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Networth and Chill with Your Rich BFF
That Latte is Why You're Broke... and other lies with Nguyen Coffee Supply
00:46:33
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- [00:13]
A
This episode of Net Worth and Chill is brought to you by Marshalls. I love sharing new tips on how to make the most of your money. And one of the biggest misconceptions about looking good is that you have to spend a lot. And I'll be real with you. I want those high quality items that'll last.
- [00:28]
B
But.
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A
But I'm also on the hunt for the best deal. How can I dress and brand name on trend pieces without maxing out my credit cards? My go to place to do that is Marshalls, where I know I can get the brands I love at 20 to 60% off retail prices. Visit a store or head to marshalls.com to see what good stuff you can find today. We're back. What's up rich friends? It is so good to be back and better than ever for the very first episode of season two of Net Worth and Chill. I've been eagerly awaiting this launch, as have some of you, per your DMs. And I can't wait to chat through all of the incredible topics we have in store for you this year. I'm your host, Vivian Tu, aka YorichBFF, and your favorite Wall street girly. You might not be able to tell, but my energy is a little low today because I haven't had any caffeine and I typically reserve drinking coffee for the days when I am down astronomically bad. And I think today might just be one of those days. I just need a jumpstart, you know? And I'm definitely not the only one. 73%. Roughly three out of every four Americans drink coffee every single day. So I'm a good company. And of that 73%, 51% of coffee drinkers buy coffee from a shop at least once a week. So it's safe to say America is pretty dependent on those tiny little beans to keep us going. But simultaneously, the cup of coffee or a little treat, has become a villain level joke across the world of personal finance and news headlines. Millennials can't afford homes because they drink a $5 latte every day. So I thought, what better way to kick off season two than by talking about the way most of us kick off our mornings with a cup of coffee. But I'll be honest, aside from liking the occasional cup for myself, I don't know that much about coffee. So today I've invited a coffee expert to join us on the pod. She is the founder and CEO of Nguyen Coffee Supply. Everyone, please welcome Sarah Nguyen.
- [02:43]
B
Hi. Hi, Vivian.
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A
Sarah, thank you so much for being here. I'm so excited to see you again.
- [02:48]
B
Likewise.
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A
And we are going to talk about all things coffee. But before we get into anything, I need to know, what is your coffee order? Okay.
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B
Well, if I'm at like a regular ish shop, it's a cappuccino.
- [03:00]
A
Okay.
- [03:01]
B
But if it's kind of like a adventurous shop, I'll take anything with condensed milk or coconut.
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A
Ooh, I love that. I love the Asian flavors. And obviously you've incorporated some amazing Asian flavors into your own brand. But I want you to walk me through the real context here.
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B
Yeah.
- [03:19]
A
How does a tiny little bean in the dirt become something in my cup? Something in a can. Something that every single one of us almost needs to start our day.
- [03:30]
B
Yeah. So it's a pretty intense process. First we start the farm and farmers are pretty much growing the beans for about nine months out of the year. And then when it's harvest season, at least for us, our farmers hand pick every coffee cherry. It's called a cherry, actually. It's a fruit. Yeah. So the coffee bean is actually the seed of the coffee cherry. So it's actually a seed.
- [03:50]
A
What is a cherry?
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B
The cherry, it kind of tastes like a bitter apple.
- [03:54]
A
Oh, yeah.
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B
It's nice though. Yeah.
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A
Okay.
- [03:56]
B
Yeah. So then they hand pick every coffee cherry when it's ripe, and then after that it goes through several different post harvest processing methods. Like a natural process is like you're letting it sun dry out in the sun for days. A full wash method is you're processing it through a full wash method. So like water wash, et cetera. And then after that it basically goes, the shell of the cherry gets like taken off through this machine and then it goes through a dryer. So everything. So all the moisture is removed. And then you get what's called a green bean. And that is the bean that is then exported to roasters. So once it's harvested, it can actually get processed on site. But actually a lot of farmers don't have the means to process on site, so they'll actually sell it to a bunch of other, like, middle players. Well, they'll kind of like collect all the beans from a certain area and then they'll sell it to like a post harvest processing facility. And then these players then process all these green beans from around the country and then they get it to the point where it's a green bean and then to export once it's. So basically it's like the farmer here and then farmer to exporter. And there could be like farmer direct to exporter or it could be farmer to seller, seller, seller, seller, exporter. And then this person, this company exports the green beans to different countries and. And then it goes to the roaster, and then the roaster roasts and then the roaster sells to cafes and then it ends up in your cup.
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A
Okay, so without sounding like an idiot, if there's a bunch of middlemen, the coffee gets more expensive, right?
- [05:26]
B
Yes, yes, it could likely, yes. But then it's also within the coffee world, there are different tiers of coffee. So there's like conventional coffee, there's premium coffee, there's specialty coffee, and those all affect the price of coffee.
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A
What makes something special or premium versus regular.
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B
So for us, like we're buying specialty coffee, right? So for example, that starts with how it's grown and harvested. So the hand picking coffee cherries at peak ripeness is a very, very important step in coffee harvesting versus some places where they want efficiency. They'll use machines to kind of shake the whole tree and grab all the coffee cherries at once. So you're getting a mix of like green cherries that are unripe all the way to ripe cherries, or if it is handpicked, instead of handpicking them, they'll just grab all the cherries all at once. Right, gotcha. So those are ways to kind of just kind of like make it more efficient. So hand picking at peak ripeness takes time. So the labor costs go up after that. It's also the sorting. Right. So then also for specialty beans in the coffee green bean world, there are different screen sizes. So like screen size like 13 all the way up to 18 is basically the size of the bean. And that really speaks to like, do.
- [06:34]
A
You want bigger beans or smaller beans?
- [06:36]
B
Well, for us we like bigger beans cause pretty much speaks to the development of the bean so it's had more time to grow and develop its flavors. So we buy screen 18, right, which is really big and beautiful and delicious. And then after that, after it's sorted, then it can go through different processing methods that also speak to the specialty nature of it. So you could do like a honey processing method which is like sun drying it with the cherries on so it has more sweetness. Or you could do like a full wash method, which is basically full wash is like you're washing it in like this giant bath or whatever. But it just costs more. It creates a more clean flavor. It does cost more. And it also produces like a well sorted like bag of beans. It's. Sorry, I'm kind of tangenting but like, yeah, there's lots of different variables that goes into whether it's a conventional bean, premium, or specialty.
- [07:24]
A
And through this whole process, like who makes the most money? Is it the farmer? Is it the seller that, you know, is the middleman between them and the exporter? Is it the exporter or is it the cafe at the end?
- [07:39]
B
Hmm. In terms of, like, margins, like, or sales, from what I gather. Because they're variables across the supply chain. Of course.
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A
Of course.
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B
I'd say. I'd say. I think cafes have the greatest margins.
- [07:56]
A
Wow. Okay. So, you know, correct me if I'm wrong. I feel like the people doing the most hard labor, the hardest work, are actually probably making the least.
- [08:07]
B
Yes, that is pretty accurate. And it's actually kind of become a really big. It's problematic for a lot of reasons. Equity. Yes. But also it's problematic because it's becoming so bad where a lot of farmers may not want to farm in the future. So if we don't design a more sustainable, a more economic, sustainable coffee industry, we can just lose coffee growers because they'll diversify or they'll move on to durian or they'll move on to jackfruit, which is, like, really popular right now in Asia. And we've seen that happen already. So just for like some quick coffee context, on math, like, in terms of the conventional market, like this past year, Robusta was at like a 30 year high. Where, like on the C market, which is like the international market, it was like just a little over $4 for a kilogram.
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A
Yeah.
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B
Right. And so that's green and that's when the importer exporter is selling it. Right. So but that's like $4. $4, 4.23 for a kilogram. When you're making an espresso, it's like 18 grams of coffee and you're selling for five. Of course, rent, labor in the US all those things. But it's a pretty, like, it's a really big disparity in terms of, like, where all the dollars are going.
- [09:12]
A
Yeah. And you mentioned a specific word that I'm guessing some of our listeners probably have never heard before. Robusta. And I know that you guys specifically love the small but mighty robusta bean we love. And can you tell me, you know, historically, I feel like Arabica. Is that how I pronounce it? Arabica beans have been really, really coveted. I remember when, like, brands like Ilia were coming out with, like, their first canned coffee options, they touted that they were using Arabica beans.
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B
Yes.
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A
What is what is, what is the difference?
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B
So Arabic and Robusta are the two most popular coffee species in the world. Arabica makes up about 60% of the total global coffee output, and the robusta is about 40%. So they're kind of like green grapes and red grapes. Right. Okay. Lemons and limes, they're just different species of the same category. Now, what makes them different in their chemical makeup is robusta beans have nearly up to 2x the caffeine content of Arabica. So extra energy. Robusta beans have 60% less natural sugars than Arabica, which speaks to the flavor profile. So because of the low sugar content, Robustas are more bold, dark, chocolatey and nutty. And then Arabica can skew more fruit forward, citrus forward. Right. In terms of like, antioxidants, Robusta beans also have double the antioxidants. So lots of great benefits.
- [10:36]
A
So what you're telling me this is.
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B
A salad, it's a better for you coffee, and then all of these things combined. So those are the benefits for like the consumer. But then in terms of like, sustainability, because of high caffeine content, Robusta is naturally disease and pest repellent. Because the caffeine.
- [10:55]
A
Because the bugs don't like the baggering.
- [10:59]
B
Exactly. And so what that means for the farmers is that robusta beans are actually easier to grow, easier to grow organically. They grow robustly and there are higher yields per farmer. So there's so many benefits for Robusta, for the consumer and for the industry. But yes, when you mentioned how certain brands over the last couple of decades, especially in the height of third wave specialty, they've really touted Arabica 100% Arabica, as if Arabica was synonymous with quality. Which is just not true. Right. Because there's poorly grown Arabica in the world as well. Right. It's a whole like marketing campaign which was very effective. Shouts to whoever did that. But the truth is, what makes something quality is not the species. Right. What makes something quality is how it's treated, how it's like, you know, grown, harvested, processed, et cetera. And so the amount of care that the industry has given to the arabica grown community over the last couple of decades, that level of care, that level of investment was not given to robusta growing farmers. So for us, our whole thing is like, you know, by not doing that, we're actually trapping an entire global coffee growing population in economic exploitation. We're saying if you grow Robusta, then you cannot be premium specialty. You could only be conventional, you could only do this if you grow arabica, we're going to invest with you, we're going to innovate, we're going to try all these different processing methods, and we'll pay more for your price. Right. So for us, here's the big connection between robusta and Vietnam. So not only is Vietnam the second law largest coffee producer in the world, Vietnam is the number one producer of robusta.
- [12:29]
A
Wait, can I ask a question? Do you think I'm assuming Arabica comes from, like, Colombia?
- [12:36]
B
Well, I would say the birthplace of coffee is Africa. That's, like, the origin. But in terms of, like, today, where, like, coffee is most popular, so Brazil is the number one producer of coffee.
- [12:48]
A
Why do I feel like everybody talks about Colombia is like, where coffee is from? Maybe it's because they export so many things that wake people up.
- [12:58]
B
I think Colombia has a great brand for coffee. Colombia is a great brand in general, for a lot of output. But yeah, and then it's like in Brazil, I think Colombia is within the top five of the world. Brazil is number one, Vietnam's number two. But then in Brazil, their majority coffee production is arabica, and in Vietnam, it's majority Robusta.
- [13:17]
A
Why do you think that Robusta hasn't been given the same PR treatment? Like, does it have anything to do with the fact that it's in Vietnam and is Asian? Like, I don't know. I'm asking.
- [13:29]
B
I mean, I asked myself the same. Those same questions, and I'm always like, people ask me, like, can you guys go ask, like, Eli Lavazza those questions? Because, like, I don't want to answer that. I think I have certain assumptions, hypotheses, historically. I want to acknowledge that, yes, historically, Vietnam is a major producer in robusta for a reason. Because after the war ended in, like, you know, Vietnam is a communist country. So there was also. So Vietnam's industry really focused on output and volume, and so it didn't really incentivize farmers to improve their crop. And so that's how Vietnam really kind of became a player, a major player in Robusta, which historically and even today, a lot of it is channeled into, like, you know, the instant coffee market, you know, maybe like the conventional coffee market. But that doesn't. While we understand the historicals of the situation, it doesn't mean we can't change, because there's actually a massive movement in Vietnam to improve the quality of their coffee, not only for their own consumption, but for the livelihoods of their farmers. Right. So this question of, like, well, why hasn't Robusta received the same PR treatment. It comes down to this question of, like, who has a vested interest in keeping the cost of robusta down? Who is interested in elevating the livelihoods of Vietnamese farmers? You know, who has a vested interest in promoting their access to arabica? Like, I think there are a lot of questions that it takes more than one person to answer, but for me, those are. I don't have the exact answer, but I just felt like it was a huge injustice.
- [15:00]
A
Yeah, I love that. And let's take that as an opportunity to pivot to talk a little bit about your company, Nguyen Coffee Supply. I need to know, like, have you always loved coffee? Is coffee something you wanted to spend your money on? Like, how? Like, what made you say, hey, I am gonna take on some of these huge legacy players and start my own coffee company?
- [15:23]
B
Yeah. I never. I did not plan for this. It was kind of like that same when people say, like, if founders knew too much, they wouldn't do it. Right. What am I doing? Well, so I've always loved coffee, and I consider myself, like, a huge coffee drinker, would drink two cups a day. But I didn't know anything about coffee. I didn't even know how to make coffee at home.
- [15:44]
A
Right.
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B
Yeah, yeah. But I feel like a lot of consumers feel that way. Right. And so in terms of, like, why, how or why did it start? It really started because I was freelancing in New York city in, like, 2016. I was spending a lot of time in coffee shops. And because your apartment is tiny, so coffee shops are like your living room. And around 2016, I started noticing Vietnamese iced coffee trending. It made me think of, like, these other macro trends of, like, when matcha entered the C. Matcha chai. Right. Matcha first entered through the cafe channel, and everyone's like, what's this cool green tea? And now Matcha's like its own massive category.
- [16:20]
A
Yeah.
- [16:20]
B
I was seeing the same thing happen. Happened with Vietnamese coffee. So, like, macro trend of Asian inspired beverages entering cafe culture. However, Vivian, every time I'd order the Vietnamese iced coffee, it was wack. It was whack. Well, sorry, no, it was not Vietnamese coffee. Right. Well, because one, it didn't taste of the Vietnamese coffee I knew growing up, which has a very distinct flavor profile. Cause it's a different bean. But then, two, I straight up asked the breeze working there, what's in your vimy's iced coffee? Like, oh, it's like our house. Ethiopian, Colombian. We add sweetened condensed milk to it. And I'm just Kind of like, so.
- [16:53]
A
The condensed milk was the only Vietnamese brand.
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B
Exactly, exactly. And what's really hypocritical about this situation is we say that we care about transparency. It's all about single origin beans from Ethiopia and from Colombia. But in this moment, it was like there was no transparency for the actual producers of that bean. Right. And there was actually no benefit to Vietnamese producers for this transaction. Right. I'm like, if we really care about transparency, why couldn't we just call it an Ethiopian cold brew with condensed milk? Yeah. Wouldn't that make more sense? Yeah, yeah. So.
- [17:24]
A
And so you talk about freelancing at the time you were working out of coffee shops, you had a small apartment. I'm really curious one. What was your relationship with money like growing up? Did you grow up with a lot of it or very little of it? And how much money did you have to start your company?
- [17:42]
B
Mm. Oh, this is. This goes really deep. Relationship with money goes deep. Did not grow up a lot of money. My parents are refugees. They're from Vietnam. They escaped the country on a boat, like many other boat refugees, in 1978, and then eventually made their way to United States, where I was born and raised. So just really grew up in like, a, you know, immigrant household, refugee household in, like, the 80s and 90s. And so my relationship with money, I started working in high school. And so at that time, you know, I was spending on things like hanging out with my friends, like getting, like, a Dunkin's or like buying some hair clippies at Claire's, you know, But. But as I started my business, I noticed that my relationship with money was very challenging because, like, in business, you have to take risks and you have to invest money to take risks. Right. And growing up, we were all. Money was always scarce. It was always like, hoarding money, keeping money. Don't spend money, save money. Like, never spend. Like, just never spend money if you could avoid it. So I really struggled in the beginning, and I still do to this point of, like, over investing sometimes, or over investing in a channel or an idea and just, like, taking that risk because you're scared to lose money, you know? And so that was definitely challenging, just, like, reworking my relationship with money, but then also in the startup world, understanding, like, how to build and scale a startup and that sometimes there are periods of where you're over investing and, like, you're not, like, profitable, but, like, that's actually the game plan to scale if you want to scale towards a certain outcome, you know? Yeah. That whole phenomenon was like, really hard for me to wrap my mind around because I'm like, this doesn't make sense to me. I've never, like, I've never operated in this way.
- [19:28]
A
And when did you feel like you were like, I have enough money to start this company?
- [19:34]
B
Never. Oh, never has it happened.
- [19:36]
A
Oh, okay.
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B
But how did it start? So I started, like, literally. It was like, all my savings, which wasn't much. It was like $5,000.
- [19:44]
A
Okay.
- [19:44]
B
This was like, 2017, 2018, we launched.
- [19:48]
A
But that was like, your life savings.
- [19:49]
B
That was like, my life savings. And I. I was like, what am I? Like, I was 30 years old, I think, at the time. Forget. So it wasn't good to see you.
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A
I love that, by the way, because people always hit 30 and they're like, my life is over. It's like, your life is just beginning.
- [20:01]
B
Yes, this is true. And now that I'm approaching 40, I'm like, everyone's like, live your 30s, like your 20s. I'm like, okay, okay, sorry, tangent. So it was like, my life Savings was like, 5K, not much at all because I was a freelancer for so many years, and then I pretty much maxed out two credit cards to, like, $20,000, which is not good. Yeah. And, Vivian, every time I tell the story, I have to say, just because this was my path does not mean I would encourage that for anybody else. And it is not. It's not like I'm not here to glorify, like, putting your life savings, you know, on the line, like, maxing your credit cards. I just feel like this is a larger conversation of, like, who has access and who has the opportunity to even build. So I'm not saying that, like, I don't think it's cool to put, but to be in that position. But my situation. That was my situation. But I'm not trying to glorify it, you know? Yeah, yeah.
- [20:53]
A
Quick plug. That's not a plug. If you are a founder or you're trying to start something, check out libraries as launchpads, because to your point, talent is equally distributed. Access certainly is not. And if you have a safety net, a parachute that, you know, you can create something cool, you can take those big swings, take those big risks, use your parents and friends networks, but, like, not everybody has that opportunity. So check out your local library. Libraries as launchpads. It's a great place. Obviously, it's going to be a free resource. Everybody loves the library.
- [21:29]
B
Awesome. I just got my library card, actually.
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A
Oh, did you?
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B
Yeah. I loved it. You can access, like, all the online databases.
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A
Yeah, exactly. It's so easy and wonderful, and obviously it's a free resource that our tax dollars are paying for, so you might as well use it. So I also want to talk about. What is it? What. What is in a name? Okay, so obviously you named this after your last name. Is my assumption Nguyen Coffee Supply?
- [21:57]
B
Yep.
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A
But I'm not even saying that right.
- [21:59]
B
Well, you're saying one of the many English versions, so it could be right.
- [22:03]
A
How do I pronounce N, G, U, Y, E, N? Because this is one of the most common Vietnamese last names, but I've never really heard a consensus of what it's supposed to be. I've heard, you know, newing Wing Nugen. We were just joking about this before the camera started rolling. When I was a little kid, I had a girlfriend who said, my last name is Nugent. And I'm like, the G is not even in the right place when you tell me that version. So tell us, how do we pronounce this word and pronounce it correctly?
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B
Okay, so Nguyen is a Vietnamese last name, which means the correct way to pronounce it is in the language of Vietnamese, which is a tonal language. And that would be Nguyen.
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A
Ng.
- [22:50]
B
Nguyen. It's in the back here.
- [22:52]
A
Okay.
- [22:53]
B
Yeah, Nguyen.
- [22:55]
A
Nguyen. I'm, like, not even doing it right.
- [22:56]
B
Yeah, it's hard. It's hard. And the reason why. Then we talk about, okay, well, how do you say it in English, which essentially. How do we anglicize. How do we Anglicize a word in a name that exists in a different tone? So the truth is, there's no. My stance is there's no right or wrong way to Anglicize muying because the sounds don't exist in the English language. Right. However, there are debatably, like, certain versions of the anglicized version that are more popular than others. Like, so that story of your friend growing up, like, I actually grew up saying Newjin, too. Really? Yeah. My parents said Nugent because every. Everyone was just trying to Anglicize it for the sake of comfort. So my parents. I grew up saying Newjean, and my parents still say it. But now it's like, you'll catch me on different days fluctuating saying, when Nguyen. Nguyen. And it's interesting because, like, now I feel like I'm in a position to always educate people. Retail buyers. Like, how do you say. And I'm like, what day? How do I feel today? Right.
- [23:56]
A
Yeah, exactly.
- [23:57]
B
Also, it's true. I think at the stat is like, 40% of all Vietnamese people in the world have this last name. Yeah.
- [24:05]
A
I love that so much. And thank you so much for taking this time to educate us because I feel like if we don't ask these questions, they're never going to get answered. And if we can say really difficult French last names and German last names and Italian last names, we should be able to say last names of every single origin. Okay, so when you are building this company, Nguyen Coffee Supply. I'm gonna anglicize it for the rest of the show so I don't embarrass myself. But were there any money mistakes you made?
- [24:37]
B
So many, so many.
- [24:39]
A
Do you have one that stands out in particular?
- [24:42]
B
Yeah, I'd say It was like 2019, late 2019. Rolling to 2020. For the first year, we didn't do any paid advertising. And I was like, it's time for us to paid advertising. I was just so desperate to get some help that I paid an agency, like $8,500 a month. Oof.
- [25:08]
A
To do pricey.
- [25:09]
B
It's so pricey. No one I know now I'm like, that's so pricey. Right. And it turned once we. And it wasn't. And they were like, we'll do pay, we'll do email, we'll do the content for you. And it just kind of ended up being like two guys, like the same.
- [25:25]
A
That didn't do anything.
- [25:26]
B
Well, the one guy doing creative content and the paid and the emails and like, I'm a better graphic designer than you, you know, Like, I could have done this, you know, But I think it was classic, like, agency selling the dream to, like, a founder who doesn't know better. And like, and I didn't negotiate. I was like, I don't want to negotiate. Because then it's like, they're not gonna do a good job. Like, I'm like, I'm gonna get my money's worth, I'm gonna pay the price, and I'm getting my money's worth. Didn't get my money's worth. And fortunately ended that. Probably within like a couple of months. Yeah.
- [25:55]
A
Hey, rich friends. You know, I love to talk about the habits of rich people. And one thing they all have in common is that they find ways to keep their money. That's something my partners at Marshalls can help you with, because rich people look the part. They're wearing high quality brand name clothes. But what you might not realize is that they didn't pay full price. That's how they're staying rich. And while you're on your Way to getting rich. You can get the same good stuff without breaking the bank by shopping at Marshalls. Head to your local Marshalls or visit marshalls.com to shop their ever changing selection of high quality on trend merchandise.
- [26:36]
B
Yeah, just like not knowing how to like evaluate partners and because I've never gone through that before, now I understand better of like gone through this a couple of times. So it's like we're bringing a partner. We generally don't want the team with 10% of our spend, you know, like or less. But now we also don't do like commission, like commission based, like ad spend, et cetera, et cetera. So just like certain things like that.
- [26:57]
A
Yeah, yeah. I also hate because I feel like, I feel this way too sometimes when you're a founder and you're strapped for time, you just think anybody can do a better job than you can. When frankly, that's not true. Like some people out there are not actually good at their jobs. And I have certainly hired people that I'm like, you are going to save my business. You are going to help me like change this. Nobody is coming to help save your business. You need to save your business. You need to change your business. And I think getting into that mindset and then understanding, yes, you can hire people who can help take tasks off your plate, who may be better than you at certain categories. But. But no one's gonna ever love your baby as much as you do.
- [27:40]
B
It's true. Yeah. So true. And honestly, and it's like I really wouldn't expect them to, you know, like, I so appreciate it when like folks on the team just like just give it their all. And I'm so grateful for that. But I don't expect them to love as much as me because obviously I have more stakes, you know.
- [27:59]
A
Yeah, of course. And you know, we talked about one of your bigger money mistakes. I wanna shout you guys out. Cause you've been popping up everywhere. I have seen you at events, you are in Whole Foods. But recently I actually saw you in a Target.
- [28:12]
B
Yeah.
- [28:13]
A
And I'm just really curious, like through the process of growing your business, like what were step by step, like, hey, I have an idea in my brain. And now I'm in Target. Target, one of the most like largest, you know, American retailers. Like, how did you go from that? Like, what were the steps? It's like first I, you know, founded Coffee Grower and then somehow I became best friends with a distributor. Like, I don't know, how does this work?
- [28:37]
B
Okay, great. So, yeah, so like early last year, we were in, like, 50 retail doors. Now we're in over 2,000.
- [28:45]
A
Whoa.
- [28:46]
B
Yeah. By the end of year, we'll be in over 2,600. In target. Yes. It's Whole Foods, Target, also in sprouts, Heb Albertsons, et cetera. So it's been a great year for retail for us. So in terms of, like, from inception to, like, retail. So for us, when we launched in 2018, you know, so you heard the origin story. We're direct trade. I flew to Vietnam, developed a direct trade relationship. So what that means is we work directly with the producer, and they don't sell to Vietnam. They export directly to us. Right. So. Oh, yeah.
- [29:17]
A
Wait, how, like, did you just, like, show up at somebody's farm, be like, hey, can we, like, strike up a business deal? Like, how did that.
- [29:24]
B
I called my family right now. I'm like, hey, guys, I'm thinking about, like, starting a coffee business. Do you know, as a farm? And mom was like, actually, I do.
- [29:31]
A
Really?
- [29:32]
B
Yeah.
- [29:32]
A
Your mom teed it up for you?
- [29:34]
B
No, my aunt.
- [29:34]
A
Oh, your aunt.
- [29:35]
B
I said, my mom. My aunt teed it up. Yeah.
- [29:37]
A
That's sick.
- [29:38]
B
It's amazing. Like, I have a really big family network in Vietnam. Most of my family's still there. And so in 2016, I went to visit my aunt in Hanoi, and she said, yeah, I know somebody. So we flew from Hanoi to Da Lat, and that was the very beginning of a relationship.
- [29:50]
A
Yeah.
- [29:51]
B
And since then. Since then, we have grown, and now we actually import from multiple partners around Vietnam, but he's still our main partner today.
- [29:59]
A
This is literally just, like, your second cousin once removed. Like, you know, like, this is some guy your aunt knows. I love that.
- [30:04]
B
It was so serendipitous. It was perfect. Yeah. And he's amazing. He's an amazing, amazing partner.
- [30:09]
A
I think being a founder, obviously, takes a lot of hard work, a lot of grit, but also it's, like, nice to smile and look at, like, those lucky moments.
- [30:19]
B
There's so much luck involved. Yes, there's so much luck involved. That's why sometimes I feel, like, bad, like, when I'm talking to the founders. Like, yes, it takes hard work, takes great. Like, all those things that you can control is critical. And there's just a bit of luck involved, too. Whether it's, like, luck with, like, the capital markets, luck with, like, retail momentum, luck with, like, is this the right moment for. For, like, a Vietnamese coffee in retail? Like, so much of it, there's a luck. There's a little bit of magic.
- [30:42]
A
Okay, so you find your farmer.
- [30:44]
B
Yes. So we now.
- [30:45]
A
Are we gone?
- [30:45]
B
So we have a farmer. We have multiple farmer. We have multiple relationships. We import the beans green.
- [30:50]
A
Okay. We roast to the U.S. to the U.S. in Brooklyn.
- [30:53]
B
We import technically to New Jersey. That's where our warehouse is. And then from our agreement warehouse in New Jersey. And then we roast in Brooklyn.
- [31:01]
A
Okay.
- [31:01]
B
We roast in Brooklyn. When we first started, we were purely direct to consumer E commerce. So I made a Shopify website, and they started selling beans online.
- [31:10]
A
Well, you sold beans?
- [31:11]
B
Oh, yes. Oh, my gosh. I forgot to bring the beans.
- [31:14]
A
I don't even feel like I knew that you sold beans at any point.
- [31:16]
B
This is new. This just launched last year. This is brand new.
- [31:21]
A
This is what I thought your whole business was like. This was the bastion of coffee supply.
- [31:27]
B
Oh, no, the bastion are the beans.
- [31:29]
A
Really?
- [31:29]
B
I should have brought the beans. No, these just launched last year. They're brand new. We were doing beans for, like, four years before this came out.
- [31:37]
A
Whoa.
- [31:37]
B
I didn't even know that. I'm so. I feel bad. You don't know that we're doing something wrong.
- [31:42]
A
No, I feel like I know, like. Cause I've seen people in the street with this enormous logo, which, by the way, genius marketing. And so I'm like, oh, Like, I know the founder of this company.
- [31:52]
B
Oh, my gosh.
- [31:53]
A
But I didn't even realize you had beans that people took home and roasted themselves or, like, you know, grinded up and did themselves.
- [31:58]
B
Oh, my gosh. Yes. Okay. This is my fault for not even bringing bags of beans for the show. No, we started as, like, like specialty coffee beans company. Importer. Roaster.
- [32:07]
A
Yeah.
- [32:08]
B
So. And I'm actually the head roaster. I learned how to roast in Brooklyn in order to start this company. You do it all. Mini hats is a matter.
- [32:16]
A
This is literally the most Brooklyn thing I've ever heard.
- [32:18]
B
Oh, yeah.
- [32:18]
A
I'm a specialty coffee roaster in my Brooklyn coffee shop. Like, that's just, like, so funny, isn't it?
- [32:25]
B
Yeah. So in 20, like 2016, I was sourcing. 2018, you finally imported, like, like, my very first pallet of green beans, which is like a thousand pounds. And then in order to use to rent, like, the roaster in Brooklyn, I had to take a roasting course. Took a roasting course. And from there, I started roasting Vietnamese coffee beans. Roast and pack in Brooklyn. And in the very beginning. So we launched, you know, a website we were only selling on the online. And I would, like, literally, like, roast, bring everything home, and then like, pack all my E Commerce orders at home in my apartment and then, like, lug a wagon of orders to, like, USPS every week and then ship it.
- [32:59]
A
Wait, okay, before we get into the rest of the story, when you launched your Shopify, did you immediately see, like, uptake or, like, did it take a second?
- [33:08]
B
We had like a. We did a whole, like, launch party, like social media. So, like, yeah, I think all my friends and family were like, upticking it, but it was, it was like a launch event. So we did see some exciting sales in the beginning. Yeah. Yeah.
- [33:21]
A
That's awesome.
- [33:22]
B
Yeah.
- [33:22]
A
And did that motivate you to, like, just keep going?
- [33:24]
B
Yeah, definitely. But you're right after the launch moment because we were like, purely organic for the first, like, year. We didn't do any paid, like, like, yeah, sales were like, steady, but it wasn't like, growing steadily. Because that really comes because, like, word of mouth, like organic marketing, it kind of taps out. Right? Yeah. So, yeah, so we were focused on just like, beans for the first four years. So we were E Commerce beans for the first four years. 2022 was a really big inflection point where we began to strategize our expansion to retail. And then that led to our product innovation of the cans. Yeah. So at this time. So we. Sorry, going back to the question earlier. So we were E Commerce for four years and it's like, we want to expand to retail because we feel like there's a cap on E Commerce or E Commerce is very expensive, especially for our category. Right. Where like the average order value is a couple bags. We're not like beady or like suitcases. Right.
- [34:16]
A
Yeah.
- [34:17]
B
So we knew though, given like, the context.
- [34:21]
A
Right.
- [34:21]
B
I was like, we need to bring people into the Vietnamese coffee experience quicker. How do we do that? It's with the cans. So in 2022, we developed the cans and then fortunately, we had been developing a relationship with Whole foods since like 2020. With the bean story.
- [34:36]
A
Yeah.
- [34:37]
B
And then they launched us nationwide last year with the cans.
- [34:41]
A
Man, that is amazing.
- [34:43]
B
Isn't that crazy?
- [34:44]
A
Yeah, it's so serendipitous, but also like, obviously so well deserved.
- [34:49]
B
Thank you. Yeah, I think so. That makes interesting how, like, I think a lot of people actually know of us from the cans as you because this was our product strategy to blaze into retail and it's worked. Right. So we had the beans for four plus years, but we never got this type of retail traction. Right.
- [35:05]
A
Yeah.
- [35:06]
B
And then we got the cans and now we're in over, like, almost 3,000 doors, random year. So this product is really was like our strategy to help grow the category awareness and get liquid to lips. But now we're actually launching our packaged coffee, our beans into retail nationwide as well.
- [35:21]
A
Oh, that's awesome. And like, were you ever worried about being like, oh, this isn't the moment, we're not making enough money?
- [35:31]
B
Yeah.
- [35:31]
A
Cause to your point, you're like, still definitely. But like what made you feel like you could keep going? Were you continuing to raise money? Were you taking a friends and family round? Cause at this point the five grand you started with, that's gone.
- [35:47]
B
Gone.
- [35:47]
A
Gone.
- [35:48]
B
It's gone. Yeah, you know, for sure. Like so to date over the last six years, we raised just like over 5 million.
- [35:57]
A
Whoo.
- [35:58]
B
Is it? Woo. Some people are like, that's a lot. Some people are like, that's nothing. Right. For me, I'm like, that's not. People raised that in like year one, you know, year one or two. But for myself, like, you know, I didn't come from a business background so like all that money has been like angels, syndicates, small funds. Like we're not VC backed and we're not like we've never done an institutional round, so we've never done like a price round. Right. So for me as a founder, it's kind of like whenever we need a little bump, like I'd raise like the first round like 200k, then like 5k, then like, like 2 million and then another 2 million. And so it was like I felt like I was always raising in small bumps. Yeah. Just to kind of like give us a boost. Because I felt like the, both the company and myself as a founder, I didn't feel quite ready for a large price institutional round. Whether it was like myself as a founder, but also sure the company's trajectory. And so we raising these small bumps so they're kind of like supported our growth. But at the same time we were always cast restraint. Right. We can't take big swings. You can always spend what you absolutely needed. But now I do feel like, you know, five plus years in, we've done the work slow to grow, but now I feel like we're ready to grow because the moment is now with retail. And so that's been our FAS journey. So yeah, so lots of like in, you know, when you're growing to like over 2,000 doors, it's very, it's, it's very complex, it requires a lot of support. And also like when you launch into retail, like it's very expensive, like Year one for a brand in retail is extremely expensive because you have to support things like free fills where like they buy a case, you give a free case. So like your margin is like automatically slashed. Right. Or like slotting fees. That could be like, you know, you know, $100 per scoop per store. That could be like $60,000 to launch. Right. Or like running promos. Right. They all want aggressive promos to drive trials. So year one, as a brand, you're really over investing to prove out your success. And the only way to do that is not from the margin making you have. You need capital to invest.
- [37:49]
A
Yeah. You need the cash.
- [37:50]
B
You do.
- [37:51]
A
And you mentioned earlier that you don't have a business background. You grew up, your parents were refugees. So they didn't necessarily have that like business acumen or education to give you. How have you been able to pick it up and learn?
- [38:03]
B
A lot of it has just been like learning on the way, like learning on the job. And for sure, like my community of other founders, we have a, I have a really amazing tight knit community of founders, CBG founders, like Asian American founders. And shout out to Danny. Shout out Danny.
- [38:20]
A
I hope you guys are watching this. Shout out.
- [38:21]
B
Vanessa Sandro. And it's been great. Like we're actually doing a retreat this weekend for a couple of us CBG Asian founders. Yeah, just like building that network and just leaning on each other. Like I've gotten so much support from my founder friends. If I needed something needs to run advice by them. Everything from retail to scaling to fundraising has really been the community I built around the business.
- [38:43]
A
I love that so much. And I want to kind of wrap this up because ultimately you mentioned this coffee, the quality starts with the bean. And a huge part of your brand mission has to take an industry that has historically been quite unethical and exploited a lot of people during the supply chain and get ethically grown beans and build an ethically like stable company. How have you guys been able to accomplish this and why is this, this so expensive to you even though it's more expensive?
- [39:17]
B
Yeah. So one of the ways we've been able to really support our mission of building equity in the industry is by being direct trade. That really goes a long way. So for example, you know, this year the price of Robusta is at a 30 year, at a 30 year high. So when we were purchasing, so the price that exports are selling was around like over $4, we're paying that four plus actually. So because we're doing premium, all these additional steps to produce specialty beans we're paying that direct to the farmer, his network. So we're cutting out a bunch of the middleman. Right. But also, I get it sometimes, like going directly to farmer isn't always feasible for the farmer either. So I've talked to other producers or like green bean suppliers in Vietnam. And even still, if you, even if you go direct to Vietnam versus like a trading company internationally, it's still better for the industry in Vietnam. Right. So that's one of the ways. And so for us, we've also really, over the last like six years, we worked really collaboratively with our farmer to improve the quality of the beans. So the cost of our beans since 2018 has gone up like 260%. Because we keep asking to do more things.
- [40:24]
A
Yeah.
- [40:24]
B
Like hand pick it when it's red ripe, transition from natural process to a full wash method, do a post wash sorting method, you know, hand sorting processing method. Like so. And I remember the first time I asked my producer, can you do a full wash on these robusta beans? He's like, I can, but I just don't know if you could sell. I'm like, what do you mean? He's like, cause it's gonna be more expensive. And I'm like, oh, let me worry about that. Let's do this. Right. So it's really about true collaboration with farmers, with people at origin, understanding what their needs are and then finding a way to just improve the quality of the beans, but also the quality of everyone's lives. Now everyone's been saying like, it's funny, I was at like a coffee event recently this year, and everyone's like, oh, Robusta's at a 30 year high. Is that your fault? Because we're like, we're buster champions, right? And I'm like, I'm really flattered. But also I'm like, this is a good thing. I'm like, the price of coffee, the baseline has been so low for so long. We need to raise the baseline of even conventional coffee up so that the whole market can go up. Right. Because if we're the only ones pushing a higher price, we get pushback all the time for retail buyers. Right. If you compare it to other industries, like wine, for example, the price of wine over the last 30 years has gone up quite a bit. Like I think it's roughly like around 150%. Right. But coffee has not. Right. So that's problematic not just for the farmers, but it really poses this threatening question of the next generation of coffee farmers. Do they want to do this job.
- [41:52]
A
Yeah.
- [41:53]
B
And if they don't, because there are many other ways to make money as farmers. And so we, as consumers, as industry, want to sustain the industry, we actually need to raise the price of coffee across the board.
- [42:04]
A
Mm. What do you think about all of those critics, those personal finance critics that are like, you shouldn't be spending money on coffee? Like, what do you say about that?
- [42:15]
B
I find that so funny. Cause it's like, I'm guilty of this too. But, like, in New York City, it's like, I'll spend, like, $18 for a cocktail. And I'm like, yeah, you know, 24, please.
- [42:24]
A
18. I know. Where are you going?
- [42:25]
B
I know, like, in Midtown, I'm like, in Bushwicks. But, like. But no, it's in, like, I get it. We have to factor in rent, experience, labor. I get it. But, like, pure economics of what it costs to make the. And what you're selling it for. Like, that disparity in margin on a cocktail and coffee, a cup of coffee. It's just like, it isn't. It doesn't compute. You know, so.
- [42:44]
A
And you don't see people making headlines like, millennials can't afford homes because of a $24 cocktail.
- [42:49]
B
This is true. This is true. Yes. Yeah, that's. It's kind of like. It's. It's shade. It's shade in the bean. It's really not cool. It's putting the entire industry down. It's like, I feel like this is like, a really massive cultural problem of, like, what is the value that we are placing in coffee, period. Right. Because it goes down to the bean. But also, oh, you shouldn't spend that much in a cup of coffee. I think we all need to recalibrate our value in coffee. And, like, yes, it's painful in the immediate period to address our expenses, but if we can all recalibrate our expenses of coffee, it's just going to be better for everyone in the long term.
- [43:24]
A
Yeah. I love that. And I think there are certainly people out there, my husband included, who's like, if I don't get my cup of coffee in the morning, I am a shell of a human. And so for something that we rely on so heavily, that is so integral to your morning commute, your happiness, and gives you that spark of joy, that gives you that glisten in your eye to, like, start your day like, it's worth it.
- [43:47]
B
What is that worth to you? What is that price? The way you describe that, what is that worth to you? I would pay.
- [43:52]
A
Yeah.
- [43:52]
B
I would pay $30 for that glistening of joy.
- [43:56]
A
Yeah. Cause I'm spending $18 on a salad at lunch now and no one's saying anything about. About the salad, so why not the coffee?
- [44:02]
B
Right? Yes.
- [44:03]
A
I love that. Okay, we are gonna go into a very, very fun lightning round this or that coffee edition.
- [44:09]
B
Okay.
- [44:10]
A
So hot or iced?
- [44:12]
B
Hot.
- [44:13]
A
Oh, what? These are iced. You know I like this.
- [44:16]
B
I know. You know what I think what's funny is I actually been drinking iced every morning, I think. Cause it was like kind of brisk getting here. I was like hot.
- [44:22]
A
Okay. Okay.
- [44:24]
B
You got me in the lightning moment. Yeah.
- [44:25]
A
Americano or cold brew?
- [44:28]
B
Americano.
- [44:29]
A
Okay. Latte or cappuccino?
- [44:31]
B
Cappuccino.
- [44:33]
A
Cream or condensed milk?
- [44:34]
B
Condensed milk.
- [44:36]
A
Cow's milk or milk with a Y?
- [44:39]
B
Some sort of cow's milk.
- [44:40]
A
Okay. Cow's milk. Okay. And then Asian coffee culture. Or American.
- [44:45]
B
I mean, Asian coffee culture, of course.
- [44:48]
A
I love this so much. Okay, so first off, Sarah, thank you so much for being here, for educating us, for being so candid about your finances when building newwind Coffee Supply. But please tell everyone where we can find you, where we can get product.
- [45:04]
B
And you can find us on our website atnguyen coffee supply dot com. Also on Amazon. You prefer that fast shipping. And you can support us in any of our retail stores, including Whole Foods, Sprouts, Target, Albertsons. Just check the store located on our website website.
- [45:21]
A
Amazing. Everybody, my favorite is the Vietnamese coffee with the condensed milk Sarah's currently drinking. The one with the coconut, I think. Yes.
- [45:30]
B
This is the non dairy one.
- [45:31]
A
Non dairy. Okay, great. But everyone please check out the show notes. Check out the description in the YouTube. We will be linking everything that Sarah just talked about so you can find some Nguyen coffee for yourself. Thank you so much for being here.
- [45:44]
B
Thank you for having me. Cheers. Cheers. Cheers. Ding. That was so fun.
- [45:55]
A
I'd like to thank my partners at Marshalls for sponsoring this episode of Net Worth and Chill. Being responsible with your finances means taking care of future you. And thankfully, while you're looking out for the you of tomorrow, Marshalls is looking out for the you of today. They've got the latest on trend and high quality fashion, beauty and home decor at a fraction of retail price. Prices. So whether you're starting a new job, taking some overdue PTO, or just sitting at home planning your next move, Marshalls will make sure you look good doing it. Shop in store or online to get the good stuff today. Thanks for tuning into this week's episode of Net Worth and Chill part of the Vox Media podcast network. If you like the episode, make sure to leave a rating and review and subscribe so you never miss an episode. Got a burning financial question that you want covered in a future episode episode? Write to us via podcast at yourrichbff. Com, Follow Networth and Chillpod on Instagram to stay up to date on all podcast related news and you can follow me at yourrichbff for even more financial know how. See you next week. Bye.