The Unlikely Path That Built Our 7-Figure Coffee Brand

0:00We didn't have an exit plan. We didn't have a business brand.

0:07Canyon Coffee became a seven-figure brand without paying for a single investment. Our MO is always try to be profitable. Don't use debt, loans, or investment for salary. Try to avoid it at all costs. That's right. Allie Walsh and Casey Wadalevich have grown their business organically year over year by 20 to 30%. With organic blends, bespoke ceramics, and a cafe that doubles as a community watering hole, customers can't get enough. And I love when I hear people being like, I bought the bag because it was so pretty, but the coffee's actually good. After almost a decade, they built their dream business.

0:41From driving retail traffic and curating the perfect campaigns to sourcing the best coffee. You have to make people care. You need them to feel inspired, so you have to have a vision they can get in on. They're here to talk to us about what's worked and what hasn't. We went from zero to a million without any other investment. I'm your host, Serena Smith, and this is Shopify Masters, your companion for building and scaling a business. Hi, guys. Hi. Hi, Serena. It's so nice to have you. As I mentioned, like, you're almost a decade in, but I want to go back for a moment. You came from the world of modeling and music and also some time as a barista, right?

1:18Not exactly coming to the world of coffee as experts. What was it that you saw in the space that made you feel like there was a hole in the market for Canyon? That kind of goes to what got us excited about coffee in the first place. We were both traveling a lot for work, Ali for modeling. I was touring as a musician. So we were kind of in a long distance relationship from the get-go. And we'd be in random towns around the country or Europe with like two hours to kill. And so that's when we, coffee became this thing that became more than just something we kind of shared in common. It became something we really dove into just kind of through osmosis, learning more about the specialty scene.

1:59So that's kind of how we learned about the industry. When we were finally home with each other, it just became really a cherished ritual to be able to make coffee for each other. And we discovered the pour over and making pour overs every morning. it's really simply I don't want to understate it I guess but it added a moment of mindfulness to our days and it added a little warmth and that is what we felt we weren't seeing in the specialty coffee industry and this isn't a knock on any brands like everyone any successful brand I think has found their voice and what resonates for them but for us at the time we saw a lot of more like overtly masculine branding a lot of motorcycles We were excited to design a coffee bag.

2:44I was. That was what I was so excited about. The design element. Yeah. And something that like spoke to those feelings for us. The other thing is we felt that specialty coffee really was downplaying organic certification. And that was something we really cared about. Like for me growing up in farm country, I knew how difficult it was to be a farmer, but especially an organic farmer. And so we wanted to, even though we were tiny when we started, in our own small way, we wanted to support organic agriculture. We also noticed that in a lot of these shops that we love to go to that sold beautiful ceramics and Chemex and coffee and all just beautiful things, we were like, they should have coffee bags next to the mugs they're selling or next to the Chemex they're selling in these beautiful shops.

3:29and we kind of went with that mindset of what would sit next to the Chemex and a beautiful ceramic. It was like different. They weren't really, most boutique stores weren't really selling a lot of coffee because that was what really helped us get started was selling in boutique shops. And you think the thing that made the difference there was the aesthetic and the design? Yeah, I do. And by boutique, she means just in case, you know, like not coffee shops, places to be selling textiles coffee table books gift cards you know um not gift cards like holiday cards that was kind of our angle to get going and start building our wholesale we just thought of where coffee wasn't being sold where we thought it's hard to just get into a coffee shop that are serving coffee by brands that are more well known or have a relationship we didn't have any relationship with any of these restaurants yet or coffee shops but we had relationships with like general store in Venice where we lived for 10 years and you know so we utilized what we knew to like get in there because I remember general store started with like we'll carry four bags you know and then like eventually be like 12 bags and like two cases like it just went up and we did like pop-ups there people could taste the coffee and then like that was a good start for us was general store the first to carry you yeah or second second the first ever was individual medley and Atwater Village RIP.

4:53Oh, I remember an individual medley. These were spots that inspired us. They kind of inspired us to start our own business. It was sole proprietors just following their passion and we'd go in and make them pour overs and be like, please give us a chance. And they did. And they did. Well, they would start too with like a couple bags, you know. I think they felt bad for us. I think they were like, oh my God, like these guys have no idea what a hill it is to climb. And it's true. And I remember getting the first check for that first like four bags we sold. I was like, oh man, like we either have to quit now or we have to sell a lot of coffee if we're going to be able to like live in LA.

5:30Yeah. You've gotten there. Yeah. Slowly but surely. Slowly but surely. Ten years later. Yeah. I mean, it's interesting though, because I think that there's something so fascinating about people who come to entrepreneurship who aren't from that background because it does give you in so many ways like a fresh set of eyes. Like you weren't looking at it from the perspective that maybe like a seasoned entrepreneur would, which would be like, how do I get into coffee shops? Or maybe how do I open a cafe first and then move into roasting later? Like, it sounds like you were kind of thinking about it through a lifestyle lens immediately.

6:02Does that feel right? Yeah. And we didn't have an exit plan, which most people would say have an exit plan. We didn't have a business plan. People were saying that to us when we were like, exit, like, like from where? We didn't really have any plan. We just wanted to like make a bag of coffee and set like, you know, we didn't have like a plan plan. But you know, I will say that the backgrounds we did have had everything to do with how we built it. So much of our success has to do with Ali's vision and her eye. And that comes from her career in modeling and fashion and just like understanding aesthetics.

6:34And for me, being both a musician and a community organizer, one thing both of those careers have in common is you don't have money. And so you have to think about all the other assets you do have. Like, and you have to, this has come in more handy once we started building our team, but like in a band or if you're community organizing, you have to make people care. You need them to feel inspired. So you have to have a vision they can get in on. And so. I feel so lucky about that. Our team right now, I feel like they all care so much about Canyon and us growing and what we're doing. And it's very much a collective now outside of just Casey and I.

7:12It's got to feel good. Yeah. It's incredible. I think that's a product too. I mean, like to spill the beans, we've known each other for a long time. So I've had a front row seat to this business. Maybe. I think so. Yeah, I think so. And we were in Oaxaca together. I remember tasting coffee in Oaxaca in 2017. Yeah. So very early in the business. But something that I can say about the two of you is that like, and not in an annoying way, but like you both just function with so much intentionality. Like you really walk the walk. and Canyon is so much a representation of that. And so it doesn't surprise me that you have this team of people who care really deeply about it because none of it is BS for you, right?

7:56Like has that connection to the intentionality and like you were talking about growing up on a farm and how important like using organic beans was. As the company has grown, has your relationship with that shifted? Has it become more difficult in some senses as you've scaled? No, actually, I think that it's, I think we've doubled down on it. Like back when we started, again, like with our backgrounds, it felt a little for me personally, I think for Audi too, it didn't sit well with us to just be coffee salespeople. We needed there to be something more we were doing. And there was imposter syndrome, right?

8:33I wasn't a Latera champion. We were like, oh, people might think, what are you doing starting a coffee company? So for us, the driving force was we just wanted to add some warmth to people's daily life. Like that was it. And this was the way we were going to do it. That was what made us tick back then. And warmth is one of our core values. And everyone knows that in the team. And everyone knows that's really the mission. And so we're never, you know, no one on Canyon's team is being told like sell more cups of coffee. Or like, it's just like add warmth, you know. whether at the shop or if you're emailing someone on customer service or how we treat each other or the UPS guy who comes to pick up, that's the through line.

9:17People first. You also had sort of an unconventional way of starting, although you might not have even recognized it at the time, given your naivete. But like, I think a lot of people moving into the world of coffee would start potentially a cafe first and then move into roasting later. But you did the reverse. Why is that? Like I said, we had no business plan or like we didn't really think about it. I don't think we ever even like thought of a coffee shop in the early days. Well, actually, if you look at our interviews back then, we were just like, we're not opening a coffee shop. Never say never.

9:49There are a few reasons for that. Yeah. We were able to travel. We were lucky to be able to do that. We didn't want to have to sacrifice that while growing a business. We actually wanted to find a way to incorporate travel into our company. And that's to this day, we make free travel guides. That's how we started our email list. We'd go to Portugal and make a travel guide with Ali's beautiful photos and my like commentary and download and build our email list. So Ali worked in service industry too. And I worked in coffee shops, like washing dishes. I think we just didn't want to be that grounded yet in LA.

10:23Also, no one would have given money to a musician and model to start a coffee shop. And we would have needed a significant chunk of coin to do that. The way we did it was because we had a friend who was able to roast on another company's equipment. So like no CapEx. We had some of Ali's savings, like I think five grand, and opened a Chase credit card for 10K. And like that's how we launched. There was no other dime between like a loan or anything. And the 5K was like for the bag design. Yeah. Like that was what we paid for. Mates rate. Wow. Yeah. And then the credit card was for like the bags, the green coffee.

10:58yeah we went from zero to a million with that without any other investment over four years wow yeah we launched on shopify yeah launched on shopify nine years ago today no i think it was september 23rd oh yeah yeah um why why did you launch which years later is the day our son was born so it's wild that is also the day we just signed the lease for our newest cafe in New York. What's the deal with September 23rd? In 2016, we like saw something astrologically, it was supposed to be the luckiest day of the year. So we were like, we have to launch tomorrow. Yeah. And it paid off. Yeah. Okay. So in those early days, like, especially given that you weren't coming from this world, coffee has grown in 40 countries, right?

11:45Like, how are you approaching the sourcing process and finding the producers that you wanted to work with? I do more of the sourcing with coffee now. I think one of the most undertold and unrecognized players in the coffee industry are the importers. I've seen in the past a lot of roasters like to kind of spin this tale like they're out there finding the best beans. And often, even if you had a coffee farm in Costa Rica or Ethiopia, and we wanted to bring your beans into our facility and roast, we're not an international logistics company. And so we'd be working with an importer to do that. And there's a lot of these importers are like some of the coolest, raddest people.

12:29And they've been out there all over the world, finding farmers, helping them increase their yields, their premiums, improving their quality. And we were already familiar enough with that just from my time in the roasting industry. So the way it worked was we wanted to start with the coffee from Guatemala. It was the one country that we had a connection to the Guru Coffee because I lived there. I studied abroad there. And so we worked with an import, a guy named Brandon that we knew at an import company, and he helped us source one. And that process is usually they'll give you options. They'll say, this is what's coming in.

13:04We taste, we say, this one rules. We like this. We agree on a price. We import it. Now, nine years later, from that time, from when we started, even though we were tiny, We wanted to, our dream would be that one day we'd be buying enough coffee that we'd really make an impact on farmers' lives. We knew at that time it was just small fry, you know. But we knew that for farmers, the most important basis of the relationship with the roaster is economic. It's not media. It's not going down and taking pictures with them. So we kind of did that backwards too. We chose to like find farms doing great work sustainably, start buying from them.

13:43And now we're at the point where some of the farmers we've worked with for eight years, they know us because we buy three, four shipping containers of coffee from them every year. You are making a difference in their lives. And that's been one of the coolest parts, especially with the regenerative organic coffee. And now we're going to visit them. Oh, so sick. Yeah. It's so nice. It's got to be so gratifying. Yeah, it's cool. I've met farmers before who we haven't been buying from. And it's just a much better vibe when there's already that connection. You know, they know that you're not wasting their time when you're there to visit.

14:21You get into individual medley, RIP, in Atwater and into general store, still thriving in Venice. And then where does it go from there? Like, talk to us about that first year that you were in existence and trying to just build bit by bit. In a very bootstrapped fashion, it sounds like. Shipping from our house. Our whole house is covered in like boxes. Filling bags at our kitchen table with a scale and like a funnel. Yeah. It felt like a drug lab. It did. Just scales and beans. The place we were roasting was in Oxnard. Yeah. Which for a non-Southern California audience, that's like up the coast like an hour, 20, hour and a half from where we were living on the beach in Venice at that time.

15:09So once a week, we'd go up there, get bins of beans, bring them to our apartment and fill by hand. But we did a ton of events. Here we did a lot of events, a lot of like Christmas pop-ups, Echo Park craft fair. Markets. Markets, all of them. We'd go to boutiques and do... Oh, hi, Santa Barbara, San Francisco. Make pour-overs. We didn't pay ourselves the first four years, I think. Allie was still modeling. I was side hustling search engine optimization. It was really just a full-time labor of love and learning a lot. People sometimes say their MBA was, you know, working somewhere, growing their business, and that was ours.

15:48And one thing that we were always inspired by that we learned from other founders or reading books, business books or other founders is we just gathered that almost everyone doesn't know anything when they start. And yet, look at what people go on to build. So that's still our mindset. The funnest part of having a business is just the excuse for all the things you get to learn. You know. I mean, you know, opening the coffee shop. Like, we've never did that before. Never managed one. Never managed. It's new to you. Yeah, all of it is new. For four years, you didn't pay yourselves. What happens four years in that allows things to change?

16:27The pandemic. The pandemic. Because we didn't have a coffee shop and we were only doing e-commerce and wholesale, including grocery. We had newsletters every, maybe we did two a week, maybe once a week. So we did have a, we had people following us that online from through our newsletters. So we had a pretty good like retail profit. Email marketing. I think when we started, we just got one out a week and it was never like, we're the best coffee, drink our coffee. I think we only had like one SKU for the first year. You know, this is where we started. We were starting to do what's now called in hindsight, a lifestyle brand.

17:03And so over four years between Instagram and email marketing, you know, we use automation, which is, you know, everyone has. But back in 2016, I think Clavio had just gotten going. And so we had that from the beginning. We had a list of, I don't know, maybe it was, it wasn't huge. It was maybe 8 ,000 people. We scrubbed it constantly to remove people who weren't responding. When stores closed or like cafes had to close, we were making up all that business online. With TTC. Yeah. It was the first time there was just more cash in the bank account. It was the first time we ever saw money. Oh my God.

17:40Before that, it was always just shoestring, just sell profit, sell profit. But yeah, I think we almost tripled in size that year. I think like the year before that, 2019, we had done maybe like 340K in sales. And then 2020, we did like 820. and that September is when we hired our first ever employee who came in to fill bags and now he's still with us and now he's a full-fledged he's a full-fledged accountant now yeah so he's become an accountant customer service from a bean counter to a bean counter that's correct shout out to Kyle Rambo Kyle yeah and then once we started having employees then that was now like that was the next thing oh yeah payroll benefits Kyle was delivering coffee in his old hip Toyota truck and after a week he's like I'm not comfortable driving this and I remember we went to a Ford dealership it was game seven of the world series and the Dodgers were in it and we were like making a deal for like a little Ford Transit it feels like the life of an entrepreneur is like the moment you feel like you've like remotely mastered something there's something else where you're like, oh, great.

18:47Something else that I know absolutely nothing about. Like you said, Casey, like I think there's actually a lot of value to the not knowing because it keeps your perspective fresh and it keeps you really curious. But looking back now, are there mistakes that you made that you feel like you could have navigated around or advice that you would offer for people getting started in the game? I mean, there's so many things. Yeah, okay, you go first. I mean, the times are so different now with social media. And then when we started, I feel like social media really, really helped us. For Casey and I, we always had separate lanes as business partners.

19:30I did all the creative and the marketing and Casey did everything else. If it needed to get done, I did it. Well. Like operations. operations, wholesale, finance, like all the things. Installing coffee brewers for new accounts. Like, yeah. There are so many times where we got bogged down by like other competitors or thinking that like we're not good enough, like how to compete with these companies who if they're, someone's opening a shop, these people are going to to be their coffee supplier. They're going to buy their espresso machine. They're going to have techs come out every day. They're going to train.

20:10Like we didn't have that. We don't have the finances to buy a new coffee shop, an espresso machine, or like all that. And I just feel like we kept going and doing our thing and like putting out our products and like doing the little pop-ups and like we just kept doing what we did well. And I think like in the end, it eventually like worked out. It took longer, took nine years to like kind of feel like we were like can compete with these bigger brands these days. Yep. I would say. but I think we just like did our thing well but like it's so different from how every other coffee company has started with money and all the things.

20:50And I think there were lots of mistakes made but we took size appropriate risks. We were like really patient. We saw where we wanted to go and we knew we couldn't like compete with those bigger roasters. So yeah, it's tough for me to think of a mistake because anytime there was one made it was just like instant learning. We didn't waste time like, oh my God, what were we thinking? we just like move right to like, oh, like how can we fix that? I feel like I have a more relevant for more recent mistake. And, you know, now we finished our own roasting facility and we started roasting there in 2023.

21:22I think we probably were the same with this back then, but just staying really focused on your core, the thing that you do. So once we had our own space and we have new products, start getting requests for different things we aren't doing. Like we opened our cafe and we have a lot of drinks on tap. One of our most popular one is a matcha on tap made with pistachio milk. And offices started being like, we want this. And so it was like, okay, yeah, that could be good. That could be a good business. And so we like, we pulled the trigger on some kegs, but then it was like, oh, now we need a keg washer.

21:57And so we pulled the trigger on that. And there were mistakes we made because we're a little bigger. So we were like, oh, we can afford this now. But we actually just pulled the plug even before we launched because we're going to try to sell those things because it's just we're growing. And if you're growing, that's amazing. And you should focus on sustaining the growth that you're getting through your existing channels and see where it can go, you know. Doing something like that, we do have ready-to-drink SKUs, but we work with a co-packer for those because we just focus on roasting. So rather than build this new ready-to-drink infrastructure and delivery route system and everything was just like, we don't do that.

22:42We'll sell through products we make with the co-packer who's great at doing liquid coffee with our beans to our specs. And if it ever reaches a volume that's so huge that it makes sense to just build our own infrastructure, then we'll do that. And Allie was a big part of that as we grew because she was always so good at saying no to things. Yeah. It seems, Seems like you guys have said no to maybe more things than you've said yes to. That's true. Said no to like probably over, it feels like over 90 % of things. Really? Yeah. What is like the mentality or the discipline behind that? Casey would have said yes to 90 % of those things.

23:26We'd be in North America right now. Yeah, I'm Minnesota nice. And Ali's like Long Island, New York. She's just thumbs up, thumbs down. I'm like, this is cool. Like we should work, you know, we should work with this brand. And she's like, it's not. I think it's just our baby. And it's like our, I just want to keep it, just keep it precious. But I know there's times you have to kind of like open that space up a little bit. But no, I think saying no and being decisive has really helped us grow. And people can see that we know what we want and that we're not just like saying yes to everything to like make money.

24:02Or like, it's like we really care about this product. We care about Canyon. and we want to grow it in a way that feels organic and that feels natural and like in tune with our life and how we want to live and I grew up in New York it's like a dream to be able to open a shop in Brooklyn and New York and that we're able to like do that right now is incredible I would be excited to open a shop in Japan or Copenhagen or anyway like that stuff really excites me but yeah I don't know I think it's just I like to keep it precious I guess I think well yeah no that's I I think that would be someone's critique of you.

24:36But I actually think that what we were doing, but we hadn't put it into words, is you had the pulse of like, you know, what became our values. Yeah. Who we work with, it has to be aligned with our values. It's a non-negotiable. Yeah. And that's not always obvious if someone's aligned with us and values. But you brought up the like, you know, never trying to make a quick book. Longevity is one of our values. And we've been asked so many times to like open a shop in a store in West Hollywood. like open up in these stores and like sounds pretty great like i think it'd be good but like it's just to me it would be like so random it doesn't really make sense with like how we want to operate and grow you know and we don't like thinking about marketing and social media like like from an e-commerce context because of that mindset and because we have those values like we don't really follow trends we've done everything in house forever yeah it hasn't been like another group or, you know, like kind of pitching us or what to do.

25:32When you launched Canyon, Ali, you already had something of a following from modeling, but like something that always stood out about your Instagram was that like, it was actually very few pictures of you, frankly, you know, it wasn't just like pictures of you looking hot on camera. It was more like a window into your world and the way that you lived your life. And it felt like people were following you not so much because you were a model, but because of like the lifestyle component. Was that like the same inherent approach that you took to marketing Canyon? Yeah, I think that's a big thing that separates Canyon from a lot of these other coffee companies is like we've done these journals on people since we've started with Justin Chung for the past six, seven years and they do so well for us.

26:17He's a photographer and friend of ours. We still do two, three newsletters a week. It's content that's not coffee related. It's not like we're just selling bags of coffee every day. It's like you're saying the lifestyle, like people getting to like read these beautiful journals travel guides like it's so much bigger than just the coffee it's the lifestyle brand yeah so I think I did have that in mind when starting this as evidenced by when six years in you open up the first cafe and echo park right and there's like a line on day one I mean I can't that to me feels like probably like the most proof manifest of like, oh, we've like really built something here.