What makes Quijote coffee a role model for an industry ›absatzwirtschaft

Andreas Felsen is used to nicknames. Because his foster brother has the same first name, he calls himself “Pingo”, like his cuddly toy. The nickname adopted in early youth has held up to this day. Since Andreas Felsen, i.e. Pingo, has been running the Quijote coffee company, he has been adorned with other nouns without any action on his part. From the “coffee knight from Hamburg” to the “coffee communist” there is a supply of flowery and bizarre names that refer to him and his actions. Not every term hits the mark, the “communist”, for example, clearly goes too far. “We would never say that about ourselves,” says Felsen. “We see ourselves as a democratic, but not a capitalist company.”

It is undisputed that the Hamburg coffee roastery works differently than most companies. Sales and profit maximization, growth and career goals, brand campaigns – what is common in normal business life plays a subordinate or no role here. Nevertheless, the team of around 15 employees is ambitious and particularly successful. What distinguishes Quijote Coffee from classic companies is the special relationship with its raw material producers, complete transparency, working in a collective according to the no-boss principle, self-limitation and a special pricing policy.

Fair trade is not enough

In November 2010, Andreas Felsen founded the direct import roasting company Quijote together with Stefanie Hesse. Driven by the idea of ​​building an equal collective and becoming a model company for the coffee industry. They think the “fair trade” approach is good, but not good enough. “I want to achieve more, especially in trading with the coffee farmers,” says Felsen.

The impetus for this comes from a trip that he undertook as a human rights observer to Mexico in the mid-1990s. There he experiences first hand the circumstances under which the many small farmers grow their coffee and export the beans. At prices that are barely enough to live on. A situation that Pingo, the trained bookseller, sees as exploitation and which fundamentally puzzles him. “Coffee is a nasty colonial product that has led to much misery. We don’t want to accept that, and with many people we run into open doors with it. “

Andreas Felsen wants to solve the problem in an economical way. He is a doer. Gripping, pragmatic, reflective. The now 48-year-old first took part in the Hamburg-based collective Café Libertad, which was founded in 1999, before starting out with Quijote coffee a good decade later. “We demand the highest quality from our partners and ourselves. That is why we are constantly developing our products. ” Be good and get better, that is the guideline. And that makes the Quijote founders self-confident. “We were certain from the start that our coffee would sell well,” says Felsen.

Superior product as a USP

He should be right. And it doesn’t even need a sophisticated marketing plan. It is enough “that our product is superior. This unique selling point quickly put us in a luxury position, ”says the Quijote founder. A few months after the start, the available coffee production is sold out for the first time – and always since then. The weekly quota is put online every Monday morning at 7 a.m. The quantity offered in the web shop corresponds to “what we can produce and ship within seven days,” says Andreas Felsen. Most of the time, the demand is so high that some coffees are out of stock after a few minutes. “Early risers have an advantage,” remarks Pingo with a smile.

Especially in the autumn and winter months, the demand regularly and significantly exceeds the supply. Usual reflexes would be: increase the production volume, raise the price, expand. Why this does not happen in its pure form is due to the entrepreneurial principles that Quijote imposes on itself. On the one hand: the unconditional quality standard. “We don’t make any compromises,” says Felsen. On the other hand: self-limitation. “We set a certain limit for our production every year. The desired quality must be achievable, for this we need qualified staff and enough green coffee, produced according to the criteria that are important to us, ”explains Pingo. In addition, the internal structures and entrepreneurial ideals must not suffer.

20 percent annual growth

Nevertheless, it manages to grow. Since the company was founded, an annual average of around 20 percent, and in 2020 even around 40 percent. Each full-time position represents around eight to nine tons of coffee produced. Last year Quijote sold almost 140 tons of roasted coffee, which is a record. The exact figures can be found in the annual transparency reports published on the website. The youngest comes from 2019 and states “another year of disaster” for the world of coffee. Accordingly, the world market price averaged “relentless 0.98 US dollars / Libra. About 1.50 would be needed to cover the producers’ costs for even average coffee quality ”. Extreme weather conditions and a new wave of the Roya coffee disease made cultivation even more difficult.

One of the most important principles for Quixote coffee is justice. Knowing well how difficult it is for ideal and reality to come together, “let’s do our best,” says Andreas Felsen. Accordingly, when calculating wages, purchase and sales prices, it is not the pursuit of maximum profit that dominates, but rather the goal of creating the fairest possible conditions for everyone involved. Especially for the smallholder producer communities with whom Quijote has worked for years and maintains close exchanges.

The Hamburgers get their green coffee directly from around a dozen long-standing partner cooperatives in Ecuador, Honduras, Peru, Guatemala, India and Brazil. “Personal contact is extremely important to us. We travel to our partners at least once a year, spend some time on site and build a relationship of trust, ”says Felsen. Co-founder Stefanie Hesse, who, like all employees, has an animal nickname and is called “croissant”, is on the go the most. Sometimes she stays with the partners abroad for a week or several weeks to work on the quality of the processes together with the farmers. “We’re very ambitious here, so working on site is essential,” says Pingo.

Quijote has partner cooperatives in Ecuador, Honduras, Peru, Guatemala, India and Brazil: “Personal contact is extremely important to us.” (Photo: Quijote Coffee)

The Hamburg roastery pays at least three dollars / Libra for Arabica and 2.60 dollars for Robusta. That is around three times the above-mentioned world market price of 2019, and “we are twice as high as with fair trade,” says Andreas Felsen. Quijote Coffee also pays its suppliers an advance payment of at least 60 percent of the value of the goods ordered. “We want the harvest to be brought in without financial stress,” he says. That is not common in the coffee business, “but we do it to take risks and meet our responsibilities.”

Company without bosses

You won’t find any fixed hierarchies or superiors at Quijote. The company works according to democratic principles. Pending decisions are discussed and voted on in plenary meetings. “We work and act as a collective,” emphasizes Pingo. This also has an effect on the remuneration mode. Since Quijote Kaffee was founded, everyone has received the same wages, regardless of how long someone has worked for the company and what job he or she does.

A distinction is only made according to social aspects: For children or parents who need to be cared for, there is EUR 300 per month in addition to the gross salary of EUR 5,000. Why this amount? It corresponds to the official average wage in Hamburg, and Quijote orientates itself on that. “We limit our personal income and work without the intention of making a profit, apart from necessary reserves,” explains Andreas Felsen. You need it, for example, to buy a new roasting machine that has been ordered for autumn next year. Then it will be possible to increase production capacity by 15 percent. If surpluses are also achieved, they must be invested in or donated to the company according to the internal Quijote contract, which can be viewed on the website, with 19,000 characters.

The following applies to pricing: the import roasting company wants to pay its partner cooperatives the highest (purchase) price and at the same time keep the (sales) price for its customers as low as possible. The logic that is common in the market economy is thus – quite deliberately – turned upside down. Rather, Pingo and colleagues are happy when the “Return to Origin” (RTO) is as high as possible. That is the share of the selling price that the producers receive. It is usually between 29 and 34 percent. Quijote always ranks in the top three of all roasting plants worldwide that make this data transparent at all.

Pingo is not afraid of rising purchase prices, on the contrary: “We even hope so, because it is good for the producers of the green coffee.” On the other hand, he makes sure that the selling price, which for espressi is between 20 and 27 euros per kilo depending on the type, does not climb too high. Because “we don’t want our customers to be socially selected based on price,” emphasizes Pingo.

Freehand marketing

The question of whether Quijote Kaffee does good marketing – or at all – can be answered with a resounding “yes”. However, the collective deals with it very freehand, far from textbook knowledge. Of the four classic pillars of the marketing mix, one stands out: “Our products enjoy a unique position, they are superior to others,” says Andreas Felsen. The intensive work on quality, the constant drive to want to become even better, has resulted in the demand by far exceeding the available production volume. The customer database includes the names and addresses of around 50,000 households and 1,000 companies. You have all bought coffee at Quijote in the eleven years since it was founded. The majority are repeat offenders: 30 percent of customers account for 80 percent of the amount ordered.

Quijote Coffee can allow itself to treat the other three pillars – price, communication, sales – in an unconventional way. In terms of sales, for example, the brand concentrates on its own online shop, which is by far the one that sells the most. In addition, customers can use the location in Hamburg’s Marckmannstrasse on Tuesdays and Thursdays. 30, as well as in a few selected shops in the region and in depots in Frankfurt and Vienna.

Andreas Felsen and his team will continue to report diligently and in detail how things will continue with Quijote. “We aim to be the leading international coffee roasting company when it comes to transparency. We want to set standards here, ”says the founder, making sales contracts, price calculations, production processes and roasting profiles public. “In terms of transparency,” says Pingo, “we should be at the forefront worldwide.”

The article first appeared as a “DMV column” in the November print edition of the absatzwirtschaft.

sales economy +

Do you want daily insights into your work in marketing? Then subscribe to our free newsletter here.