that without having to invest in more equipment. At the moment he is exporting to Aruba and Bonaire. Aruba is an interesting market. Every six weeks he dispatches coffee to Aruba. Until now he has not yet really pushed the export as he is still developing the Curaçao market.
“As long as there is still room for growth on the local market, we will not pursue the export market aggressively, with the chance that the local market could fall behind”.
Sprock is aware that he should be looking for overseas markets in light of the challenges on the local market but argues that the company should not grow irresponsibly without a well thought out growth strategy. The moment that a foreign market opens, and there are incentives to promote exports, he is ready to jump on those opportunities.
Notwithstanding the positive results of the company, he still has difficulty to get financing for his growth strategy on the local market. The sales went up, but the costs structure is also high. For the volume size that he is making, the margins are not so big but if he Increases this, the retailers will also upscale their price, while the current price quality balance is just right. The local banks are conservative. If you do not have substantial own capital, you will experience problems to get the right financing. Sprock started from scratch. All the sales and profits went back into the company. Notwithstanding his growth success, the banks still require a lot of collateral. It seems that they do not consider ‘goodwill’ a collateral. Although he did receive financing to buy the local Delifrance cafetarias. “Maybe if you are from a well-established family, they might look at it differently” Sprock says. He does not have other partners at the moment and prefers to keep it that way for now. He is open for more financing possibilities for instance international funding. “Private equity funding could be interesting” he adds. He is also interested in support for export research and the development of export sales. The opening of Starbucks in Curaçao did not influence his sales. Starbucks was more targeted to tourists, and trendy youngsters. The more mature customers that typically like to sit down and enjoy their coffee, did not shift for Starbucks. The same goes for the competition from Miko Puro, Smit & Dorlas ets. Sprock has confidence in his brand. Café Barista is not just a cup of coffee and there is still room to grow in Curaçao.