Why ask a roastery about its green coffee storage and stock levels?
Green coffee is the roastery’s largest working asset, and it spoils if stored badly. Asking about storage and stock tells you what condition the beans are in, how much is on hand, how long the supply lasts and what inventory figure belongs in the sale.
Look at the room itself. Beans do best in a cool, dry and clean place, off the floor, away from strong smells, and rotated so the oldest bags go first. Ask how the roastery tracks lot numbers and arrival dates, and whether older lots have been tasted lately.
Then look at quantity. Ask how many bags are on hand, what is on order and how long the current stock lasts at normal roasting rates. Too little stock can mean a scramble after closing, while too much may mean beans that are going stale or cash tied up. Ask how inventory is counted and valued in the books, and how the sale will treat it. Many deals count stock on the closing day, so agree beforehand how it will be done and who will take part. Ask your accountant how stock appears in the financial statements. If roasting equipment is part of the deal, check that too, since its condition affects how reliably that stock becomes product. Ask too whether any stock is held on consignment or still owed to a supplier, because that affects what the buyer actually receives on closing day.
Key takeaways
- Inspect storage conditions, lot labels and rotation, not just the count.
- Compare stock on hand and on order to the normal roasting pace.
- Agree in advance how inventory will be counted at closing.
- Ask whether any stock is on consignment or unpaid.
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentWhat is inventory
- 02Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 03Business Development Bank of CanadaGovernmentWhat are financial statements?
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