It’s a bean bonanza for a Baron and a Junkie at Yahava Koffee Works. Russell Quinn reports.
AUSTRALIA’S ongoing love affair with coffee has encouraged local roaster Alex Kok to enhance his wholesale and retail operations in order to target the nation’s java junkies.
The founder of Yahava Koffee Works opened a new store in the Swan Valley last year, and followed this with a move from his operation’s original location in Wilyabrup to larger premises in neighbouring Margaret River last month.
And Mr Kok, who calls himself a ‘Koffee Baron’, is now looking at national expansion.
Yahava’s burgeoning popularity following nine years down south (up to 60,000 customers now pass through the cafe each year) meant the original premises was stifling the company’s growth.
“Ultimately, we were running short on space and we wanted to increase seating capacity and area for merchandise,” Mr Kok told Gusto.
“Coffee is integral but we have a huge range of accessories, all developed with food technicians, like elixirs and flavourings, which make us unique.
“And people were always saying they had some difficulty finding us in our old location.”
Mr Kok says that, since moving to Margaret River in February, turnover has increased 40 per cent compared to the same period last year.
“It’s astounding, I didn’t expect it to move like that,” he says.
“I actually thought it would be lucky to break even.”
The success story has been replicated at the Swan Valley site, which is already well on its way to turning over between $1 million and $1.5 million in its first year, a figure equivalent to the South West outlet’s turnover after almost a decade of operation.
Co-owner Jake McAuliffe, who goes by the moniker ‘Koffee Junkie’, spent more than six months down south familiarising himself with the business before opening the Swan Valley site in July last year.
Mr McAuliffe says the $300,000 spent fitting out the cafe-cum-roasting arena, and $80,000 annual rent, has been well worth it.
“Something like 150,000 new coffee machines were bought in Australia last year,” he says. “People are becoming more discerning in their coffee purchasing, which is good news for our wholesale business.”
Mr Kok explains that the company’s structure was amended after business partner John Batty came on board a few years ago to assist with the development of the company.
The two men own and operate Yahava’s wholesale arm, which delivers about 60 per cent of the company’s overall earnings, after being split from the Yahava management company shortly before the move to Margaret River.
The management company charges IP fees to the managers and co-owners of the two retail outlets – Mr McAuliffe and Harriett Stocker in Margaret River.
Both Mr McAuliffe and Ms Stocker have close to a 25 per cent stake in their respective retail outlets, and both have first opportunity to buy new shares in any future retail outlets either in WA or interstate.
Mr Kok says plans for another Yahava store in Queensland are in motion with an opening date forecast for the next 12-18 months.
He describes the company’s growing online mail-order system as a huge chunk of the business, about 20-30 per cent currently, which is expected to quadruple in the next three years, reinforcing the humble bean’s recession-proof status.
And Yahava, which was the 2009 Telstra Western Australian Business of the Year, is also targeting Singapore and Hong Kong markets with the help of Austrade.