Healthier Options
Interview with Philip Crouse and Laura Smith
Cup & Compass
With Jeff Yoskowitz and Kathryn Gordon
Jeff: Hi Philip
and Laura. Tell us how you started with Cup &
Compass?
Philip:
I founded the business about a year ago.
It started with a passion to create a natural and lightly sweetened
horchata. I didn’t grow up with horchata
and only discovered it a few years back while visiting my girlfriend in
Philadelphia. I was fortunate to have
worked for a few food companies before starting my own. I quickly brought on Carlos who was a
classmate of mine in business school.
He had restaurant experience so brought a different perspective than my
own.
As we continued to learn more about the beverage industry,
we identified a larger opportunity in the dispensed beverage category in fast casual
restaurants. It was really then that our mission was born to provide a
wholesome alternative to the soda fountain. I approached Laura at the beginning of 2012
to help out on the Finance and Operation side of the business. She left her Wall Street career to join us
full time in May and we couldn’t be happier that she did!
 |
| Carlos, Laura and Philip of Cup & Compass |
Laura:
I worked with a few start-ups before and I have a passion for the natural
food industry, health and wellness. Cup
and Compass married my passion for healthy food with my business background. We
have a lot of complimentary experiences from our diverse backgrounds which come
in handy given we are currently doing all the sales, marketing, manufacturing,
delivering, finance and operations for the business!
Kathryn:
Can you tell us about your current product line?
Philip: We partner with fast casual restaurants and a
talented group of tastemakers to develop customized products for each
restaurant’s customer base and menu. Only basic, pure ingredients are used and
we lightly sweeten our products with organic cane sugar. We are currently in 2
Mexican taquerias where we offer a Hibiscus Lemonade and a Horchata. We will be
introducing Limeade shortly as well.
All products are handmade, in-house.
 |
Philip checking the temperature of
the Hibiscus Lemonade
|
We manufacture at the Organic Food Incubator in Long Island City. We do all of the manufacturing ourselves! We work there once every week or two, but as our demand grows we can increase our time commitment via the incubator’s shift schedule. We can make about 150-200 gallons in a shift.
Note: read about Organic Food Incubator and Bad Ass
Organics in our earlier blog entry on “Creating An Organic Incubator Kitchen”
at www.foodstartuphelp.blogspot.com
Jeff: How
long is the shelf life you’ve been able to create?
Philip:
It depends on the product. Our
horchata can last three months before the taste starts to change
noticeably. The Hibiscus Lemonade lasts
longer. It does have to be refrigerated after
it has been opened though.
Kathryn:
You install a dispenser near the soda fountain at a restaurant? How does that work?
Laura:
We manufacturer the beverages and package them “ready-strength” in 2 ½
gallon bags with a dairy hose cap. Our
dispensers are made specifically for our packaging. We have a fantastic design team that
retrofits each of the dispensers so that it really stands out at our partner
stores. It’s refrigerated at about 37ยบ
F. We are continuously improving our
dispensers and packaging and are currently working on a new version of the dispenser
which will agitate the product and make it easier for retailers to operate.
Jeff: It’s
a very interesting product, so what are the comments you’re getting back from
clients?
Philip:
People have loved them so far! A
lot of people appreciate that the drinks are only lightly sweetened. We’re currently in the West Village and the
Upper East Side, and the demographics of each area are completely different, so
it’s very interesting trying to optimize the sales in each location. We are also in the process of developing new
products and flavors based on customer feedback and our own ideas.
Jeff: What
have been the biggest challenges to date?
Philip:
Finding a bag that would work for our production process and also be
compatible with the dispenser was quite a challenge. We found that the bags that we needed for our
machines were not compatible with our hot fill production process. After speaking to a ton of folks who said
that it couldn’t be solved, we were fortunate to end up finding an amazing
vendor who partnered with us and solved the issue with a customized bag.
Laura: Another challenge is minimums. We
consistently run up against minimum order sizes. We have created great
partnerships with vendors who are excited to grow with us. Without their help
we would have 10,000 bags, 100s of pounds of hibiscus and 50 dispensers that we
wouldn’t know what to do with!
Kathryn:
How are you identifying additional clients for your products?
Laura: We
like to try and meet people at target restaurants through friends and industry contacts. It also has been helpful to connect with
other food and beverage entrepreneurs in NYC.
We hope to be build successful relationships with our current
restaurants and retailers so that other potential targets hear about us through
word of mouth.
Philip:
One of the reasons why we enjoy the Organic Food Incubator so much is because
it’s a like minded community of entrepreneurs, and Mike Schwartz (one of the
partners of the incubator) is a teacher (and fellow Chef/Instructor at ICE with
Kathryn
and Jeff)
and has been instrumental in helping us perfect our production process. It was challenging to scale up ¼ gallon
batches to 55 gallons, and Mike’s insights have been tremendous.
Our long term goal is to create a platform in fast casual
restaurants across the US for customers who want natural, lightly sweetened
beverages that pair well with the food they are eating.
 |
| A happy Cup & Compass horchata customer at Dos Toros Taqueria |
Kathryn:
Did you think about bottling the beverages and selling to grocery
stores?
Philip:
No. The bottled beverage is
brutally competitive and very expensive.
We think that there is a large opportunity to create healthier dispensed
beverages with no preservatives that customers can get at their favorite
restaurants.
Jeff:
Working in a start-up; how are controlling your costs?
Laura:
We have augmented our small team with talented interns from ICE and NYU
to help with the production. We were
also lucky to get taken on by Orrick, as a pro-bono legal client. They have
been nothing short of amazing. Lastly,
Columbia has been very supportive. The
university has sponsored an office space at Spring and Varick Street, Columbia
Business Labs, which we will be working out of for the next year. We share the office with 20 businesses and
around 30 entrepreneurs.
Kathryn:
Tell us about the name: Cup and
Compass. What’s the significance?
Philip:
It wasn’t our first name, actually.
The first name was Tiny Kitchen, since we started in my home
kitchen. As we approached our launch
date, we found out from our lawyers that that our name wasn’t going to fly
because of trademark issues.
Laura with Bags of Hibiscus Lemonade
We were very invested in the name Tiny Kitchen so it was
painful letting go. However, it gave us
the opportunity to step back and take a look at the business again as it had
changed significantly since we first named it.
We decided we wanted to contextualize “beverage” in the new name, and we
wanted something sentimental, invoking tools that have basic, functional uses. Finally, we wanted to bring in the idea of
discovery since we are trying to get people to discover something new. That is how we landed on Cup & Compass.
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