Kicking Horse Coffee is brewing up growth

Written by ProfitGuide Staff

Invermere, B.C. — population 2,500 — sits spectacularly at the headwaters of the Columbia River in the Columbia Valley between Purcell and the Rocky Mountains. The closest “known” town is Banff, a 90-minute drive away. That isolation and scenery was exactly what attracted Elana Rosenfeld and her husband Leo Johnson to the tiny community.

Outdoors oriented, the former Torontonians ran a fruit stand and a café before opening Kicking Horse Coffee Co. in 1996 to produce and distribute organic coffee. The idea was born of frustration — an unmet need for a good cup of coffee. Specialty coffee was gaining favour and the pair spied opportunity in premium, whole-bean organic blends. “If we can sell 350 pounds per week, we are laughing,” Rosenfeld wrote in her informal business plan back then. Today, the company sells 25,000 pounds per week to grocery stores and restaurants in Canada, the U.S. and Holland. Staff now number 15, and Rosenfeld projects 2006 revenue of $10 million.

How does a tiny company from nowhere compete in the competitive coffee industry dominated by heavyweights such as Starbucks and Timothy’s? The popularity of coffee, organic food and the slow-food movement has certainly helped. Still, Kicking Horse has a few secrets of its own.

Here’s Kicking Horse’s recipe for success:

1. Differentiate yourself.

Kicking Horse chose to compete in the organic fair-trade niche, which suited the founders’ ethical values and was a relatively untapped market. They import their own green, shade-grown premium coffee beans and roast it at high altitude to their own standards. Coffee is custom-blended after roasting. They roast only based on orders (no pre-roasting) and package all coffee on roast day.

The unique packaging and the names of its 21 blends of coffee — Kick Ass Coffee, 454 Horse Power, Cliff Hanger, Hoodoo Jo — embellish and capitalize on the local legends surrounding Kicking Horse Pass. “It’s real and speaks to people,” says Rosenfeld. “You don’t have to be a connoisseur to buy and enjoy our coffee.”

2. Play to your strengths.

Rosenfeld does not follow coffee-industry trends or look to it for ideas. The outdoor lifestyle, remote location and chummy business culture are core components of the company and apparent in the brand’s website and packaging.

Seeing an open door for organic coffees in the massive grocery-store market, Kicking Horse convinced Vancouver Island-based Thrifty Foods, now a chain of 19 supermarkets, to stock its products in the “healthy food” section rather than compete head-to-head with other coffee manufacturers.

3. Choose your partners well.

Finding the right distributors is crucial. “We have chosen individuals or very small companies that share our passion and values,” says Rosenfeld. Compatible products and contacts with desirable accounts are also important. “And you have to enjoy working with them and have real trust.” Rosenfeld credits a Vancouver Island-based distributor for her company’s success at Thrifty Foods, where Kicking Horse Coffee sales are up 40% over last year.

4. Find a champion.

Thrifty Foods executives were also willing to teach Kicking Horse the ropes of the grocery business. Through trial and error, the firm learned about packaging and labeling requirements and laws, packaging sizes and shipping cases. “We made a lot of mistakes but they stuck with us. Their way of doing business is different from the other big guys,” says Rosenfeld. “We were very fortunate.”

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