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Sunday, 08 June 2014 22:00

Ferris considers national retail expansion after JP’s Coffee acquisition

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In acquiring JP’s Coffee in Holland, Grand Rapids-based Ferris Coffee & Nut Co. plans to kickstart its retail development in West Michigan and beyond, executives said. Ferris plans to maintain the JP’s Coffee presence and brand and bring on founder Jack Groot to manage the brand and head up Ferris’ retail operations. In acquiring JP’s Coffee in Holland, Grand Rapids-based Ferris Coffee & Nut Co. plans to kickstart its retail development in West Michigan and beyond, executives said. Ferris plans to maintain the JP’s Coffee presence and brand and bring on founder Jack Groot to manage the brand and head up Ferris’ retail operations. COURTESY PHOTO

Ferris Coffee & Nut Co.’s acquisition of another staple in the West Michigan coffee industry has the potential to position the combined company for national growth.

The Grand Rapids-based coffee roaster and nut distributor in late May acquired JP’s Coffee, a specialty café located in downtown Holland for more than two decades. The transaction immediately helped further expansion plans for Ferris that otherwise would have taken years to complete, said John VanTongeren, president and owner of Ferris. The deal also allows the Grand Rapids company to tap into JP’s Coffee’s experience in the retail coffee sector as Ferris continues to build its business outside of West Michigan, he said.

Ferris plans to maintain the JP’s Coffee brand identity and its coffee shop in downtown Holland while providing the former standalone store with more resources. Company founder Jack Groot will continue to develop and manage JP’s Coffee’s brand while also taking on a leadership role as Ferris’ new director of retail operations. In his new role, Groot will oversee employee education and Ferris’ retail development.

“What Jack has done so well in Holland, we want to be able to expand that, initially in West Michigan and the Grand Rapids area and then nationally,” VanTongeren said. The company wants to expand “on a scale larger than what JP’s has done in the past, without losing that sense of community.”

Both VanTongeren and Groot are confident that Ferris and JP’s will continue to grow their individual brands.

Despite JP’s being an inherently local company, it has a recognizable brand within the coffee community that both parties are eager to see evolve, VanTongeren told MiBiz. Plans for the expansion of both brands are still in the development stages as Ferris forms a strategy for future growth, he said.

“We want to take our core competencies and apply them to a planned execution for expansion,” Groot said. While the partners “have an idea what that will look like,” they were mum on what the details of the expansion might entail. “But you can get an idea because you see who Ferris is and you see who JP’s is.”

In the short term, customers are unlikely to notice any changes, Groot said. JP’s Coffee’s products are unlikely to change and neither company will undergo staffing changes as a result of the acquisition.

While JP’s Coffee was known for its commitment to employee training via its Midwest Barista School, Groot will seek to broaden that effort at Ferris. The program brings into Ferris the capability to educate future national and international industry professionals, Groot said.

“There is a great need for good, consistent quality education and training in the coffee industry,” he said. “For the industry to be sustainable, there needs to be education or training for the people who own and operate coffee businesses.”

The terms of the deal were not disclosed.

For Ferris, the acquisition comes on the heels of a $1.3 million expansion and renovation of its production facility at 227 Winter Avenue in Grand Rapids’ west side neighborhood. Ferris aims to increase its production space by 10,000 square feet, renovate its corporate offices, increase production efficiencies and meet updated food safety regulations. The company also plans to add a café to its retail space as part of the expansion.

This is also not the first time Ferris operated its own coffee shop. It previously ran the Riverfront Café — Ferris Coffee & Nut for three years in the Plaza Towers building in Grand Rapids and maintained a small retail shop at its headquarters before the renovation.

Ferris learned a lot from its first experience in running a café, VanTongeren said, noting that being able to leverage Groot’s retail experience will be instrumental in the new venture.

Ferris is ramping up its retail and distribution business at a time of expansion for the specialty and gourmet coffee industry.

According to a 2014 trends report from the National Coffee Association, 61 percent of Americans drink coffee on a daily basis, and they appear to be switching to more gourmet options. Of those daily drinkers, 34 percent drink gourmet coffee, an increase from 31 percent last year, the report stated.

These industry trends demonstrate the impact of speciality coffees on the market and serve to highlight the importance of the Ferris-JP’s Coffee deal, said Chad Morton, a partner at the Direct Trade Coffee Club, a Grand Rapids-based organization that consults businesses in sourcing coffees.

Morton — who was not involved in the Ferris deal — expects to see continued movement toward consolidating coffee distributors with retail café operations that have a strong emphasis on education throughout the supply chain.

“The more knowledge you have across all links in the supply chain, the more knowledge you have to produce a better product,” Morton said.

As speciality coffee consumption in the United States continues to grow, executives at Ferris say the company is poised to ride the industry’s potential growth wave. Despite the possibilities, both VanTongeren and Groot are convinced their aligned values of responsibility to both the consumers and the community are vital for the future.

“Opportunity is not the limiter, what is the limiter is your ability to execute,” Groot said. “When someone builds out a coffee shop, they need to understand the community and build it out so it serves the community.”

Read 6134 times Last modified on Wednesday, 13 August 2014 10:41

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