At age 55, Doug Hildreth decided it was time to act on his long-suppressed entrepreneurial itch.
"I've had so many ideas in my head and never put them to use, and then somebody else comes along and does it," said the foodservice director of a church camp and conference center in Spofford, New Hampshire.
That's why when Hildreth came across nitrogen-infused coffee last summer, he decided not to let someone else take over the nitro coffee business in his hometown. Instead, he launched 320Nitro and hasn't looked back.
|Doug Hildreth makes his signs colorful to convey the flavor variety of his beverages.|
What's nitro coffee?
Nitro coffee is infused with nitrogen under high pressure, then chilled in a keg. The drink, which has a unique mouth feel and a taste that some compare to beer, has been popular for a few years. According to Mintel, sales of cold-brew coffee (coffee that is steeped, not heated) grew 339 percent from 2010 to 2015, with estimated sales reaching $7.9 million in 2015. From March 2015 to March 2016, iced coffee orders totaled 832 million at gourmet coffee, donut and bakery outlets, which was a 20 percent increase, said Bonnie Riggs, restaurant industry analyst at The NPD Group.
"Because it's nitrogenated, it has a creamy mouth feel," Hildreth said. The cold version is less acidic than the hot one.
"It drinks a lot different than a hot coffee that's been cooled and put on ice," he said. "It's just a different drink." It also allows people to enjoy something sweet without added sugar.
Sampling proves successful
When Hildreth offered nitro coffee to people at his conference center, the response was great. Not wanting to miss out on what he saw as a growing trend, he decided to launch 320Nitro. From his research, he found that nitro coffee was growing in popularity in restaurants, but only two trucks in the country specialized in it.
|Hildreth retrofitted the truck with premix containers and 12 Guinness taps.|
After studying the science behind nitro coffee, Hildreth developed his own 24-hour infusion process. He did not wish to reveal details about the process, which he is trying to patent.
A food truck is born
Hildreth purchased a used, red 2014 Nissan van for $20,000 and retrofitted it with 12 1-gallon premix containers and 12 Guinness taps, a three-compartment sink, a hand sink, a solar generator and an ice shaver. The solar generator powers the freezer, refrigerator and ice shaver. The equipment cost $12,000 in addition to the truck, and Hildreth did all the installation work himself.
Since most of the drinks on the truck are served with ice, Hildreth had to get a frozen confection truck license from the city health department.
Having a beverage truck has its advantages in a city like Keene, New Hampshire, which strictly regulates food trucks. As a beverage truck, he is not restricted from parking at festivals and parks like food trucks are.
"We can go anywhere," he said.
A focus on variety
320Nitro selections include three coffees but also has three teas, including a bubble tea, two nut milks (sweet and non-sweet), four craft sodas and Hawaian shaved ice. One of the craft sodas is maple cream made with real maple syrup. Another is honey ginger beer soda with real ginger.
Positive customer response
When Hildreth took the truck on its first outing at a city park selling all drinks for $3 (including taxes), he did $225 in sales in an hour and a half. He was pleased. About half of the people were already familiar with nitro coffee, and he had to teach the other customers about the drink.
"I quickly got a lot of requests from businesses," said Hildreth, whose Oreo-infused nitro coffee is the brand's top seller.
|Shaved ice is served with most of the drinks.|
Local businesses wanted him to park at their facilities, and he willingly obliged. In some cases, he serves employees and gets paid by the businesses based on how many drinks he serves.
He also goes to festivals, high school sporting events and public swimming pools.
Hildreth accepts cash and credit and debit cards. About a third of the sales are paid with credit cards, which he accepts using Square.
"Most of my customers are repeat customers," he said.
Sales are evenly split among coffee, bubble teas and shaved ice.
"The men tend to go for the coffee, the women tend to go for the bubble tea, and younger people, shave ice," he said.
Operating with few resources
Because the truck is still Hildreth's side business, he's not yet ready to hire a staff, nor can he afford to sink a lot of money into advertising. He works eight to 12 hours a week when he has time away from his regular job. And to keep costs down, he uses Quickbooks for accounting and Square as his POS system.
|Hildreth has found gift coins popular with customers.|
Given that he is working part-time, it will take him a couple of years to recover his investment. His food cost averages 30 percent of his sales, but he's happy with his progress.Hildreth's best month was $3,800 in sales.
His main goal, however, is to sell franchises and possibly his nitrogen coffee infusion process once he gets his patent.
"You can do $300 to $500 an hour on it," he said for the truck.
With the business now closed for the winter, Hildreth is brainstorming new ways to improve his offerings when he reopens in the spring.
He plans to capitalize on the growing popularity of bitcoin by accepting bitcoin payments.
Creative marketing pays
Social media has been Hildreth's main marketing tool. He has 800 social media followers and has received 56 unsolicited reviews — all "five-star" ratings. He posts his schedule on Facebook and Instagram.
To encourage repeat business, Hildreth offers a ceramic "coffee coin" for $20 that entitles a customer to buy eight drinks. There are eight checkboxes on the back of the coin that Hildreth marks off one at a time for every sale. The coin yields a $4 savings for eight drinks.
The promotional coins, which Hildreth buys from an online vendor, have proven popular with regular customers.
Photos courtesy of 320 Nitro.
Elliot Maras Elliot Maras is the editor of KioskMarketplace.com and FoodTruckOperator.com.