Onyx Coffee Lab sees growth in Northwest Arkansas, beyond

Legend has it that a goat farmer in Ethiopia discovered coffee beans in the ninth century. He noticed that after his goats ate the “cherries” of a particular tree in the coffee forests, they were so full of energy that they didn’t want to sleep at night.

He reported this finding to the abbot of a local monastery who struggled to stay awake during the long hours of evening prayer. The abbot made a drink with the cherries, and they helped him stay alert and awake.

From that origin, the coffee trade began.

For Onyx Coffee Lab owners Jon and Andrea Allen, their origins in the business weren’t quite that legendary, but the brand they’re building in Northwest Arkansas and beyond is certainly becoming the stuff of legend. In their earlier years, Andrea, 41, percolated the ins and outs of retail, while Jon, 42, had a thirst for the agricultural side of the industry.

“My wife and I, we have both worked in coffee, I mean all through high school and beyond from starting out as baristas where we both worked in Fayetteville. We’ve always been infatuated with it,” said Allen.

Andrea managed two coffee cafes when she was younger, while Jon studied micro roasting and traveled through Central and South America as well as East Africa to learn the coffee trade.

“It’s a beautiful industry, and the best part of coffee, if I’m being honest, is the agronomy side,” he said. “We’ve always loved it and knew we wanted to bring high-end specialty coffee to this area, but we wanted to do it in the right way. That took learning all the building blocks to lead up to it.”

RIGHT BUSINESS BLEND
The Allens are doing it the right way. Onyx Coffee has developed into a diverse revenue model that includes retail shops, business-to-business (B2B) coffee sales, and direct-to-consumer (D2C) sales.

Allen said B2B and D2C constitute the bulk of the company’s growth, even as its retail operations are set to grow from four locations to as many as 10 Northwest Arkansas locations this year.

“We started Onyx because we saw there wasn’t a coffee company whose basic audience was the coffee industry itself,” he said. “The demographics we aimed initially for our target audience was baristas and roasters and importers and people within the hospitality industry. That was who we were geared toward and really remains who we’re geared toward.

“Now, it turns out that if your local barista in L.A. tells you their favorite coffee is Onyx, then it turns out others buy it too. That started to increase our distribution and our D2C business in an organic fashion, even though we were really focused on the hospitality industry.”

Onyx is set to open three new retail cafes in the next month: two on the new Walmart campus in Bentonville and a big buildout in downtown Springdale on Emma Avenue that will feature a major chocolate operation, but more on that later.

There are also plans to open an Onyx Coffee at Northwest Arkansas National Airport and on the Fayetteville Square. Allen also hinted that another Bentonville location is on the drawing board. The company could go from four to seven to 10 pretty quickly. Allen said the three pillars of its business — retail, B2B, and D2C — are symbiotic. They all feed off each other for building Onyx and improving its products.

“It’s sort of the holy trinity of our establishment. I think without one of the legs, the whole thing falls,” he said. “It becomes this great circle of knowledge where we also learn from all these different people using our coffees … It also really allows a lot of R&D [research and development] on our coffee. We’re not just a roaster. We put our money where our mouth is when we use it,” Allen said.

CHOCOLATE FACTORY
Onyx’s new Springdale location will feature chocolate production, a business niche the company has been growing for about six years. Chocolate is similar to coffee from a production standpoint, Allen said, which makes it a product where coffee bean knowledge is transferable.

Onyx’s award-winning chocolate brand is called Terroir, and it also includes vanilla bean products and honey. The Springdale location will allow the company to meet demand in the bean-to-bar chocolate space.

“We’ll be doing all the chocolate manufacturing there, sort of showcasing it for everyone to see, but also for distribution. We currently sell chocolate to a couple of hundred cafes around the world, and then a few retail establishments along with our own e-commerce,” said Allen.

Coffee is still the mothership, although the Terroir chocolate project has been growing. Allen said they’ve taken their time with Terroir so as not to lose focus on coffee.

“The real opportunity I think still is in our bread and butter, which is going to be coffee,” he said.