By Nancy Dahlberg
The coffee was unique and delicious, the space was warm and welcoming, yet this Miami startup was facing the probability of mounting losses riding out the pandemic economy.
But in this story, the coffee startup not only survives, but the future looks brighter with a couple new revenue streams. Much of that is thanks to an ingenious partnership the startup forged with a new food & beverage incubator that will pay dividends to the community by helping other small businesses get their start.
Gail Hamilton Azodo and her husband Uchendu Azodo opened SIPS, a coffee roasting company and eatery, in July 2019 in the CIC building in Overtown. The building, at 1951 NW 6th Ave., also houses a co-working center and research labs, so there was a steady stream of customers. Lindsey Hopkins Technical College is also nearby.
But when the co-working space and the school largely closed down temporarily due to the COVID-19 crisis – and those facilities drove most of SIPS’ business -- it would be easy to just throw up your hands. But not these entrepreneurs, said Michael Sellinger, loan director of Miami Bayside Foundation, which mentors, provides training and provides loans to minority-owned small businesses in Miami-Dade, including SIPS.
The first step for the Azodos was negotiating with their landlord, who was understanding and flexible. Then it was time to turn up the heat on online sales, and make other pivots that would be good for the business long term, too.
SIPS shut down temporarily in late April and “that gave us time to rethink the whole model,” said Gail, an entrepreneur who has worked in the hospitality and food industry and previously founded another food-related startup, Lemon City Tea Company.
SIPS’ owners create and sell only their own coffee blends but had been using a roasting service in Delray Beach. So they brought in a roaster, and can blend up to 400 pounds of coffee a day all in-house, said Gail, adding that SIPS hires its staff from Overtown.
Customers are always interested in knowing the origins of SIPS coffee, and now they can see it being roasted, she said. “And we work directly with our farmers. We’re working on bringing in a coffee farmer in Nicaragua right now and she is a fourth-generation woman-owned coffee farm.”
SIPS reopened in early June. But as Gail went through the numbers, she noted they were spending a lot on food items when coffee was their passion and there were better uses for their excess commercial kitchen space. “We recognized there was an opportunity for other food businesses to operate here who need the space,” Gail explained. “Let’s make it their space.”
That’s when SIPS joined with the new Junction Halls Food & Beverage Success Incubator – Gail is a partner in the incubator with founder Michael Hall – to open the kitchen to food entrepreneurs in the incubator.
The free 6-week incubator program offers one-on-one mentoring, hands-on training sessions, a marketing stipend and the use of the commercial kitchen, Hall said.
The first incubator class filled up fast and Junction Halls is already taking applications here for a second class, Hall said.
Incubator participants can use the SIPS kitchen to create their products and SIPS can be a popup market for their goods. After the program, they can contract with the kitchen if they wish, as could other food business owners.
The first incubator class began Sept. 22, with 17 companies. “The initial response and interaction is beyond any course that I have sat in,” said Hall. “There is less about what could be and more actions plans of what will be – real-life manifestation of success.”
Classes have been full of authentic questions and hands-on solutions, Hall said.
“Everything isn’t about additional money when you have access and opportunities," Hall said. "In tech, you need millions for staff and expansion. In the food and beverage world, that can be solved with a better website, marketing and a real mentor to guide a company. We have seen small but measurable results already. A lot of the help people are seeking we are able to offer those services directly with our company. We have helped with naming, branding, collaborations.”
At the same time, SIPS is rolling out a national brand strategy to sell online.
“Since COVID, I overly invested it our e-commerce business,” said Gail, who won a grant from the Sara Blakely Foundation and put the grant dollars to work ramping up the e-commerce business. “E-commerce is only about 10% of our business now but we see it as more than half of our business.”
And with time, dozens of new food businesses will get their start in the Junction Halls F&B Success Incubator and will use SIPS commercial kitchen. A win-win solution for these crazy tough times.
Follow @ndahlberg on Twitter and email her at email@example.com
A version of this story originally ran on the GrowBiz blog. Photos were provided by SIPS. Photo at top of post is Gail Hamilton Azodo with her son, Jidenna Asher, and husband, Uchendu Azodo.