In the ever-evolving landscape of specialty coffee, few companies have managed to navigate the complexities of both wholesale and direct-to-consumer (DTC) markets as successfully as Propeller Coffee Co. Based in Toronto, Canada, this innovative roaster has not only survived but thrived amidst changing market conditions and global challenges. Let's explore Propeller Coffee's impressive journey and uncover the strategies that have propelled them to the forefront of the coffee industry.
The Foundation: Building a Multi-Faceted Coffee Hub
From Empty Factory to Buzzing Ecosystem
Propeller Coffee's story begins in 2013 when co-founder Losel Tethong spotted potential in an empty 10,000-square-foot factory in Toronto's Junction Triangle. Rather than simply setting up a roastery, Tethong envisioned a comprehensive coffee ecosystem that would serve multiple purposes:
- A state-of-the-art roasting facility
- A welcoming café space
- A versatile event venue
- A cutting-edge coffee lab
- An education center for baristas and enthusiasts
- A warehouse to support distribution
This multi-use approach laid the groundwork for Propeller's future success, allowing them to diversify their offerings and create multiple revenue streams from the start. By centralizing their operations, they were able to maintain tight quality control while also creating a destination for coffee lovers and industry professionals alike.
Core Values as Guiding Principles
At the heart of Propeller Coffee's operations are three core values that have shaped every aspect of their business:
- Quality: An unwavering commitment to sourcing and roasting the finest beans, ensuring every cup meets the highest standards.
- Sustainability: A dedication to environmentally friendly practices, from energy-efficient roasting to compostable packaging.
- Community: A focus on fostering relationships with customers, partners, and coffee growers around the world.
These values have not only guided Propeller's business decisions but have also resonated strongly with their customers, creating a loyal following that has supported them through various market shifts.
Mastering the Wholesale Game: Education and Relationships
Barista Training as a Competitive Edge
One of Propeller Coffee's key strategies in building a strong wholesale business was their focus on education. Recognizing that the quality of the final product depends not just on the beans but also on the skill of the barista, Propeller invested heavily in training programs.
As Losel Tethong explains, "In that last 35 to 40 seconds of the life of that bean, you can either make or break that coffee." This philosophy led Propeller to offer comprehensive training programs for baristas from their wholesale clients, including:
- Espresso extraction techniques
- Latte art workshops
- Cupping sessions for flavor profiling
- Equipment maintenance and troubleshooting
By ensuring that their high-quality beans were being prepared to perfection, Propeller not only improved customer satisfaction but also strengthened relationships with their B2B partners. This approach set them apart in a crowded wholesale market and led to partnerships with high-profile clients like the Four Seasons Hotel and numerous independent cafés across Canada.
Sustainable Sourcing: Beyond Fair Trade
Propeller Coffee's commitment to sustainability extends far beyond their roastery. Their sourcing practices have become a cornerstone of their wholesale appeal, particularly to businesses looking to align with eco-conscious suppliers.
The company has cultivated long-term relationships with farmers in countries like Ethiopia, Guatemala, and Colombia, focusing on those who prioritize:
- Water conservation projects
- Soil remediation efforts
- Fair treatment of workers
- Community development initiatives
For example, their partnership with the Karahari Coffee Cooperative in Ethiopia has led to the implementation of water-efficient processing methods, reducing water usage by up to 90% compared to traditional methods. This not only ensures a more sustainable product but also improves the quality of the coffee by allowing for more precise fermentation control.
These direct trade relationships allow Propeller to offer transparency in their supply chain, a feature increasingly demanded by wholesale clients who want to tell a compelling story about their coffee's origin.
Pivoting to Direct-to-Consumer: Agility in Crisis
The Pandemic Challenge and E-commerce Solution
Like many businesses, Propeller Coffee faced a significant challenge when the COVID-19 pandemic hit in 2020. With 80-85% of their revenue coming from wholesale clients, the sudden closure of cafés and restaurants could have been catastrophic.
However, Propeller's foresight in establishing an e-commerce presence on Shopify prior to the pandemic proved to be their lifeline. As Losel candidly admits, "If we hadn't been on Shopify when the pandemic began, we would likely not be here."
This existing e-commerce infrastructure enabled Propeller to rapidly respond to the surge in online demand for coffee as people began working from home. Within weeks, they had scaled up their direct-to-consumer operations, introducing:
- A user-friendly online ordering system
- Contactless local delivery options
- Nationwide shipping capabilities
Innovations in DTC Offerings
To capitalize on the shift to DTC, Propeller Coffee implemented several new initiatives designed to enhance the at-home coffee experience:
Subscription Program: Offering regular deliveries of fresh coffee to customers' homes, with options for frequency and blend customization.
Loyalty Program: Rewarding repeat customers with points redeemable for discounts, exclusive products, and early access to limited edition roasts.
Expanded Product Range: Introducing coffee-related merchandise and equipment, including:
- Branded mugs and tumblers
- Home brewing equipment (pour-over sets, French presses, etc.)
- Coffee storage solutions
Virtual Coffee Tastings: Launching online events where customers could sample new blends guided by Propeller's expert roasters, creating a sense of community even during isolation.
Educational Content: Producing a series of brewing guides and video tutorials to help customers replicate café-quality coffee at home.
These initiatives not only helped retain existing customers but also attracted new ones looking for high-quality coffee experiences in their own kitchens. By the end of 2020, Propeller's DTC sales had grown by over 300%, offsetting much of the loss from their wholesale business.
Balancing Wholesale and DTC in 2025: A Model of Resilience
As we examine Propeller Coffee's position in 2025, we see a company that has successfully balanced its wholesale and DTC operations, creating a resilient business model capable of withstanding various market conditions.
Wholesale Renaissance
With the return to normalcy post-pandemic, Propeller's wholesale business has rebounded strongly. However, the company has maintained a more diversified approach to B2B sales:
- Expanded Office Coffee Services: Capitalizing on the hybrid work trend by offering tailored coffee programs for offices of all sizes.
- Enhanced Training Programs: Utilizing both in-person and virtual platforms to provide ongoing education to wholesale partners.
- Sustainability Partnerships: Collaborating with eco-conscious businesses to create custom blends and co-branded products.
- Hotel and Restaurant Specialization: Developing specific programs for the hospitality industry, including signature blends and staff training.
DTC Growth and Innovation
The direct-to-consumer segment, which proved crucial during the pandemic, has continued to thrive and evolve:
- Personalized Subscriptions: Using AI algorithms to recommend blends based on customer preferences and past purchases.
- Virtual Tasting Experiences: Offering regular online sessions with coffee experts, creating a global community of Propeller Coffee enthusiasts.
- Sustainable Packaging: Introducing fully compostable bags and a reusable container program to minimize environmental impact.
- Mobile App Integration: Launching a smartphone app for easy ordering, brewing tips, and loyalty program management.
Technology Integration
Propeller Coffee has embraced cutting-edge technology to enhance both its wholesale and DTC operations:
- Blockchain for Traceability: Implementing a system that allows customers to track their coffee from farm to cup, increasing transparency and trust.
- IoT-Enabled Roasting: Utilizing smart sensors and machine learning to ensure consistent quality across batches and optimize energy usage.
- AR Coffee Education: Developing augmented reality experiences for packaging, allowing customers to scan their coffee bags for immersive origin stories and brewing instructions.
The Future of Propeller Coffee: Expanding Horizons
Replicating the Multi-Use Model
Building on the success of their Toronto headquarters, Propeller Coffee is planning to replicate this multi-use space concept in other Canadian cities:
- Montreal: A new 8,000-square-foot roastery and education center slated to open in 2026, featuring a bilingual training program.
- Vancouver: Plans for a west coast hub combining roasting, retail, and event spaces, with a focus on showcasing Pacific Northwest coffee culture.
These expansions will allow Propeller to strengthen its national presence while maintaining the local, community-focused approach that has been key to their success.
Barista-Owned Cafés: A Revolutionary Concept
In an innovative move set to launch in 2026, Propeller Coffee is introducing a new café brand that will be owned and operated by experienced baristas. This initiative aims to:
- Empower coffee professionals by giving them a stake in the business
- Ensure top-quality service through owner-operator dedication
- Create a network of passionate brand ambassadors across the country
The program will provide selected baristas with business training, financial support, and ongoing mentorship, creating a new model for café ownership in the specialty coffee industry.
Global Sustainability Initiatives
Looking ahead to 2030, Propeller Coffee is doubling down on its commitment to sustainability with ambitious goals:
- Carbon-Neutral Roasting: Investing in renewable energy sources for all roasting facilities and implementing a comprehensive carbon offsetting program.
- Farmer Support Programs: Expanding initiatives to help coffee growers adapt to climate change, including funding for drought-resistant crop varietals and agroforestry projects.
- Circular Economy: Developing new ways to repurpose coffee grounds and packaging, including partnerships with local gardeners and composting facilities.
Lessons for the Coffee Industry and Beyond
Propeller Coffee's journey offers valuable insights for businesses in the coffee sector and other industries:
Diversification is Key: Having multiple revenue streams provides resilience against market shifts and unexpected crises.
Embrace Technology: E-commerce capabilities and digital innovation can be lifelines in changing market conditions.
Invest in Education: Training and knowledge-sharing create value beyond the product itself, fostering loyalty and differentiation.
Stay True to Core Values: Consistency in quality and ethics builds long-term customer trust and brand strength.
Adapt and Innovate: Be ready to pivot and explore new business models when circumstances change, without losing sight of your core strengths.
Sustainability as Strategy: Environmental and social responsibility can be powerful differentiators and drivers of business growth.
Community Building: Fostering a sense of community among customers, whether B2B or DTC, creates resilient relationships that withstand market fluctuations.
Conclusion: A Perfectly Balanced Blend
Propeller Coffee's success story is a testament to the power of combining traditional coffee craft with modern business acumen. By staying true to their core values while remaining agile in their approach, they've created a model that not only weathered the storm of a global pandemic but emerged stronger and more diverse.
As we look to the future of the coffee industry, Propeller Coffee stands as an inspiring example of how businesses can evolve and thrive in the face of challenges. Their journey from a local roastery to a multi-faceted coffee powerhouse with thriving wholesale and direct-to-consumer channels offers valuable lessons for entrepreneurs and established businesses alike.
In the world of coffee, where the perfect brew is a delicate balance of art and science, Propeller Coffee has found the ideal blend of tradition and innovation, of wholesale expertise and direct-to-consumer agility. As they continue to grow and evolve, one thing remains certain: their commitment to quality, sustainability, and community will keep them at the forefront of the coffee industry for years to come, propelling them forward into a bright and flavorful future.
