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Lawrence Business Magazine LLC
Lawrence Business Magazine LLC
2018 First Quarter - Human Resources

Collaboration Is Key

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Collaboration Is Key

Local business owners connect to help make their bigger dreams a reality.

| 2018 Q1 | story by Anne Brockhoff | photos by Steven Hertzog
Collaboration

Alchemy Coffee & Bake House and KANbucha and Bates Co. (owner of Bon Bon and The Burger Stand restaurants) have a lot in common. Each opened in a miniscule space. Each grew rapidly, with no outside investors. And, each counts people among its most essential assets.

Collaboration

Alchemy

Relationships with customers, employees, collaborators and even each other have helped these entrepreneurs maintain their brands and thrive even as they expanded. Certainly, they’ve beaten the odds so far. One-third of all new businesses fail within two years of starting and half within five, according to the U.S. Small Business Administration. Yet, Alchemy is celebrating its fifth anniversary this year, KANbucha, its eighth, and The Burger Stand, its ninth.

“It’s not just that the products are good, though they are,” Joni Alexander, who co-owns Alchemy with Benjamin Farmer, says of the company’s success. “It’s a human connection.”

It’s impossible not to experience that at Alchemy, given that the service counter, bakery, prep and storage areas, and handful of tables are squeezed into 420 square feet. Customers chat with baristas while waiting on their pour-overs (a style where each cup is made to order) and espresso drinks. Folks pause at the kitchen window to see what Alexander is baking that day, and cars come and go from the eight-spot lot near the corner of 19th and Massachusetts streets.

Farmer likes that the shop always feels busy and that it embodies the coffeehouse culture he’d come to love as a college student. Would he have liked to find a bigger location back in 2013 when he opened? Maybe. But, Alchemy was entirely self-funded, with only some of Farmer’s grandfather’s property as loan collateral; so, it wasn’t really an option.

“This model was about all I had the budget for,” Farmer explains. “When I opened the doors, I was down to my last dollar.”

Farmer’s customers quickly became fascinated with the Kyoto brew towers he’d installed in a case along the north wall. With their glass beakers and coils, the towers look more like lab equipment than coffee makers, but the design allows cold water to slowly drip through ground coffee to produce a smoother, sweeter concentrated coffee known as cold brew.

A Cold Brew Winner

Collaboration

Benjamin Farmer, Alchemy, relaxing behind his coffee bar

It was a hit, and customers were soon asking where else they could buy it. Farmer began bottling and selling his cold brew at The Community Mercantile (The Merc) and Cottin’s Hardware & Rental. After watching sales numbers for six months, “I thought we could make something out of this,” he says.

Farmer went from producing 4 gallons of cold brew concentrate a week to 40, and he knew he was out of room. One day, while chatting with Elliot Pees, KANbucha’s owner and an Alchemy regular, Farmer discovered they had the same problem.

The two decided in 2014 to lease a 2,500-square-foot warehouse in Riverfront Business Park, off North Second Street. Farmer, his father and Pees then spent about nine months renovating and turning it into a joint production facility.

Farmer engineered a larger cold brew system and installed a Diedrich IR-12 coffee roaster, and began roasting his own beans. He and Pees added other equipment, such as the bottle filler they share, but the operation is far from automated.

“Most of it’s still done by hand,” Farmer says. “There’s still a craft aspect to it.”

By the peak summer season in 2017, Farmer was producing 300 gallons of cold brew concentrate a week-enough to supply 60 wholesale customers in Lawrence, Kansas City and Denver with both bottled product and kegs for accounts that prefer serving it on tap. Bottles, cans and growlers are available at the shop and online. Alchemy cold brew also goes into Martin City Brewing Company’s MCBC Alchemy Coffee Stout and Hildebrand Farms Dairy’s Mocha Milk.

Farmer will continue focusing on regional growth, in part, because his cold brew doesn’t contain preservatives and, so, has to be refrigerated, which complicates distribution. But, he also likes developing relationships with his wholesale customers in the same way he does with retail ones.

Collaboration

Joni Alexander behind her food counter at Alchemy

“That’s why we’ve been so successful,” Alexander says. “We’re physically here. It’s our passion.”

Alexander and Farmer met shortly after Alchemy opened, when he was searching for a source of baked goods. The model-turned-baker began supplying Alchemy with muffins, sweet breads and other treats in 2013, and opened a closet-sized bakery in the shop in June 2014.

“When we came up with the idea of putting a bakery in here, it was a very ‘aha!’ moment,” says Farmer, who is now engaged to Alexander.

Hiring for the Long-Term

Alchemy usually has between 10 and 13 employees. When there are openings,
both Alexander and Farmer interview applicants to find a fit for what they describe as a tight team.

“We don’t have scripted interview questions,” Farmer says. “In the end, we try to have a conversation. That’s when someone’s true self comes out.”

Once hired, employees progress through a series of training levels. As they gain more experience, their compensation goes up. Alchemy pays above minimum wage, Alexander says, and tips are shared among all staff according to a formula that takes into account employee longevity, the number of hours worked and which training levels they’ve passed.

Farmer and Alexander agree it’s important they support employees’ own aspirations, but it also makes management sense.

“We’re in this for the long haul,” Alexander says. “If we invest in good employees, they invest in making this a good business, and it pays off in the long term.”

That will become even more important as Alchemy adds a second location at 816 Massachusetts St. this March. The 2,200-square-foot building will include plenty of seating, a bar, a full basement for storage, an office and a side room where Alexander’s daughter and Farmer’s son can do homework and play.

Collaboration

Elliot Pees inspecting his Kanbucha out of the tank

Coffee offerings will be similar, if streamlined somewhat to appeal to “people who want to pop in and out,” Farmer says. There will be more on-tap options, including Alchemy’s nitro coffee (cold brew that’s been charged with nitrogen to give it a thick texture and creamy head) and KANbucha, and a growler refill station.

The original Alchemy, which Architectural Digest in January called the most beautiful coffee shop in Kansas, will remain open, although Alexander will move to the new site’s 550-square-foot kitchen. She’ll continue making breakfast sandwiches, pies, donuts and other baked goods, as well as baking custom cakes and catering. She’s considering more food options, and the couple is applying for a liquor license. There still won’t be a set menu, but Alexander says her customers are used to that.

“Our branding is built on trusting Ben’s and my palate, and our direction,” Alexander says.

Farmer agrees, “We pursue what we’re passionate about, and that’s what makes it good.”

It’s a philosophy KANbucha’s Pees identifies with, and he appreciates being able discuss with Farmer their similar business challenges.

“We’re both learning a lot, and we share a lot,” Pees says.

Fermenting Success

Collaboration

Pees became a fan of kombucha, a tangy and effervescent fermented tea that contains probiotics, while teaching music at Southwest Middle School. He found instructions for making his own online and was soon experimenting with recipes and flavors.

“My DIY nature kicked in,” Pees says.

Pees liked what he was making and figured the Lawrence market would respond to a local kombucha. He took a food-safety course, researched food handling, labeling and other requirements, installed a certified kitchen in his basement and began selling KANbucha at the Lawrence Farmers’ Market and The Merc in 2010.

Demand for KANbucha increased, especially after The Merc expanded its coffee and juice bar, and began selling it on tap. Moving to the joint production facility freed up Pees’ kitchen basement, and he rented it to food start-ups, including a tortilla manufacturer and a company that makes fermented vegetables.

“Being able to speak with them and help them through the murkiness of owning a business, what steps to take, who to talk to-I was happy to share my experience,” Pees says.

KANbucha’s north Lawrence location has a production kitchen, cold storage, bulk ingredient storage, a temperature-controlled fermentation room, warehouse shelving and a small office. Sharing with Alchemy has proven ideal, and Pees says he couldn’t have afforded such a build-out on his own. There are other synergies, as well, especially when it comes to marketing.

Both kombucha and cold brew coffee are easily served on tap, so it made sense to design a stand-alone, self-dispensing unit for grocery stores like The Merc, Hy-Vee and Kansas City’s three Whole Foods stores. The units have three taps-one for Alchemy’s cold brew and two for KANbucha flavors, usually its most-popular, ginger rose, and another selection that changes regularly.

Prospective clients “perk up a little about having that combination of beverage options, especially when they’re two things people are looking for,” Pees says. “It’s a no-brainer.”

He’s now selling more KANbucha in bulk than in bottles, which is a boon, since bottling is expensive and labor intensive. KANbucha is available in 25 locations throughout Lawrence, Manhattan and Kansas City.

On-tap availability has also made both KANbucha and Alchemy’s cold brew more appealing to local restaurateurs such as Codi and Simon Bates, of Bates Co. They sell both products on draft and occasionally in bottles at The Burger Stand restaurants in Lawrence and Topeka. For Bon Bon, they collaborated with Pees on a bespoke KANbucha flavor that’s only available at that restaurant.

Collaboration

Product line of Alchemy and KANbucha drinks

“It’s been fun to work with both Ben and Joni, and with Elliot, and see their companies grow,” Simon Bates says. “We’re all relatively the same age, and we’re all committed to our town. We all share the same vision.”

The couple moved to Lawrence and helped Robert and Molly Krause launch The Burger Stand concept in what was then Dempsey’s Pub (it’s now called Dempsey’s Burger Pub) in 2009. The menu stuck to burgers and fries, because there wasn’t room for much else, Simon Bates says.

“There was a grill, a fryer and a flat top. It was really pigeon-holed in there,” he says.

Their following grew, and in 2010, The Burger Stand moved to the Casbah at Eighth and Massachusetts streets. A second site opened in Topeka in 2011. The Bateses became sole owners of both in 2015.

The schedule was grueling in the early years, and the couple frequently worked 80-plus hours a week. That commitment had an unexpected payoff: Because they as owner-operators were almost always present, they developed a loyal staff and came to better understand how to motivate and retain employees.

Benefits Boost Retention

Pay is one factor. The Bateses are committed to paying a living wage and constantly evaluate the balance between wages and tips to ensure they add up to about $15 an hour, depending on how many hours a week an employee works.

The couple has boosted benefits, too. They subsidize some fuel costs for managers who use their own vehicles for company errands. They offer paid parental and sick leave, paid vacation and health insurance (with an opt-in for dental and eye care) for eligible employees. This year, they hope to add individual retirement accounts (IRAs) for higher-level managers. It’s all helped reduce turnover.

They offer flexible scheduling for employees who are also students or artists, or have other passions. For those who want a career with the company, they strive to find management and leadership opportunities, like working with social media or gardening, that suit their talents.

Collaboration

Codi and Simon Bates at their bar in Bon Bon

That’s all added up to a solid team of managers and employees, which in turn enabled the Bateses to open Bon Bon in east Lawrence in 2016.

“We love this neighborhood,” Simon Bates says. “We love everything about it. We love the people.”

They found a long-empty historic stone building that was rich in character but had no space for a kitchen. Their solution? Park a food truck next to the building and cook from that until they are able to build a permanent, albeit still external, kitchen.

Bon Bon’s menu is an eclectic collection of dishes that reflects the couples’ love of travel and utilizes ingredients from as many local farms as possible, including their own Bon Bon Gardens across the street. It’s a very personal concept and one they relish having been able to craft over time.

“The Burger Stand took off, and we’ve just been steering it,” Codi Bates says. “With Bon Bon, we thought about what we could create. We were able to think it through, every detail, our vision, our voice.”

That process allowed the Bateses to consider their goals and every aspect of their business, including what’s worked-and not worked-over the years. They reorganized the company to better take advantage of any future business opportunities, wrote a mission statement and outlined what they consider the key pillars of their business.

“That’s based on everything we’ve already been doing-caring for our community, caring for our staff, caring for our customers, the environment, our suppliers and vendors. Just caring for other people,” Codi Bates says.

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