Hugh Duffie — Sandows Cold Brew
Sandows Cold Brew Coffee
After years visiting independent coffee shops as a customer, Hugh Duffie began his professional involvement in 2012 working at TAP Coffee. Here he met friend and future business partner, Luke Suddards, who was managing the newly opened Wardour St location. By summer 2013 the pair had conceived what would later become Sandows, pioneers of the bottled cold brew movement in the UK.
The pair took their time to launch, fine tuning their strategy over a period of 12 months. In April 2014 they officially launched the UK’s first independent, bottled cold brew brand.
In the 17 months since their launch, Sandows’ have accumulated a list of accomplishments garnering respect from all areas of the industry and beyond. Included among these are:
2014 winners of the Young British Foodies (YBF) Coffee Category
Stocked in dozens of cafes in London and the rest of the UK
Stocked in Fortnum & Mason, Selfridges and Wholefoods Market
The launch of Nitro Cold Brew coffee in the UK (May 2015)
The recent launch of 750ml bottles as part of a strategy to broaden the uses of cold brew
In February 2015, the pair raised investment through equity crowdfunding platform, Crowdcube, to support projected growth. The campaign’s success was one of the fastest ever at its time, raising £125,000 (£25,000 more than their target) in just over 48 hours
After spending months designing and building a space to facilitate higher volume, the pair will imminently launch the official Sandows Brewery in Hackney Wick.
So, how did you and Luke come to be in the business of cold brew coffee?
Luke and I were working together at TAP and were already genuinely into cold brew. Most of the staff were drinking mostly filter coffee rather than flat whites so we wanted to drink black iced coffee when it was hot. We were making cold brew every day at work and had realised that there was interest and demand from consumers. Plenty of cafes were making cold brew but no one was making a branded product yet in the UK, so there was an opportunity there.
Sandows relieves cafés of the burden of having to make it themselves. Cold brew is what we specialise in so we can guarantee the quality and consistency, plus we respond to consumers tastes constantly and add value to each cafés business.
Tell me more about becoming conscious of the demand from consumers?
We became conscious that there was a shift in what consumers valued. I mean, look around you, whereas once it was not-from-concentrate, now it’s green juice. It’s alkaline diets, dairy free, and ‘free from.’ It’s convenience and it’s higher expectations for aesthetically pleasing packaging.
I think it comes down to this… If the aim of the game is to introduce more people to this (independent) world of coffee, so that something, which is ethically responsible can be sustained, then you need to acknowledge and respond to the tastes of consumers.
So what does ‘connecting with consumers’ entail?
Well part of that is the product. The other part is being where consumers are. That is, the consumers who aren’t already in independent cafes… most of the market. That means in homes and on supermarket shelves. We want to be the alternative to the bottled Frappuccino, but one, which supports our part of the industry. We want to give people a straight choice and have confidence that they’ll choose us. The idea of being able to introduce consumers to specialty coffee through a bottled product where there’s no chance of them accidentally using three scoops instead of one or using a kettle covered in limescale. Nailing the subtlety of being able to have total control of their experience but not beat them over the head with the idea, or intimidating them is where our opportunity is. To be that offering in, for example Waitrose, is what excites us.
Cold brew is the way to occupy that space. We’ve got a product and an industry that we believe in and we’re working towards those pretty ambitious goals.
People’s tastes are changing. You can get craft beer now in any of the supermarkets. In the US, the craft beer section in some supermarkets is enormous. There’s also whole sections for independent coffee roasters. It’s a matter of time here. I think you just need to do it in the right format and put it where people want to find it - perhaps as a little reward when they’re buying something really boring, like oven cleaner.
So we're talking about Food and Beverage in a much broader sense than the cafe, big stockists and I assume, much more competition? What does this mean for business?
With big stockists you have so much competition for shelf space. You need to earn the shelf space. It’s not how cool your product is etc. It’s literally how much benefit they get from your relationship and primarily financial benefit. One of many things we’ve learnt is that “incremental revenue” is important for buyers.
It’s really about efficiency. If there’s lots of competition, you need to perpetually be increasing the value. It’s not just about price either. In Tesco you need to be more valuable to them than a Coke. In Wholefoods it might be Vita Coco you’re competing against. It really doesn't matter who the competition is, if you can create more 'value' then it becomes appealing. There’s more to value though than just having the lowest price. It might be that you’re bringing a new audience into their business or supporting an image they want to develop.
Big retailers have to pay huge rents. If a ‘facing’ (one row) of Vita Coco (which costs next to nothing in comparison and is supported by a brand with expert merchandising and promotion) gets them closer to paying their rent and staff then it becomes tough for them to choose something that is being sold in as cool or ‘huge in the US.'
I guess the café equivalent of businesses with larger economies of scale and deeper insight would be the chains. In the case of Sandows, it’s other drink companies, but essentially I think it’s a similar obstacle for businesses.
In your case, what is the biggest problem big competitors present, and how do you guys respond to that?
You have to find a way to create value that makes you indispensable. We don’t have the resources of big competitors so we have to use what we do have. For example, Luke and I are actually a great Litmus Test for our own audience given our age and interests. That relieves some of the need for an insight department.
You can learn something from big competitors though. Their behaviour often reflects all of these extra resources they have, so you can look at them as a case study. For example, look at which coffee origins are stocked on supermarket shelves. There are origins which are brands unto themselves and there’s a reason they are on shelves. You can imagine someone in Tesco picking up a bag of coffee and saying “Oh yeah, Colombian coffee is nice, i’ve heard of that” and that is why it’s always Brazil, Colombia, Kenya, Guatemala in those places. So much of the decision to buy one of our cold brews is foreign. We’re looking to connect some part of that process with what is familiar to consumers, to relieve their ‘risk’ in the purchasing. A good example of where we have learned from big competitors - sticking to familiar origins for the time being until consumer tastes become more adventurous on the coffee front.
What about beyond competitors for insight?
We also look at craft beer, artisanal chocolate, fine dining restaurants, fine wine/natural wine and fashion even. There are examples everywhere of brands and industries finding their ‘position.’ We look at brands that create loyalty by creating ‘more’ than just the product and brands that understand appealing to the aspirational nature of consumers. An outfit is not just the clothes that you wear. Cold brew and independent coffee in general is definitely an accessibly priced way of regularly reinforcing your image through the choice to drink better coffee.
I gather the extra need to be efficient was part of the motivation for scaling up of the production at the new site?
We’ve spent a good few months fitting out the brewery. To extend our reach we’ve moved everything over to distribution. That’s just another cost for us so we need economies of scale and the brewery means we can sell more coffee, confident that we can definitely make it. On the other hand, you can’t just show a supermarket your backyard brewing kit. You need to show them you have the highest hygiene standards and that you can produce a consistent quality product.
It can be easy to talk about pleasing our distributors as that’s who we sell directly to now, but we’ve made all these changes for the cafes and ultimately for the consumers. Getting the product to a place where they’d want to buy it, is a pretty significant part of making it easier for more people to try our cold brew. Doing that is something we need to scale to manage as it's not easy when everything has to remain refrigerated.
The capacity that the brewery has made available has allowed us to bring all of our prices down significantly, (25%) making it more viable for cafés and more accessibly priced for consumers. Plus, it’s great to have our own space - it’s really cool to have achieved that in such a short time and we’re stoked.
This is where crowd funding becomes necessary?
We had to decide if Sandows was just going to be two guys hand marking bottles for the next however long, or whether we had the confidence in what we’d created and vision for where we wanted it to go.
It’s not like Luke and I are serial entrepreneurs who’ve spotted an idea that has worked in the US. There’s a distinction between thinking something will work and disbelieving it could fail. That bullish attitude was very much our approach towards funding on Crowdcube and a number of our investors have said they were struck by our authenticity and energy for the brand and felt compelled to be involved.
You mention a vision, or strong idea. In terms of moving forward with confidence and also being competitive, what role does strategy and planning play?
Strategy at Sandows is split between the proactive or reactive. Making decisions early on like buying very high quality coffee rather than something that makes us loads of money, helped us to take ownership of the position as the best quality branded cold brew available. However, often the nature of being in the start up phase can slow things down and we have to play the long game a bit more. That’s when we look to extract as much value out of the things we think we’re the best at and hold off on the things we can’t do yet. For example we’ve sampled thousands upon thousands of people at Selfridges, Wholefoods and Fortnums, which has strengthened our relationship with those key accounts and helped us establish ourselves as the original UK cold brew.