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Original article URL: http://bridgemi.com/2011/08/coffee-is-million-dollar-enterprise/
30 August 2011
Pricey coffees were among the first casualties of the Great Recession as people cut $4 lattes from their strained household budgets. Even mighty Starbucks was humbled, closing hundreds of stores across the country as the economy tanked.
But one small Traverse City gourmet coffee company prospered during Michigan’s “lost decade” by adhering to an ideal: It’s not just about the coffee.
Higher Grounds Trading Company not only roasts and sells coffee from its store in the former laundry building of the Traverse City Regional Psychiatric Hospital, now known as the Village at Grand Traverse Commons.
It also has a mission — to help coffee farmers around the world earn a decent income while nurturing their environments. Higher Grounds promotes itself as Michigan’s only “certified fair-trade, organic roastery.”
“We’re an organization that has a solid brand that people want to support,” said Chris Treter, 36, who founded the company with his now ex-wife, Jody, in 2002. “Good things are happening.”
Sales of the company have been growing by an annual rate of between 10 percent and 20 percent in recent years, Treter said. The company will post revenues of about $1 million this year.
Treter and his then-wife started Higher Grounds after living in Mexico working with local coffee farmers, promoting human rights and helping the farmers develop new markets for their coffee.
The Treters launched their company by borrowing $3,600 from family members to coffee from the Mexican farmers and a roaster.
“We were grad students. We had no money,” he said. “We built this on nothing.”
In addition to selling coffee through its retail location, Higher Grounds operates a mail order business through its website (highergroundstrading.com) and sells to specialty grocery stores.
It recently won a contract to sell its products to The Fresh Market, a 106-store chain based in North Carolina.
“That was really significant for us,” Treter said.
Higher Grounds employs nine people and plans to hire several more by next year. It is planning to expand primarily through additional contracts with grocery chains.
Treter acknowledged that he didn’t follow conventional business practices in building his company.
“I got lucky,” he said. “They told us in grad school not to start a business until you’ve worked in that industry. I did the opposite.