Organic Brands in Demand

Organic Brands in Demand

Silver Spring, Maryland resident Sonia Marie Bunch always knew she’d invest in an organic food and beverage line–the only question was when. In February 2008, Bunch added an organic coffee to her roster of offerings under The EverGreen Home, then an organic bedding and green living consulting company. But the demand for her coffee quickly grew from modest sales of six cans a month to 14,400 cans a month to 181 Mid-Atlantic grocery stores. “I just love coffee and knew going into this that it was a huge, huge market since more than half of adult Americans drink it,” Bunch says.

Born out of the ’90s coffee house scene, organic coffee accounts for $21 billion of all coffee imported to North America, reports Research and Markets. Though larger brands failed to crack the organic coffee market, The EverGreen Home found a niche in unroasted or green coffee beans, says Kelly Keenan, beverage buyer for Stop and Shop/Giant, subsidiary of mass-market grocer Ahold USA, which stocks The EverGreen Home Coffee. “It’s extremely unique and allows us to get in touch with the home coffee roasters in our customer base that we’ve never had a way to talk to before.”

A former NASDAQ market analyst, Bunch impressed the store’s executives by “knowing her product, her competitors her marketplace and her niche,” says James Sturgis, director of supplier diversity for Ahold USA. “I was more blown away by Sonia than I was her product.”

Bunch jumped into the java business right as the economy tanked and wasn’t able to secure a bank loan. The 46-year-old borrowed about $30,000 from friends and family, and nearly lost her house in order to can her first few orders of USDA certified organic, fair trade brews. Fulfilling the Giant Foods account in September 2009 proved an even taller order. “We went into a strategic alignment with the roasting company that we work with and they fronted the cost for us because they believed in the product so much,” Bunch says. The costs of roasting and canning took an $82,000 chunk out of her profits from the delivery. Bunch’s beans are procured through brokers that work directly with farms in Indonesia, Ethiopia and South America.

Bunch runs The EverGreen Home from her home office and spends about $5,000 annually on Website maintenance and trade shows where she promotes her coffee brand through lectures and home roasting demonstrations; her monthly in-store demos are free. The company also pays about $800 a year for memberships in the National Minority Supplier Diversity Council, the Organic Fair Trade Association and Green America.

Having operated in the red for nearly three years, Bunch expects revenues of $300,000 by year’s end, and projects revenues of $1 million in 2010 by expanding into an additional 380 Giant and Stop and Shop stores in New England.

While The EverGreen Home Coffee is also available at three Whole Foods Markets in Southwestern Maryland, the company also sells powdered Japanese-style green tea from it’s Internet storefront and has plans to sell Fair Trade honey, peanut butter, and hot cocoa. “We truly plan to become the brand to buy organics from,” Bunch says.

Perk up: Smart strategies for growing a grocery brand:

Value small steps. Beverage buyer Keenan says it’s a big leap of faith for a grocer to take on a fledgling brand, but building a stronger brand in smaller store makes your brand more solid.

Bite the big guys. Find a niche that puts such a big dent in a larger brand’s business that they want to buy you out just to get you off their back, says veteran diversity supplier manager Sturgis.

Talk to your buyer. Your idea of good sales may not match those of your buyer. Find out what her expectations are and exceed them, Sturgis says.