Spouses Dave and Susan Ward founded Buddy Brew in 2009, and Sarah and Raphael Perrier, also husband and wife, founded Kahwa Coffee in 2006. Though the couples don't really consider each other competition, they often come face-to-face for wholesale accounts and retail customers, with everyone wanting to know the same thing:
Who serves the best cup of coffee in Tampa Bay?
In 2006, Sarah and Raphael Perrier hosted a media day in St. Petersburg to introduce locals to their new coffee company, Kahwa Coffee.
Nobody showed up except one food critic from Tampa. He asked Raphael Perrier, “What are you doing?”
Without hesitation, he responded, “We're going to create the biggest coffee company in Tampa Bay.”
Raphael wasn't blindly diving into the coffee world.
He worked for a Philadelphia coffee company for 10 years, where he started as a barista and eventually moved into wholesale. He had connections to big chefs and had witnessed the company make good and bad decisions before he decided to open his own.
But mostly he and his wife, Sarah Perrier, had a vision. “We saw it,” Raphael Perrier says. “We knew the area and we could see things were changing,” Sarah Perrier adds.
Nearly a decade later the company, named after the African word for coffee, has become a recognized brand in Tampa. Kahwa has six locations in the Tampa area and 450 wholesale customers. That includes a handful of big accounts, from the Tampa Convention Center to some contracts with Disney. The company has also taken on the underdog role, in competing with Starbucks for customers.
Kahwa had around $3.5 million in revenue in 2014, split evenly between its wholesale and retail business. The couple expects sales to grow at least 25% in 2015, to $4.5 million, with fingers crossed they will win a contract later this year to build a cafe at Tampa International Airport. More locations are coming, including a location in Westchase and a downtown Sarasota store. The firm has 50 employees.
But the growth hasn't come without pain.
In 2011, the Perriers had built the business to 70% wholesale, 30% retail, but were at a turning point. The couple had to manage two shops and 300 wholesale accounts, including 100 local clients.
To hire more people and open more shops, they needed to either bring in an investor or give wholesale to a distributor. They opted to go with a distributor, Tampa Beverage Solutions.
Even though Kahwa would lose a lot of margin on the coffee it sold wholesale, it freed up time to work on the shops. The Perriers wanted to concentrate on retail because even if the coffee prices went really high, they could boost a cup in a cafe 25 cents without much heartache.
Moving ahead Raphael Perrier says without question, the company's biggest competitor is Starbucks, on both the wholesale and retail side. He estimates “90% of the population is still a Starbucks crowd.” But Kahwa is making moves to continue to inch into Starbucks' market share in Tampa.
In 2013, for example, the Perriers stepped out of their comfort zone of city coffee shops and bought an old Wendy's building in South Tampa, a more residential area. The best part? The large building had a drive-thru. “It was a huge statement, that we can compete with anybody, even Starbucks,” Raphael Perrier says.
In another attempt to keep up with Starbucks, Kahwa recently invested $17,000 to develop a phone app. It provides people with the convenience to pay for coffee and get rewarded for each cup through their phone. They launched the app in September, and now around 30% of in-store revenue comes through phone-payers, Raphael Perrier says. The app also provides some intel for the company, allowing it to see average customer sales.
The couple is also working on designing K-Cups — one more way to provide coffee to customers, through sales in-store and online. Starbucks may be a “marketing machine” with all the brand recognition, Raphael says, “but we have better coffee.”
Kahwa Coffee Top Accounts
Paul Bocuse Restaurants/Bakery in French Pavilion at Epcot
Baystar Group, including restaurants Salt Rock Grill and Island Way
Steve Westphal Group, featuring restaurants like Parkshore, 400 Beach Seafood and Taphouse, and Aqua Prime
Mise En Place, a fine dining restaurant in Tampa
Como Hotel Group, including the Metropolitan in Miami and Parrot Cay in Turks & Caicos
Nassau, Bahamas Airport
Read our story on Buddy Brew, "The Buddy Brand."