Leap of Faith

March 23, 2020

Melissa Brown always knew that she wanted to run her own business. What she couldn’t predict was the path that would lead her to Well-Bean, which started as a humble coffee cart and grew into a thriving full-service break room management company. Like many entrepreneurs can attest, that path involved multiple twists and turns, risks and rewards, and several leaps of faith.

“I knew from a young age that I wanted to own my own business,” Brown said. “I was raised without means, so I’ve had to learn to hustle and it taught me to be fearless. If my parents could raise five kids on nothing, I knew I had to go after it.”

 From farm to cup

Brown’s parents were church planners, moving the family around the U.S. to start churches in different communities. In 2002, they went on their first mission trip to Nicaragua, where they subsequently started a nonprofit called New Song, supporting healthcare, wellness and spiritual initiatives in rural areas. Brown, who was working in health and wellness in Raleigh, N.C., visited her parents every year, marveling at how they scraped together $50 and $100 donations from supporters. She knew there had to be a better way to fund New Song and support rural communities in Nicaragua. During her 2012 visit to Nicaragua, she had a revelation.

“We did a coffee farm tour, and it just hit me on that tour,” she recalled. “My parents were working so hard to raise such little money, and I knew that a business could raise a lot more. I thought, ‘What if I started a company that could help give back and support New Song?’” 

While Melissa and her husband initially considered moving their family, including their two young children, to Nicaragua, they decided that they could best support New Song, the coffee farmers, and the surrounding communities by importing a Nicaraguan resource to sell in the U.S.

“I can own my business and we can give back and support them from afar,” she said.

The Browns sketched out the plan on an airplane napkin on the flight home to Raleigh. They knew they needed to learn more about coffee in order to do wholesale, with the ultimate goal of roasting beans and selling them by the pound. Brown also knew that by sourcing the beans directly from the farms, they would be able to pay the farmers more.

“By working directly with the farmers in Nicaragua, we’d be able to pay them a fair wage because we’ve cut out the brokers and the middlemen,” she said. “And then I’m cutting out the brokers and the middlemen for clients because they’re dealing directly with the roaster instead of a distributor. It literally goes [from the] farm, to us, to the client.”

 Coffee cart leads to campus

Following the napkin-sketched business plan, Melissa Brown learned about coffee beans and the roasting process, leading to the official launch of Well-Bean in 2013. She wanted to open a drive -through coffee booth but couldn’t find the right location, so her first retail attempt for Well-Bean involved a coffee cart on a college campus in Wake Forest, N.C.

“We had a little cart that we would roll in and out every day,” she recalled, laughing. “We were near the library, under a little 10-by-10 canopy. It was quite the humble beginnings.”

The coffee cart proved to be an unsustainable business model due to low foot traffic during bad weather, summer and winter school breaks.

“It was a terrible idea — we spent too much money and we made no money, but we learned more about coffee,” she said.

Brown applied that knowledge when she found the right spot for the drive-through coffee booth, which she opened in 2014. She said running the booth was fun, but that she knew she was limited on how much money she could make with such a small footprint. She turned her focus back to the college campus, with multiple offices, departments and buildings filled with employees drinking coffee.

“I realized there was a company delivering coffee to all the offices, and I thought, ‘Why can’t we do that?’ Because, nobody likes the coffee there,” she recalled. “So, I approached the school.” Brown was told that the coffee service provider was also supplying the school with snacks and beverages and any necessary equipment. “I said, ‘I can do that!’” she continued. “And they said, ‘No, I’m not sure you can.’ So I said, ‘How can I prove to you that I can do it?’ They said that I’d need a website where they could order; I’d have to provide equipment. It took me a year — and they only gave me one office at a time, and then one building at a time — but at the end of that year, I had the whole campus. And that made so much more money than the drivethrough, so I dove right into office coffee in 2015.”

Building business with bean-to-cup

Brown sold the drive-through and refocused her business strategy with her only other full-time employee, roast master Chad Batten. She said that once she focused selling her locally roasted beans through office coffee service (OCS), her business took off in The Triangle, a technology hub anchored by Duke University, The University of North Carolina at Chapel Hill and North Carolina State University.

“There was really nobody roasting coffee that was doing office coffee, so I really stood out from the competitors,” she explained. “As the roaster, I didn’t want to sell K-Cups. I wanted to sell something where I could use my beans, and the only way to do that was bean-to-cup, which was pretty expensive. The problem was that I didn’t have any money.”

Brown found a funding partner to help her rent the equipment to the client, who would then pay for the equipment, taking the financial burden off Well-Bean as she approached potential customers.

“I could go in without having to have a lot of resources to get a big account,” she said. “This company would pay for the equipment, and then I could offer my local beans.”

As Brown grew her bean-to-cup offerings, she started expanding her other services as well.

“I’m the typical entrepreneur. If somebody asks if I can do it, the answer is ‘yes,’ even if we didn’t do it,” she said. “Clients would ask for water, ice, pantry services and everything that goes along with the break room, so we added everything and became a full-service break room management company.”

As the company grew, Brown focused on putting all profits back into Well-Bean, never forgetting the farming communities in Nicaragua that she was determined to support.

“I had to pump all the money that we made back into the business,” she explained. “I couldn’t pay myself for four years, because if I did, I basically would’ve just created a job for myself, and not a company. So, we lived off my husband’s salary, we took out a lot of personal loans. We were up to our eyes in debt. It was a really hard time, but I knew I had to try. I knew that this was bigger than me and bigger than a paycheck or just a business. This was something that was supposed to happen, and I was just going to be part of it.”

Brown said she moved forward by focusing on the next step instead of letting herself get overwhelmed.

“There was just this quiet confidence that I knew one day it would work,” she said. “I would drive around town and I’d see business booming everywhere — it’s still booming in Raleigh — and I thought, ‘If I can get in front of an account, I could talk them into it.’ It was just building credibility to get in front of the right people.” 

Sustainably supporting farmers

Brown’s efforts paid off. By the summer of 2016, the company became profitable and she was able to hire staff and qualify for a business loan. Well-Bean was now a flourishing social entrepreneurship, or a for-profit business supporting a non-profit.

“That’s really something that helped us stand apart from our competitors — our story,” Brown said. “We’re not just a third-party coffee distributor. We are the roaster, and we also work directly with the farmers in Nicaragua, paying them a fair wage.”

Well-Bean only sells beans they source and roast themselves; no other name-brand coffee is offered through the company. “People thought I was insane when I said I wanted to do that,” Brown recalled, laughing. “They were like, ‘No, people want Starbucks!’ But what people want is coffee that tastes good. If we can program equipment to match our coffee, it’s going to blow away any national brand.”

Since many factors can affect how coffee tastes, Brown says she won’t put a bean-to-cup machine in a client’s office until she does a coffee tasting with their staff. This secures buy-in from the employees and educates clients on how to use the equipment properly.

“They can be confident to sign a contract with us. Not only do we give such great equipment, but we match the beans they choose to the coffee machine, and it works because we program it correctly,” she explained. “As a roaster, it really helps us solidify our beans being sold for a long time versus just selling other national brands.”

Well-Bean sells 2-pound and 5-pound bags of whole coffee beans, as Brown noted this is the most sustainable way to provide coffee to clients.

“With bean-to-cup, there’s not even paper waste. It’s filter-free, it’s all bulk, and we do it in craft packaging that’s recyclable,” she explained. “For me, the passion comes from being able to help clients create a more sustainable office environment with their coffee service. That drives me.”

Higher profit margins, lower client costs

Brown said that her profit margins are much higher using Well-Bean’s own coffee instead of other brands. WellBean currently offers 11 types of coffee beans, ensuring that clients will find their perfect match.

“I didn’t want to have a ton of SKUs sitting in a warehouse, because coffee gets old,” she explained. “If it’s whole bean, you should really consume coffee within six weeks. If it’s ground, within one to two weeks. A lot of our competitors have warehouses filled with coffee that could be six months old or older, and that affects the taste.” 

While Well-Bean offers traditional brewers, Brown said that 99% of new placements with clients are bean-tocup brewers, even in offices as small as 10 employees. Through her relationship with the equipment lending company, she’s able to charge the client a flat rental fee without requiring a large minimum spend per month.

“I just break down the math with clients. The bean-to-cup machines are a lot more efficient with coffee [than traditional brewers],” she said. “A bean-to-cup machine might cost 28 cents per cup, but if they were to brew coffee by the pot, you use a lot more coffee because you’re not extracting as much as you can out of the bean-to-cup machine. So, when we sell a traditional brewer, they end up spending 35 cents a cup, and then some of that gets wasted because they may not finish the whole pot. When you paint that picture for a customer, it really is a win-win on the financial side and on the quality side.”

What’s next for Well-Bean

In late 2018, Brown started expanding into micro markets, which she said was a necessary step to stay competitive. She entered an exclusive partnership with 365 Retail Markets, which connected her with Steve and Patty Closser at Translucent. They subsequently opened 14 markets together. Brown recently renovated Well-Bean’s roastery, increasing her cold brewing capabilities.

“We place kegerators and we deliver cold brew and kombucha,” Brown said. “It’s turned into one of the larger revenue streams for new business. The reason it’s taken off is because no one is really doing it here, so we saw that gap in the market and we wanted to fill it. Our margins are incredible because it’s our own coffee.”

While the expansion of services has been good for business, Brown wanted to focus on why she started Well-Bean in the first place. In January 2020, Brown took her fifth coffee farm origin trip to Nicaragua, bringing industry professionals from Canteen, Agora Refreshments, and G & J Marketing and Sales. In addition to visiting the farm Well-Bean sources directly from, Brown provided food baskets, medicine and toiletries to families in need through New Song.

“It was great to go down and see how coffee can change the farmers and the living situation on the farm,” she said. “We can make money and give back to New Song and really change those communities with what we do every day.”

“My goal is to be a 100% roaster for office coffee and convenience services, and to work directly with partners,” she continued. “There are a lot of roasters out there, but not many that just focus on OCS, and none that were OCS operators that then went into roasting. I can take that background to help other operators be successful. My goal is to have five or six partners from around the world that we can source direct from, and then work with a nonprofit in those areas. So, for instance, we bring in Nicaraguan beans to support New Song, and when we work in Guatemala, we want to work with a non-profit there so we can support their local economy and the non-profit with the sale of those beans.”

Brown recently moved one step closer to this goal, announcing that a national OCS operator will acquire Well-Bean’s routes in a strategic partnership, allowing her to focus on coffee. This partnership will also expand Well-Bean’s reach, as the national OCS operator will sell its coffee and cold brew.

“This will help us move more coffee and allow us to source direct from more farmers,” Brown explained. “We’ll offer custom-tailored programs for operators — we can work with any machine and tailor the program to fit with our coffee.”

Brown is now able to fully focus on that original plan scribbled on a airplane napkin eight years ago: to run a coffee company that not only serves a good cup of coffee, but also does good.

“Roasting and philanthropy is my passion, and also the sustainability practice in all of that,” Brown said. “Working with farmers who are producing in sustainable ways and then working with operators who are operating sustainably, as we are at Well-Bean.”

And as an entrepreneur, Brown truly enjoys what she does every day, including leading 16 full-time employees and multiple contractors.

“I love that my staff brings people joy every day,” she said. “I know that sounds silly, but we come in and they’re like, ‘Oh, the coffee people are here!’ We’ve been able to create such a fun culture at Well-Bean. My staff is fantastic. I love having the opportunity to work with staff members who are hungry, engaged, and who also know how to have fun and not take life or work too seriously.”