Grady's Cold Brew - Brooklyn, New York
Grady Laird first started selling bottles of his cold-brewed coffee concentrate to co-workers at GQ Magazine in 2009, when he was working as a production editor there. Laird and two friends, Dave Sands and Kyle Buckley, started making the coffee concentrate in Laird’s apartment kitchen in Brooklyn, and as business grew they brought on friends and family as investors.
Sales were steadily increasing, and in early 2012 while searching Craigslist, Laird found Grady's Cold Brew a new home in a 6,000-square-foot brewery, in space sandwiched between Brooklyn's fast-growing Williamsburg and Greenpoint neighborhoods. At the time, the space was adequate for production because Grady's was only beginning to find its way to the shelves of a few local grocery stores. Grady's Cold Brew is sold in 16- and 32-ounce bottles that must be refrigerated. The concentrate is added to water, regular milk, soy milk or other beverages to make iced coffee.
But by the summer of 2013, new sales came to a halt. More than two dozen Whole Foods outlets from New York City to Maine, as well as Fairway and Fresh Direct, were selling the New Orleans-style coffee concentrate in their grocery stores, and Grady's production had reached capacity.
"We were on a sales freeze because we knew we couldn't make enough product," Laird said. The small group of the company's initial investors had decided early on that they would not take on additional investors because it would mean giving up equity in the business, and private lenders would not take on the risks associated with their startup.
About a year earlier, the owners considered a loan through NYBDC, but quickly determined they were not ready to take on such a large financial burden. "We weren't confident enough yet to take on a loan," Laird said.
After gaining a foothold in the coffee market, Grady's Cold Brew was ready. The business received a $415,000 loan through the NYC Food Manufacturers Growth Fund for machinery, equipment, site upgrades and other areas.
Funded jointly by the New York City Economic Development Corp. and Goldman Sachs' Urban Investment Group, the Food Manufacturers Growth Fund will provide up to $10 million in affordable growth financing for the small, food-manufacturing sector that is a critical piece of New York City's economy. Loan amounts range from $50,000 to $750,000.
The Growth Fund loan allowed Grady's to increase capacity (production could increase 10-fold this year), maintain working capital and launch a new product. Grady's has hired a handful of new sales people, bringing its total employees to 12. Laird expects to hire as many as 10 new employees as demand for the company's new product grows. The new product, brew-it-yourself, cold-brew grounds called Grady’s Cold Brew Bean Bags, debuts in late March.
Laird says NYBDC provided Grady's with more than money. The application process required a business plan -- something the owners had never developed.
"The loan turned out to be an incredibly good thing for more than one reason," Laird said. "It forced us to put together a profile that gave us a nice, solid business foundation."