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by Maxim Vershinin

Retailer Profile: The Coffeemunist Manifesto

Categories: 2012, MarchTags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , Author:

Good morn­ing! Do not be sur­prised when your neigh­bor­hood gets a new cof­fee shop with Russian writ­ings all over it. It will prob­a­bly have a catchy name and Soviet inspired designs. No, the com­mu­nists did not take over the world just yet, but the Dazbog fran­chise arrived in your town. Brothers Leonid and Anatoly Yuffa, who fled the Soviet Union to escape the régime and start a new life here in Denver started Dazbog from scratch. I met with Leonid, so that we could find out more about their suc­cess story; here it goes:

V. Dobroe Utro Leonid! I love your com­pany name: it is solid, intrigu­ing, and Russian. Could you please explain what it means?
Y. Thank you. “Dazbog” is a com­mon term in Russia. When you start a fam­ily, have a new busi­ness, move, or get a new job, every­one that you know says “dazbog” to you, so that you will be for­tu­nate in your endeav­ors. The term sym­bol­izes hap­pi­ness, health, wealth, and suc­cess in every part of your life. We thought it was very appro­pri­ate for our busi­ness because when one con­sumes cof­fee he/she expe­ri­ences hap­pi­ness and peace of mind, even if it is just for a slight moment dur­ing their lives.

V. I am not too famil­iar with Denver’s cof­fee scene, how would you describe it and is there some­thing one needs to con­sider before open­ing up a busi­ness here?
Y. Denver’s cof­fee scene is very sim­i­lar to Seattle’s and Portland’s because of the weather – lots of rain, so the cof­fee cul­ture has boomed a lot faster than it has in other parts of the coun­try. Our com­pany has 26 cafes in Colorado and lots of whole­sale busi­ness, but Starbucks, for exam­ple, has over 400. The issue for any busi­ness owner in Colorado becomes the rent fac­tor: it is still very expen­sive here, espe­cially in the Denver met­ro­pol­i­tan area, com­pared to other parts of the coun­try with sim­i­lar demo­graph­ics. In addi­tion, the lack of den­sity (there is a lit­tle less than 6 mil­lion peo­ple in the entire state) fur­ther wors­ens the sit­u­a­tion by lim­it­ing the amount of rev­enue one can receive from a local business.

V. How did Dazbog come to be? Did your fam­ily have some pre­vi­ous expe­ri­ence with the cof­fee busi­ness in Russia?

Y. No, our fam­ily had noth­ing to do with cof­fee in Russia. I grad­u­ated from CU with an Accounting and Finance degree in ‘92, decided to open up a cof­fee shop, and did more research than I prob­a­bly should. At the time, it was really in the infancy of the gourmet cof­fee indus­try, because even in Italian restau­rants here you couldn’t get an espresso cap­puc­cino. I decided to import some espresso equip­ment to train and a few years later stum­bled on the fact that I had a great palate for bev­er­ages, for cof­fee in par­tic­u­larly. So, in ‘96 my brother and I started Dazbog.

V. So Dazbog started from just one shop back in time?

Y. I actu­ally didn’t end up open­ing a cof­fee shop. We started off doing strictly whole­sale busi­ness focus­ing on our brand­ing, qual­ity and ser­vice. Our cus­tomers were cof­fee shops, cafes, resorts and spe­cialty stores. Only in the last five years we have been doing fran­chis­ing. We started with one cor­po­rate store and from there we opened more stores, and then franchising.

V. What was your moti­va­tion to become involved in retail after 10 years of suc­cess­ful whole­sale?
Y. You know the more we branded, the bet­ter our retail­ers and our whole­sale cus­tomers did, and at a cer­tain point we decided to test the brand on the streets to see how viable it was to have a stand-alone brand. So, we opened up the first store, which is still bloom­ing for us, and we have never looked back. People really have accepted our brand because it gets them inter­ested in try­ing it, and we deliver with the con­tent in the cup.

V. Successful fran­chis­ing is hard to orga­nize and man­age in any type of busi­ness. It appears to be like a walk in a park for your com­pany, what is your secret?
Y. It all came together for us in the right way and the right time. I believe that most cof­fee com­pa­nies out there who attempt to start fran­chis­ing and cor­po­rate stores do not under­stand the dis­tri­b­u­tion busi­ness and how to get prod­ucts to their stores. For us, we became experts in dis­tri­b­u­tion, man­u­fac­tur­ing, and ful­fill­ment, so we are now able to make sure that our stores are get­ting the high qual­ity prod­ucts on time with all of the sup­port. It is the oppo­site of how most retail­ers are doing it, but in our opin­ion, it really worked out for the best. However, we are very par­tic­u­lar in who we do busi­ness with in terms of fran­chis­ing espe­cially. We want peo­ple that do not only have pas­sion for cof­fee, but have a pas­sion for our brand as well.

V. How would you char­ac­ter­ize your roast­ing phi­los­o­phy?
Y. I believe the best cup of cof­fee is just a nat­u­rally sweet cup, but still retains the char­ac­ter of its ori­gins. For that rea­son we are big pro­po­nents of the medium roast, which to us is choco­late brown with nat­ural sug­ars carameliz­ing and with oils just start­ing to come out.

V. What do you think is the main rea­son behind your suc­cess?

Y. You know, one word that comes to mind is that we are authen­tic. Authentic in all terms of the word: we are who we are, we tell a story through our brand, and we are not mak­ing things up. The brand serves as a can­vas for telling our story. In addi­tion, the story of every ori­gin needs to be told. We trans­late it into the cup by rep­re­sent­ing the true sweet­ness and the nat­ural char­ac­ter of the beans, and that is the authen­tic­ity of the cof­fee and how it relates to us.

V. Any future plans?
Y. Smiles… People ask me all the time when are you going pub­lic? When are you guys going to sell? What is your exit strat­egy? To me it is like: what exit strat­egy? I love what I do every day, and I love that it is just me and my brother. Why would I ever want to stop doing what I love? We grow organ­i­cally and healthy based on what we can afford to grow with­out harm­ing the farms. As long as I am hav­ing fun, I could be doing this for the rest of my life, and there is no rea­son for me not to be doing any of those things.

Dazbog Coffee Company

www.dazbog.com
1090 Yuma Street
Denver, CO 80204
coffee@dazbog.com