Boston Business Journal
by Sean McFadden
February 02, 2007
ORANGE -- With his coffee business really brewing these days, Dean Cycon is a bit concerned it could boil over if left unchecked.
The founder and president of 14-year-old wholesale coffee roaster Dean's Beans Organic Coffee Co. (officially incorporated as Proud Harvest Inc.) estimates he sold about 450,000 pounds of coffee last year, all processed at his 6,400-square-foot headquarters and beanery in Orange and available in 450 locations nationally, including supermarkets, small markets, cafés and food cooperatives.
During the recent holiday season, business for his 100 percent certified organic and fair trade products shot up by 40 percent, creating a heavy workload for his 10-member staff.
"The biggest stumbling blocks to Dean's Beans aren't what would keep us from growing, but what excess, or rapid growth, can do to us," said Cycon, 54.
As a result, he doesn't have a formal marketing plan in place, instead preferring a more "passive guerilla" approach that relies on word of mouth, occasional speaking engagements and product demos and giveaways at events such as last year's Tony Awards presentation.
And when Whole Foods Market Inc., his single biggest account at 80 stores, offered the opportunity to sell his products in all of their stores, Cycon declined, fearing it would triple the size of the operation before he was ready.
"For us to engage in a quantum leap of growth ... we're not ready for it, and we're not looking for it," Cycon said.
His philosophy is: "To me, growth is the outcome of a good business; it's not the goal."
With that in mind, Dean's Beans still brought in revenue of $2.6 million last year; this year, the company is projecting revenue of $3.1 million. At the same time, the company is doing a booming business on the Web, which now accounts for more than 20 percent of its sales.
Ask him about the expense of running a strictly organic, fair trade business and Cycon will admit that his 14 percent profit margin could probably be 20 percent or more were it not for the company's generous labor and benefits package, including starting salaries of $11 per hour, 100 percent health care coverage and profit sharing.
Or the fact that he's paying about 20 cents more per pound for organic coffee beans than nonorganic, which he purchases from 13 farming cooperatives in 12 countries.
"Our profit margin is based on this route," he said. "I don't think we'd have the sales that we have if we didn't go organic and fair trade."
Rick Peyser, director of social advocacy and coffee community outreach at Green Mountain Coffee Roasters Inc. in Waterbury, Vt., said, "Dean is the kind of competitor that Green Mountain Coffee Roasters appreciates. He keeps us on our toes as both companies strive to make a real positive difference in the world and where we do business."
A former international lawyer, Cycon said his business was, in fact, an outgrowth of his work in the late 1980s with the Santa Fe, N.M.-based nonprofit organization Coffee Kids Inc., which assists children and families in coffee-growing communities through development projects.
Coffee Kids co-founder Bill Fishbein said, "Dean has shown that you can sell the highest-quality product, pay the highest price for it, pay for the environmental and social value and you can still earn a profit."
From the get-go, Cycon has taken a fairly conservative approach to building the operation.
His startup costs were $8,000 -- $7,000 for a used coffee roaster and $1,000 for 750 pounds of coffee.
Recent expenditures -- including a one-bag roaster that can process 150 pounds of coffee three times an hour, new packing machinery and a 10-kilowatt, energy-efficient solar paneled roof at his plant -- have been funded internally from cash flow, a new $100,000 revolving bank credit line and digging deeper into his home equity loan.
While he's not actively pushing it, Cycon understands that the business will continue to grow, albeit organically.
Already he's planning a 4,000-square-foot warehouse addition to his plant in the spring, which will require several more hires.
"To me, if we do this business right, and we offer a good product at a good price, and we let the world know what our values are, we're going to grow," he said.