Vermont Coffee Company – Coffee Roasted for Friends

The Vermont Coffee Company, a privately held corporation, was founded in Bristol, Vermont in 2001, and moved to Middlebury in 2007. The company currently employs twelve people. The company’s specialty is “big, bold coffee,” the result of proprietary blends and a unique ‘slow-roasted’ style.

The Vermont Coffee Company (VCC) is fully committed to social and environmental responsibility. All the coffees they use are certified organic to USDA standards and are purchased under international fair trade guidelines. Their motto, “Coffee Roasted for Friends®,” is truly their mission. They try hard to be a good friend to their farmers and a loyal friend to their customers.

VCC’s brand has been growing steadily over the years. Growth has come from the addition of new outlets, but more significantly, growth has come from penetrating deeper into their existing customer accounts. Their same-store sales in 2009 grew more than 30 percent, thus reflecting their steady increase in market share.

VCC’s new facility in Middlebury, Vermont, is a state-of-the-art facility with two custom-built environmentally friendly coffee roasting machines, packaging lines and pick–pack-and-ship operations. The facility currently runs at less than half of its first shift capacity, so there is plenty of capacity for growth.

While still in their Bristol facility, VCC consulted with VMEC regarding production flow. Utilizing the information learned from VMEC, they set up their new facility for optimum flow. After the first year in the new facility, however, they realized they needed to take the next step to simplify order-processing procedures. Additionally, they knew efficiencies needed to be constantly evaluated in order to remain competitive in the marketplace, especially during the current economic downturn.

VCC first met with VMEC to evaluate their current processes, and determined that these processes could be enhanced through the utilization of a Supermarket & Kanban System. VMEC educated the production team on the system and the benefits they would see from this change. The second step was a day-long training session with management to lay out the steps needed to make this change. VMEC provided support through this process and was available for further discussions as needed.

The changes made to their production systems allowed VCC to increase efficiencies by eliminating a cumbersome spreadsheet and some procedural steps in their order process system, freeing up hours equaling approximately .5 FTE (full-time equivalent). It also created a more streamlined flow of information, as the customer orders were now the catalyst for production. This allowed VCC to lessen the number of times information was touched and cut out unnecessary analysis of this information, thereby shortened order processing time by several hours per day.

Since VCC’s business model is to move product from roast to ship within 24 hours without maintaining an inventory, it was vital to have a system that could easily adjust stocking levels as needed. The combination of a supermarket and kanban system achieved this goal. Through the increase in efficiencies they have seen their cost of production decrease, and with that decrease, they were able to hire two new employees.

Results achieved were:

1. Reduced production costs from 6.5% of sales to 6%
2. Increased efficiency, freeing up hours equaling approximately .5 FTE (full-time equivalent).
3. Hired two new employees
4. Sales increased over this period of time by approximately 30%
5. A productive process for all involved

Colleen Smith of Vermont Coffee Company – The knowledge, expertise, and support of VMEC personnel made all the difference in this transition. They worked with us until we had the results we were looking for. We would never have come up with this system on our own. We were extremely impressed with their knowledge and the results they secured.