Utah-based Beans & Brews has ambitious plans to go regional

Coffee shop chain exploring how to expand its high-altitude brand to Colorado, Texas and elsewhere.

(Beans & Brews) The Utah-based coffee shop chain Beans & Brews announced in June 2022 that it is looking to expand, with potential franchises in Colorado and Texas, among other places.

When Beans & Brews first opened in 1993, Utahns were so unfamiliar with coffee drinks, “we rarely got to fire up the espresso machine,” said Jeff Laramie, the company’s co-founder and CEO. “If someone ordered a latte, we’d all fight over who got to make it.”

W/hen the national chain Starbucks opened its first Utah stores in the late ‘90s, they were competition — but they also boosted Beans & Brews’ business, Laramie said.

“It brought a lot of legitimacy to the industry,” Laramie said. “That’s when Beans & Brews really took off, because people began to understand what specialty coffee was, and Starbucks was in the market in a way we couldn’t afford to be.”

Now, nearly 30 years after the Utah-based company began, Beans & Brews has ambitious plans for its own national expansion.

The company started rolling out franchises in 2004, and now, according to the company’s website, it has 62 locations in Utah, plus two in Idaho, one in Nevada and one in Arizona.

The company now plans to expand its footprint with stores in Colorado, New Mexico and Texas, as well as additional locations in Nevada and Arizona. Laramie said the company is open to growing beyond those states when it makes sense to take that step.

‘You have all the people in place’

“We’ve never actually put any dollars into marketing or development,” Laramie said, adding that their growth up until now was almost completely organic. But at the end of 2021, he said, Beans & Brews made the decision to work with Charger Investment Partners, a private equity firm, and focus on growth and expansion.

Kevin Laramie, the co-founder and chief operating officer (and Jeff’s brother), said one of Charger’s board members told them, “you have all the systems in place. You have all the people in place. You just need to turn the lights on.”

That, Kevin Laramie said, is what motivated Charger “to partner with us, and grow this, and turn it into something quite a bit bigger.”

There’s one important aspect of the business, the Laramie brothers said, that can’t be exported from Utah: Salt Lake City’s elevation.

Elevation turned out to be a key factor when the company started, and the Laramies bought their first roasting machine from a retired engineer who had moved from San Francisco to the small town of Fallon, Nevada.

“We trained in Fallon for about three days, and we went back home to Salt Lake. He shipped the roaster to us, and we put it all together, and had him on the phone as we were roasting coffee,” Kevin Laramie recalled. “But nothing was working the way it should. We were burning batches left and right, and nothing was drinkable. We couldn’t figure out what was going on. …

“FInally, he said, ‘The only thing I can think of is the altitude.’ That’s when we had the ‘A-ha’ moment,” Kevin Laramie said.

Water boils at a lower temperature at higher altitudes, the brothers remembered. So they threw out their burned beans, and started over with a modified temperature chart.

High-altitude roasting provides a better flavor profile, Kevin Laramie said, because you can roast at a lower temperature for a shorter period of time. The longer the coffee sits in the roaster, the more stale and flat the flavor becomes — so the shorter roasting time gives the coffee a brighter taste and lower acidity.

The high-altitude roast has become part of Beans & Brews’ branding, Jeff Laramie said. So the company has bought new roasters, and a larger facility to roast beans in Utah.

The other important piece of the expansion, the Laramies said, was case-by-case vetting of franchisees, which is handled by Kim Falk, vice president of franchise development.

Falk said she starts the process with a phone call. “I take time in getting to know them,” she said. She said she wants to know their motivations, their personalities, and their past experiences — to see if they’re a good match for the brand.

“We can train anyone on every part of the business,” she said, “but we can’t train someone on how to build relationships and be in the community… That’s what I’m looking for, someone who has that, and is trainable on the business model itself.”

A flexible franchise model

Beans & Brews’ business plan is extremely ambitious, said Rick Haskell, associate professor of finance at the Gore School of Business at Westminster College.

For any company looking to expand through franchises, Haskell said, it’s important for the parent company to have resources to match its ambition, including the ability to support all the new franchisees.

“And then, finally, there has to be reasonable consumer demand to meet the presence of the new providers of the product in a given marketplace,” Haskell said.

Haskell added that he understood that Beans & Brews vetted franchisees financially, asking them to make a capital commitment of $250,000 to $300,000. “I’ve got to believe that they look at them closely when it comes to operational awareness and the ability to execute, because otherwise it destroys the brand,” he added.

Beans & Brews gives franchisees the latitude to personalize their shops and change pricing, Haskell said, which larger, more rigid corporate chains don’t often do.

“If we’re talking about McDonald’s or somewhere else, good luck,” he said. “They’re just small enough that the franchises aren’t just nameless or faceless. They tend to work with their franchisees. You go to the one on 106th South and 1300 East, in Sandy, very often you’ll find that the person behind the counter waiting on you is one of the franchise owners. That’s not uncommon.”

That fluid approach has been part of Beans & Brews’ business model from the start, Jeff Laramie said. In their early days, he said, many people in Utah weren’t interested in drinking coffee, so they got creative with the menu, adding such non-caffeinated items as frappes and Ghiradelli drinks.

“We appeal to a lot of different kinds of people, young, old, all the way across the board, which was critical to our success over the years,” Jeff Laramie said.

The economy is a wild card — including what people are willing to pay for a fancy coffee drink — but Haskell said that “having local ownership that’s locally invested, which I think is part of the Beans & Brews shtick, if you will, is very important here.”

In his experience, Haskell said, having an edge with the food is foundational, but people go back to places primarily because they like the atmosphere — or the people.

“You go to any food establishment other than a grocery store, and if you enjoyed the food, and enjoyed the environment, then you might consider going back. But how many places within three miles of where you might live can you enjoy the food and enjoy the environment? There’s lots of them,” he said. “You’re going to go back to those places that have given you something memorable, something out of the ordinary.”

Haskell said that when he and his wife go out to dinner, they “go to the restaurants we go to because we enjoy the food and it’s not food we can easily replicate in our own home, and we’ve gotten to know the owners. When we come in, they come over and say ‘hi,’ and maybe sit down and talk for a bit. That’s the remarkable part, right?”

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