This week’s episode of “WisBusiness: the Podcast” is with Scott Isabella, president and CEO of Colectivo Coffee.
The coffee business, which launched in 1993, grew across Milwaukee before expanding to Madison and Chicago in the mid-2010s.
“Think early 90s, 1993, you know, the coffee scene back then looked a lot different than it does now, where you can kind of go to any city in America, even if it’s a tier two or tier three city, and find great coffee,” he said. “Obviously that wasn’t the case in the early 90s, and so they started around this passion of delivering a better cup of coffee.”
Isabella, 35, discusses the company’s evolution over time and its current business model, which relies on suppliers in Indonesia as well as parts of Central and South America and Mexico.
“We’re sourcing from all the major regions, and kind of having that direct farmer relationship has been a part of our company since the 90s,” he said. “Some of our co-op relationships go back 20 plus years.”
He also weighs in on international trade impacts on the industry, amid concerns about tariffs leading to higher coffee prices. Isabella notes coffee prices were already on the rise “way before the tariff conversations,” and the new uncertainty around U.S. trade policy has led to even greater volatility.
“You get to a place with the consumer where you say, it’s either I’m going to eat some of my cost with the margins, which you see a lot of businesses doing that, or I’m going to pass it all on … we’ve taken the approach of, we don’t know where coffee is going to be in six months or a year from now,” he said. “And we need to do right by the customers, and so we’re taking a lot of this margin hit in the short-term.”
Isabella highlights some of the factors playing a role in earlier price increases, ranging from climate change to labor shortages and harvest trends. But he notes the picture is complex.
“I don’t think it’s an easy answer … I would hesitate to trust anyone who says they know exactly what’s going on,” he said.
Listen to the podcast below, sponsored by UW-Madison:
