The Real Coffee Bag Company: Reinventing the tea bag by giving it a java makeover

Using material sourced from Japan, and the company hand-making each bag at its factory in Shropshire but is raising finance to fund the purchase of a machine to speed the process up.

To find out more about the origins of the business and hear where she would like to take it one day, Real Business spoke with co-founder Jeanne Day.

How did you come up with the idea for the business?

Whilst in Portugal we developed an appreciation for good coffee, but on our return to England, discovered there was no product available providing a conveniently quick cup of coffee which gave a full ground coffee taste in the manner that a bag works for tea.

After discussing the concept of the coffee bag with friends and taking on board their feedback we developed the coffee bag as it is now.

How is it different from what existed before?

It is a real alternative to an instant, at a realistic price compared to other brands. Fresh coffee in your cup with no mess or fuss. The coffee bag has never been done well in the UK, and the explosion in the coffee market has made this product possible and desirable.  Everyone drinks coffee on the go, with little time to brew a fresh percolator of coffee.  Before long coffee bags will be as common and widely accepted as a tea bag, and other companies will want to be doing it too.

In what ways were the early days of the company financed?

Our initial input came from HSBC who gave us an overdraft facility which enabled us to set up the business, and create our first product. We then used our own funds for nearly a year, before we were able to secure a startup loan from BizBritain.

What experience do you have of running a business?

Paul successfully ran his own painting business for many years working within the construction industry on local authority and NHS contracts. Jeanne ran a vehicle leasing company dealing direct with the MOD, with a turnover of £5m per year based at RAF Stafford.

How did you know your product would appeal to the market?

Nothing like this has successfully been produced before, but due to modern achievements in fibre technology this product is now ready to go, and becoming increasingly popular.  Anyone who has experienced its true convenience has become a customer. As well as continually taking on new customers we have many repeat orders.

Trials and testing with coffee lovers and everyday coffee drinkers, creating a range of blends to suite all taste and all times of times, even an excellent decaf with no sacrifice on taste.

What have the hurdles been along the way, and how have you dealt with them?

The company nearly came to a grinding halt when Paul was seriously injured in a fire in early May last year, but since his subsequent discharge from a long stay in hospital his recovery has made us both all the more determined to carry on to succeed.

Finance has always been an issue. Starting and running anew company is comparable to having another small child  – it’s always hungry and craves constant attention.

What made you settle on crowdfunding?

What a great idea! It spreads the investment risk and increases the likelihood of receiving the full funding required from a spread of many people investing a small amount.

The banks no longer want to take a risk with a new business so the doors are closed to further finance in that area. The most damaging thing for new business is to be tied into large loan repayments early in its development, which can prove to ultimately kill it. The benefit of crowdfunding is that the valuable investment is in use within the business for three years while it gets itself on its feet, hopefully giving great financial benefits to the people who believed in the idea tenacity and experience of the founders at an early stage.

What will you be using the money for?

The money will be used to purchase a machine to manufacture the coffee bags. This will increase our capacity enabling us to grow our business.

The second major area of expenditure is marketing, the main part of which will be taken by our attendance at the Farm Shop and Deli Show in April this year at the NEC where we anticipate we will make significant contacts and take orders.

Finally the funds will enable us to both work full time on the business, as well as looking forwards towards employing staff to help the business grow.

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What advice would you give to a company considering crowdfunding?

It is vital to put together a really sound business plan and one that is fool proof and stands up to scrutiny, but one that you know can be realistically achieved, with effort and perseverance.

How will you be looking to scale the business in the future, and what do you think the biggest challenges will be?

Our plan if for efficient large scale production, but we anticipate the challenge will be funding a controlled large scale expansion, whilst ensuring overall quality remains consistently high.

Always having a personal excitement in the business and keeping everything fresh. We have lots of ideas for new output, but must take care not to expand too quickly.

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