Jacob Jaber, CEO, Philz Coffee

SuperNova Award Category

  • Matrix Commerce
  • Technology Optimization & Innovation

The Company

Founded by grocer and lifelong coffee lover Phil Jaber in 2003 in San Francisco’s Mission District, Philz Coffee specializes in more than 30 custom coffee blends with beans from around the world—Yemen, Timor, Ethiopia, Peru, Indonesia, Kenya, Sumatra and other nations. With baristas and single-cup filter drip coffee stations for hand-crafted cups, Philz takes a customer-centric approach to coffee with the motto, “one cup at a time.” Today, Philz Coffee has 13 retail locations in the Bay Area, supplies coffee to more than 100 corporate and retail customers including Facebook, Whole Foods, Twitter, Google, Virgin America, LinkedIn and Yelp, and sells direct-to-consumer both in the U.S. and internationally over its ecommerce storefront.

The Problem

Philz took off in 2008, when Phil’s son, Jacob, returned from college to help his father grow the business. Initially running on QuickBooks, the company recognized the standalone accounting package lacked the integrated functionality and scalability that Philz would need to meet its goals to grow its business in an omnichannel model across retail shop, wholesale and online commerce channels. Philz started with one store and has goals of eventually over a 1,000 retail locations. As it began to grow, Philz struggled with time-consuming complexity in tracking and replenishing inventory, managing transactions with suppliers and corporate customers, and getting a handle on key business metrics.

The Solution

With growth under way, Philz foresaw problems down the road if it continued with QuickBooks and added standalone applications to deliver needed new functionality. The company devised a business blueprint that would seamlessly blend supply sourcing, inventory and warehouse management, and multi-channel commerce in a customer-centric model with the goal of the “perfect order.” After evaluating leading ERP systems in early 2010, Philz decided on a cloud approach to enable mobility and avoid the high capital costs and maintenance of on-premise IT systems, choosing NetSuite as the cloud ERP and Ecommerce solution best suited to its vision of frictionless, real-time matrix commerce.

The Results

With its move to cloud business management, Philz has gained end-to-end efficiency while dramatically reducing the administrative and IT time, and the costs it would have incurred with the alternative approach of siloed in-house systems, powering disruption in the Bay Area coffee industry and rapid growth into new markets and channels. Philz has real-time visibility into inventory at its 20,000-square-foot warehouse with store managers empowered to reorder on demand, and a business dashboard to track such metrics as margin, sales, average ticket, customer count, labor costs and more. NetSuite manufacturing capabilities for work orders, light assembly and bills of materials, including a feature to conceal secret ingredients that go into Philz’ proprietary blends, simplifies and speeds the creation of custom blends.

The Technology

NetSuite (www.netsuite.com)

Metrics Matter

Philz Coffee’s revenue has soared 400 percent since the company went live on NetSuite in June 2010, with the number of retail locations increasing from a handful to 13, with five more planned to open by 2014 and a vision for hundreds of shops in California and across the United States. Philz has grown its B2B retail and corporate customer base from zero to more than 100, adding an important revenue stream and elevating brand awareness. At the same time, the company has expanded its direct-to-consumer web channel to about 5 percent of revenue, with its NetSuite SuiteCommerce storefront linked to back-end ERP for seamless order management and financial reconciliation.

Disruptive Factor

Philz has intensified the “coffee wars” in the Bay Area and beyond, offering customers superb coffee, a unique experience and flexibility in purchasing, from using a Square mobile payment app on smartphones at a Philz shop to ordering online or buying fresh beans at such high-end grocers as Whole Foods. Cloud business technology is proving critical in enabling Philz to disrupt the market, compete against much larger companies such as Starbucks and Peet’s, and execute on its growth vision, gaining the efficiency and visibility it needs to deliver the perfect order, one cup at a time. Philz’ success and potential have not gone unnoticed: In April 2013, the company raised millions of dollars in VC funding to drive growth, with Summit Partners as lead investor and Summit’s managing director taking a seat on the Philz board of directors.

Shining Moment

Philz is perennially voted “Best Coffee” by San Francisco Bay Guardian and SF Weekly readers; Apple selected Philz to serve coffee for the keynote address at the Apple Worldwide Developers Conference this June in San Francisco, with 3,000 cups served by 9:30 a.m.

About Philz Coffee

Phil Jaber immigrated to the United States as a boy. Once Phil had scratched together enough capital, he opened a corner grocery store in San Francisco’s Mission District. Phil’s passion for coffee led him to spend hours developing special blends, bean by bean, roast by roast.  For 25 years, Phil perfected the blends that customers can now only find at Philz Coffee. He began offering these exclusive blends, brewed one cup at a time, in his Mission District grocery store. As word of mouth grew, he took the risk of shutting down his successful market and replaced it with the first Philz Coffee store in 2003. 

Since then, Phil's son Jacob Jaber has helped Philz Coffee expanded to 13 locations across the Bay Area. Customers continue to "tell a friend" and share their enthusiasm for Philz with friends, family and colleagues and Philz continues capture the hearts and minds of coffee lovers and carry out its mission to better their day.