‘That was the worst day of my business life’
Eight years ago, Helen Russell and her wife Brooke McDonnell received some bad news that threatened the future of their business Equator Coffees.
Starbucks, the world’s largest coffee chain, had announced that it was acquiring Equator’s biggest customer, a bakery chain called La Boulange.
“That was the worst day of my business life,” recalls Helen.
At the time, San Francisco Bay Area-based Equator was a small wholesale coffee roaster. Losing La Boulange meant that more than $1m (£770,000) of orders were cancelled overnight. The company’s survival was at stake.
“I got a call directly from the owner of La Boulange about the sale,” says Helen. “We had been partners for years, I personally installed the brewer in his original bakery. We had grown together.
“At that time La Boulange [then 20 stores in and around San Francisco Bay] was by far our largest customer. My biggest concern was for the people who relied on Equator for their livelihoods.
“I didn’t see how we could lose that much business and not lay people off at our roastery and default on coffee contracts with our farmer partners.”
But determined to save their business, and the jobs of their employees, Helen and Brooke decided to re-invent Equator by opening their first retail outlets, across San Francisco and beyond.
“We turned our focus to opening our first retail cafe, and actually closed the revenue gap created by losing La Boulange,” says Helen.
“It was the first year of business where we didn’t show sales growth, but we actually added about a million dollars of new business that year!”
Today, Equator has grown to 155 employees across eight retail stores in the San Francisco Bay Area, with three new branches opening in 2020. It also supplies coffee to consumers across the US via its website, and to 460 business customers countrywide via its wholesale arm.
Helen, who has the chief executive title, and Brooke, who is president, could only have dreamt of such success when they launched the business 25 years ago. The idea for Equator came one day when they were taking a coffee break from their job at the time – buying and selling houses.
“I was having a mocha with whipped cream,” says Helen, “and Brooke was telling me about the viscosity and flavour notes of her espresso.
“And I said, ‘Oh my God, you love coffee, I love business. We’re in our early 30s – we should start something together.'”
They wrote a business plan on the back of a napkin that afternoon, and began their journey by acquiring and operating two coffee carts.
They initially bought in beans that had already been roasted, but Helen says that they very quickly became frustrated with their suppliers.
“We were shocked by the lack of information we would receive from our roaster partners,” she says. “No one would share what was in the blends, let alone what they were paying to their farmer partners.”
This did not sit well with the couple, so they decided to sell the carts and buy a small roaster instead. They set this up in their garage.
“We knew then that we wanted a different type of coffee company,” says Helen. “One that focused on transparency and sustainability.
“We were the first roastery in California to offer Fair Trade certified coffee, and we continue to pay above fair trade minimum prices to our producers.”
Helen and Brooke were also female pioneers. “When we started in 1995, there were only five women [including us] roasting coffee in the US.”
Today Equator has a number of high profile business customers, including the restaurants of top US chefs Thomas Keller and Dominique Crenn, and the cafes and coffee bars at the headquarters of Twitter, Google and LinkedIn.
Helen says that opening its own stores helped Equator to secure such high-profile customers because its bricks-and-mortar outlets “helped us build our brand and our reputation”.
But building a viable coffee business to compete against the industry giants was never going to be an easy task. Helen’s strategy was simple – offer what the big players couldn’t, because they would always be able to sell coffee for a price that would be too low for Equator to beat.
“We had to be unique,” she says. “We had excellent tasting coffee, talked about where the coffee came from, and offered a level of service the big guys couldn’t.
“Our customers responded to that. Had we simply tried to be a local version of a big company, without a unique selling proposition, we would not have been able to compete.”
Equator is also unusual in the coffee shop sector in that all its staff have access to health insurance. “Sure, it’s expensive, but health insurance should be a right of all Americans,” says Helen.
“Any CEO who has a private plane, and also people who work for them who are uninsured, is running their business wrong.”
Coffee expert Willem Boot, is the founder of Boot Coffee, a company that trains people to work in the industry. He says that Equator stands out against its competitors because of the quality of its staff.
“It all comes back to the people that work for them – coffee-dedicated and socially-minded, kind human beings. These qualities define the essence of the Equator coffee experience.”
Proudly owned by a lesbian couple, Equator is particularly popular with members of the LGBTQ community. “Simply by Brooke and I being out, along with Maureen our first employee and current executive vice president, people from the LGBTQ community know they can come to us and feel protected, valued and appreciated,” says Helen.
“We are bigger now than I ever imagined we would be, and I still feel like we are just getting started,” she says. “We have so many options because we’ve made the right decisions for us and kept our focus on using business as a force for good.”