Editor’s Note: Managing inventory onsite or in a warehouse is a crucial part of operations in a roastery, and the tighter the protocols the better. Weekly meetings, physical bag count, monitoring consumption, and staying connected with your trader are all essential parts of successful green coffee inventory management. When procedures are clear and followed to the letter, these tasks become part of the regular workflow that keep things running smoothly. This is the first article in the series. Part II: How to Book Green Coffee and Part III: Pro Tips for Inventory Management are also published. You can also watch an off-the-cuff conversation between Sandra Loofbourow and Chris Kornman on this topic here.
Inventory management may be one of the less glamorous jobs in a roastery, but it is also one of the most crucial. The panic and dread caused by realizing there’s not enough coffee for today’s roast is reason enough to have good protocols in place. Conversely, overbooking coffee can feel like a weight around a roaster’s neck, as the bags sitting at the warehouse slowly decline in vibrancy and quality and storage fees keep piling on. Good inventory management should reduce stress and increase both quality and profitability.
Note: the volumes and pars we discuss here will nearly always be in reference to unroasted green coffee. When using roasted coffee consumption as a reference point, remember to account for the weight lost during the roast process – usually about 20%.
Here’s what roaster should keep in mind when examining their green coffee inventory:
1. What are your menu needs?
The more clearly you understand your menu the easier it will be to supply coffees that work within it. There are two things to keep in mind here:
First: What is your brand identity? What mission drives you, and how do you want that reflected in your coffees? Having a precise understanding of what you’re trying to do with your coffee menu will help you and your trader understand what coffees might fit on your menu.
Second: Who is your customer base, and what do they want? The better you’re able to serve your customer base, the more loyal they will be. Get precise about the kinds of customers you’re looking to attract and how you’ll retain them. How can your green coffee choices influence customer loyalty?
These two concepts are your guiding lights. The more clearly you understand these motivators, the better. But remember, it’s important to be flexible! Your mission may change as the needs of the company become clearer. Similarly, the demographic of customers you serve may change with the neighborhood or with peoples tastes. Be inquisitive and incisive and re-evaluate when necessary.
We can use this information to get very specific about green coffee needs. Make a list (or even better, a spreadsheet!) of how many blends, components, and single origins you want to have on hand. What role does each menu item play? How much flexibility is there in each of those menu spots? How are they expected to perform in your cafes and wholesale accounts? How much of each type of coffee do you expect to move?
This brings us to the next point:
2. Volume projection/consumption
Understanding how much coffee the roastery goes through on a daily, weekly, monthly, and yearly basis is crucial to managing green inventory needs. Luckily, there are many tools we can enlist to help gather this information.
If it’s your first time doing this, start by working backwards. If the roastery supplies a café, figure out how much roasted coffee those cafes use each week. It’s the same for wholesale – how much roasted coffee is going to wholesale clients? Start with weekly pars and work from there to build monthly, quarterly, and annual pars.
If you’ve been roasting more than a year, look at annual sales trends: getting a feel for when roasted coffee consumption goes up and when traffic dies down can be incredibly helpful for planning for green coffee management. Use your Point-of-Sale provider or your sales manager for precise details. December may be an incredibly busy month for your company, but everything comes to a complete halt in January. Use this info to order green coffee accordingly!
If you’re using roasting software like Cropster, use historical roasting data to inform your decisions. Was there a month when you roasted more coffee for cold brew? When sales of your Holiday blend went up? Use all the data at your disposal do build a clear picture of your usual expected consumption of green coffee.
HOWEVER: Even the most accurate data tracking will have occasional oversights and errors. Schedule time (weekly and/or monthly) to do a physical count of green inventory. Do not rely entirely on the numbers on your screen. Scheduling weekly inventory meetings with your production team to assess current stock, consumption, and future needs is the best way to stay on top of your green coffee inventory and prevent disaster. When in doubt, do a physical count!
When forecasting your future needs remember: about 20% of your total green coffee volume will be lost in the roasting process!
3. Plan Ahead/Seasonality
Coffee is a seasonal crop and keeping fresh coffees can be an important factor in maintaining the quality of a menu. Understanding when coffees are arriving to the local port or warehouse, and how quickly coffees are aging out is crucial to keeping things delicious. How can you set up inventory needs in a way that allows for fresh arrivals?
Be sure to allow for enough flexibility in your menu to allow for fresh coffee. This means:
- Build time to sample fresh coffees throughout the year
- Allow enough flexibility in your menu to allow for different origins to make an appearance
Like managing physical inventory in your warehouse, green buying requires frequent check-ins. Ideally, a roaster should have enough coffee booked to get them through the next 3-6 months of roasting. That’s a tight turnaround and will require frequent sampling of fresh samples and regular communication with your trader about inventory needs. As always, the tighter your protocols and the clearer your communication with your trader, the better!
Managing inventory onsite or in a warehouse is a crucial part of operations in a roastery, and the tighter the protocols the better. Schedule weekly meetings, count your physical bags, keep an eye on consumption, and stay connected with your trader. This can seem like a lot, but when standard operating procedures are clear and followed to the letter, these tasks become part of the regular workflow that keep things running smoothly.
With these protocols, there should be plenty of time to talk with a trader and sample some offers when there is a gap in inventory needs. Check out Part II of this series for detailed information on how to manage samples, maintain good relationships with your trader and producers, and build a delicious coffee menu.