Latest / Scaling Up with Fexingo: How Small Businesses Become Mid-Market Companies / How a Coffee Roaster Scaled Past 20 Million by Fixing Logistics
Transcript
- Lucas: You ever wonder why a twelve-dollar bag of coffee from a local roaster costs half that at the supermarket? Luna: I always assumed it was just margins — the small guy pays more for beans, roasts in smaller batches, passes it on. Lucas: That's part of it. But the real killer for most specialty roasters isn't the coffee cost — it's logistics. And today's episode is about one roaster that fixed that problem and went from a single cafe to a twenty-two-million-dollar wholesale business. Luna: Twenty-two million? That's a big jump. I want to know how they got there without burning out. Lucas: The company is called Greenlight Roasters — based in Portland, Oregon. Founder Jenna Torres started with one cafe in 2016, then started roasting for a few other shops. By 2021 she was doing about three million in wholesale revenue. But she was stuck. Luna: Stuck how? Demand was clearly there. Lucas: Demand was there — she had over a hundred accounts. But every week was chaos. Her green coffee inventory was tracked on a whiteboard. Shipping labels were handwritten. Drivers would show up at the warehouse and the pallets weren't staged. Orders that should have taken two days took five. And her biggest accounts — the ones paying top dollar — were getting orders late. Luna: So she was losing trust with the customers that mattered most. That's a classic growth trap. Lucas: Exactly. And the thing is, her coffee was excellent. She'd won a couple of regional roasting awards. But operational excellence wasn't part of the culture. So in early 2022, she made a decision that felt risky at the time — she hired a logistics manager before she hired a head of sales. Luna: That's counterintuitive. Most founders would pour money into sales first. Lucas: Right. But Jenna realized that more sales without better fulfillment would just amplify the chaos. So she brought in a guy named Marcus Chen, who had spent ten years at a third-party logistics firm. And Marcus started by mapping the entire flow — from the moment green beans landed at the Port of Portland to the moment a finished bag landed on a cafe's shelf. Luna: I bet that map was ugly. Lucas: It was a mess of sticky notes and arrows. But it revealed a few specific bottlenecks. Number one: green coffee inventory was a guessing game. They'd order based on gut feel, then run out of popular origins three weeks before the next container arrived. Number two: their warehouse layout was pure chaos — seasonal blends were stacked next to single-origin microlots, and pickers wasted twenty minutes per order just walking. Luna: That's huge. Twenty minutes per order adds up fast when you're shipping fifty orders a week. Lucas: And they were shipping closer to two hundred by that point. So Marcus's first big move was implementing a warehouse management system — a WMS. Nothing fancy, just a cloud-based tool that cost about six hundred dollars a month. He barcode-labeled every pallet of green coffee and every finished SKU. The system tracked lot numbers, roast dates, and shelf life. Suddenly they could see exactly how many bags of Guatemala Antigua they had, and when the next shipment was due. Luna: That's the kind of fix that sounds boring but changes everything. What was the impact on order accuracy? Lucas: Within sixty days, picking errors dropped from about eight percent to under two percent. And more importantly, they could promise customers a specific delivery window and actually hit it. Before the WMS, their on-time in-full rate — OTIF, as it's called — was hovering around sixty-five percent. After the WMS and some layout changes, it jumped to ninety-two percent within four months. Luna: And I'm guessing that OTIF number became a selling point. Lucas: Absolutely. Jenna and Marcus started including their OTIF stats in pitch decks for new wholesale accounts. They'd say, 'We deliver on time and in full ninety-two percent of the time. Our industry average is around eighty.' That opened doors at regional coffee chains that had been burned by unreliable suppliers. Luna: So the logistics investment paid for itself quickly. But what about the green coffee side? That's a different beast — international shipping, price volatility, quality variability. Lucas: Marcus tackled that next. They shifted from buying spot lots — whatever was available at the moment — to forward contracts with three of their core origin suppliers: a cooperative in Ethiopia, a farm in Colombia, and a group in Guatemala. They committed to volume six months out in exchange for better pricing and guaranteed allocation. That reduced their green coffee cost by about twelve percent and eliminated the panic orders. Luna: Forward contracts feel risky for a company that size — what if demand drops? Lucas: That's the trade-off. But Jenna's reasoning was that her wholesale base was growing thirty percent year-over-year, and running out of coffee was a bigger risk than sitting on a little extra inventory. And she hedged by using the contract volume as a floor, not a ceiling — she could always order more spot if demand spiked. The predictability on the supply side let her optimize the roasting schedule, which improved freshness consistency. Luna: Freshness is everything in specialty coffee. Roast dates matter to cafes and customers. Lucas: Right. And the final piece was route density. Marcus realized that most of their wholesale accounts were within a forty-mile radius of the roastery, but they were delivering to them on different days — a Tuesday run to the west side, a Thursday run to the same zip code. He consolidated into zone-based delivery days: all accounts in the northwest get Tuesday, all in the southeast get Thursday, and so on. That let them cut delivery miles by twenty-two percent and reduce the fleet from five vans to four. Luna: That's a direct bottom-line impact. Lower fuel costs, less wear and tear, and probably happier drivers. Lucas: Drivers were happier because routes were shorter and more predictable. And the accounts liked it because they knew exactly when to expect their delivery — Tuesday morning like clockwork. One cafe owner told Jenna that switching to Greenlight saved them two hours a week of receiving chaos. Luna: So what did the numbers look like after all these changes? Give me the revenue and margin story. Lucas: By the end of 2023, wholesale revenue had grown to about eleven million. The logistics overhaul had added maybe two points to net margin — from about eight percent to ten percent. But the real acceleration happened in 2024 and 2025, as word spread that Greenlight was reliable. They added accounts in Seattle, San Francisco, and even a few in Denver. Revenue hit twenty-two million in the trailing twelve months ending June 2026. Luna: And the team? How many people now? Lucas: They've got about forty-five employees — up from twelve when Marcus joined. The logistics team itself is five people, including a route planner and a warehouse lead. Jenna told me she used to spend thirty hours a week just firefighting shipping problems. Now she spends maybe two hours a week on logistics, and the rest on sourcing, roasting, and building relationships. Luna: That's the dream, right? Scaling without the founder being the bottleneck. But what about the challenges they still face? No growth story is smooth sailing. Lucas: The biggest challenge now is maintaining that OTIF number as they expand geographically. A Denver account means a two-day truck ride instead of a local van run. They've had to partner with a regional LTL carrier, and that introduces variability. Marcus is piloting a real-time tracking system — think Uber-style tracking for pallets — to give customers visibility and reduce the anxiety of long-distance shipping. Luna: That's smart. The expectation of transparency is only going to grow. If I'm a cafe in Denver, I want to know exactly where my coffee is. Lucas: Totally. And that's where I think a lot of small businesses miss the mark. They think scaling is about marketing or sales. But for product businesses — whether it's coffee, furniture, or pet food — the logistics backbone is what determines whether you can actually keep the customers you win. Luna: Yeah, and it's not sexy. But it's the difference between a company that plateaus at five million and one that breaks through to twenty-plus. Lucas: Jenna's story is a great example of that. And if you're running a business like hers, we hope these conversations move your work forward in some small way. If they do, and you'd like to support the show staying ad-free, listener support is what makes that possible. You can find us at buy me a coffee dot com slash fexingo. No pressure — just a way to keep the episodes coming. Luna: Yeah, and we really appreciate everyone who's chipped in. It lets us focus on finding these stories. Lucas: Alright — back to Greenlight. One last thing that stuck with me: Jenna said the moment she knew the logistics shift had worked was when a customer called to thank her for delivering the wrong coffee. Luna: Wait — that sounds like a disaster. Lucas: Right? But the customer said, 'You sent us the Colombia instead of the Guatemala, but it arrived on time, perfectly packed, with a note apologizing for the mix-up and a prepaid return label. No other supplier has ever done that.' That customer actually increased their order. Because reliability and service matter more than a single mistake. Luna: That's the playbook. Systems that allow you to recover gracefully from errors. That builds trust. Lucas: Exactly. So for anyone listening who's stuck in the five-to-ten-million range — take a hard look at your logistics before you pour money into marketing. It might be the lever you haven't pulled yet. Luna: And if you want to hear more about how Greenlight handled their route density optimization, we'll link to a case study Marcus wrote in the show notes. For now — next episode, we're talking about a craft brewery that scaled to thirty million by fixing their keg return process. Lucas: That one's wild. Kegs are like liabilities that wander off. See you next time.