The OG of Organic Coffee: 30+ Years of Growth

Organic coffee wasn’t a trend when Jim Cannell started roasting it. It was a belief and a bet, made years before most shoppers could even explain what “certified organic” meant. I’m joined by Jim from Jim’s Organic Coffee as we trace the real origin story: starting in the early natural foods trade, educating buyers who assumed all coffee was organic, and building demand store by store until the brand grew into a semi-national footprint.

We get specific about the money side, because coffee is a working-capital business. Jim breaks down how vendor terms and net-30 purchasing helped him manage the cash conversion cycle when every bean is imported, and why a traditional bank line of credit only makes sense once inventory turns quickly. He also shares how a merger early in his career created the nest egg that helped launch Jim’s Organic Coffee in 1996, plus how bank financing supported equipment purchases so the company could roast in-house rather than rely on co-packing.

From there, we talk about scaling with intent: expanding from one unit to five, shifting from rent to real estate ownership, and growing beyond grocery into foodservice accounts like cafes, bakeries, and hotels where service, calibration, and consistency matter. We also walk through volatility, including COVID demand shifts, tariff pressure, and serious commodity price spikes, plus the hard-won lessons from 2008 that pushed tighter terms, smarter SKU choices, and more disciplined operations.

If you care about entrepreneurship, CPG financing, organic food, or how a mission-led coffee roaster survives three decades of swings, this conversation is for you. Subscribe, share this with a founder friend, and leave a review with your biggest takeaway.

Connect with Keith on LinkedIn - https://www.linkedin.com/in/keithkohler1/

Transcript

Welcome And Guest Introduction

Keith Kohler 0:03

Welcome everyone. It's Keith Kohler, your financing man here with the latest version of how I financed it. And again, by way of background, what I do is I help clients get the right financing at the right time. That's Transaction Me. And I meet them where they are and guide them along their financing journey. That's Transformation Me. So transaction plus transformation equals financing man. And today we have a great guest who I had the pleasure of working with on financing. Really a very long and interesting career in the coffee space. And we can't wait to see what cooks up and what percolates today, right? So excited to bring to the how I finance this stage Jim Cannell from Jim's Organic Coffee. Hey Keith, how are you? Great to see you. Glad to have you with us today. And I I could have strung together a few more verbs of metaphors on coffee, like percolating and what's brewing and absolutely.

Jim Cannell 1:07

Yeah, yeah, yeah. No, no shortage of those. Yeah. Staying grounded, you name it.

Building The First Organic Roaster

Keith Kohler 1:12

Staying grounded, that's even better. I didn't think of that one. Okay. You know, Jim, you've been at this a minute, right? Um, you you started gyms several decades ago.

Jim Cannell 1:22

Uh as a matter of fact, 1996, uh, we celebrate 30 years uh, or excuse me, to 2026, we celebrate uh 30 years of gyms organic coffee. Um, the founding was in 1996, and um you know, we're happy to have hit that milestone. And it's as we talk to you know, various people in the natural space, in the organic space, it's nice that uh veterans, shall we say, are like, wow, that is really something, you know, and we're we're not always one to sort of toot our own horn, but um yeah, it is something to sort of hang our hat on, and you know, 30 years, all organic. Um, and you know, yeah, we're we're proud to do that.

Keith Kohler 2:12

Yep. Probably. Isn't it true that thinking that since it was 1996, you were probably one of the very first to be organic?

Jim Cannell 2:20

Uh that is correct. Um, so the longer story goes back to 1992. Um, that's right. Yep. Uh when um I started the world's first all organic coffee roaster. Um and so that's kind of where the the the company-owned part of it begins. Um prior to that I've been in the coffee industry as a broker importer of of green coffee. Um uh but yeah, in 1992, I set out, I started a company that still exists as a brand today called the Organic Coffee Company. And I knew that I wanted to do organic. Um, and I knew it wasn't like, oh, there's a market niche for it, you know. Uh it was just like I like coffee and I want to do organic. And I mean, I didn't know who Whole Foods was. Um, I didn't know anything about roasting uh like on any kind of small or large industrial scale, but this is what I wanted to do, and this is that's that's how we started.

Keith Kohler 3:37

Yeah. So you really created the market, right? There was not a quote unquote white space or a market demand that you perceived.

Organic Rules Before USDA Standards

Jim Cannell 3:44

Uh that is correct. Yeah, that is correct. Certainly the the origin story in terms of the desire to do it and the mission, it was about like I I believe in organic, this is what we want to do, you know. And certainly, you know, over the years, um we've seen, you know, other companies, you know, embrace organic for the trends and things like that. But we've also seen a lot of those companies sort of come and go over the years as well.

Keith Kohler 4:14

Um you founded the company, was organic at that time the same thing that it is today? Is it a similar definition or similar guidelines?

Jim Cannell 4:26

Um when I start so when I started the first company, 1992, um, same definition, which is you know the basic definition is grown without synthetic pesticides or fertilizers. Um but at that time it was before the USDA slash NOP program was put in place.

Keith Kohler 4:46

Ah, before a standard was set, right?

Jim Cannell 4:49

Before a standard was set. And so um the you know, hats off to the organic industry for recognizing early on we need a certification standard. And so at the time, you know, certified coffee, which of course the coffee's grown all over the world, um, yet at the time the the primary certifiers were all in really North America or or Europe. And um, so they it was kind of challenging for them to get to the coffee farms, whether at the time it was like said say Mexico, Guatemala, Indonesia, Peru, um were about the only places where you could where we were able to buy a certified organic coffee. Um and but then by 1996, you know, the NOP had come into place, and we started to see more offers from other countries, be it Ethiopia, Colombia, um, you know, you name it now, there's a a variety of sources where you can get great organic coffee. Yeah.

Selling Organic Coffee Store By Store

Keith Kohler 5:56

So awesome. I mean, I had not realized you were really one of the creators of the industry and of the market.

Jim Cannell 6:02

But but sort of back to like kind of the original question and the white space sort of thing. Um the the only place you could really sell an organic coffee was a natural food store. You know, they're the only time.

Keith Kohler 6:17

Yeah.

Jim Cannell 6:18

For the most part, it was like the only sort of people that recognized that was like, oh, you've got something that's organic. You know, that's something, that's what we're all about. That's what we do here. And um, again, literally, it was, you know, going to like libraries to Xerox copies of yellow pages around the country uh to get names of natural food stores. And and some of them are were the mom and pop kind of pill store places, but some of them uh you know had a burgeoning uh uh coffee business, um, bulk foods and things like that. Um but it again it was it was strictly confined to the the that natural space. It slowly started to evolve, so which has been certainly great for us, where we do a lot of business in independent bakeries, cafes, hotels. Uh people recognize that, you know, they recognize the quality of organics that they want, and they sort of rely up on us for, uh, but also, you know, they don't have to be an all-organic hotel or you know, bakery in order to serve a really good organic coffee that that you know says a lot about them and what they support as well.

Keith Kohler 7:39

In that initial period, too, when you were just starting out and selling a product, did you have to do a lot of education, consumer and and trade education, or um from other places, or how was that at that time?

Jim Cannell 7:51

Yes, absolutely. Um, but but there is a there's an example where um in the early days, if you went into a restaurant or something like that, you know, their their reaction might be like, well, isn't all coffee organic? Like, huh?

Keith Kohler 8:10

Like really, that was a that was a initial reaction.

Jim Cannell 8:13

It might have been an initial reaction. So you know in order to sort of um uh go where the education already was, is why we really you know spent so much time in the natural foods trade where there was already uh a passion for it and things like that. Yeah.

Keith Kohler 8:30

So you were truly winning stores one by one by one, right?

Jim Cannell 8:34

One by one by one, yeah. Yeah, even um sort of the back in the day uh at at Whole Foods, for instance, you know, you'd might be able to catch the uh the bulk buyer either on the phone or you know, at a trade show, and they might be they place an order. Um, so certainly, you know, to their credit, they've grown, but like those layers are not what they used to be. Yeah.

Keith Kohler 9:01

And when you started out, did you have packaged and bulk or some combination, or what was that initial product offering?

Jim Cannell 9:09

Correct. It was uh packaged and bulk, yeah.

Keith Kohler 9:11

Yeah.

Bootstrapping And The Cash Cycle

Jim Cannell 9:12

Um, so the uh uh the small grocery bags um of about 12 ounces, um, and then the bulk five-pound bags, where they again in in the natural foods trade, most of those would go into bins, so consumers could help themselves to either a quarter pound or a full pound. Um that has also changed considerably um because I think people are sort of recognizing, I mean, there's still bins out in the field, but the cost of the upkeep cleaning them, that sort of thing, more consumers just want to grab um a bag of coffee, and um you know, they could they could bag it grab a bag of coffee off the shelf and just put it in the cart and they're good to go. And and truth be told, it's actually fresher that way, as a matter of fact. Yeah.

Keith Kohler 10:12

I can imagine. So here you were starting out in retail stores. What was your initial financing when you first got the product off the ground?

Jim Cannell 10:22

So um we have just bootstrapped this from the get-go. And um so again, prior to starting the first company in '92, I'd been um my my very first job was in the coffee business, um, which was down on Wall Street, um, as a green coffee broker. So we were um selling from importer to importer um or importer to large roasters. This is um uh again, mid-80s, where you know, there there wasn't a roaster on every street corner. You know, there wasn't even a cafe on every street corner.

Keith Kohler 11:02

Yeah, there wasn't the proliferation of coffee culture at that time, right?

Jim Cannell 11:06

Absolutely, yep. Yeah. Um, so but at any rate, um just from you know being in that business and then uh knowing, you know, after doing it for a couple years, I did I saw some of the specialty coffee roasters around the country, and I was like, oh, this is interesting. And then again, the desire to organic uh to be organic led me to be like, okay, this is what I want to do. Um, but essentially, you know, saving some money, you know, at one point I sort of moved home and was, you know, with my parents and was able to sock away um some money, and that's where it where really the initial uh sort of seed capital came from. Um and yep, yep. And it was um uh again, early days, it was um just doing what I could. If I needed to pay myself, I'd I'd kind of I'd maybe write myself a check and then I'd kind of back out the the payroll taxes after I wrote the check. So yeah, it was like strictly cash, strictly cash flow. Everything went back into the business. Yeah.

Keith Kohler 12:20

I was curious, Jim. In those initial days, probably like it still is today, all coffee is imported, right? From correct territories around the world. How did it look in that initial period in say a cash conversion cycle? Like you had you laid out money to purchase inventory and then you you landed it and you sold it. What did that kind of look like? Can you walk us through that?

Jim Cannell 12:41

Sure, absolutely. Um so again, back in the early, early days, the only place where we could get certified organic coffee was out of the port of San Francisco. So yeah, these were importers that I'm you know were were you know friendly competitors, or I still buy from people I've worked with over years and years. Um but but certainly San Francisco was more developed in that than New York said. Um and it would be a question of, you know, you we'd we'd be buying on net 30 terms, um, and you know, we'd we'd just uh turn over pallets um bit by bit. Um and so um the you know, we might get not a full, certainly not a full truckload, um, but we'd get a couple pallets in, we'd turn them over, and then get another couple more pallets, you know, that sort of thing. Um so from a financing standpoint, um didn't have a line of credit just yet, um, and would just work with um vendor terms to um uh finance those purchases.

Keith Kohler 14:03

That's and of course, that's one of the best financing sources out there when you when you can get it. So that's great you had that early on.

Jim Cannell 14:11

Uh yes. Now, as we've gotten bigger and everything, um, I do uh we have a line of credit with traditional bank that we will use periodically. Um but the reality is now we turn things so fast that we're bringing in you know a truckload of coffee every two weeks, every week. We we do still rely on some of that vendor financing. Um and but as need if need be, I'll dip into the line of credit. Um, maybe for a coffee that doesn't move as fast, and we we need to make a larger purchase of it or something like that.

Merger Exit And Restarting With Capital

Keith Kohler 14:58

Yeah, so as long as the inventory is rotating quickly, correct, then you're in good shape. So what so you found you financed it yourself up to a certain point, and then you got the line of credit, and that was your first outside capital, or was it um pretty much.

Jim Cannell 15:14

So the the full the full story is you know, organic coffee company I I built up. I actually um, and this is all whatever it's 30 years ago, it's all sort of public knowledge. I I um got a merger offer from Allegro Coffee of Boulder, Colorado. Um so Allegro came to me and said, We like what you're doing, we want you to be part of this. They were much larger than than uh I was at the time, and it was like, okay, this is great. You know, let's put the two companies together. Um, so I did that deal. So from a my stock in my company, Organic Coffee Company, became Allegro stock. It was emerging. After about a year and a half, and this happens all the time, where you know, small company gets acquired, and you know, it doesn't really work out the way the original entrepreneur entrepreneur uh desired. You know, everyone went in for the with the best of intentions, but it doesn't always work out, as you know. Yeah. Um, so I said, hey, thanks guys, I'd rather be back on my own. And so essentially they said, okay, great, well, that's fine. They didn't want me to own their stock when I wasn't working for the company. So um they make sure I have this right. We they sold me back the stock. Or they bought the stock. They bought their stock from me. Yes, exactly, exactly. So um, so that gave me a nest egg to start gyms.

Keith Kohler 17:02

Oh, I see. So that was the original financing.

Jim Cannell 17:05

That was, yeah, yeah. So so we we took my my dribs and drabs of of what I've saved up and put into organic coffee company, and then it became, you know, a little bit more of a pot. Uh, but again, this was, you know, okay, certainly it wasn't like uh, you know, looking at retirement or anything like that, you know. Um and so with gyms then, so we we were able to sort of uh take that money and leverage it um through just essentially like a uh a working capital loan to um again, traditional bank, much looser days than they are now.

Keith Kohler 17:54

Very different days than now.

Jim Cannell 17:56

Yeah, yeah, yeah. Where it's like, okay, you've got X amount of money, we'll be happy to loan you 80% of that money, you know. Now that number would probably be like 50%, you know. Um, so I was able to do that um and then use that money for the equipment that I needed, you know, on a higher level basis to get gyms going to the way I wanted it to be.

Why Roasting In House Matters

Keith Kohler 18:23

At what point did you decide to have the facility that you're in now that you said, hey, I'm gonna roast my own and have a manufacturing facility?

Jim Cannell 18:31

So I've I've always, you know, even with organic coffee company, we always roasted our own. I mean, oh yeah, absolutely. Off absolutely. Coffee is, you know, it's a craft, you know, it's it's a passion. Um, I do know that in like CPG Consumer Package Goods 101, they'll tell you, no, no, no, go to a co-packer, yeah. Yep, yeah, absolutely. You know, go to a co-packer, that way, you know, your money's not tied up and that sort of thing. Um, but um I just don't think that applies for coffee, you know. Um, we've you know, um we've got our plant here. Um so we've we've always done that, roasted our own, sourced our own. Um people, coffee consumers recognize that and they uh recognize they've they've got a pretty high, what you might call like the BS meter. You know, they they can sniff out BS, you know, pretty quickly. And you know, if if I mean there are companies that are out there that do take that have coffee co-packed, I mean, certainly we're not one of them, you know. Um, and I mean it's it's it's it's a passion project, you know. We love our coffee. Um we work very hard to produce an incredible coffee, and the only way to do that is when you're doing it yourself, you know.

Keith Kohler 20:11

So you got the um as you grew, you got the money from the stock uh repurchase from them. You're buying the equipment. Was it always in the facility that you are currently sitting in now?

Foodservice Growth And Equipment Financing

Jim Cannell 20:23

Yes, it was always in the facility um where we are now. Uh we started out, it's it's one of these kind of like business bay buildings. Um you, of course, have been here, Keith. Um, but it's uh pretty classic, you know, high ceilings, you know, office in the front, small office in the front, and warehouse in the back with the dock space. Um so we started out with one unit where there was the office in the front. Um, there wasn't even uh a second floor to it. Um so we had, you know, one person, two person, then three people up in the office, and then the back is where we had uh one roaster, uh one packing area, and and the shipping. Um and this was in like a uh 100 feet by 25 foot facility, you know. So we just turning things over, and and then um as we grew, um I was fortunate, you know, at the time I was renting, um, and uh the landlord um kind of was like, you know, I think I'm interested in selling the building, and you know, we got into a nice conversation and we worked out a nice deal where you know I didn't have to buy it right away, but eventually I bought not the entire building, but a couple units, and then a few more units became available. So so right now, um, you know, we occupy five units uh that you know we own, you know, and and that's been a really good thing. Again, from a financing point of view, um better to uh um uh uh uh you know get the value of paying a mortgage rather than paying rent. Um and it's also uh allowed us in the banking relationships they there's there's nothing better for the banks than real estate you know they're it's the collateral they love most for sure exactly exactly i mean they they you know again they we have great relationships and we know that you know they you know they're not interested in the equipment we have and things like that but you know having that real estate um helps the relationship certainly yeah yeah so you grew from one to five over and about how many what was the year span for that um I'm gonna say I I think it's about 10 years yeah yeah so so let's say maybe starting in uh not 1996 but 1999 maybe and then bought two and then bought the other three um so yeah uh so that's kind of when it started yeah brilliant so the over that kind of 99 to 2009 uh getting the physical plant much larger tell us share with us a bit what was going on in the trade at that time how did you expand your your retail footprint or other channels that you explored yep absolutely um so in the trade um it's just really it's been ongoing you know there's been you know years where we've had stronger growth and and some that are flat you know um and that's okay um within the trade as organic has matured we saw like I touched on earlier more interest in outside that natural foods trade these cafes and the bakeries um and one of the things from a financing standpoint that they that growth in that part of the world has required is coffee brewing equipment and grinders um so the somewhat unknown thing is that oftentimes you go into an establishment that's serving coffee and there's a bunch of equipment there's refrigerators ovens you know all that stuff oftentimes it's the coffee roaster coffee supplier that provides that equipment um so in order to grow there's been a function of how much equipment you can put out into the field um and hoping and it's it's uh some oftentimes it's a crapshoot because you know new business it I mean a new restaurant you know is the riskiest business on earth you know um and of course they all think they're gonna be successful um but it doesn't always pan out that way um so the but nevertheless um that big change in terms of being able to go into these bakeries hotels coffee shops and provide them with the equipment and sell the pounds because oftentimes that's where the volume is um you could sell um if you're a single supplier to one establishment that's brewing your coffee every day is can be much more reliable and a better steadier volume than a grocery store where you a consumer goes into the store and has gym's organic but they've got maybe 20 other selections to choose from and it could be a mainstream supermarket which of course then you you know you've got your Maxwell house you've got your Starbucks you've got your Pete's so there's competition from all sides um so um that breaking into that sort of non-trade business has been great for our pounds um and that's kind of benefited everybody now I should say that somewhat since COVID and over the years if as margins have shrunk um and just everything's gotten more expensive we don't really get involved in we'll we'll we'll sell equipment like at our wholesale price but we're not in the business of just giving it out like we used to you know um exactly it it did certainly help in terms of rapid growth at the time but we and most roads have dramatically backed off that over the years yeah it makes a lot of sense right because the cost of that plus will the business survive or if it doesn't do they return the equipment or did they sell it in the open market or what would happen in those scenarios? Yeah uh generally I mean we'll be able to get equipment back but um yeah certainly we've had some times where it's been it's been lost and nothing you can do about it. Yeah.

Keith Kohler 27:39

And at the same yet at the same time as you mentioned having that equipment on premise meant more loyalty more likelihood that Jim's was going to be perhaps one of the few selections offered versus as you said in a grocery setting where there can be a cast of thousands. Correct exactly yeah yeah so when you think of this growth Jim over time are you do you mind sharing with us like about how many locations are you in today?

Jim Cannell 28:08

So of course yeah we're so we're at about um 700 grocery outlets um nationwide and um when I say nationwide I mean we're we're really sort of a semi-national brand it's it's more up the up and down the eastern seaboard and certainly strongest in the Northeast. But we do have some great pockets of retailers in the Denver area even Southern California um and so those are mostly either traditional uh natural food stores um or uh conventional stores that have their organic sections um then in addition to that um we have about 250 maybe 300 solid growth uh excuse me what we define as food service accounts oh food service okay service bakeries cafes places that are brewing the coffee primarily um and those are are much more confined to the Northeast really New England um and then less so down in the New York area as well does the concentration in New England beyond home cooking right have something to do with the cost of transport let get it set up at your uh your customers does that have something to do with the footprint as well um yeah yeah um yes certainly freight is part of it but it's a service thing as well um so in the in the natural foods world as you know there's you know there's a broker network that helps take care of customers and things like that um in the food service world it's um people the the supplier wants us to take care of them to make sure they're brewing consistently great coffee so they'll come to us and say you know I just I want you to take care of me I want to be I love your coffee I get it at some other place and you know I want it I want ours to take taste like this day after day after day. So in order to do that I mean we'll we'll get their equipment fine tuned to be to be grinding right and to be brewing right but it's an ongoing thing because over time you know maybe the grind particle size change or you know the brewer doesn't what it's called throw doesn't put out as much water as it used to and it needs to get tweaked. So my sales team in addition to sort of our quality control team um help take care of that with our customers out in the field. So again that's that's a that and and that holds true regionally you know all over the country um so hence the reason we're it's more of a New England footprint so it's it's in our backyard. Yeah.

Keith Kohler 31:13

I totally get it it's quite it comes back to the quality and the service level. Exactly yeah brilliant Jim and so you know over this long period of time when you reflect upon these 30 years I was curious if you could share with us how you've built out your organization over that time.

Jim Cannell 31:32

Great. So I mean I'm still the CEO you know chief bottle chief bottle washer I've I've done just about you know really kind of everything here over the years. But it it I'm fortunate to have wonderful people you know working for me. And the the way we're set up now is it's it's almost like we have a a director of operations and a director of administration and it's it's almost like front of house back of house. So my director of ops john he's running the plant on a day-to-day basis you know coffee coming in overseeing quality control making sure it gets packaged right and out the door um and then Tina who's director of admin is really the business manager she's running the books she's doing all that stuff um and so that's kind of how we fall and then from there of course it goes down to um you know all the the people ever the wonderful people that are working in the warehouse customer service and then sort of sales and marketing which really kind of sales and marketing I guess yeah I oversee that um but same thing I'm fortunate to have great people that are um uh taking care of things they you know they don't like probably being a sales manager is not my strong suit um but fortunately I have people that are motivated so they don't need that management um they need management in terms of like I'm happy to help them out with the customer and things like that um but they don't need the motivation to sell more cases or anything like that. Yeah.

Keith Kohler 33:32

It's interesting when you bring that up Jim because I think in my dozens and dozens and hundreds of conversations with founders this is the area where most people find often find it difficult. It's nice that you're talking to us saying hey I have great people not everybody always says that when I when I talk to founders they seem to sometimes have struggling with finding either people who share their same values or who have the competency to get the job done. Or in your case as you said it seems like you've got a great group of self-starters who they get their stuff done and you happily don't have to provide a lot of oversight or feel like you have to micromanage things.

Jim Cannell 34:18

Absolutely um and and that it's it doesn't just limit itself to sort of the sales and marketing team everybody here you know great staff been here a long time um we we we do our part we take care of them absolutely yeah yeah what a great blessing because again I think you would agree that is a bit of a unique path to have that success in getting the right people and probably many people have been with you for many years. That's definitely the case though I mean certainly over the years yeah we've we've um uh from a I I have an undergraduate degree in economics I did not go to business school so my my business degree is kind of I've made every mistake you can possibly make um and some of them a few times but even there you know uh again that's reality sometimes you you hire people and everybody has the best uh intentions and it it it could be a couple hours in it could be six months in and you realize well wait a minute wait a minute this isn't the right match so over the years though we've gotten better at you know identifying people and and getting that right match to start yeah brilliant um I think Jim again you've grown the store count you grew the on-premise you grew the food service and again the financing between the uh line of credit I imagine grew as you grew and then of course the real estate financing as well got you to a certain point and then we worked together on that one financing for additional work and capital.

Keith Kohler 36:06

Absolutely yep yep and that was exciting to support you because you've all when I spoke with you what I was captivated by was a very very committed vision and I know how I'm going to execute on it. Yep you were very clear on that with hey this is the salesperson I need or I'm gonna build out build that out this is exactly what I'm gonna do and that and that's something I think that comes not only with experience but a real dedication to being very precise and being and doing the doing the work doing the true analytics.

Jim Cannell 36:43

Yeah well thank you Keith and I appreciate you um again it was uh fortunately that we met at at Bob's uh Bob Burke seminar that we uh know and love um and um it was a great way you know that we you know still have to kind of supplement the other financing that we have on the books and um it's been really nice again the sub supplementing the traditional financing that you know even though it's sort of backed by a mortgage there's a certain amount of um uh uh restriction for lack of a better term and um the um it it it's it's a little less flexible than the stuff that we worked on. Um so as a result it gives us opportunity where sometimes you don't know what's gonna come your way and um it it it it takes a lot of that risk out and you know there there there may have been a small premium for it but I think as you look at risk and things like that it it's well worth it yeah no question.

Volatility: COVID, Tariffs, Price Spikes

Keith Kohler 38:09

I'd love to pick up on what you just said about risk because I think even for folks outside of CPG maybe in just general parlance or when we see on the TV reports about the economy things like coffee comes up right uh when people talk about tariffs and supply chain and um broader macro issues we hear about commodities.

Jim Cannell 38:34

And so I'm curious when you reflect upon the pandemic years and since then can you give us a bit of um walk down memory lane about how have you handled these these unexpected maybe some expected or secular swings I'm really interested to know that part of the story yep so the more the more recent one was the um real real um spike I mean serious spike in coffee prices and then tariffs on top of that and it was and remains challenging um and you know we couldn't pass things you can only pass on so much you know and we also we we didn't want to be you know the brand that's you know changing prices every couple months things like that we want people to look to us for solid reliable high quality coffee um but we you know we want to keep it reasonable you know um so that's been you know a recent challenge and uh you know I don't have a crystal balls I don't know where prices are going you know uh it could be anywhere you know um and and then you take an example like again who who in 1999 or who in 20 who in 2019 getting my decades wrong again um my centuries wrong um who in 2019 you know foresaw covet coming you know and we we we managed that um for I remember um as as it was all sort of happening fortunately being in the food business we were a I forget what the term was an essential product um so we were you know we were um allowed to stay open um again we weren't a retailer so we were shipping to distributors and and actually like at the time like Amazon for instance we just kind of you know we we Amazon is a partner you could buy our coffee on Amazon but we just kind of got in our act together there so um that took off you know it was incredible yeah um not drinking on premise but they were certainly drinking at home everybody was drinking at home exactly um and um but again anything could have happened there um so we managed that uh when you talk about risk again we were all talking about the the health risks and things like that we had customer service of course they didn't need to be here so they weren't here we'd figured out a way for that they could work from home um very quickly we we'd already had some systems set up and we just kind of had to improve them um but even the my the discussion was like I mean I'm like I I want to be in the office you know I want to be on the floor with the warehouse team and you know the early nobody knew what the what the virus was doing and you know John the production manager he's like we can't risk me being there and you being there and and one of us being down you know so I was like oh yeah I guess not I guess I I need to sort of stay at home which I didn't want to do but and anyway um that's how we sort of kind of managed that risk and we we came out of it okay um uh we talked earlier about like the the difference between bulk and bags and like bulk sales went to like hardly anything so the bag sales took off and you know we we we'd that it was a trend that had been go was um had been going on for a long long time and and um so we were able to sort of meet that need um but again you don't who knows what's gonna happen next you know yeah yeah so really it's these have been the most volatile times right since pandemic and and to now when you over that 30-year history of the company yes and um yeah I could go back again we're talking financing and um it it's it was 2008 like the mortgage crisis mortgage crisis mortgage crisis where we were again we're like we we were almost like letting customers dictate their own payment terms to us they're like oh we'll pay you whatever and we weren't really uh uh doing a great job of like following up on those kinds of things and I at the time I was like you know I should probably maybe bring a partner in and you know seek some outside capital and um the at the time I spent a lot of time pursuing that but sort of the a lot of that money was withdrawn from you know the markets and things like that. So again kind of in hindsight fortunately no I never did a deal but I sort of turned my back on I mean I don't want to say turn my back in a in a negative way but like rather than focus on raising cash Capital, I focused on the business, you know, and like okay, these are the changes we need to make. We need to rein in the terms. We need to, you know, get rid of. We've got these items that aren't selling. Why are we why are we keeping them? Okay, there might be a pain point for a couple customers, but let's get rid of them. And we I took the time to focus on the business, and of course that um has been good in the long run. Yeah.

Keith Kohler 44:26

Yeah, you really became very surgical, right?

Jim Cannell 44:29

Looking at tactical, I imagine. Yes, exactly. Exactly. Yeah. And and yeah, identifying, you know, which are the good sellers, which are the high margin, which are the low margin, you know, do making and somewhat, you know, making those tough calls as need be. Um, and some involved staffing, um, and to to you know, make ourselves a better company um uh uh on the other side of it. Yeah.

Next Chapter And Founder Reflections

Keith Kohler 44:58

So Jim, here you are today, now 30 years in. When you think about the next years, right? What could come? Is it new clients? Is it new products? What are some of the initiatives that you're thinking about?

Jim Cannell 45:13

Um so uh we've got some you know uh great things uh on the docket for the rest of this year, um, which uh I'm gonna sort of keep close to the chest for now. Absolutely fine. Um we're really excited about that. Um we're we're really excited about again, just like the staff that we have and um some some new people that are maturing into their roles, uh, which is great. Um I'll also kind of mention we we're onto the second generation. My youngest daughter, um uh Margot, has been working for gyms for now two and a half years, um, and that's been great. Um, it's uh we we've got um in in terms of new products, there isn't much that is like we have something going on there that's like a brandy new product coming out, but we are gonna be making some tweaks to things um that we're looking forward to sort of launching in the second half of this year. Um, and um with that, it's just kind of it's it's I don't want to, it's a little more of the same. I mean, the coffee business is a great business. Um we we've got great relationships with people at Coffee Origin. I've done some travels recently to go go down and see them. I look forward to continuing to do that. Um, and as we there's a little bit of this um uh with growth comes more growth, and the brand gets gets recognized out there a bit more. And both from a grocery standpoint and from that food service standpoint, we're as we take this, is a kind of always been our thing, is like take care of the customers, take care of the existing customers first, and then things are gonna come back to to to it to us in good ways. And it might be that someone, oh, I've been buying your coffee coffee at Whole Foods for years, and now I'm opening up a coffee shop, you know, and how how do let's talk? What do we do? You know, or you know, I see your coffee someplace and I want it in my store, you know, all those kinds of things are kind of building upon themselves, um uh which is which is certainly a good thing, yeah.

Keith Kohler 47:45

Yeah, when you've been in business that long, there's that diaspora, right? Folks who worked in one setting and then they go to another one. Well, I've got to take Jim's with me.

Jim Cannell 47:53

There you go. Yeah, as a matter of fact, we had a c a person come in for sort of a plant tour who's working for a new company earlier this week, and um he's he's taking a look at putting us uh into some of his hotels, and so that's great. Yeah.

Keith Kohler 48:09

Jim, it's quite a story, right? Over 30 years. Thank you, Keith. Yeah, when you think of weathering ups and downs, um expanding your physical plant, uh, the financing grew with you, and able to get uh a capital stack that made sense, not just from the cash flows, but also the collateral and all the other things that go into financing so that all the parts could fit together. And I have a traditional way of winding down our conversations. And as I say thank you, and and we get to that point, my first big question to you is what are you most proud of?

Jim Cannell 48:50

Um I will say I'm most proud of being part of consumers' day. You know, a small part of them enjoying that cup of coffee, whether it's at the kitchen table or at a cafe or in a to-go or in a you know, their thermos that they take to work or something like that, that is something that I and we are all very proud of. You know, it's a it's a it's just a little part of their day, and I know that the the taste coffee, the taste of the coffee is part of it, but another part of it is the organic origin that I believe our customers recognize and appreciate, and that is you know, in turn the farmer relationships and the wonderful places all over all over the world where the coffee's grown is you know something to be proud of. I great question. I appreciate that, Keith. Thank you. Yeah.

Keith Kohler 50:10

Thank you. And our second one is Jim today in 2026. Now looking back, what would you tell Jim in 1992?

Jim Cannell 50:21

Um I would probably it it's not a path that we took, but if it it it may have been, again, no regrets are of course ever, um, but it may have been um take a look at outside capital. You know, things may have been differently, may have gone differently, if early, early on, um I rather than just bootstrapping it the way I did, if I sought, you know, seed capital to build something bigger, I could have done that. Um and at the same time um done the research and listened to more people that were in the industry, which would have been the that more traditional way to do it. I wouldn't have said I wouldn't have copaced necessarily, but um it it could have been uh a different and and potentially larger scenario had I done that earlier on. Yeah.

Keith Kohler 51:48

Do you think that was if I can explore that just a little bit? Do you think it was because you had a bias towards bootstrapping, or was there anything perhaps equity was either daunting or fearful or anything, or I just I didn't I didn't know any better.

Jim Cannell 52:05

I didn't know any better. You had not seen examples of that. Exactly. Exactly. It was uh again, um I had my path forward that was like, okay, this is what I'm gonna do and kind of how I'm gonna do it. And you know, it it honestly didn't occur to me. And if you'd asked me, you know, 25 years ago, it would have been my answer would have been like, no, I don't want to be um, I don't want the responsibility of um being beholden to someone for their capital.

Keith Kohler 52:40

And all that goes with it, right?

Jim Cannell 52:42

And all that goes with it. Yeah, exactly. And and and and that so to so now when we talk about quality and things like that, it's like we're you know, we do what we want, you know, we do, we put out great coffee, and it's a function of because we want to, it's it's not you know, answering to somebody else who might say, Well, I can, you know, you need another point of margin and find a way to get it, you know.

Keith Kohler 53:09

Yeah, it's really it's a great way to conclude our discussion because it's it's a conversations founders get to have with themselves all the time, right? The great news for you is even though there might have been some trade-offs, maybe, hey, I could have grown it a little faster. I think what you can certainly say is you grew the company that you wanted for yourself and for your impact, your legacy, your your customers, your consumers. It is it's Jim, it's his values, it's his way of doing business, and it's his product.

Pride, Lessons, And Closing

Jim Cannell 53:41

Absolutely. Yeah, well put. Well put. Um, and and let me also say, Keith, again, thank you for everything. You've been a great partner, and your knowledge of financing and the the deal that we worked out that was, you know, um required some finesse, you know. Um you uh you really saw it through and you looked at it, you know, again, from every angle um to make sure it was a win-win for everybody. And I really, really appreciate that.

Keith Kohler 54:16

And uh yeah, it's completely my pleasure, Jim. And you know, when I think about your why I'm here, right? Because here you build an amazing business. And then there was that just an additional opportunity that I could play a role in one chapter of the 30 years of it all. And so, you know, really, Jim, thank you for being with us today here on the How I Financed It stage and telling the story. And maybe you can end it with the best metaphor about brewing percolating. Give give us one to end it off.

Jim Cannell 54:48

Oh my goodness, pressure's on. Um uh uh wow. Um I just I'll just talk to coffee in general and what a wonderful business it is with you know great people from a lot of people touch it from origin to the importing to the the baristas out in the shops to you know the business owners and the and and finance people. Um it's a great business, and I'm just really, really happy to play a small part of it. Yeah.

Keith Kohler 55:24

You're wonderful, Jim. Thank you so much for joining me today. And this is Jim and me signing off for this episode of How I Financed It. Thank you, Keith. Thank you so much for joining me on this episode of How I Financed It. I encourage you to reach out to me on LinkedIn at Keith Kohler1, and I look forward to connecting there.