Chinese-Canadian retail coffee venture thrives under crowd control

When Mike Li and his family arrived in Vancouver 11 years ago, he never imagined he would one day be knee-deep in the organic coffee business – and loving it – but that’s how it turned out for the Chinese-Canadian entrepreneur.

Li described his experience with the coffee industry as a “love affair” that culminated in the opening last April of Pacific Coffee Roasters’ first bricks-and-mortar café location in the Vancouver Public Library building downtown.

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What’s unique about Pacific Coffee Roasters is that Li isn’t the only owner. In fact, there are 11 of them – all with equal stakes, equal rights and equal ownership in the business. As such, the start-up coffee shop is one of the first examples of a Vancouver business launched through the “niche crowdfunding” model. The concept, Li said, could eventually attract more Chinese-Canadians to the coffee business.

“There are a lot of Chinese-Canadian entrepreneurs who dream of owning their own coffee shop,” Li said, noting that the popularity of a Chinese song in the 1990s about a café created an idealized image of the business among many Chinese speakers. “The difficulty comes when they don’t know how the business works, so many people take the easy route and go with franchises – and they often end up not making money.”

Li, who owns three Lower Mainland coffee roasters (including retail brand Best Gourmet) in addition to the physical Pacific Coffee Roasters café, said many Chinese entrepreneurs wanting to get into coffee quickly end up committing to franchises. These require fees and can limit the store owner’s ability to know finer details about beans, roasting and other aspects of coffee production, which severely restricts the ability to grow beyond owning a couple of franchise stores.

The alternative, Li said, is Pacific Coffee Roasters’ planned model.

Just as the café’s 11 owners share knowledge on how to run the café (Li brings roasting and industry expertise, while others contribute to marketing, interior design and other aspects of the business), Li is now approaching other independent cafés in Vancouver about sharing resources behind the scenes while allowing each store to keep its unique brand. The result he said, could allow creation of an independent café co-op of sorts that may encourage more newcomers to look to this new model for entry into the sector.

“Our idea is to use this platform to expand,” Li said. “Vancouver is famous for coffee, but if you look around, there are many small, independent shops struggling to scale up. Some have problems with managing a shop, while others may not know where to access the right beans; everyone has their unique challenges, and our plan is to link everyone together so the network can fortify each shop owner’s weakness while maintaining the diversity of the market.”

Sales at Pacific Coffee Roasters, whose organic products fall into the high-end, premium coffee market, jumped 400% from April to August. Regardless, the café and its nine staff members are aware of the intense competition in the downtown coffee space – which is one reason Li decided to go with an upscale, organic-foods-driven menu.

“On this block alone, there are nine places to buy coffee,” Li said, pointing to the area of the library facing Robson Street. “You have to provide something that others cannot provide, whether it’s the coffee, other products, management or service. We are lucky that having 11 owners means 11 enthusiastic origin points of word-of-mouth marketing, and a big number of our initial customers come from that. And we believe our coffee is one-of-a-kind, which is key because Vancouver is a knowledgeable coffee market, and you can’t succeed with just any product.”

Ultimately, Li said he would like to open a few more Pacific Coffee Roasters stores in Metro Vancouver, but he is even more bullish on the cross-café platform idea, since it is something he believes will lend Vancouver’s coffee industry a unique flavour that would differentiate it from the scene in other cities like Seattle.

“I feel that success can’t be quantified by sales numbers or revenue,” Li said. “Crowdfunding is about gathering people, funding and ideas. The key isn’t to lessen each person’s individual financial burden, but to gather expertise…. So, as long as we can get a number of independent cafés and coffee makers together towards a common goal, that’s what we’d like to see. We are not seeking quantity, but quality.”

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