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Business Observer Thursday, Feb. 24, 2022 4 months ago

Strong brew: Brothers bring disruptive, creative mindset to coffee startup

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Hogg Batch Coffee Co., with its emphasis on experimentation, was bent but not broken by the pandemic. Its quick-thinking founders are now poised for big growth — and the challenges that come with it.
by: Brian Hartz Tampa Bay Editor

Twin brothers David and Duane Hogg, 39, have the Tampa Bay coffee scene abuzz with Hogg Batch Coffee Co. It started as a passion project. But it has become a second career with loads of growth potential, a business model that involves a wide variety of revenue streams and a production process that infuses coffee with alcohol.

Originally from Connecticut, the Hogg brothers moved to the area in the late 2000s for graduate studies at the University of South Florida. Today, they’re both employed in senior digital marketing roles — Duane at JPMorgan Chase & Co., and David at New York Life.

As undergrads, though, both David and Duane attended an art and design school, specializing in computer animation, and they have an urge to create, particularly David, who considers himself “a serial entrepreneur and hobbyist.” In an ironic twist, however, he says he didn’t drink much coffee until landing a corporate job.

“I got introduced to coffee at the office,” David says. “Going along with the routine of having conversations in the office break room and drinking pretty horrible coffee, more for the caffeine than the taste.”

'I'm nervous about an explosion of growth. I think that's gonna happen this year, and so we're already projecting to have more time allocated to this business.' David Hogg, co-owner and co-founder of Hogg Batch Coffee Co. 

David’s wife introduced him to Starbucks and other premium coffee brands, and the die was cast. The brothers launched Hogg Batch Coffee Co. in 2019, using their own funds with no outside investment. In 2021, thanks to a private-label deal with The Scott, the bar at the Cordova Inn in downtown St. Pete, as well as sales at its retail and roasting location in the city’s Grand Central District, Hogg Batch Coffee brought in $50,000 in gross revenue. That might not sound like much, but it’s double what the Hogg brothers made in 2020, and they expect sales to double again in 2022. It was also enough to hire two part-time staffers to work at their store, which is currently open only on weekends.

“Because of the way we manage this business,” David says, “it's on this trajectory of very small growth because we haven't even tapped into the things that we can tap into. I'm nervous about an explosion of growth. I think that's gonna happen this year, and so we're already projecting to have more time allocated to this business.”

So what’s holding the Hogg brothers back? 

BALANCING ACT

For starters, David, with a wife and 8-year-old child at home, has a family to consider. Duane is unmarried but has had to sacrifice a great deal of his social life to focus on Hogg Batch Coffee. Also, the pandemic, coming just months after they launched the company, halted the farmers’ markets and other local in-person events that they relied on for sales and marketing.

“Transitioning to e-commerce was a big shift for us,” Duane says. “We were doing tons of markets throughout the year. Face to face, that’s how we grew our brand; that’s pretty much how we sold anything. It was an uphill climb for us … especially since we had such a local audience.”

The COVID-19 crisis also complicated the brothers’ strategic plan to cultivate partnerships and collaborations, not only with venues like The Scott, but fellow coffee companies that have contract roasting opportunities available. They also wanted to create a space at their roastery where people could come in and try their hand at coffee bean roasting.

“That hasn't taken off,” Duane says, “but it’s part of our core thinking.”

GET CREATIVE

Adaptation and improvisation are part and parcel of the creative process, so, when faced with the pandemic’s myriad challenges — “we did consider” throwing in the towel, David says, adding, “it was a ‘double down’ moment for us when 2020 hit” — David and Duane put their heads together and came up with a plan that helped shepherd their fledgling business through the crisis.

In essence, they turned their roastery and retail shop, at 2327 Central Ave. in downtown St. Pete, into a giant Amazon locker, of sorts.

Courtesy. To celebrate Black History Month and the election of Ken Welch, St. Petersburg's first Black mayor, Hogg Batch Coffee Co. released a new blend, dubbed "The Mayor," made from Ethiopian Guji coffee beans.

“We created a self-service entry kind of thing,” Duane says, “where we set up an appointment. So you buy your coffee, get instructions to schedule your time and then you get a code to access [the store]. It was a way to keep the locals with us. And at-home coffee sales took off in 2020, so we didn't wanna miss that ball.”

It helps that they had a hit on their hands in the form of their alcohol-aged coffee. Prior to roasting, Hogg Batch beans are stored in barrels that have been soaked with tequila, rum, whiskey and bourbon. The company even offers a cognac-flavored coffee, and its beans have been used in cocktails served at The Scott and Copa Lounge in St. Pete’s Edge District.

Focusing on local sales has helped the brothers offset inflation-driven higher costs for raw materials and shipping, though David says they reluctantly raised prices toward the end of 2021. However, as a premium, craft product, he says there’s some “wiggle room” when it comes to Hogg Batch’s pricing and what customers are willing to pay.

“We already exist outside of the normal pricing,” David says.

BROADENING APPEAL

As Black entrepreneurs in an industry whose customers skew white — and whose major players, like Starbucks, tend not to open many cafes in African-American neighborhoods — David and Duane believe they have an opportunity to help more people of diverse backgrounds develop an interest in craft coffee. After all, coffee beans are typically grown in areas, such as South America and Africa, that have predominantly non-white populations, and there’s a rich tradition of coffee culture in Turkey and the Middle East.

“We didn't think about that going into it,” David says, “but we realized that there's a lack of diversity in some of these coffee spaces. And so, I think it's important that we try to facilitate that and bring it to communities and people who aren't necessarily into specialty coffee as much.”

Mark Wemple. David and Duane Hogg at The Scott bar, the Cordova Inn venue that was one of their first clients.

Education is a key part of the brothers’ marketing efforts. They say most people aren’t aware Africa is the birthplace of coffee, and that the continent produces some of the finest specialty coffees on the planet.

“South American coffee is probably more prevalent,” David says, “but the African coffees are usually the ones that have nuance and things that you need to learn to appreciate. They’re not going to show up at Dunkin’ Donuts.”

Hogg Batch also prioritizes diversity in the types of coffee beans it uses and the places from which it sources beans. As opposed to other roasters that tend to order the same beans from the same suppliers over and over again, David and Duane pride themselves on having a constantly changing product lineup that’s a result of their experimentation and innovation. Not only does that scratch their itch for creativity, but it helps them generate repeat business and stand out from the competition.

“Experimental coffee release has been our primary business model,” Duane says. “We don't have a signature line of coffee that you can count on. We do the opposite of what most coffee companies do. We rotate our coffee monthly. To me, it’s a differentiator.”

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