Overview
The founder of Espresso Armando is aggressively trying to grab a share of the exploding espresso coffee business in the U.S. by building a superior espresso brewing machine amidst the domination of this marketplace by European competitors.
For the Love of Great Coffee
Trends and cultural activities in a country are often influenced by other nations or regions. A trend that has exploded in the last few years in the U.S., is the consumption of gourmet coffee drinks. Espresso bars and coffee shops offer the newly enlightened American consumer a wide variety of gourmet coffee drinks. In most major cities, it seems that you can’t walk more than one or two blocks without running into a Starbucks, Seattle’s Best or Timothy’s coffee shop. Furthermore, successful television shows, such as “Friends” and “Frasier,” have glamorized coffee shops and fancy pastries. The morning ritual of having a “good old cup of Joe to get your motor started” is now for any occasion, and for any age. Coffee consumption has become a daily ritual for many demographic groups. It pervades many aspects of our daily lives: from the workplace to studying to socializing.
The machines that create these varieties of coffee drinks, almost exclusively come from Europe – Italy, Spain and France. In particular, the well-crafted espresso machines, and brewing expertise of the Italians have made them the de facto worldwide, industry leaders. However, does an American know how these machines function, and more importantly, how to brew these drinks?
One man who knows exactly how these machines function, and who decided to improve them – so he could always get the perfect espresso every time – is Armando Conti. Armando is the founder of “Espresso Armando.” His company is considered the premier domestic espresso machine builder. A self- proclaimed perfectionist, Armando has spent the past five years designing, building, testing and selling a commercial espresso machine. His machine has won rave reviews from some of the top coffee experts in the U.S., and the world. Located in Hollis, New Hampshire, Armando and his wife Geri, hope to capture a significant share of the commercial espresso machine sales in the U.S., by convincing consumers that their method for brewing espresso is the purest way to make an outstanding drink every single time.
From Music to Mocha
A little more than five years ago, Armando began to “build the world’s best espresso coffee machine.” Although, he was not unfamiliar with creating a new business. His first entrepreneurial venture led to the founding of “Espresso Armando.” “I was an audio fanatic and was selling retail audio equipment part-time at night out of my house that was by appointment only selling very expensive equipment. In 1985, I decided to build my own turntable because as a dealer I was carrying other people’s turntables and none of them satisfied me.” He designed a turntable with a fluid-damped isolation system (essentially shock-absorbers) to keep records from skipping during a vibration. “I received some positive feedback from customers and manufacturers and dealers that the device was very good.”
His success in developing a technically superior audio component, presented a common problem of many entrepreneurs who start out of the gate quickly, “Between the turntable production and the retail audio business and my full-time job nothing was happening properly. The retail business was way behind and the production for the turntables was backlogged.” Something had to give, so he decided to quit his full time job and go out on his own. “I had always wanted my own business and here was a chance to lead me to a venture that would take me to a next greater venture.”
After starting on his own company in 1987, he and his wife – who had left her job to work full-time in the audio venture – decided to quit the retail business, and focus exclusively on the turntable business. In 1990, they moved the business out of their the house into a 1500 sq. ft. facility, and hired their first full-time employee. That venture continued as their sole business activity until October of 1991.
Armando understood the turntable business was finite because of the growth of compact discs (CD’s). “When my wife quit her job to work with the audio business full-time I knew I had to start looking for what would be my ‘retirement company.’ The audio business was an off-the-cliff company and I needed to find a venture that I could work at for 20 years or sell someday and retire from it.” In 1989, Armando began searching for what could be his next company. “There was no formal evaluation process, mostly just mind share. I wanted to build a real value-added business that I could hopefully sell someday.” Armando had no preconceived limits on his next venture. “I think a lot of entrepreneurs think this way in that every product you touch or service you see you start to think what is the buy-in to this industry? Is there room for a niche player? What expertise is needed? How can I get in?”
The Search for Great Espresso
The espresso venture idea came as a result of his purchase of a home espresso machine. Armando wanted a machine that would allow him to make good espresso at home. Until then, his interest in coffee was mostly as a casual drinker. He enjoyed the coffee and cappuccino that he and his wife would buy at the Italian North End of Boston, Massachusetts. After losing interest in most coffee drinks, Armando tried espresso, and he liked the stronger, more flavorful beverage. “I really liked the espresso because of its complexity and its density and the ability to taste many different characteristics within it.” According to Armando, his $300 machine did not produce a quality coffee drink. He considers quality to be of the utmost importance. “I started buying gourmet ground coffee and still could not get it to look and taste as good as the espresso shops were making.” To remedy the problem, Armando bought a used, commercial espresso machine.
To find a commercial espresso machine, he called restaurant suppliers, but none of them could help him track one down. Finally, one supplier led him to an espresso dealer. “It was during this hunt that I started to wonder why was it so hard to find them, and why wouldn’t these distributors want to know where to buy them?” When he bought the used machine he decided to rebuild it, and what he saw inside was “horrifying.” “There was peeling plating, brass turning black and copper eroding. When I saw that I thought to myself do I really want to drink out of this, or do I just want to sell it when its rebuilt?” He realized that coffee shops had these exact machines, so they must be in the same condition. Even so, he decided he wasn’t going to stop drinking coffee. As Armando describes it, his altruistic nature came through to inspire him to conclude that, “Someone has to build something safe to drink from.”
His next idea came as he was trying to locate spare parts for the machine. Many parts were hard to locate, and then on back order. He saw a business opportunity in this industry. “In my efforts to locate spare parts for the espresso machine I purchased, I learned from industry participants that every owner of a commercial espresso machine was facing the same problems.” Most of the machines that were being sold had come from Europe, and the spare parts all had to be purchased from Europe. Service organizations and distributors in the U.S. were many times low or out of critical spare parts needed by their customers.
When he rebuilt his machine he started making espresso on a regular basis. He realized the machine produced inconsistent coffee. “Sometimes it was burnt, other times it was not. Sometimes it would be three weeks in between having a great espresso. That frustrated me because I wanted the same damn thing every time.”
Armando’s strong technical background as a mechanical engineer allowed him to analyze the brewing process, and to conclude that water temperature was critical. He believed he could build a machine that would maintain a consistent water temperature throughout the entire brewing process. He would employ a dual pressure vessel system: one system for the coffee’s water, and the other for the steam boiler. In 1991 he finished rebuilding the machine, and then researched his idea for the next eight months. To help with his idea, he sought input from industry professionals, such as a coffee distributor in Boston. He also read industry trade journals to look at the industry’s expansion potential.
In October of 1991, he decided to start his espresso machine business. “I didn’t pursue the audio industry due to its niche nature, the capital requirements, and the technical expertise it required. I was a mechanical engineer and needed electronic expertise.” He felt that a big industry player was probably at the $10MM level. He thought there was a $50MM potential, if he branched out to products based on the espresso machine, such as drip brewing. “There were no limits beyond our business abilities…this is what made me finally decide on this industry. I also felt that the service in the current industry was terrible and that it would not be hard to shine in this business.”