The startup making instant coffee you actually want to drink
Two years ago, Kalle and Josh from Sudden Coffee asked the the question “Is it possible to make instant coffee that tastes great?". After selling 50,000 cups of their product, the answer is clearly yes.
Their product is a no-brew instant coffee powder that actually tastes good. It is is delivered in a small test-tube with their iconic red label and lightning bolt logo. When mixed with hot water, it makes a cup of coffee that is arguably as good or better than a cafe made filter coffee or pour over. The value proposition being you can have a cafe quality coffee in your home or office without having to go to a cafe.
Far from the hipster cafes of the Mission District, the founders Josh and Kalle work out of an industrial lot in South San Francisco that sits opposite a trucking depot. As I wait for them to get ready for their interview, Josh makes himself a cup of his own product in a chunky yellow mug. His co-founder, Kalle messages me saying he will be a bit late to the office this morning with the unexpected yet highly acceptable excuse that he forgot we had an appointment because he got married yesterday (this was also news to Josh).
The office has everything you would expect. Empty soylent bottle. Couch with sleeping pillow and coffee stain. Ikea desks. Endless coffee paraphernalia. It gives the definite feel that productivity takes priority over tidiness. There is a comforting hum of rows of vacuum pumps coming from the production area in the adjacent room.
Kalle has been a barista for over 10 years, and first got into coffee when he was living and working in Auckland, New Zealand. A native of Norway, he has run his own coffee shops and was ranked 9th best barista in the world 2015. He views great coffee as one of the simplest ways to improve a person's day. He also believes that everyone should have great coffee, and that it should be accessible, not arrogant and hipster.
“Great coffee is the cheapest luxury there is. For $3 a cup you can get some of the world’s best coffee. You can’t do that with wine, or whiskey. It would cost you 100 times that.”
While studying food science at university Kalle learnt a lot about instant coffee. He also quickly learnt (like most people) that the instant coffee you can buy today sucks. The reason for this he explains is that it is made from the cheapest and lowest quality coffee beans, which are then roasted to an inch of their life, extracted twice at high temperatures and pressures, all to maximise yield, at the cost of taste.
Kalle had a radical new idea in 2015 that formed the basis for Sudden Coffee:
“We start with the best coffee we can find, extract it really carefully, as I would in my coffee shop, and then dehydrate it in a way that would preserve all the good flavours”
This is how they make Sudden Coffee, which has been rated by top chefs as being on par in flavour and complexity of the best pour over coffee.
The other half of the Sudden Coffee founding team is Josh. He is an industrial engineer who worked as a McKinsey consultant optimizing operations and processes at factories across America. Growing up he was always fascinated with things like how to make the line faster at McDonalds.
After leaving the corporate world, he went through a lot of ideas for food related startups when he landed on one called Devour - the premises was on demand burrito bowls made by Michelin star chefs.
“A burrito bowl perfect - is It’s lower carb than a burrito - a bowl is easy to deliver; rice or lentils holds up much better than bread. You can use a lot of exciting ingredients and make something really amazing”.
The business was on the verge of launching when the co-founder and chef decided that startup life wasn’t for him and he bailed. Feeling down in the dumps, a former boss suggested that Josh meet up with this guy he knows who is working on something to do with coffee in his garage.
“So I go to meet this guy in a garage, and he comes out wearing an apron” Josh explains. This was when Josh first met Kalle.
“Why would a hipster barista want to make instant coffee?" Josh asked him at the time.
Kalle explained why he loves coffee - “It’s about making people feel good, in a scalable way”
Fortuitously, two weeks before meeting Kalle, Josh had written down the the mission of his now ill fated burrito bowl company on a card and stuck it to his wall. The mission read “Making people feel good”.
This is now the first company value of Sudden Coffee.
Sudden Coffee is well on it’s way of changing the way we all drink our coffee. It has recently been backed by Y Combinator, whose motto is ‘make something people want’. And that’s exactly what Sudden Coffee has been doing - to date they have sold over 50,000 tubes, and only until recently they have simply not been able to make enough coffee to supply their customers demands.
“A year ago we could produce 1,000 cups a month, now we can make 90,000 cups a month. We have also reduced our production costs by a factor of 3”
“A year ago we could produce 1,000 cups a month, now we can make 90,000 cups a month. We have also reduced our production costs by a factor of 3” Josh explains.
To accelerate growth they recently closed a $2.8m seed round lead by Charles River Ventures which will enable them to go after the $31bn specialty coffee market.
But growth is not without it’s challenges. They have gone quickly from one freeze dryer in a garage to more than 10, and the operational complexity of meeting demand will grow exponentially.
“At some point we will need to buy a $10m piece of equipment, which I find a bit terrifying” Josh tells me. On the customer side their next challenge is getting the word out to as many people as possible. Moving their customers from an adhoc purchase model to a subscription model is also an important strategic move according to Josh.
“A subscription model allows us to have a connection and relationship with the customer, but it’s not something that people are currently used to doing”
Making Sudden Coffee in the early days involved Kalle making espresso shot after espresso shot, hundreds at a time, then freeze drying them turning them into powder. Now they have transitioned to a more scalable process where perfectly brewed coffee is frozen into thin sheets before being delicately and precisely evaporated in freeze drying units. The end result is a tray of coffee that looks a little like a baked cake. This is then powdered and stored before it is packaged.
The factory floor is the complete opposite of the office when it comes tidiness. Everything has it’s place. Everything is colour coded. Kalle knows he is not the most organised and he likes that Josh puts tape on the tables showing where everything should be put.
When asked what drives each of the founders, for Kalle, it comes down to making someone's day better as well as impact.
“Building this is the biggest way to create the impact that I want. I like to be useful to the world and create a positive impact in the most scalable leveraged way. What annoyed me about running a cafe the potential upside of impact is very small.“
Josh’s thoughts on what drives him is it is ultimately is a desire to build things.
“I really like building things, putting pieces together and building a team and culture. I like fostering community, within the company and with our customers” he explains.
“It’s also important that I can make a product that people can relate to, something that they can understand, touch and feel”
As we wrap up the interview, I ask if there is anything else they would like to add.
“Tell everyone who reads this to subscribe to Sudden Coffee” they say.
Always be hustling.
You can subscribe to Sudden Coffee here.