My guest today is Gatis Zēmanis, co founder of "Kalve Coffee", we are talking about design as a strong component of business from day one.

M: Hi, Gatis! Thanks for the coffee which comes from Coffee Roastery KALVE and which has been roasted here, in Riga. You have worked with coffee a lot. Can you tell me a bit about the history? When did you start and how did you end up in coffee?
G: Many people have asked “Why coffee? “, and the answer is that this product is important, I like coffee, and it’s a very interesting product to work with emotionally and financially, but the connection to coffee most likely are the people from this industry, and what makes this industry cool is its openness and responsiveness on a global level, and it seems that coffee is a massive global business, but while we are on the topic of specialty, you can actually reach any point of the world, farmer or the world’s best barista, or a roaster.

M: Can you briefly explain what is specialty coffee?
G: It differs with quality – there’s specialty coffee and there’s mainstream coffee. There’s an institution called Cup of Excellence who are special certified judges who assess coffee’s sensory characteristics and give you points. Specialty coffee means that each bean that’s in your package will be free of defects, they will have more or less the same size and gradation, namely, there will be a lot more work put into the coffee to bring out the best of it. Interestingly, if we talk about mainstream coffee… actually the topic of coffee is changing very quickly, and coffee demand globally is growing, and few days ago I had a conversation with a Latvian scientist Ilze Laukalēja who studies coffee and who has research a lot of thing in USA universities, and she had a question from one of the biggest corporate companies of Brazil that produces green coffee about what to do with the mainstream coffee that people need less and less. They found that this coffee has a lot more antioxidants and a lot of good substances, and now there’s a big question mark regarding what to do in order to turn this defect into an effect.

M: When you started, you were not the first coffee roaster in Riga. I know that historically there have been more than 20 coffee roasteries in Riga, but back when you started there were 2 or 3. When you came up with your offer, what was the essence you put in your brand when you recognized that there’s a place for one more roastery and what was the place you hoped to occupy?
G: Primarily, me and Raimonds, my partner , saw that we really love the specialty coffee and that we like everything that this specialty coffee offers in the sensory and community sense. And we saw that specialty coffee is not emotionally and financially presented in the way that we see it, that it was more like a niche product. If we would let a coffee drinker, who drinks Italian coffee, try a specialty coffee, he would think it’s bitter and expensive etc., so our goal was to make this specialty coffee emotionally and financially available.

M: I know that your brand has many values that you strictly adhere to, one that you mentioned was availability, price. Are there any other values that you identified from the beginning and that you considered as the pillars of your brand?
G: We really put in a lot of work in the beginning in order to create a navigation map for us that’s based on these pillars – core values. One of them is availability, and it doesn’t only mean price availability… speciality coffee doesn’t have to cost 50 euros per kilo, it can just as well cost 25 euros per kilo. Or availability of taste, when it doesn’t mean that this coffee has a particular, bitter, fruity taste that’s not acceptable to an Italian. We are able to create an expresso blend that’s specialty, but which is accepted by both an Italian and a specialty coffee drinker. The second value, which is absolutely essential and nowadays topical for almost every company, is sustainability. Sustainable design, sustainable thinking within the company, sustainable delivery or packaging.

M: One of the things that separates you from most of the companies, is that you had a strong emphasis on a high quality brand design from day one. There are a lot of beautiful brands, but there are few brands where this has been addressed from the beginning. You are one of the rare companies that has a designer within its founding team. Such brands are not many, Madara Cosmetics is one of the examples and you are also one of such companies that has a designer at hand from day one, and that is obvious. What was the decision on your part when you understood that this is an aspect that is worth paying attention to?
G: It was most likely an unconscious choice and coincidence. It was clear that we wanted this to be a high-quality brand not only in the terms of contents, but also regarding design. It had to look really good. Our ambitions were high enough that we saw this coffee brand not in the context of Latvia or the Baltics, but in the context of Europe. Destiny brought us together with this one guy Jānis Andersons, and at the very beginning we had decided that we would not attract investors just so we could sustain the ability to manoeuvre and freely make decisions. So, when we met Jānis and started talking, we understood that we can’t afford to pay him for the whole brand development, marketing strategy etc., and through conversations we came to a conclusion that maybe we should be partners.

M: You mentioned brand culture and that you had a common understanding about how the company should be created. I know that you work a lot with the internal culture. Maybe you could tell me about your approach to the invisible parts that we don’t see on the shelves, but that you work a lot on.
G: In reality it’s very simple. In the company internally it’s important to know the rules of the game for all stages, for example, what do I expect from my partner, what I expect from a colleague, how we as a company want to communicate outwards and how we explain that to baristas. We have invested a lot of time and work in various internal materials, one of them is “The Handbook of Kalve’s Values”, where we have stipulated various things, for example, how the brand communicates with a person, the brand being the product and me as a company representative, and the barista, and any product we choose to sell in addition to coffee. How the brand communicates with environment. How we as people should communicate with our clients, our partners, our friends etc. And the other material, which is very good and serves as a bible that should from time to time be read by everyone within the company, is “Ethical Guidelines”. It includes various situations where we have described how we want our clients to be communicated with.

M: It think it’s very cool that you have done that. Your company is young, and such things often are done only when you are starting to drown, when the company has grown and you realize that you can no longer hold the team in line. You have done it at the very beginning, by writing down your principles as a founder, so afterwards it’s easier to scale them and grow bigger. You mentioned the easier route… I have one more question about this topic. Even though you’re not a tech start-up, you are trying to implement many things from this field in your daily life. You mentioned KPI, you have talked about the Lean methodology, which normally is language used by tech start-ups. Tell me how you implement it in your daily life and what it means to you.
G: A person close to me keeps saying that you should develop a lazy person within yourself, which means you have to arrange your work environment and all systems in a way that actually makes you effective, so that you save time, you save money and resources etc. Lean methodology is one of the methods used in production; I don’t think you have to look up what it is. And KPI is a method that helps you find the weak links and work on them.

M: A while after founding the roastery, you opened your first coffee shop on Stabu Street. What was the idea behind this coffee shop? Was it marketing? What was the idea then and what is it now?
G: If I’m being honest, the expectations weren’t great. We knew we wanted to open a cool coffee shop where we ourselves would like to work. The idea was to show how we see a modern, worldly, high-quality, easily accessible café. This is the easiest way to receive feedback from the client, because it’s not only a café, but also a store. The barista is able to talk to people, ask what they liked and what they didn’t, understand how many people return, how many come once and don’t return. It’s a platform on which we can measure many different things with our product.

M: You talked about things that shouldn’t be rushed. You even started your company gradually and deliberately. You said there were no big investments. If I’m correct, you started with a 60 000 starting capital, which isn’t a lot for a producing company. There were no big investments from the outside, which means slower growth, but that was a deliberate decision.
G: You can quite easily attract certain investments to such a concept as ours, but the question is whether you should. Big investments quite often put you in a losing position, and you lose certain ability to manoeuvre. Whereas, if you grow more slowly, you are able to adapt to the market. If we had invested thrice as much money, would we be able to pay all of it now? Most likely not. Everything has to happen little by little.

M: At the beginning of our conversation you mentioned sustainability as one of the main pillars you based your company on. You see that there is a demand for these things, people are willing to pay a little more for a sustainable product.
G: Quite often, if you want to change something in your life so that it’s in line with the sustainability principles, it most likely requires some changes, and people are lazy when it comes to that. On our part, we actually created a system regarding packaging that works really well, it was really important for us that this packaging differs from anything else on the market and that we combine it with certain sustainability principles. For example, if we look at standard coffee packaging - it’s produced from two materials, therefore it doesn’t comply with sustainability principles. There are two materials, you can’t separate the waste, it means you can’t produce it from recycled plastics, so we ended up with this can. A lot of people use the opportunity to refill these packages. The idea is that if you buy a can at our store and pay 10 euros, you can come back and refill it for 6 euros. The idea was not to increase the price so that this sustainable product gets going, but the opposite. We need to create a system based on sustainability principles that makes it easier for people to change their habits. They see they can save 4 euros, which, considering their consumption, would be around 100 euros per year, so they do it. The design-based thinking is not only reflected in the product, but in our every step – how we choose premises, how we furnish the bathroom so that moms can change their babies etc. I think that what separates successful people or companies from less successful ones is decision-making, how successful you are at making certain decisions at a certain time. If we talk about design… my side of the company is the business management side, Raimonds oversees the coffee where I don’t even intervene, and Jānis oversees the design side, not only the product, but a wider, strategic design. But when it comes to big, important decisions, we make them together, not separately. I think it’s the right way to make a better decision.

M: How do people see this small coffee roastery from an even smaller country that’s not Italy and is not known for coffee? What’s the reaction when such good coffee suddenly comes from this world region?
G: I think it’s important to set very high goals, set a high bar at the very beginning. Big ambitions in a good sense, but then it’s important to check whether you can attain them. It’s really bad if you have big ambitions that you can’t attain, or vice versa - you have the ability that you can’t actualize because your ambitions are too low.

M: Then I wish you success in actualizing these ambitions step by step and may your every morning start with a good coffee!
Gatis Zēmanis:
https://www.linkedin.com/in/gatis-zemanis-25836073/?originalSubdomain=lv

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