Coffee, Compassion, and Canines: Merging Business with Animal Welfare

Intro: Broadcasting live from the Business RadioX Studios, it’s time for Women In Motion. Brought to you by WBEC-West. Join forces. Succeed together. Now, here’s your host.

Lee Kantor: Lee Kantor here. Another episode of Women In Motion and this is going to be a good one. But before we get started, it’s important to recognize our sponsor, WBEC-West. Without them, we couldn’t be sharing these important stories. Today on Women In Motion, we have Claudia McMullin with Hugo Coffee Roasters. Welcome.

Claudia McMullin: Thanks for having me.

Lee Kantor: I am so excited to learn about your story and learn about Hugo. Tell us what inspired you to start a coffee roastery.

Claudia McMullin: Oh, well, that’s a story in and of itself. So I’m a reformed attorney of 25 years, and I moved to Park City, Utah from New York in 1999 because I didn’t want to be a partner in a Wall Street law firm. And so I up and quit my job and moved to Park City, Utah, where when I landed, I wanted to do anything but practice law. And of course, I had to practice law for a while because it’s the only thing I knew how to do. But in the meantime, I was trying to do other things, and other things I tried included, I ran an animal rescue, Friends of Animals, Utah, which is now Nuzzles & Company. I did that for a few years.

Claudia McMullin: I ran for public office and won for two terms, and it was in that capacity as the chair of the Summit County Council, I learned that opportunity to buy a coffee shop inside the Visitor Information Center because the vendor was not renewing its lease. I thought it to be a travesty because I went to the shop a lot. So I went home to my husband and I said, “Well, I could do that.” And he said, “No, you can’t.” I said, “I’m not asking permission.” So, I bought a coffee shop, called it Hugo, because I had name recognition not only from my public service as a counselor, but I also ran an animal rescue. So I decided to name it after my handsome rescue pup, Hugo. A year later, I decided to integrate and launch a roasting company in order to have a larger impact in the world of animal rescue.

Lee Kantor: So, the path was through the animals. They’re connected. This isn’t two separate journeys. They’re like now one larger journey.

Claudia McMullin: I have married my love of coffee with my love of animals. My animal love preceded my coffee love. And I ran the animal rescue. So when I got into the coffee business, I named everything after my animal, Hugo, and gave back to animal welfare organizations nationwide.

Lee Kantor: So now, did that help you in kind of differentiating yourself in the marketplace? You know, as a coffee shop owner, did that, you know, because that’s a point of differentiation.

Claudia McMullin: Sure. It helped me – with respect to, like, hospitality accounts, the animal welfare mission isn’t as important as it is to consumers. It’s very important to individual consumers. But like, you know, my coffee is also, by the way, really good coffee. And it’s served in auberge and like montage. And those companies don’t really care that much about my animal welfare mission as much as they care about the quality of the coffee and our servicing of the account. The consumers love the mission, and we know from individual consumers that they buy the coffee. They buy Hugo Coffee products because of the mission, and they buy it again and again because it’s fantastic coffee.

Lee Kantor: And then did you get into – did the coffee shop business expand as well, or is this primarily direct-to-consumer? Like, what is the coffee business for you?

Claudia McMullin: So, it has really – oh, my gosh, Lee, it has evolved since pre-COVID, post-COVID, no COVID, and then post-COVID. So pre-COVID, we were, Hugo Coffee was 99% B2B hospitality. I didn’t even have a Shopify. I wasn’t – I was, like, maybe in two grocery stores, like local, independent-type grocery stores, but it was really more the hospitality accounts. It was all the hospitality accounts.

Claudia McMullin: So when COVID hit, I not only lost all the business of the coffee shop, the Hugo Coffee shop that I bought, but I also lost all my roaster accounts because they closed. And so, I pivoted directly – I pivoted quickly into direct-to-consumer online and grocery sales. We did that. And meanwhile, the hospital – and hospitality did end up coming back.

Claudia McMullin: But meanwhile, I did not enjoy the vertical of grocery. It was not a very successful pivot for me, financially. So ultimately, what we ended up doing, what I ended up doing is, in order – first of all, in order to focus on growing the roasting company, I sold the coffee shop in 2022 so that I could grow the roasting company and not focus on, you know, payroll and supplies and hiring, you know, hiring baristas.

Claudia McMullin: Now, fast forward, a couple of years, I got into the Salt Lake City International Airport. So, I got myself ACDBE certified in 2022, which is Airport Concessionaire Disadvantaged Business Enterprise. That helped me get a shop into the Salt Lake City International Airport Phase Two, which opened in November 23rd. We have since, and this is breaking news, actually, we have since pivoted back into coffee shops. So now, I just closed last week on a purchase of a company called Two Creek Coffee, and now I own three coffee shops in Salt Lake City. So I purchased the company, which operated three coffee shops, and then I hired the owner to come into Hugo and continue to operate the coffee shops.

Lee Kantor: And will it be operated under the brand Hugo?

Claudia McMullin: Yes. So during the course of the summer, we are going to change off the – I mean, we’ve changed off all of the site, all of the operations, our all Hugo operated, but the signage is coming on in July. And our hope is to open two more coffee shops in 2024. So that by the end of ’24, we’ll have five Hugo-owned shops and two essentially franchises, which is the original shop that I bought in 2014 and sold in ’22; it’s still called Hugo Coffee and uses Hugo Coffee products. It’s just a franchise. And the airport is a joint venture which is essentially a franchise. But we’ll have seven shops with our name on it by the end of ’24.

Lee Kantor: Now, in telling the story, you make it very – you make it seem pretty easy that you just pivot and start new verticals. But each of these has their own kind of adventure and they each have different types of needs in order to be successful. How do you kind of juggle all of those things? Because, you know, roasting coffee is one business, you know, and then owning a retail establishment that sells to the public is another business. I mean, these are totally, really, different things. So, how do you kind of manage all these things and find the right people to help you be successful in each one?

Claudia McMullin: Well, how I – well, first of all, the pivots are not – I mean, you know, let’s be honest, COVID was not a pivot that was well thought through. It was a reaction to a catastrophe in my business. So what are you going to do when all your B2B hospitality accounts close? You’re going to try to get consumers to buy your product, and you haven’t really done that before. So I hired, you know, a marketing team. I developed a website; I had a Shopify. You know, I did what I could to grow that vertical with not a lot of money in 2020 and 2021, while people were actually consuming a lot of coffee from purchasing online during that time, which was good.

Claudia McMullin: That pivot was not – that pivot was out of necessity, frankly, as was the pivot to grocery because of COVID. Now, the pivot into grocery was not successful at all. So it was not – it also was born of necessity and panic because we’re still in the COVID world where I’m still trying to build back a business and keep my employees employed and keep a business going. So, the decision to get into these verticals was not analyzed and thought through but it was reactionary to the pandemic. My decision to exit the grocery vertical was not – that was well thought through because I could see that if I continued to go down the path of the grocery vertical, I would be rendered – I would be put out of business. So, I exited the vertical.

Claudia McMullin: Now, the pivot into coffee shops, that kind of got my brain was reactivated with respect to operate – with respect to coffee shops when I got into the airport and I saw what a nice-sized account that is. I don’t operate the coffee shop in the airport. It’s a joint venture. So I’m still – Claudia McMullin is still not in the business of operating coffee shops, but the business that I got from the airport was a game changer, a size account. And I thought, well, maybe we should enter the world of coffee shops again as long as I don’t have to operate them.

Claudia McMullin: So, I put it out in the universe in a newsletter in January of ’24. And this lovely woman, Anisa, called me to have coffee. She’s been my customer for eight years. I know this person. She wanted out of the back end of operating coffee shops like payroll and QuickBooks and all that stuff. I have a bookkeeper, I have an accountant. I’m like, “I’ll take that stuff over as long as you operate the shops all by your company, you operate the shops and become my director of retail operations.” And that’s what we did.

Claudia McMullin: That was a business decision I made for two reasons only, and the number one reason is cash flow, because there’s nothing like cash flow from a coffee shop because you get cash every day in the bank and it’s fantastic. Number two, I did it for brand awareness. So those were – that was what was behind these decisions. And any suggestion that they’re easy is just they’re not easy. A lot of these decisions were born out of pain and necessity and panic. But the last one was a good one. The last few have been really good. And I’m very happy about the coffee shops and being in the airport.

Lee Kantor: So, it sounds like the kind of the ball you’re trying to keep your eye on is to grow the brand of Hugo and sell more beans.

Claudia McMullin: Yes, because at the end of the day where I have my impact in animal welfare is in the online sales. So I really want to grow this brand into a brand that is the go-to coffee for animal lovers nationwide. I want robust, robust subscription-based model of online sales because that’s where I give back to animal rescues and sanctuaries nationwide. I don’t give back on wholesale accounts because I don’t have the margin to give back because I’m selling wholesale.

Lee Kantor: Right.

Claudia McMullin: But when I retail, I have the margin to have an impact on animal welfare organizations.

Lee Kantor: Right. So that makes perfect sense. So when you are in the roastery business and selling the beans, how do you kind of get the beans from Utah? Like, how -what does that process like finding the right grower and, you know, making sure they’re the right fit for you?

Claudia McMullin: So what – how we did that? So that was, when I started Hugo Coffee in 2015, I was a lawyer. I don’t know a thing about coffee or a thing about running a manufacturing company or even, frankly, a coffee shop. But I did them all. But I did partner with a very talented roaster, and I brought him on with me from the very beginning. And he had a relationship with an importer, and I relied upon John to choose the importer, to choose the farms, to choose the beans, to create the signature roasts. And he did all of the above.

Lee Kantor: But how do you even go about that? Like, does he have to go down to South America or wherever we get the beans to, you know, find out the right farmers? Like, how does that work? It seems so overwhelming.

Claudia McMullin: He was the one with the knowledge base so I can’t tell you how he picked X farm in Colombia over Y farm, or if he did so in conversation with the importer. My guess is he did it in conversation with the importer because we are a premium product. So we buy premium beans, so they’re fair trade, they’re organic. And so that right there is, you know, that limits the universe of farms and places from which you can purchase green beans. But you, Lee, are asking the wrong person about the how to pick the beans because I delegated that whole part of my business to a very talented roaster who did all of that for me.

Lee Kantor: Right. Which – and that is the – so you found the person that can solve that?

Claudia McMullin: Yeah. I started the company with the person.

Lee Kantor: Right. And then how did you meet him? Was that just by chance or you just, you know, put the word out? You’re looking for somebody that can help in this area.

Claudia McMullin: Well, so what happened was – this was interesting. So what happened was, like I mentioned, I bought the coffee shop in 2014. The coffee shop was formerly operated by a company called Silver Bean Coffee. Silver Bean sold me the coffee shop. John was Silver Bean’s roaster. So a year later, so now it’s 2015, June of 2015, and I learned that Silver Bean was sold to a distributor. And I thought, okay, well, that’s not good for me because I know my prices are going to go up and my quality is going to go down. And then I thought, well, I’m going to start my own coffee roasting company.

Claudia McMullin: And I also knew, by the way, that when Silver Bean, because Silver Bean was a premium product, and when Silver Beans sold to a distribution company, I knew that John, the talent of Silver Bean, was going to get really unhappy very quickly, right? Because he’s going to be roasting Folger-quality coffee, and it was not going to make him happy. So I let him get pretty unhappy. And I gave him three months and I called him and I said, “How would you like to start a roasting company with me? And I’ll let you, you will be the roaster. You will be the one in charge of creating the signature roast, picking the beans, roasting the beans, blending the beans, and I will do everything else.” And that’s how it happened.

Lee Kantor: So, that sounds like the second time, maybe the first time, but this is the second time in this story that you found a person that does what they do and you say, let me do the part you don’t like.

Claudia McMullin: Yeah, exactly. Let me get well – with respect to John, it was let me give you your dream job. Right? You’re 26 years old and I’m going to give you this opportunity to create a brand with me. And you’re going to get to create the roasts yourself. And won’t that be awesome? He loved it and of course, jumped on that opportunity.

Claudia McMullin: And so, yes, I got him out of an unpleasant situation into a great opportunity. And I’m doing the same with Anisa because she’s a different human. I only closed on the deal last week, and she is so excited because she’s only doing the stuff she loves to do, and she’s excited and re-energized to continue to do it because I took the stuff she doesn’t like off her plate.

Lee Kantor: And that’s a great lesson for other entrepreneurs, right? To, you know, stay in your lane, you leverage your superpowers and then find other partners that have superpowers that you don’t have that are complementary and figure out ways to work together.

Claudia McMullin: Yes. And another thing is to which, you know, comes to you after the fact, like, oh, duh. Another means by which to grow is by an acquisition, by acquiring another business. And you find a motivated seller and see if you can integrate them into your business, which I’m just lucky enough to have found a very motivated seller who really wanted to work for me and really still wanted to continue to operate coffee shops.

Lee Kantor: So, now any kind of thoughts about this former career of being a lawyer? Like, do you want to go back to that? Is that the past? What is it like to be this kind of the new version of Claudia here?

Claudia McMullin: This is like round four of redefining me. I mean, I – by the way, not for nothing. I started the roasting company at 55, so no, I’m not going back to being a lawyer. I let my license go immediately because I had been practicing for 25 years and I was done. I don’t think though in the past four years, during COVID and post-COVID, that I have not considered, like, being a paralegal because I’d make more money, like just go work for a law firm. But I didn’t do that. I persevered with Hugo Coffee and kept going.

Lee Kantor: Now, you’re building obviously a community around the brand and the stores, and the whole kind of coffee roaster and culture is around this Hugo, and they’re giving back to animal causes. How does that make you feel every day? I mean, it must be so rewarding to see your efforts kind of go directly into a cause you’re super passionate about and seeing, you know, every bean that’s sold is helping an animal somewhere.

Claudia McMullin: It’s fantastic. I mean, I have a wonderful philanthropy manager named Beth. She and I always talk about how, what we get up in the morning to do, is this because it saves animals. If I were just in the coffee business, I can promise you I would not be in the coffee business any longer after COVID. And that was just – it’s just a really painful time in our business. But I persevered because of my love for animals and knowing that I was having an impact on their lives. So, no. And it’s completely the opposite of being an attorney or, you know, a county councilor where all you do is make people mad.

Lee Kantor: You’re surrounded by tails wagging.

Claudia McMullin: That’s right. And I also should mention, Lee, that Hugo Coffee Roasters has two distinct brands, one of which is Hugo, the Hugo brand products that supports dog and cat rescue. We also have a brand called Fluffy Cow Coffee. That coffee supports farm animal sanctuaries. So, we talk to rescues and sanctuaries weekly. We do fundraisers weekly for sanctuaries and rescues around the country and we meet these people and they become our partner and they become our partners for life. And it’s wonderful.

Lee Kantor: And that’s probably not an area that people kind of think of is farm animal needing these kinds of services as well.

Claudia McMullin: Exactly. So what we have found is, you know, what we have learned over the course – so by the way, Fluffy Cow is a brand I purchased in December of 2020. So that was another acquisition and I did so because of the – I obviously love the mission because I’m not just a lover of dogs and cats. I’m a lover of, like, all animals. And I loved what he was doing, so. And he wanted to sell the brand so I purchased the brand. And we’ve been having these fundraisers ever since January of 2021.

Claudia McMullin: What we’ve learned in doing so is that we have a waiting list for farm animal sanctuaries who want to partner with us because they don’t have the avenues of raising funds that a dog and cat rescue has. Dog and cat rescues, everybody knows about dog and cat rescues. Everybody loves dogs and cats. Most people do not know about farm animal sanctuaries, and they don’t have a lot of routes to raising money.

Claudia McMullin: So, when we do our fundraisers, we get the most – we get so much gratitude out of these farm animal sanctuaries. It’s so nice. And then they tell us, like, what are $200, what the impact was. And you know, it built this kind of a structure. It installed a French drain so the pig’s feet don’t get mange. You know, it builds a shade structure for pigs in the summer. It’s feeds – it feeds cows for a month. You know, this kind of thing, it’s fantastic.

Lee Kantor: So, now what drew you to WBEC-West? And why did you decide to get involved in this community?

Claudia McMullin: So, I got involved with WBENC. I got certified with WBENC in order to accelerate my introduction into the grocery vertical because there were a lot of DEA efforts in that vertical and I needed to be certified. So I got myself certified and I went to the WBENC Conference in Atlanta, I think, in ’22 or ’21.

Claudia McMullin: I didn’t know much about WBENC. And then, I learned from my friend, Missy, more about the WBEC portion, the organization. And then I went to that conference last year after doing the PSP program, which was fantastic for – I mean, I would recommend that to anybody because if you want a good capability statement and a good one-minute pitch or three-minute pitch, that’s a great place to learn and hone those skills.

Claudia McMullin: Then, I went to the conference and I just met so many wonderful people. It was like the first conference I’ve ever been to, like, literally ever, that I enjoyed. I had a great time. So, now I was all in. So, now I’m getting even more involved, and I want to go to all the events, and I want to do all the programming because I’ve met such fantastic people and gotten such amazing insights and the offering of fantastic resources.

Lee Kantor: So, what do you need more of? How can we help you? Like, who’s your ideal customer? And maybe one of the listeners, or we can connect you with them.

Claudia McMullin: My ideal customer, when it’s a consumer, is anybody who loves coffee and has a pet, or anybody who loves coffee and has a dog and loves animals. I would love for consumers to subscribe to Hugo Coffee or Fluffy Cow Coffee because when you get that subscription, that bag of coffee is going to go – proceeds are going to go to a sanctuary or a rescue, which is fantastic.

Claudia McMullin: When it comes to the B2B hospitality, my ideal customer would be a corporate caterer, a hotel. I do banquets. Like I said, I’m in Blue Sky Auberge, I’m in Montage. I’ve been in St. Regis. Like, I’m capable of doing big accounts and I have tremendous capacity as well.

Claudia McMullin: I have definitely two distinct, different kinds of consumers. One is a B2B hospitality account, which would tend to want to be more of a premium product because I have a premium product. So, they would have to be willing to spend, you know, an okay amount of money on great coffee. And the other humans who like, who love coffee, great coffee, and love animals.

Lee Kantor: And if somebody wants to learn more, is there a website?

Claudia McMullin: Yes, there is, hugo.coffee or fluffycowcoffee.com. You can always reach me at claudia@hugo.coffee and follow us on Instagram and Facebook. And we’ve had both Fluffy and Hugo presence on Instagram and Facebook, and we’re launching into TikTok as we speak.

Lee Kantor: Well, Claudia, thank you so much for sharing your story. You’re doing such important work and we appreciate you.

Claudia McMullin: Thank you so much for giving me the time to tell my story. It was so nice to meet you, Lee.

Lee Kantor: Oh, my pleasure. All right. This is Lee Kantor. We will see you all next time on Women In Motion.