Why roasting collectives will never go out of fashion

Roasting collectives (or co-roasting spaces) have long been a useful resource for industry professionals looking to roast their own coffee. Budding entrepreneurs and smaller-sized companies leverage these facilities to build their brand and flex their creative muscle in a more affordable way.

The collaborative nature of these spaces also encourages knowledge and skill sharing, which can help roasters scale quality more easily. Simply put, they are a viable option for businesses that don’t have the capacity to invest in their own roastery.

So in the wake of near-record coffee prices and rising operational costs, it’s likely that more and more companies will rely on roasting collectives to manage their increasingly tight margins. Undoubtedly, this will reshape the wider coffee industry.

To learn more, I spoke to Chad Burton, Sales Manager at Cosmic Garden Coffee, and Collin Bay, co-founder of First Crack Coffee.

You may also like our article on whether co-roasting spaces will become more popular in specialty coffee.

How co-roasting services add value to specialty coffee

Although it can be a lucrative industry, entering the coffee roasting space doesn’t come without its challenges. Over the last four years alone, Covid-19, conflict in Ukraine and Gaza, rising inflation rates, and high arabica and robusta prices have all piled pressure onto coffee shops and roasters.

On top of dealing with these issues, investing in essential equipment (including roasters, ventilation systems, and storage silos) is a huge expense. This machinery has only become more costly in recent years, too.

Chad Burton has worked at multiple roasteries since starting his coffee career in Cape Town, South Africa, before moving to Dubai in the UAE in 2018. He is the Sales Manager at Cosmic Garden Coffee – a Dubai roaster which offers co-roasting and packaging services.

“Roasting collectives are fundamental to businesses who want to start roasting but lack the funds and knowledge to get started,” he says. Start-up costs for roasteries can run into the tens of thousands, which inevitably alienates many brands who don’t have the cash flow to invest upfront.

Shared facilities, on the other hand, present a viable alternative. Members rent spaces and equipment by the hour or day, which lowers barriers to entry to commercial roasting.

“These spaces allow brands to begin their coffee roasting journey while also learning from those around them,” Chad tells me. “This gives them access to community mentorship and guidance, and ultimately contributes to the growth of the specialty coffee industry.”

Co-roasting spaces may not always be the best option for new coffee businesses, however. Members don’t own the equipment or facility, which limits how they can use the space. If a roaster wanted to scale their brand and include a showroom for visitors, for example, they would need to rent their own space or unit.

Impact on the wider industry

Beyond improving access to essential equipment, co-roasting spaces can be an important resource to local and regional communities. 

Collin Bay is the co-founder of roasting collective and consultancy First Crack Coffee. Founded in 2013, it operates multiple facilities in the US.

“The value they generate varies based on the needs of the customer, but above all, they provide flexibility and value,” he says. “We offer free educational courses, as well as green coffee sourcing and packaging services.”

Co-roasting spaces often host community events, workshops, and cupping sessions which allow industry professionals to network, build relationships, and learn from one another. In addition to encouraging healthy competition and collaboration, this can be a catalyst for further innovation.

Why roasting collectives are likely to become more popular

Prior to the emergence of third wave coffee in the early 2000s, the concept of a shared roasting space was generally unheard of. But as the micro roaster market has exploded over the past decade or so, they are more common than ever before.

“Roasting collectives have blown up over the last five years,” Chad tells me. “I often find myself in conversation with customers and coffee enthusiasts who want to start their own brand using private label services with established roasters.”

Starting any business can be an overwhelming prospect, but in a competitive industry such as coffee, it’s especially intimidating. Managing already tight margins has become increasingly harder in the wake of rising coffee prices. On 24 August 2024, London robusta futures, the global benchmark for prices, reached a record US $4,971/tonne. New York arabica futures, meanwhile, hit US $2.49/lb – almost their highest level in decades.

For larger roasters, buying cheaper coffee and focusing on blends rather than single origins can help navigate these challenges. But for less experienced roasters, switching suppliers or swapping out origins to better manage costs can be tricky. 

Co-roasting spaces then present a viable opportunity for new and smaller-sized roasters to not only reduce spending, but to learn how to operate more efficiently as market volatility persists. Given that there is no end in sight to high interest rates and coffee prices, roasting collectives could be a solution for many roasters looking to leverage the expertise of more established roasters.

But they don’t work for everyone

Collin points out that the decision to join a roasting collective needs to be made carefully.

“Different facilities vary greatly in their structure and services,” he says. “Roasters should speak with operators beforehand to ensure they can support their short and long-term goals.”

While some co-roasting spaces may prioritise training and community engagement over housing state-of-the-art equipment, the opposite may be true for others. A shared facility which offers the latest advanced roasting technology, but doesn’t encourage a more collaborative environment, is unlikely to be the right fit for a less experienced roaster.

“How a co-roasting space operates needs to reflect your values, goals, and business model,” Chad says. “For this to work, you need to understand how you would integrate and interact with other members.” 

He highlights that joining a roasting collective is a two-way street. Roasters gain a lot from their membership, but they also need to be willing to reinvest back into the community that they share the space with.

There’s always room for improvement

As coffee prices and interest rates remain high for the foreseeable future, roasting collectives will have an even more important role in the industry.

“They are incubators for businesses to scale in ways that would otherwise be impossible,” Collin explains. “As such, shared roasting spaces are at the forefront of innovation and knowledge dissemination in roasting, and are crucial to the growth of the specialty coffee industry.”

He adds, however, that if operators want to keep up with an ever-changing coffee market, they need to make a continuous effort to diversify their services.

“The basic idea behind roasting collectives hasn’t shifted,” Collin says. “Instead, they invest in premium equipment and better access to industry partners like importers, producers, and packaging manufacturers.”

Similarly, Chad emphasises that by focusing on education and operational efficiency, co-roasting spaces can improve their value proposition beyond a place to roast coffee.

“Increasing sustainable roasting practices and energy efficiency will naturally attract more roasters to join, too,” he adds.

As roasters’ margins will be squeezed even tighter in the coming months, roasting collectives will play an increasingly important role in the coffee industry.

Although they won’t work for every business model, co-roasting spaces add a lot of value to specialty coffee – which is why we’re likely to see more and more in the years to come.

Enjoyed this? Then read our article on how coffee equipment distribution channels work.

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