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Business Observer Friday, May 15, 2020 6 months ago

Higher grounds: Coffee company hits its stride as it aims for the top

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With nearly 20 cafes and a rapidly growing roster of high-profile partners, Raphael and Sarah Perrier, the husband-and-wife team that runs Kahwa Coffee Roasters, have seen big rewards come from big risks.
by: Brian Hartz Tampa Bay Editor

Raphael Perrier won’t refer to Starbucks by name. Instead, the Kahwa Coffee Roasters co-founder uses phrases like “big green” to describe the Seattle-based java giant (more on that later). 

Kahwa, headquartered in St. Petersburg, is becoming the Starbucks of Florida — a ubiquitous brand that combines a high-quality product with appealing cafes and lucrative partnerships with the likes of HSN, the Tampa Bay Rays, Disney World, Publix and Kathy Ireland, the former supermodel-turned-global-entrepreneur. 

‘When you are building a brand, you need to keep in mind that not everyone is going to like the same cup of coffee. But we’ve tried to create something that’s easily accessible.’ Sarah Perrier, co-founder of Kahwa Coffee Roasters

Founded by Raphael Perrier and his wife, Sarah, in 2006, Kahwa has 15 cafes, with four more in development. Its coffee is served in 26 Publix grocery store cafes statewide, as well as high-profile locations including Tampa International Airport, Tampa Convention Center, Epcot Center in Orlando, the Don CeSar Hotel in St. Pete Beach and Armature Works in Tampa. The firm’s packaged coffee is available for sale at more than 800 retail locations. 

“I always want to push more, risk more, and Sarah is always asking, ‘How do we get there?’” Raphael says of the core relationship dynamic that has driven Kahwa’s rapid growth. “Everything we’ve done is a risk.” 

Raphael worked in coffee sales before opening L’hexagone, a bar and club, in 2002. In 2005, the Perriers sold that business and, instead of socking away some money for a rainy day, invested 100% of the proceeds into starting Kahwa. In the early days, the couple would roast the coffee beans, package them up, do all the paperwork, repair equipment — whatever needed to be done. That included deliveries. 

Kathy Ireland, left, and Sarah Perrier. Courtesy photo.

Driving around St. Petersburg on delivery runs, Raphael says he daydreamed about what it would be like to have his product sold at Tropicana Field and on HSN. “Everything we envisioned happened,” Raphael says. “We always had the vision of where we wanted to go.” 

That vision includes competing with Starbucks — an audacious goal, to be sure, but if not Kahwa, then who? Dunkin’ has a different target market and value proposition. Krispy Kreme is more focused on donuts as the centerpiece of its branding efforts. Tim Hortons has nearly 5,000 locations, but most are in Canada. 

But it takes more than vision and dreams to take on industry titans like Starbucks, let alone fend off local competition. “We also had the experience in the coffee business,” Raphael says. "We had the background. … That helped us a lot." 

The Perriers attribute a great deal of their success to simply not taking no for an answer — and to being supremely confident in their product. 

“We don’t go back and change our approach,” Raphael says, describing how he and Sarah, both 44, win over skeptics. “We have them come back to us.” 

He adds, “We have rarely lost a customer in 13, 14 years in business. But every time we do, we say, ‘OK, no problem. I’m pretty sure we’ll see you again.’ And usually, we do see them again.” 

Another key strategy? Picking a lane, preferably one not too narrow, and sticking with it. 

“It’s coffee — a subjective thing,” Sarah Perrier says. “When you are building a brand, you need to keep in mind that not everyone is going to like the same cup of coffee. But we’ve tried to create something that’s easily accessible.”

Kahwa is developing a cafe made from shipping containers on 4th Street North in St. Petersburg. Courtesy photo.

Sarah says customer service, not just personal taste, is also vital for coffee success. That’s why Starbucks is so dominant. “Big green” customers know exactly how they are going to be treated, every time, regardless of which cafe they patronize. 

“The whole experience of being in the cafe, … that's usually more of a factor in whether people come back,” she says.

Of course, the COVID-19 crisis has hurt. The pandemic and subsequent business shutdown kept Kahwa’s cafes closed except for drive-thru and takeout service. Five of its cafes had to shut down completely as the company’s revenues plunged 70%. The company had been doing more than $10 million in annual sales, with revenues growing 10-20% year-over-year. 

“We kept people employed, as many as we could,” Raphael says of the response to the coronavirus pandemic. “But we had to take drastic measures.” 

Some of the company’s 120 employees were furloughed, but everyone is back to work now. Through a combination of its own cash reserves and Payroll Protection Program funds, Kahwa was able to pay employees regardless of whether they could work. 

“It’s been a weird time,” Raphael says. “But we’re OK. We’ll make it.” 

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