Little Coffee Bag Co: ‘How do I reach a wider market with an exclusive product?’

Virtual Board Carrie Bate Little Coffee Bag Co

In 2011, Carrie Bate was an admin assistant in a Shropshire primary school. Now, she presides over the £2m-turnover Little Coffee Bag Co, with six million people dunking her creations every year. But can she take her brand mainstream while retaining its luxury allure? Our experts have the answer…

“The accidental businesswoman.” That’s how Carrie Bate, founder of revolutionary Little Coffee Bag Co, describes herself. Her four-year journey from primary school admin assistant to director of a £2m-turnover brand may have witnessed the odd stroke of luck. But ‘accidental businesswoman’ belies her entrepreneurial nous.

This is a woman so confident in her brainchild – bags delivering cafetière-style coffee – she rebuffed a £100,000 Dragons’ Den investment. She spied business openings everywhere from hotel rooms to airlines. And with no design experience, she crafted Little Coffee Bag Co’s chic packaging, which sees them take pride of place in premium stores Harvey Nichols and Harrods.

Bate has had her share of personal tragedy too – the type that would derail many other companies. Her father took his own life shortly before Little Coffee Bag Co’s launch. Just over two years ago, she had a nervous breakdown. Then, cruelly, as her brand started gaining traction, she was diagnosed with a tumour.

Her cheeriness and chutzpah have helped see her through – many clients are shocked when she embraces them with a heart-warming hug after meetings, rather than a formal handshake. “I don’t have any airs and graces,” she tells Director. “I was brought up on a Brighton council estate and get just as excited when a B&B calls as the Hilton…”

It was watching hapless Apprentice candidates botch their tasks that the mum of four (then working in a primary school) began thinking about creating her own product. A year later, Bate’s husband was embarking upon a camping trip when her eureka moment struck. “Rather than pack him off with a jar of Nescafé, I thought, ‘Let’s make a coffee bag!’”

“I thought the world had gone mad,” she adds. “It’s like wheelie suitcases. I couldn’t believe it hadn’t been done.” Unfortunately, it had been done. Lyons had been producing coffee bags since 1974. Initially crestfallen, she sampled the bags, which only rekindled her determination: “They didn’t represent what I loved about coffee – the packaging, the smell, the theatre and smoke. I just thought ‘I can do better than this’. [From then] I was like a dog with a bone.”

Although launching a business seemed forbidding (“you don’t believe you can have a career after you’ve had kids”), Bate handed in her notice on the first day of term, September 2011. With her businessman husband investing £100,000, Bate experimented with beans and cup before selecting blends through Peterborough-based Masteroast and producing the bioweb-made bags herself on machinery ordered from Turkey.

Little Coffee Bag Co’s packaging and artwork, with its elegant embossed foiling and grosgrain ribbons, were designed by Bate, too. “I love make-up packaging – taking cellophane off to find something exciting inside,” she says. “Coffee has never been tarted up like that before – it deserves it.”

Meanwhile, the oven-roasted ground coffee used in each bag (her four blends include organic, decaf and Jamaican Blue Mountain) chimed with the barista boom. One in five of us now visit a coffee shop every day. In 2009, it was one in nine.

Bate’s belief that a gap in the market existed for premium coffee bags was confirmed in January 2013, when Harvey Nichols and Harrods were so taken with the home-made samples Bate prepared on her ironing board, they vied with each other for exclusive stockist rights (Harvey Nicks won, but today they’re available in both).

That April, Bate went on Dragons’ Den. But a self-assured pitch masked an awful truth: she had suffered a debilitating nervous breakdown months before.

“I was quite ill on that show,” she remembers. “It wasn’t depression – my wiring had gone wrong, I’m in a good place now. [Back then] I don’t know how I got out of bed every day.”

Peter Jones and Deborah Meaden offered Bate £100,000 in return for one-third of the business. But with deals with Virgin Trains and easyJet pending, she turned them down. Having inked contracts with both companies (today Little Coffee Bag Co sells 3.5 million bags a year on easyJet and is available in Virgin Trains’ first class), Bate suffered another setback in early 2014. She was diagnosed with a spinal cord tumour. “I was two days away from being paralysed from the chest down,” she remembers.

Now tumour-free, Bate remains committed to her vision, whether it’s visiting plantations with security guards in Colombia or limiting the product to luxury lifestyle stores. “I’ve questioned whether I’d buy Calvin Klein jeans in Sainsbury’s or Tesco and I wouldn’t,” she says.

She also signed a deal with the IHG hotel group, meaning her bags are gradually replacing measly sticks of granules in InterContinentals and Holiday Inns worldwide. That’s not her only global expansion: Bate has augmented her four-strong Shropshire team with seven staff in South Africa, Denmark and Dubai.

“I’ve always considered myself a housewife,” says Bate. “But looking back, I was good at things but never really appreciated it – folding up socks, a good mum, a good cook. It’s no surprise my business is good.”

Carrie Bate, founder of Little Coffee Bag Co, asks our virtual board: How do I reach a wider market with an exclusive product without marginalising its luxury?

Robert Ettinger, chief executive, Ettinger London

Virtual Board Robert Ettinger Ettinger LondonProducts at this price point need to be to be sold in volume to achieve a good turnover and reasonable profits because otherwise they will always remain a relatively niche product sold only in small quantities.

To achieve this, larger retailers and customers will need to be approached but it is critical to maintain a consistent retail price throughout.

It is generally only food retailers who can and do mix luxury with staples so successfully. This is something that would be impossible for me to do selling luxury leather accessories.

To retain the luxury image while doing this, it will be necessary to obtain the advice of top professionals in marketing and PR. It may be worth sitting down with them and your non-executive directors and thrashing out exactly what the message is that you wish to convey.

It is only through telling the right story in the right way that this luxury image can be maintained, allowing you to reach a wider market with an exclusive product without marginalising the luxury. As in some ways it is a product that is easy to emulate, you need to set yourself aside as an exclusive, quality and renowned brand and to build a loyal customer base that will buy your products exclusively.

Stephen Robertson, founder, Metis Partners

Virtual Board Stephen Robertson Metis PartnersOften this type of change in strategy is linked to a scale-up of the business or expansion into non-local markets and so protecting the value of the brand, particularly a luxury brand, is crucial.

Companies may consider developing brand guidelines for internal use and external use (by third parties such as partners and distributors) to ensure they use, promote, and protect the brand in a way that is consistent with the stated brand values. This will ensure the value of the brand itself is protected, as it will often be the most valuable intellectual property (IP) asset in a business.

It might be worthwhile to extend from a luxury product to a luxury service. These days data is an increasingly important form of IP. Providing a luxury experience with customers/channels and, ultimately, consumers through engaging with them on social media can allow a company to collect and own valuable data and analysis on consumers.

This could allow them to build a direct luxury-focused relationship with consumers beyond the channel relationship, which could be crucial to the business in the future, allowing them to sell other luxury products to their consumers or granting rights to other (luxury) firms to sell to the customer database – for a share of fee or revenue, of course! Naturally, the more IP in the business the more valuable it is on exit.
Stephen Robertson is a member of IoD Glasgow

Bate’s response
Thank you so much for taking the time and trouble to give me advice. What has come across strongly is how important the story is behind the brand. To raise more awareness of the product, I perhaps need to raise awareness of my story and put myself forward a little more. I like Stephen’s idea of connecting with other luxury brands to share our customer databases and I hadn’t considered this before now. Robert’s advice of clearly delivering the message that I am conveying about the exclusivity of the product has given me the confidence not to, at any point, marginalise the luxury of my brand.

To join our virtual board or to seek its advice, join our reader panel
What advice would you give Carrie Bate? Email us

About author

Christian Koch

Christian Koch

Alongside his work for Director, Christian has written features for the Evening Standard, The Guardian, Sunday Times Style, The Independent, Q, Cosmopolitan, Stylist, ShortList and Glamour in an eclectic career which has seen him interview everybody from Mariah Carey to Michael Douglas through to Richard Branson with newspaper assignments including reporting on the Japanese tsunami and living with an Italian cult.

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