Coffee subscriptions have been around for over a decade, but in 2020 they reached a height nobody saw coming. Trade, the JAB-backed subscription company, grew 400% at the start of the pandemic. Square’s annual report showed that the average subscription run by coffee shops and roasters doubled in size.
The subscription model is firmly cemented in the mainstream, and coffee roasters who launch their own in-house subscriptions—as opposed to leveraging a third-party marketplace—have a lot to gain.
Let’s explore how you can build and launch an online coffee subscription for your roasting business.
We looked at new research and interviewed experts across the industry to put this guide together. In it, we’ll cover things like:
- The 3 different types of subscriptions you can offer
- How to price your coffee and other operational challenges
- Creating a Subscribe page that customers love
But first, a quick look at the key benefits of launching your own subscription and why it’s such a high-leverage sales channel for coffee shops and roasters.
The 4 Key Benefits of Launching a Coffee Subscription
Subscriptions are all the rage for consumers, and it’s not all empty hype from the business perspective. Offering a subscription that you have complete control over creates a unique way to interact with both new and existing customers—and the upsides are no joke.
- Create a new source of recurring revenue. It’s why we all love wholesale clients. Regular, reliable income lays a foundation for investment in other areas of the business.
- Achieve a higher customer lifetime value. Customers who subscribe experience little to no friction when it comes to that second (or fifteenth) purchase, since they’re already invested. Subscribers are sticky, which increases their lifetime value over customers who have to make a conscious effort to purchase items one at a time.
- Generate long-term loyalty with continuous customer engagement. Subscribers are here for the long-haul, are more likely to open your email newsletters, and see your brand and products on a regular basis for months or years. These folks are your biggest advocates—and your biggest spenders.
- Access new customer segments. The subscription ecommerce market is expected to grow 65% annually for the next five years—that’s a lot of customers and dollars being traded for repeat purchases. Not everyone wants to go through the labor of logging into your site every time they need a new bag. And there’s no shortage of potential subscribers out there.
There’s reason to get excited about adopting the subscription model, but it’s going to take some careful logistical planning to get your operation ready for the opportunity.
How to Prepare Your Operation for An In-House Subscription
If you’re looking to offer coffee subscriptions, we’ll assume you’re already selling coffee online via your own ecommerce store. If not, we suggest reading our guide to setting up your ecommerce store—that article walks through some ways you can prepare your operation for accepting online orders generally.
Pick Your Coffee Subscription Type
There are three main types of subscriptions you can offer a coffee roaster, each with its own operational challenges and upsides.
- Monthly Roaster’s Choice (easy) — The simplest way to get started is to offer a “roasters choice” style subscription, where you hand-pick a specific bean to be the coffee of the month. Customers who enjoy a white glove experience, and who trust your high quality standards, often gravitate toward this offering style. However, the average coffee lover will probably appreciate more personalization.
- The Single Coffee Loyalist (medium) — Giving customers the ability to subscribe to individual coffees on repeat is a great way to capture those regulars who love a specific bean. If you go this route, we suggest keeping things simple by only offering your year-round coffees at first—setting up new single origins each month can get a little exhausting.
- Customer’s Monthly Pick (hard-ish) — Setting up a subscription where customers can log in and select their own bean each month can be burdensome to set up and is more hands-on over time, but it gives your subscribers the ultimate level of choice and will likely attract the strongest following.
The right choice for you primarily depends on two factors: (1) what your customers are going to appreciate the most, and (2) your tolerance for adding complication to your operation. Remember, you can always start simple and add complexity as you prove the model.
Determine Your Pricing Model
Perhaps the biggest draw to the subscription model for customers is that they receive a slight discount in exchange for their recurring loyalty. Especially in the coffee world, where people are buying multiple bags per month, a small amount of savings can add up over the long-haul.
We suggest offering a 10% discount (or so) to subscribers right out of the box. This is a healthy incentive for people who order irregularly to get on a more consistent subscription. It also answers the frequent customer question: “Why would I subscribe if I could just buy one bag at a time?”
While discounted prices do cut into your margins, the difference is easily made up when customers stick around for more than two or three months. The exact price of your subscription will be based on your green coffee and operating costs.
Generally, prices fall somewhere like this:
- $14-16 Per Bag — These are good daily drinking beans, like your house blend and other crowd favorites that have a mass appeal.
- $17-20 Per Bag — Your higher-scoring (and higher cost) beans need a price bump. Customers who pay at this level generally have higher standards.
- $21+ Per Bag — These well-paying customers are excited to experience your most nuanced and rare beans. They’ve probably been around the block a few times and get excited by interesting and unique coffees.
Profitwell conducted a 10,000-person survey in 2018 that revealed how consumers think about coffee pricing—and what is most likely to get them to pay extra. The study found that survey participants were willing to pay the most for coffees where they had strong feelings about the country of origin.
“The willingness to pay for single-origin coffee is much higher—almost 200%—whereas Fair Trade and organic both sit around the 100%-increase mark. The coffee’s provenance is really what people are expecting to pay more for.”
The takeaway is that, to succeed at that higher price point, you’ll need to lean heavily into exclusive and interesting single origins.
Establish Your Roasting and Shipping Schedule
You already have a roasting schedule for fulfilling regular ecommerce and wholesale orders, but you might need to tweak it to serve your subscription customers. It all comes down to what you promise subscribers.
Roasting and shipping to order is the most attractive option, because coffee lovers get the promise of uber-fresh coffee and fast shipping. However, this can create operational strain, because you end up with unpredictable amounts of coffee going out on a daily basis.
That’s why many roasters in our network opt instead for a weekly batch roasting and fulfillment schedule. In this model, all orders for the week are held until a single day when they’re all processed at the same time. Some customers might like having to wait a few days for their first order to ship out, but there are a few advantages to doing it this way:
- Only 4 potential subscription roasting days per month, instead of ~30
- Better inventory control and planning
- Easier to manage employees and labor
No matter how you fulfill orders, communicate it clearly to customers. Don’t leave anyone guessing about roast days or shipping timelines.
Building the Subscription on Your Ecommerce Store
Now that you have a plan for what you offer, and how you offer it, it’s time to get it all up on the website. Let’s discuss the backend technology and the front-end user experience.
Layering on Subscription Technology
From a technology perspective, billing for subscriptions is a whole different beast compared to standard ecommerce orders because there are countless ways customers can subscribe (frequency, quantity, which coffee, etc). That’s why many popular platforms—like Shopify and WooCommerce—don’t offer subscription functionality right out of the box.
Here are the plugins that are most common among roasters in our network:
If you use Squarespace or Weebly, you have subscription billing built-in, but you might find it harder to create custom subscription options. Paid plugins like ReCharge tend to have more customization options, so make sure to cross-check your vision for what subscription type you’d like to offer against the features of your platform.
Creating a Subscribe Page That Generates Sales
Marketing 101: A confused customer doesn’t buy anything. When you create your subscription page, it’s important to think like your customer. What about a subscription excites them? What questions do they want answered before making a commitment? What concerns do they have about subscribing?
Here’s what we suggest to ensure your Subscribe page converts well.
- Explain why they should subscribe. Tease the built-in discount on coffees. Explain how subscribers get first access to new or exclusive beans. Build hype about what it means to subscribe.
- Get detailed about how they subscribe. Paint the picture as clearly as possible of steps they need to take to subscribe; how to pick their coffee, frequency, and quantity; exactly when their first order will ship; how long till that first box arrives at their doorstep. Specifics are essential here, or you risk a flood of customer support emails.
- Hype the specific coffees. If customers can choose specific coffees, don’t just list their names from a drop-down menu. Make sure customers can see how they’re different (origin + tasting notes at the very least). If you’re doing more of a Roaster’s Choice subscription, show what last month’s coffee was. You want to help customers imagine and get excited about what they’ll be receiving soon.
- Answer those FAQs. Keep it simple with an FAQ section that asks the common questions explicitly at the bottom of the page, even if you’ve already answered questions somewhere else on the page.
- Use your best coffee photography. Coffee is all about the senses, so make sure you’re creating mouthwatering anticipation with incredible photography. We’re coffee people… this one should be a breeze.
Before your page goes live, run a handful of tests with various credit cards, subscription options, and addresses. You want to be 100% certain everything is set up correctly before your raving fans arrive on the page.
Finally, Nail the Unboxing Experience
A coffee subscription is a commitment. These customers aren’t regular folks passing by your coffee shop whimsically—they’ve signaled that they’re dedicated to your brand and coffees. Now it’s time to remind them why.
Don’t just plop a bag of coffee in a plain mailer and call it a day. Anyone can do that.
Create an unboxing experience that’s unique to your brand.
Include a kind note thanking them for subscribing. Slide a postcard of coffee details in the box that explains why you chose this month’s coffee (Roaster’s Choice) or reminds customers why they picked a certain bean. Offer a small discount on a piece of gear or swag as a gesture of goodwill. Send a branded sticker they can attach to a laptop or bag.
When you go the extra mile to make customers feel special, they tend to stick around longer.
Launch Your Coffee Subscription in 3 Steps
There’s a lot to do here, but it all boils down to three core steps:
- Set your model and pricing
- Create a roasting and fulfillment schedule
- Update your site with the new subscription functionality
Naturally, you also need to be roasting exceptional coffee!
If you’re not already roasting, there’s no need to spend countless hours on training and a fortune on equipment. We developed the Bellwether Roaster as the fastest way to get a roasting operation up in weeks—not months.
The Bellwether requires no training, can be operated by your baristas, and fits neatly in your existing coffee shop. It’s the quickest way to dive into the coffee subscription waters.