Jamie Forsyth has turned a seemingly simple idea into a global company.
Selling four million reusable coffee cups in 32 countries over five years has taken a lot of hard work. Jamie Forsyth, COO of KeepCup, explains how it happened.
Where did the idea for KeepCup begin and how did you develop the business?
I think we had some inclination that it could be quite a big idea. I was running a café business, with seven cafes called Bluebag in Melbourne with my sister. We saw how many disposable coffee cups were walking out the door every day. We looked for an alternative and there wasn’t one. That’s where KeepCup came about.
There are about 500 billion paper cups used every year. In corporate environments, 20 per cent of their waste stream is paper coffee cups. It is a huge problem and the cups can’t be recycled because they are essentially plastic cups, because they’re lined with plastic.
Everything else we found on the market was more of a thermos style cup, which didn’t really suit espresso. We knew the idea could work commercially because the coffee industry globally is huge, and the amount of disposable cups that go into waste is massive. We felt people were aware of that problem but there wasn’t necessarily a solution.
So the first step was designing the cup. It had to outperform paper, it had to fit under the spout of a coffee machine so baristas could work with it. We tried a few designs ourselves before we realised we needed external help.
How did you fund the initial design?
We applied for and won a couple of design grants – one from the City of Melbourne and another from Design Victoria. So that injected a bit of capital, and we also had capital from Bluebag and that allowed us to bring in a professional design firm.
In the early stages there were times we questioned if we should continue. The big thing about KeepCup was behavior change – you’re asking people to wash a cup and bring it back, and that’s a really hard thing to do. We took the chance that people would be willing to do that.
How did you market KeepCup?
We did a design stall at Fed Square (in Melbourne). We sold more than 1,000 KeepCups in about six hours. At that point we knew we were on to something.
A KeepCup is the equivalent material of 20 disposable plastic lids. Our business mission is all about reducing the impact of the coffee industry, and essentially reducing disposable cups. The other secondary benefit of it is that we do highlight to people the value of reusing and recycling more broadly.
How did you expand internationally and what was that like?
KeepCup does well in countries where design, sustainability and coffee are important culturally.
When those three things come together we have a really viable market.
The third wave coffee movement is also important to the product. The first wave was instant coffee, the second wave was the Italian immigrants bringing espresso machines. The third wave is the start of café culture – specialty roasters, single origin – people who care about coffee.
KeepCup does best in those third wave markets.
What have you learned about different global markets?
Despite coffee being a global phenomenon with some universal macro trends, you certainly can’t have the same playbook for all markets. Cultural differences have meant we have had to consider differences in marketing, pricing, materials and colors. As an example, we have seen great uptake of our new tempered glass KeepCup in the US, as they see the value in making the takeaway experience superior by drinking from glass.
The overseas expansion has been the most challenging thing for a small business.
When you go into overseas markets you’re not as keyed into the culture, you don’t know of the laws, the taxation, there is so much complexity and there’s not a lot of people you can turn to for expert advice.
What was your time studying a Bachelor of Business in Marketing at RMIT like?
I wish I had paid more attention! Absolutely everything I did, I had to revisit later in business, and maybe the positive thing was I didn’t feel completely like a fish out of water. Wish I’d paid more attention in statistical analysis (who’d have thought it at the time!), because I’ve gone back to it so many times.
What advice would you give to someone who’s got a great idea and wants to start a business?
Be encouraged to pursue an ambition and idea if you really believe in it. To protect yourself from the risks of an idea, you need to talk to a lot of people and ask for advice. Ask anyone who will listen! Then have a staged plan about how you would go about launching that business where at certain points you’ve got green and red lights to evaluate and know if you should keep on going.
Jamie Forsyth graduated from a Bachelor of Business in Marketing in 1995.