April 26, 2019

Building a Better Culture

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While working on his graduate degree at the University of North Carolina at Chapel Hill in the mid-1990s, Brett Smith started to feel the entrepreneurial itch. He wasn’t sure what type of business he wanted to be involved in, he just knew he wanted to be in business. So he began researching different companies with the prospect of becoming an investor or even starting his own venture if the right opportunity presented itself.

As Smith explored his options, coffee kept grabbing his attention. He stumbled across a coffee company business plan about the same time he began noticing a growing number of independent coffee shops opening up in the area. Soon after, Smith met Fred Houk, who worked at a small roasting company in Durham. All signs seem to point to coffee.

“When I met Fred, we just started talking,” recalls Smith. “He wanted to go out on his own, and I wanted to start a company. We decided to team up, then hit the ground running.”

Counter Culture Coffee began in 1995 with one tiny roaster and operated out of a 750-square-foot building in Durham. Smith and Houk were never interested in running a “coffee shop”; instead, they wanted to procure and roast the best coffee possible. So they reached out to some of the most talented chefs in the Raleigh-Durham area, and soon Counter Culture was being served in some of the region’s best restaurants.

“We cut our teeth on the great culinary scene in the Triangle,” says Smith. “We were setting a high bar for ourselves as far as quality, and working with chefs of such high caliber, we had to deliver. That became ingrained in what we do as an organization.”

Today, Counter Culture Coffee occupies a 24,000-square-foot space in Durham and has a second roasting facility located just outside San Francisco to serve the company’s West Coast clients. Counter Culture also has numerous “training centers” scattered throughout the country, offices that look like hip coffee shops but function as service centers for sales, education, and equipment support.

“The training centers are a cornerstone of our business model,” explains Smith. “It’s one thing to have a roaster in a town and you get to know the local restaurants and you can build your brand in that community, but it’s hard to jump to that next town over.

“We made a conscious decision not to have cafes because we wanted to support restaurants and cafes,” he adds. “About the time we started looking outside the Triangle was about the time that independent coffee shops were really starting to appear. So we opened a satellite office in Charlotte that we considered a sales and support office, but we quickly realized there were incredible benefits to that. Having a physical presence in a market really offers a lot of opportunities to connect closely with your customers.”

Currently, Counter Culture has training centers in Atlanta, Charleston, Asheville, Durham, Washington, D.C., New York, Boston, Chicago, Los Angeles, San Francisco, and Seattle; facilities in Dallas and Miami will open soon. The spaces are used not only to support wholesale partners, but to host special events that foster interaction with consumers.

“One of the traditions we’ve had at Counter Culture, for going on 20 years, is the Friday tasting,” says Smith. “It was something we initially did only within the organization. Everybody would stop what they were doing and get together to taste coffee. It was very communal, a time when we shared what we were doing and experienced coffee together.

“Eventually, that evolved to including customers, potential customers, and now, end consumers,” he continues. “At our training centers, we have tastings every Friday and there might be 15 or 20 people. Here in Durham, we’ve had tastings with more than 100 people.”

Another cornerstone for Smith and Houk is sustainability. In an industry that’s seen its share of questionable business tactics, Counter Culture Coffee has been on the leading edge of fair-trade practices and transparency. “When you look at your business through the lens of sustainability and consider the short- and long-term impact of your actions, you want to come to a win-win solution,” Smith says. “You think about how this can continue on for everyone involved.

“When you take that approach, it leads to making decisions that are fundamentally sustainable,” he adds. “And you keep challenging yourself to try to live up to that commitment. That type of relationship with your stakeholders, the environment, and the long-term financial viability of your business is a good business model. The commitment to building a business through the lens of sustainability is not an either-or proposition; when you do it right, it’s not a compromise.”

Truth is, Counter Culture doesn’t just “talk the talk” when it comes to sustainability. The company utilizes a “transparency contract” so that everyone in the supply chain understands what the economics are for their segment. The company also publishes an annual “Transparency Report,” which can be viewed on the corporate website, that details everything from operations and quality initiatives to carbon footprint statistics and price transparency. “It’s an internal way to hold ourselves accountable,” Smith says. “It’s created an internal system that keeps us moving forward.”

The coffee market is a global behemoth rife with competition, but according to Smith, it’s also a caring and collaborative industry. “I have amazing friends who are competitors, and I’ve become lifelong friends with people all over the world,” he notes. “That’s been really special on a personal level.”

On the professional front, Counter Culture satisfied the entrepreneurial call that Smith felt more than two decades ago, enabling him and Houk to make a difference, in their own way, while making a living. “As a business opportunity, I certainly didn’t see the growth of specialty coffee—there was an amount of luck in picking the right segment of an industry that’s had a lot growth and that’s still growing,” says Smith. “Counter Culture has given me such a great opportunity to do what I love in terms of building an organization and a product that has so much depth and breadth and reach. It’s been incredibly rewarding.”

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