The Power Up ⎯ SN.01/EP.01
Why You Should Let Marketing Guide Your Sales Strategy According To Sagebrush Coffee
Tune into Matt’s conversation with Sean to discover how, and why, Matt has expanded his business over the years and the role marketing has played in that growth across various channels.
During the episode, Matt shares, “It’s weird because it’s not like I can buy toward the trends throughout the year. I have to buy upfront and then figure out over the course of the year where it’s going to slot in best. It’s part of why we opened up so many channels.”
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About The Business
Business name: Sagebrush Coffee
Founded: 2012
Founder & owner: Matt Kellso
Location: Chandler, AZ
Website: https://sagebrushcoffee.com
Sales diversification strategy: E-commerce, monthly subscription service, coffee shop, wholesale
About Our Guest
Matt Kellso, founder and owner of Sagebrush Coffee has long been obsessed with coffee. In fact, he used to eat coffee beans like candy as a kid. And years later, Matt still couldn’t stay away. As an engineer, he would work in his local coffee shop every day while trying to recreate his favorite roast of coffee on his kitchen stove every other part of the day.
In 2012, Matt’s passion for coffee finally turned into a career with an e-commerce store. After struggling to break into the market of a good cup of coffee at a Starbucks price point, he pivoted to bringing the best coffee possible to people’s homes. Through his work, Matt finds importance in highlighting the hard work of the farmers, processors, and exporters while providing educational tools to serve the needs of premium coffee lovers.
To discover how Matt markets high-quality coffee across different sales channels through marketing, listen to the whole episode on The Power Up.
Full Transcript
Sean (Thrive): Hello everyone, it’s Sean from Thrive with another episode of The Power Up, where I meet with successful small business owners and operators to learn about their business strategy so you can take their insights and level up your own business. Once your business is ready to expand, knowing where to start can be overwhelming. Our guests have some creative solutions for how they’ve tackled tricky problems and turned them into growth opportunities. Now let’s dive into today’s episode.
Our guest today is Matt Kellso, founder and owner of Sagebrush Coffee. From eating coffee beans like candy as a kid to working in coffee shops every day as an engineer to trying to recreate his favorite roast of coffee on a stovetop kitchen, Matt’s passion for coffee finally turned into a career.
In 2012, Matt was determined to make high-quality coffee available to everyone, which highlights the hard work of the farmers, processors, and exporters. That’s why Sagebrush opened as an online store first, but nine years later, they opened a coffee shop in Chandler, Arizona, with a focus on providing educational tools to serve the needs of premium coffee lovers.
So Matt, are you ready to get started?
Matt (Sagebrush Coffee): Yeah, that’s great.
Sean: Alright Matt, so tell us a little bit about your first start with the online store. Why did you start with an online store for your coffee shop? You know, that kind of goes against the normal thought of a coffee shop, but why did you start with online?
Matt: So it was 2012 when I actually bought myself a coffee roaster that no one should have as their personal coffee roaster. It was just too expensive, too nice. And maybe a month or so later, my wife’s stove broke, and she commented that she needed a new one, and I said, “Okay, great, you’ve got an $800 budget.” And she said, “You just spent double that on a new roaster.” And I’m like, “Yeah, well, we drink coffee every day.” And she’s like, “Yeah, do you know how I use a stove?”
So, anyway, long story short, I decided to start a business to try to pay for my habit. I was working full-time as an IT director and a marketing, like a digital marketing manager, and so I knew online marketing. So I started the business just saying, “Hey, let me see if I can sell this stuff online.” So we did that in 2012. It worked. We bought a couple more roasters to be able to support the volume, and by July of 2013, we were just running full speed ahead.
Sean: Really? So at that time, were you selling to retailers? Who was your target audience that you were selling the coffee beans to?
Matt: Yes. So when I first started, I was thinking, hey, if I can be at the price point of like a Starbucks but be better, I should be fine. And that didn’t work, like everyone just went for the brand recognition of Starbucks. And so then, a few, I don’t even remember how far into the process it was, where I got a sample of a coffee that was just really, really good and it was outside of the price point to be able to sell at Starbucks’s price. And so I anyway said, “I’m going to mark it up and just see if there’s customers out there.” I actually wrote a blog, said, “Please don’t buy this Kenyan coffee because I want to drink it myself.” And by the end of like 24 hours, I sold out of it. And I was like, “Oh, okay, this is who we are.”
And then started to focus on getting the best coffee I could find. So over time, we just started getting better and better and better coffees as I started to learn that side of the industry. And here we are.
Sean: Very cool. So, you know, I have no historical experience in this arena at all, but you know, if you’re talking to me or someone that’s interested in getting into something like this, how do you even go about sourcing coffee?
Matt: Yeah, so early on when we were small, it was a lot of relying on coffee exporters throughout the countries that we work with. Some of them are importers, some are exporters, and just trying to work with them to find what we actually liked, what worked best for my palate and my roasting style. And then as we’ve grown, I’ve started moving further and further up the supply chain. So now we have several relationships with farms.
Even in March, I decided I wanted to go to Costa Rica and improve our sourcing in Costa Rica. So it was my daughter who just turned 16, it was her spring break, and I’m like, “Hey Eden, you want to go to Costa Rica and find some coffee?” And so I just WhatsApped a few people that I knew in Costa Rica and said, “Hey, I’m coming, help me find some coffee.” And we ended up staying the night at one of the farms of the families that I know, cupped a ton of coffee while we were there, and came home with some great ones. I actually yesterday got an email that they’ve all arrived in the US and I’m ready to start selling them.
So it was just kind of a, let’s fly out there and figure it out. So it varies. I can’t really do that in Africa, but Latin America, it’s easy to get down there and go source them.
Sean: Yeah, for traveling’s sake. What’s your palate? What’s your favorite type of roast or coffee?
Matt: Oh man, that’s an impossible question to answer. That’s like the “what’s your favorite movie” question. I’ve got them all categorized. But I historically have always loved the complexity of an Ethiopian coffee, a dry process that has a lot more fruit notes to it. It’s always been just where I’ve landed.
However, over the last year and a half, we’ve been sourcing some coffees, and my son and I have traveled to the origin. I have three kids, I’ve traveled to origin with each of them, and last, about almost exactly a year ago, my middle child and I went to Colombia to judge their best cup competition. And so we cupped over the course of a week something like 150 different coffees, ranked them all, scored them all, and came home with a few that we just scored as outstanding.
There’s a Colombian Geisha that we have that I’m literally drinking right now, that every sip, I’m just like, “Oh my goodness, that’s a good cup of coffee.” So it’s hard to know. I mean, this one’s the Geisha variety, which, if you think of coffee like you think of apples, where there are lots of varieties of apples, there are lots of varieties of the coffee plant. And the Geisha variety generally is more floral and complex and pretty expensive, and this one is one of the best I’ve ever had.
Sean: That’s great. Similar question: What’s the best way to brew a cup of coffee in your opinion?
Matt: Oh man, it depends on what you’re drinking. So, I think the staple go-to way to brew a cup of coffee is a V60 pour-over. Dial it correctly, get the right extraction, and you can walk away with almost any coffee and have it taste great. And that’s what we do on bar here.
However, I have a barista that’s been playing with actually blending this Geisha with another coffee that we have from Ethiopia, and in a shot — so it’s like 8 grams of the Geisha, 21 grams of the Ethiopia — puts it in a shot and pulled it for me on Saturday, and I was like, “Oh my goodness, that’s incredible.” And I’m not normally just a straight espresso drinker.
Sometimes it just depends on the kind of coffee and how you want to bring it out. If you’ve got a really rich, dark roast, earthy coffee, you’re going to want to put that in a French press. If you’ve got something bright and fruity, a Chemex is going to draw that out.
So I don’t know that I have a favorite brewing method. Embarrassingly, my go-to is just a drip Moccamaster coffee pot every morning. But when I come into the shop, if someone else is doing it for me, I’ll take a premium espresso or a really good V60.
Sean: Love to talk about some product trends and market changes, and how you think about that in your industry? You know, like a boutique or something, is going to be looking at the most current fashion coming out, but how do you think about that in your business? Is there something in the coffee industry that you’re keeping up on? How do you look at that kind of thing?
Matt: Oh yeah, I’m sure this is the case in every industry that you just got to see where the trend is and ride that wave. But in the 10-plus years we’ve been doing this, we’ve hit several waves.
Probably three, four, five years ago, everyone was doing cold brew, and we were selling cold brew makers and cold marketing stuff for cold brew, and everyone was super excited about cold brew.
Even early on, I think the AeroPress was a big brewing method, which it seems like brewing methods tend to be the trend, and then you try to match coffees to help with those different brewing methods.
But these days, maybe a year or two ago, and this might be getting a little coffee nerdy, but anaerobic fermentations, where they were just the process of processing the coffee cherry. From cherry to the bean that we roast here, they would put them in fermentation tanks, and you’d get some really wild flavored coffees. Everyone was jumping on “what’s the new anaerobic? This is going to be crazy.”
So we jumped on that bandwagon and sold some of them and sold some really premium ones. I don’t think those really trend with the American palate. I don’t think Americans love that funky flavor in their coffee, but it was a trend. It was a trend we hopped on.
The new one that I’m probably not going to hop on as much is fruit fermentations, where they actually, in those fermentation tanks, put pineapple and then age it with that, and it comes out and tastes like flavored pineapple coffee.
We just cupped a bunch of those last week, and I just can’t get into them. So sometimes you’re just like, if that’s a wave that the market’s going to trim towards, maybe I’m just not going to ride it.
Sean:And then, how do you think about your business and your different channels? Because I’m pretty sure, if I remember correctly, you guys sell wholesale. They also have retail and coffee shops. How do you think about product assortment across the different sales channels, from wholesale to retail to different locations? Are you selling on social? How do you think about your business across those different channels?
Matt: Yeah, there’s a lot of thought. So, being an online, primarily an online coffee roaster, we spend a lot of time talking through marketing. We have an entire marketing team. Actually, I was up late last night working on our September-October marketing calendar, thinking through what products we have, what we have coming in.
You know, in coffee, you’re buying into those trends. Like when I went to Costa Rica and bought that coffee, it was, “Hey, this is what I’m going to buy.” I went to this farm, and they had, call it, 25 bags, which a bag is about 150 pounds, and that’s their entire crop. That’s everything they have for the year.
Well, if it’s great, I just want to reserve the whole lot. And so that ends up becoming what I sell for the year.
And then depending on how it cups and how it sells, I might market it towards one channel or the other. So if there’s a wholesale coffee, like we cupped a coffee and we’re like, “Man, that’s going to be great on bar as an espresso,” we’re going to sell this as an espresso to our different espresso roasters, and I’m going to buy as much as I possibly can of it. And when we run out, we’ll switch to something else.
So some of it’s at the cupping level, and some of it’s even as it starts selling, just how is this selling, and where do we want to market it?
So it’s weird because it’s not like I can buy towards the trends throughout the year and think about it that way. I have to buy upfront and then figure out, or reserve upfront, contract upfront, and then figure out over the course of the year where this is going to slot in best.
So I try to plan it upfront, but the plans never work 100%. And so then it’s trying to figure out where. You know, it’s part of why we’ve opened up so many channels is because I have home roasters that love the hobby of home roasting, and some coffees are just too hard to roast if you’re doing that at home on the home roasting machines.
So, trying to think through, okay, I don’t want to slot this coffee in that takes a really, really skilled roaster because he’s just not going to like it.
So yeah, it’s kind of a juggling act always.
Sean: Yeah, I’ve heard you talk a lot about marketing. Before we jumped on the call just now, you were talking about marketing being a big deal. And then you just said you were up late last night with it.
For anyone in the audience that’s listening to this, you know, our customers or other business owners that maybe don’t particularly see marketing as being a big deal for them, why are you so big on marketing? Why has it been a thing for you? What would be the sales pitch as to why someone needs to invest more heavily in that? Do you have any advice for anyone like that?
Matt: So I started sending emails when I was coaching my kids’ soccer team. As I was setting the lineups for it, I’d write a quick email and send it to customers. And that was like our wave of marketing: like, “Hey, I’ve got a quick say.” And a lot of times it was communicating to customers new coffees.
As we’ve evolved, that’s evolved, and just trying to get our coffee in front of as many eyeballs as possible, I’ve started to learn where are the different areas online are. And that’s 100% of our marketing is online right now.
So what are the areas online where we want to find, I mean, I hate to say it this way, but just find eyeballs that might buy our coffee and then put our product in front of them as many times as possible.
So when I talk about marketing, I mean clearly our regular customers, giving them those same emails, updating them on things, trends in the coffee shop, trying to connect them emotionally to our business.
You know, it’s a family-run business, and so we regularly talk about the family. And when things, even trials go on in our lives, we put that in front of the customers.
A big piece of that is, you know, when I’m an online business, it could be that they don’t know me. It’s not like the coffee shop where people walk in and know them every day.
We’ve got customers in the coffee shop that we find out they’re going to get engaged before their fiancé does because they’re so excited about the ring they just bought. That’s a real-world example.
And in the online world, it seems like you’re just another website. So, how do you connect to those people in a way like you do in the coffee shop?
That’s why we’ve tried to be as transparent as a family as we can in front of them, as transparent as a business. Every week, we write what we call the “Just What We’re Drinking” email that goes out to our customer base.
And we pick off some employee and give a quick bio, and they talk about what their favorite drink is this week and why they love it. It’s just a way to humanize the business and make it feel like a community, not just a transaction.
Sean: I love that. So it sounds like you’re really focused on building relationships with your customers, not just selling coffee.
Matt: Exactly. And that’s what’s helped us grow. People want to buy from people they trust and feel connected to. It’s not just about the product, it’s about the story behind it, the people behind it, and the experience they get when they interact with us. Whether that’s online or in the shop.
Sean: That’s a great lesson for any business owner. Now, switching gears a bit, what are some of the biggest challenges you’ve faced running Sagebrush Coffee, especially as you’ve expanded from online to brick-and-mortar?
Matt: Oh man, there are a lot. The biggest challenge has been managing inventory and forecasting demand. When you’re online only, you have a lot of control and can adjust quickly. But when you open a physical location, you have to stock a lot more upfront, and you can’t just pivot as easily.
Also, staffing is a big challenge. Finding and training great baristas who understand the level of quality and customer service we want to provide takes time and effort. And then there’s the operational side, everything from equipment maintenance to managing the shop’s daily flow.
Sean: Yeah, that makes sense. How do you handle inventory management across your different channels?
Matt: We use a combination of software tools to track sales and inventory in real time. It helps us see what’s moving fast and what’s not, so we can reorder accordingly. But honestly, there’s still a lot of manual work and gut feel involved, especially with seasonal coffees and limited batches.
Sean: With all these moving parts, what advice would you give to someone looking to start their own coffee business or specialty food business?
Matt: Start small and focus on quality. Don’t try to do everything at once. Build a loyal customer base and listen to their feedback. Also, invest in marketing early, even if it feels uncomfortable. People need to know you exist before they can buy from you.
And lastly, be patient. This is a marathon, not a sprint. Success doesn’t happen overnight, but with persistence and passion, you can build something great.
Sean: Fantastic advice. Matt, thank you so much for sharing your story and insights with us today.
Matt: Thanks for having me, Sean. It’s been a pleasure.
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