Coffee’s an accommodating beverage.
It’s found almost anywhere, takes nearly any form—bean, ground, dripped, freeze-dried, churned into ice and sugar—and can be grown into a profitable business.
“We needed something flexible we could run from home and make lots of money,” said Jeff Duggan, who with his wife, Christa, runs Portola Coffee Lab in Costa Mesa.
The Duggans’ 7-year-old coffee roaster-retailer won a Family-Owned Business Award in the medium-size category at the Business Journal’s 17th annual award ceremony at Hotel Irvine on June 21 (see related stories, pages 1, 5, 6 and 9).
“The clock was ticking immediately,” on the company’s founding, Jeff said.
• The Duggans’ son Gabriel was born in 2007 with a heart condition.
• Christa left her lucrative job in venture capital firm to better care for him.
• The family bought a house in 2008—just as the real estate market tanked.
The couple needed a plan and a business.
Caffeine complied.
“I absolutely adore coffee,” Christa Duggan said. She came somewhat late to the party but said, “I love [it] as much as Jeff, (and) he was my true introduction to quality coffee.”
For Jeff’s part, the plan had to work because “the only thing I knew how to do was roast coffee.”
Baked Good
Coffee—adaptable, home-based and lucrative—not only fit the need, it was about their only option.
It was also fun.
“I’d been roasting for about 10 years,” Duggan said. “I was getting good at it and enjoying myself.”
He roasted beans for friends and family, and after knocking on exactly two retail bakery doors, found one that would let him do it from its shop: the Layer Cake Bakery & Cafe in Irvine.
The Duggans took a “little section on the side in front of a bay window” in exchange for supplying the cafe with roasted coffee beans at cost, a percentage of the Duggans’ own sales, and kicking in for some of the facility’s utilities.
“I wasn’t gonna be picky,” he said. “I just counted my blessings at that point.”
The shop had been paying about $9 a pound for coffee from a Los Angeles-based roaster, and Portola could supply them from better-than-next-door for about $5 to $6 a pound.
A shop can go through about 20 pounds of coffee in a single day, Jeff Duggan said.
“They had a pastry section and served breakfast and lunch,” he said—an excellent match considering the suitability and ubiquity of coffee as a pairing for such food offerings.
The business at the time was just roasting—the company name was Portola Handcrafted Coffee Roasters—but within 18 months of starting at Layer Cake, Duggan knew he had something.
“It was a low-cost, low-risk way to test the idea,” Duggan said. “We were there long enough to answer the question, ‘Would Orange County like it?’”
Christa Duggan saw a notice on Greer’s OC lifestyle blog about a shopping center off the I-405 Freeway.
The layout is now known as SOCO and has become a mecca for home and kitchen items, ritzy retail, and high-end, high-quality concepts like Portola.
At the time, it wasn’t.
“When I walked the space [the center] was barren,” Duggan said. “We put a lot of faith and trust in the new owners. They had a vision (for the home-and-food focus) and they offered to help build out the bakery.”
The Duggans opened the first and still-flagship location of Portola Coffee Lab in 2011.
4 Locations
The company now has four locations, three of them added last year in Costa Mesa, Tustin and Old Town Orange. Two more, in Mission Viejo and at Pacific City in Huntington Beach, are opening by summer’s end.
Portola in Orange is—as was the Duggans’ first deal in Irvine—part of another food service location, Provisions Market, and also in front of a bay window.
Jeff Duggan said that for a full location, “We shoot for an average of $800,000” in annual revenue.
The company will employ about 70 when the two new locations open.
“We’re going to push into Los Angeles next year,” he said.
A letter of intent for that first non-OC site could come this month.
