Church Cafes

HELPING LEADERS BECOME

B E T T E R S T E WA R D S .

Presented by: Kerry Group

2

CHURCH EXECUTIVE • C H U R C H C A F É S

churchexecutive.com

Table of Contents WHY A CHURCH CAFÉ?

4

It isn’t difficult to make the case for a café in your (or any) church.

From fellowship to ministry-supporting revenue potential, if done right, many churches have discovered a “recipe for success.”

To set the stage, our team surveyed dozens of church café managers, as well as the specialty beverage experts at my company, Kerry — a global leader in food and beverage products and technologies. Their tried-and-true insights are integral for setting up coffee shops in houses of worship.

By Jim Wendt

BEST PRACTICES: PURCHASING AND SUPPLIES

7

There are three ways to make money from a café: sell more, raise prices, or lower costs. While selling more is always worth pursuing, raising prices can be tricky.

So, the fastest way to make your church café more profitable is to lower costs.

By Levi Andersen

churchexecutive.com

C H U R C H C A F É S • CHURCH EXECUTIVE

3

WHY A

church café?

By Jim Wendt

It isn’t difficult to make the case for a café in your (or any) church. From fellowship to ministry-supporting revenue potential, if done right, many churches have discovered a “recipe for success.”

To set the stage, our team surveyed dozens of church café managers, as well as the specialty beverage experts at my company, Kerry — a global leader in food and beverage products and technologies. Their tried-andtrue insights are integral for setting up coffee shops in houses of worship.

Praise the latte It helps to first understand the café landscape and marketplace.

Long gone are the days of simply ordering a cup of coffee. Consumers — including the people who attend your church — want greater variety, flavors and options than ever before. The Specialty Beverage industry was borne of this consumer demand. Today, latte and frappe menu items far exceed coffee options.

Increasingly, more people are seeking out healthier alternatives to coffee. The increasing variety of formats and flavors in the U.S. market has proven effective at attracting younger consumers.

More consumers are seeking out coffeehouse treats. This trend supports the 16.5-percent growth in coffeehouse sales from 2008 to 2013, which reached $28 billion in annual sales!

Forward-thinking churches have clearly adopted these trends, offering everything from coffeehouse drink stands to fully constructed and branded cafés on church premises.

4

CHURCH EXECUTIVE • C H U R C H C A F É S

churchexecutive.com

churchexecutive.com

C H U R C H C A F É S • CHURCH EXECUTIVE

5

Focus on: church café operators In an effort to better understand our church customers, we surveyed dozens of church café operators. Membership in these houses of worship ranges from a few the hundred to several thousand. Here’s what we found: • Nearly one-third (27 percent) of their cafés have been open for two years or less. The rest have been in operation between three and six years.

• More than 70% serve beverages that include lattes, blended frappes, blended ice coffees, coffee and hot teas. One respondent noted that his church’s café serves specialty drinks created by the teens in the membership.

• More and more churches are expanding their beverage offerings to appeal to consumers’ broader tastes. To this end, 56 percent now serve chai tea lattes and fruit smoothies. Additionally, some churches (50 percent) now offer iced teas and 27 percent offer lemonades.

• Only 13 percent of churches offer Sunday-only beverage service; 69 percent open their cafés in conjunction with other weekly events and activities. And, 19 percent of these cafés — mostly in larger houses of worship — are open every day.

Driven by community and fellowship We asked café operators in houses of worship a critical question: Why do you offer café-style beverages at your church? The vast majority (82 percent) said that creating a pleasant atmosphere for parishioners was very important or critical. But — with a 100-percent response rate — the overwhelming motivation was to encourage fellowship and a sense of community.

Additionally, encouraging young people to attend was a primary consideration for 93 percent of respondents. And, as Kelly White, lead pastor at Horizon Church in Victorville, CA, points out: “It gives our teens job experience that they need.”

What about planning?

Beverage product selection topped most respondents’ lists when planning their church cafés. It’s no wonder, then, that these forwardthinking church cafés offer so many drink options. For Carlene Boldizar, a manager at Central Church in Collierville, TN, Big Train Chai and DaVinci syrup and sauces are proving very popular.

The old adage “location, location, location!” rings true at churches, too; 81 percent said the café location was very important or critical to its success. Accordingly, most churches (75 percent) picked locations where a large number of people could gather, and 44 percent chose locations that were previously underused. “We created a fun visual look, as well as plenty of seating to promote places for people to connect,” explains Horizon Church’s Kelly White.

Additionally, 100 percent of respondents were concerned about resources, and 94 percent considered costs to run the café. Electricity availability (to operate blenders and other equipment) and proximity to a kitchen or back office area also weighed in.

When it comes to keeping operational costs in check, 93 percent of respondents said they use volunteers to man the barista stations. Others (20 percent) pay support staff. And, others (7 percent) use existing church staffers to help with the administrative tasks for purchasing and setup.

Revenue building Although most respondents indicated profit was not a factor in setting up a church café, one still must consider the price-cost model to gauge the potential for church fundraising.

According to our survey, the average cost of a specialty drink — to the church — ranged from $.30 to $1.75. To the customer, specialty drink prices ranged from $3 to $4. By keeping overhead low and staffing primarily with church volunteers, church cafés can generate healthy margins of $1.25 to $3.70 per drink. This can add up quickly: respondents in our survey serve between 100 and 1,000 drinks per week! With some 6

CHURCH EXECUTIVE • C H U R C H C A F É S

quick, back-of-the-napkin math, that’s a monthly revenue increase between $500 and $16,000 — vital funds for supporting existing church ministries or funding new ones.

No barista needed As with any operation, quality is essential to a successful church café — in particular, great-tasting offerings. When asked to rank their selection criteria for specialty beverage products, church café operators cited flavor and taste as No. 1.

Food safety concerns (which makes recognized brands preferred) was also very important, followed by customer service — especially, accurate and fast shipping (before-Sunday delivery) and the ease of purchasing online.

Ease of use and preparation weighed in heavily, too. In this respect, Big Train — a leading specialty beverage powdered mix brand — has supported churches for decades. “Many churches like the ‘just add water’ approach to making gourmet drinks,” explains Levi Andersen, Kerry’s Beverage Specialist and former coffeehouse owner. “[Churches] like beverage mixes from brands like Big Train and DaVinci Gourmet, because anyone can learn quickly, including church volunteers.”

And, for Karen Maitoza, who represents Summit Christian Church in Sparks, NV, the types of products she likes to purchase come down to a few key criteria: “shelf-stable; no refrigeration space needed.”

Easy preparation is also important for large-scale events such as pancake fundraisers and church-wide breakfasts. To this end, Goldendipt — a brand with a 50-year history — offers churches a wide variety of baked good mixes in large-quantity bulk bags: gourmet pancakes, waffles and more.

All in a name To name, or not to name, your church café — that is the question.

Creating a brand name can create some excitement and intrigue while keeping parishioners coming back. Respondents shared some of their own cafés’ clever names, including: • Intersection Café at New Castle Bible Church (Mackinaw, IL) • Crosswalk Café at Central Church (Collierville, TN) • Grace Café at Grace Christian Church (Sterling Heights, MI) What do they all have in common? A focus on fellowship and faith.

Whatever you end up naming your café, focus on building a great gathering place where a growing population of drink enthusiasts will want to congregate. Select easy-to-make products your volunteers can quickly master. And, pick diverse products — that taste great — to keep the fellowship strong.

Jim Wendt has more than 20 years of experience in marketing, sales and business development. He is the eCommerce Marketing Manager at Kerry, responsible for digital marketing for Kerry’s North American Food and Beverage Brands, including Big Train, DaVinci Gourmet, Oregon Chai, Goldendipt (griddle, baked goods, batters and coatings products) and Golden Ladle (soups and culinary sauces). churchexecutive.com

BEST PRACTICES: PURCHASING AND SUPPLIES

Tried-and-true strategies for keeping café costs in check

By Levi Andersen

So, you’ve opened your church café and you’re ready to show off your operational excellence. Keeping costs down is key — not only in the name of good stewardship, but also to maximize your café’s fundraising potential.

There are three ways to make money from a café: sell more, raise prices, or lower costs.

While selling more is always worth pursuing, raising prices can be tricky. So, the fastest way to make your church café more profitable is to lower costs.

Since most church cafés are operated by volunteers, let’s talk about what it looks like to get the return you seek on your church’s investment.

Start tracking product waste and promote consistent measuring. This is a money-saver you can employ right away (like, today). One effective tool for teaching your volunteer baristas about product waste is to make them pour every bit of leftover milk into one container and excess made product into another. Then, see how quickly it adds up. This is an eyeopening exercise to help barista staff understand how precise measuring can make an impact.

If you serve espresso drinks, lattes are very consistent in how much milk they need. It only varies because of extra flavors or shots, what type of milk you’re steaming, or if they want it extra foamy.

Those three variables aside, you should be using the same amount of milk for each drink, so why not identify how full your steaming pitcher needs to be each time?

I like to use my steaming DaVinci Gourmet’s Drink Profit Calculator helps café operators figure out costs per serving. It also pitcher’s spout as a gauge includes some preformatted beverage ingredients for measuring. If I fill my costs that are editable.

20-ounce steaming pitcher right to the base of the spout, then I know I will have too much milk left churchexecutive.com

Levi Andersen

over. Consider buying a 12- and 20-ounce pitcher for this exact waste issue.

It could save you 5 ounces of milk (at $.03 per ounce) each drink, each week, over years. That’s a lot of “moo-la!”

Use shelf-stable products. To avoid waste related to product spoilage, simply use shelf-stable products. Depending on the brand, powdered beverage mixes can last for a long time — usually, 12 to 16 months.

Liquids might need to be refrigerated.

Also, many blended ice coffee mix powders already have powdered coffee in them, negating the requirement for espresso machines. For chai teas, some baristas prefer a liquid base. Many churches buy shelf-stable Oregon Chai Super Concentrate; just add hot milk or, for iced versions, ice and milk.

Big Train powder chai has a loyal following of consumers nationwide.

Churches that serve Big Train chai are likely to get favorable responses from parishioners. Instead of liquid bases for frappes, you can easily find hundreds of powder options. These won’t be sitting in your refrigerator during the week when you have no ‘customers’ buying them. You might not think this is a problem right now, but are you sure one of your own youth pastors or volunteers isn’t making drinks throughout the week for themselves, with the justification of, Otherwise, it will just go bad!

C H U R C H C A F É S • CHURCH EXECUTIVE

7

What other costs are you simply giving away? When I worked for Caffe Ladro in Seattle, WA, we did something I think is brilliant: we didn’t double-cup, put on a sleeve, or put a lid on any drink. If you wanted a lid (even for an iced drink), then you had to grab one from the cream station.

A few things about this approach made an immediate impact: • Not all people even want a lid, which lowered supply costs per drink.

• It sped up our service times because we didn’t have to hold a drink in front of the customer and ask: “Do you want a straw? How about a sleeve?

No sleeve, but a double-cup, you say? OK, we can do that.”

• It seemed to make people more comfortable with bringing in their own to-go cups because they saw that we really cared about waste.

When crunching the numbers for my own coffee stand near Seattle, I was surprised to learn that it was actually cheaper for me to buy plain white paper cups than coffee sleeves. Also, I went online and bought a little stamp with my logo on it. Making each cup hand-stamped was a nice, artsy touch that people liked.

Do you accept credit cards at your church café? You should! How many folks carry cash anymore? Lowering credit card transaction fees can be an instant lift. Square Up offers a very competitive way to accept cards for payment. They have multiple device options, including a white square accessory that connects easily to mobile devices. It was perfect for what I was doing — no setup costs or monthly fees; only a small withholding when a credit card was used. The really great thing about this tool was that I could use it to manage my inventory and see what was going on at the shop, even while I was away. The real trick here is that if you use it for ringing up cash, there is no charge to you. So, if yours is a cash-only café, you can use it for free.

Can you charge a customer for using a credit card? Where I was in Seattle, doing so was illegal; so, it might vary from state to state. One way to get around charging surcharges is to simply offer a lower “cash price” versus “credit card price.” If you’re going to offer cash customers a discount, it should be clearly stated near the cash register. Consult your credit card company or legal team for more information.

Take advantage of sampling programs. Curious about a new frappe, pancake or fruit smoothie mix? Many beverage mix suppliers offer samples to make it easy for customers to decide about bringing on new products. Kerry Foodservice — owner of brands including Big Train, DaVinci Gourmet, Oregon Chai, Golden Dipt and others — has a very lenient sampling program. Church café managers can contact Kerry Customer Care at (800) 244-8724 for sample requests.

Calculate your margins. This seems like perfect sense; but, surprisingly many businesses guess what their costs are and loosely calculate price points. DaVinci Gourmet has a pretty cool Drink Profit Calculator that helps café operators figure out costs per serving. It also includes some preformatted beverage ingredients costs that are editable. Use coffee?

Enter the price per pound and based upon the size of the drink it figures out cost per cup. Have milk? Enter price per gallon. Enter the price you’re thinking about selling the drink for, and voilà! The profit margin is calculated. This is great for busy café managers who could use some easy tools to track costs and margins and to help set pricing that makes sense.

Once you know the cost per cup for every ingredient, you can make better decisions. For example, if your organic coconut milk is twice as expensive as your 2% low-fat milk, consider charging for the difference in cost — $.50 more for coconut or soy milk, for example.

Aaron Ducksworth has setup five cafés inside of churches. When asked about equipment requirements, he had this to share: “Regardless of whether you’re inside the church or out, if you can, buy it. Or, let someone donate it with no strings attached.”

8

CHURCH EXECUTIVE • C H U R C H C A F É S

As Ducksworth points out, renting equipment might be acceptable for a very short term — six months or less — but he warns against renting equipment long-term. Additionally, he cautions, the premise of receiving the equipment for free if your church signs a long-term coffee bean / syrup / small ware contract “is really just a modified form of financing.”

“Most ‘church coffee’ tastes like it was left over from The Last Breakfast and is just plain awful,” Ducksworth adds. “The first miracle of Jesus was making drinks of exceptional quality (See John 2:1-11), and Christians are supposed to be modeling themselves in His image.

“Seriously, whether you’re a Christian or not, go and read that story and note the reaction of the guy who was throwing the wedding party,” he continues. “He flipped out and specifically mentions how the beverage quality was unlike what was considered ‘normal.’”

Ducksworth makes a good point: whatever your work is, do it the best you can. Your ability to do such fine work is a gift — yet, by and large, we don’t. Lukewarm, brackish brown water served in a Styrofoam cup is the status quo from yesteryear. Churchgoers today expect greater quality and more options.

For a great resource, be sure to download the Why a Church Café? eBook.

A few words about “profit” Business-wise, the Bible says that all things were made by him (God).

This includes basic math.

If your business income is lower than your outgo, then it’s an amenity, not a profit center — at least, according to your profit-and-loss statement, which you should be keeping.

If your café model is not intended to make a profit, that’s fine. Just keep in mind that churches sometimes don’t realize “profit” in the same way as traditional businesses.

Businesses show profit in the form of cash and assets left over at the end of their accounting year. In the church world, the profit rationale might look a little different.

Every church keeps (or should keep) data on how much it’s spending to recruit new members each year. So, OK: your café isn’t set up to make money, per se. But, through the relationships formed as a direct result of its existence, let’s say 25 new members join the church per year. Of those, let’s say 10 begin to give tithes and offerings that collectively amount to $40,000 annually. Assuming $4,000 x 10 new members, it could be argued the cafe made a $40,000 annual “profit” — it’s just rather difficult to plug that into Excel.

Levi Andersen has made coffee in Seattle for a decade. He has owned and operated a coffee stand in the Pacific Northwest and was the Educational Programming Manager at Coffee Fest tradeshows. Recently, Andersen launched the Audio Café podcast to help café owners with their business. Currently, he is the Beverage Product Specialist for Kerry, concocting recipes and menu strategies for foodservice and café operators serving DaVinci Gourmet, Big Train, Oregon Chai and a few other global coffee brands. Andersen attends marketplace tours to taste emerging trends, and speaks at beverage industry events. churchexecutive.com