Our history goes back to 2015, when Ryan Roth was the CEO of a large architecture firm with 400 architects. He was always surprised that even though he was constantly in some of the best hotels in the world and his firm was designing some amazing 5 star hotels, no matter what, he always had a bad coffee, but why? And how does this impact farmers?
Most branded hotels you know are not owned by these brands but under contract and usually make only 5% of the profit of the hotel each year. Because of this the management company looks to cut costs as much as possible, buying the cheapest produce possible, but presenting it very well.
Would you prefer to work with one supplier who gives you 50 items you need daily but not the best rates per item or 50 suppliers?
With coffee it’s a little different, as a coffee company will offer a free $20,000 coffee machine and free maintenance of the coffee machine, but will require a three year coffee supply contract. The coffee company won’t make a profit until the 3rd year but the hotel management company will not have to spend $20,000 on the machine or anything on maintenance.
We can go into more detail about why it’s always bad coffee at breakfast when it’s a free refill, but you can see where we’re going and this is where the spark came from for KaBu & Co.
When Ryan understood this, he started travelling to coffee farmers, rice fields, tea plantations, salt fields and so on. He then started following the coffee from farm to cup and along the way he realised that 50-70% of that supply chain added no value. A short time later, he realised if he could figure out the logistics, then an e-commerce marketplace would be the solution.
“He then started following the coffee from farm to cup and along the way he realised that 50-70% of that supply chain added no value.