When Ali Kothari and Johnny Fayad launched their business as freshmen at Northeastern University, they had two goals: Get into the local Shaw’s grocery store — and sell a million of their coffee bars.
Four years, a new name and a few new employees later, they’ve smashed both.
Fayad and Kothari have both gotten their diplomas, and Eat Your Coffee is now in 1,000 stores — more than triple the 300 they had when we met the pair in 2016. Deals with Texas-based H-E-B grocery stores and and midwest retailer Meijer drove that expansion.
Now with Vice President of Marketing Kate Prince, whom they hired last summer, on board, they are seeing growth most entrepreneurs only dream about.
Oh yeah, and they’re all under 30 years old.
“Now what’s exciting is we’re able to dedicate 100% of our time to the company,” said Kothari, noting that while in school they had to at least show up for class to get the attendance points.
And now they’re thinking outside the bar.
But First — How the Heck Can You Eat Coffee?
Yes, coffee is a liquid. I’m a smart guy, so I know these kinds of things.
Kothari and Fayad found that in the rush to catch an 8 a.m. class (ah, college, when 8 a.m. was considered early), it just took too long to brew up a cup of joe and eat the most important meal of the day.
So in 2013, they combined the two — coffee and breakfast — into CoffeeBars and launched New Grounds Foods, which was the company’s original name, in Boston with the help of a $500 prize from the Husky Startup Challenge.
The pair used Kickstarter, which has become crucial to their business model, to raise more than $44,000 in less than two months.
Right now, Eat Your Coffee pays BumbleBar, an organic protein bar manufacturer based in Spokane, Washington, to produce its three flavors of CoffeeBars: Mocha Latte, Coconut Mocha and Caramel Macchiato. The last production run resulted in nearly 100,000 bars, Kothari said.
How These Young Entrepreneurs Are Handling Major Growth
Though Eat Your Coffee still operates at a loss, Fayad said he’s close to wrapping a significant round of funding from investors who want to get in at the ground floor of their business.
“Honestly, I attribute a lot of that growth to the product,” said Fayad.
But the company’s growth is also rooted in the knowledge the pair picked up along the way. Although Fayad made and sold longboards when he was younger, and Kothari watched his father start a half dozen business growing up, neither one of them had experience with a major manufacturing operation.
Prince, the relatively new hire, is by far the most experienced one of the group. She’s 29 years old, while Kothari is 22 and Fayad 23. She spent six years at General Mills before she was bitten by the entrepreneurial bug.
“We made a lot of mistakes the first year learning to navigate the sales process,” Fayad said. “Obviously we’re still making mistakes and still learning, but we’re doing a lot better.”
Despite the company’s success, growing pains have cropped up for the young entrepreneurs.
In May, Eat Your Coffee (then New Grounds Foods) had a deal to supply H-E-B with Eat Your Coffee Bars, but a misforecast led to them not having enough bars to stock the Texas grocery stores.
“Production is probably one of the larger issues we face, primarily from the forecasting side,” says Kothari, the financial quant of the the company.
They still landed the contract, but the memory of that challenge won’t go away soon.
But the wins keep coming, as all three of the top executives point to the Meijer deal as one of the highs of running a startup during a massive growth phase.
“We kind of took risk launching there, we didn’t know how it would be received,” Fayad said. “It ended up turning out really well.”
Thinking Outside the Bar… and the (Big) Box (Retailer)
The company is at a major crossroads right now, as it’s currently undergoing a complete re-branding effort along with its fundraising round.
But, in the company’s immediate future, it’s going back to a model that sparked the growth Eat Your Coffee is seeing today: another Kickstarter campaign.
To help pay for production of a new flavor, the firm will ask backers to pony up $20,000 in the newest crowdfunding effort.
For now, they’re sticking to their core product, but Prince said they have a big vision for expanding into other areas of the grocery store.
“We’re definitely looking to expand beyond that aisle,” said Prince, noting the company will rely on its brand image to move into other snacking area — think granolas, cereals or bite-sized versions of the original Eat Your Coffee Bar. “After we feel we have a brand that can stand on its own, that’s when we’ll start looking at other categories.”
Alex Mahadevan is a data journalist at Codetic. He prefers his coffee in liquid form.