A former pro snowboarder and coffee junkie, Dave Lee has already turned one of his two favorite pastimes into a business, and is now working on the second.
Lee founded Signal Snowboards in 2004 and manufactures about 4,000 snowboards a year. But snowboard sales slow down in the summer, so what's a boarder-turned-businessman to do?
Inspired by his own six-cups-a-day java habit, Lee is now marketing coffee to support his board business during the off-season. His L.A.-based company poured its first cup of Signal Coffee in August, targeting the same snowboarding set that buys his winter sporting gear.
"I always loved coffee so much when I was boarding; I just wanted to get it for free," Lee said. "I promised all my buddies I was going to start a coffee company so we could drink all we wanted."
Lee is married to Kennedy, a former MTV vee-jay he met when she enrolled in snowboarding camp. He started Signal using his money and some his wife invested.
With the boards business up and running, Lee is working on putting his bags of coffee, which come with Signal stickers bearing slogans like "grinding rails and beans," into the independent outlets that carry his snowboards.
The initial coffee-related expense hasn't been much a few thousand dollars from the snowboard business to buy hundreds of pounds of un-roasted organic beans from San Francisco wholesalers.
One of his snowboard connections has provided some help, too. Steve Myers, one of Signal's sponsored pro snowboarders, owns a professional-grade coffee-roasting machine and has been in the roasting business for about six years.
Lee has five employees working on the coffee side of the biz. His costs include the $2.50 per pound wholesale purchase and whatever he pays the roasters (he splits the work between his pro rider and another private roaster in Seattle). He sells his seven blends for $10 to $12 a pound depending on the variety, pretty much in line with fancy coffee brands that retail in the $9 to $13 a pound range.
Though the profit margins are good, it hasn't as yet qualified as an overnight success. So far, Signal has sold about 500 pounds of the java, which is only in a handful of stores. The majority of the sales have come via Signal Coffee's Internet-based "coffee of the month club," which has about 50 members.
Eventually, Lee said he hopes the coffee line and related merchandise will be successful enough that he can afford to be "really creative" with his boarding business.
"People who are in the coffee business would scoff at the poundage we sell right now, but it's something fun," Lee said. "If we could get the coffee to take off, then we won't have to worry about how many boards we sell."
At some retailers, like Revolution Snowboards in Washington, Lee wants to put in Signal coffee bars and baristas to make hot drinks on cold winter days. The company already has believers in some of the retailers who stock the coffee.
Tim Swart, the owner of Univ apparel boutique in Encinitas, said he got hooked on Signal Coffee through the online coffee club and is now stocking the java (but not the snowboards) in his just-opened store.
"I think coffee is going to end up being his primary business because there's more of an outlet for that," Swart said. "I love it. I'd like to get Dave in the store to drink six cups of his coffee and see what happens."
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