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Business starts brewing

October 31st, 2016

Local company builds new type of coffee machine

By Kimberly Dupps Truesdell | The Journal Gazette

The building with the white-painted brick facade on Leesburg Road, just north of West Main Street, appears to be just another industrial place. A flat roof fades into the horizon and a sizable parking lot separates it from traffic driving by.

But take the small set of stairs to the door at the center of the complex, and a visitor enters the offices and assembly facility of an upscale espresso equipment manufacturer that is changing not only the way cafés serve lattes and cappuccinos but also how factories do business.

Modbar, created by Aric Forbing and Corey Waldron, launched in 2013 at the Specialty Coffee Association of America show in Boston with steam, espresso and pour-over modules. Since then, they have installed the system in about 250 cafés across the country, including three in Fort Wayne, according to general manager Brad Staats.

Each year, sales have doubled those of the previous year, he says.

And now, the company is poised for a bigger year in 2017. Modbar recently started shipping to Australia, the United Kingdom and Europe, and this fall, it introduced the product to five Asian countries.

“We’re at this crossroads in our growth,” Staats says. “We know it’s going to happen and we’re ready for it.”

But, as founder Forbing says, it’s a “scary and exciting time.”

A different approach

Coffee drinkers entering a traditional shop can expect to see a counter, bakery case and a hefty machine that brews espresso and steams milk. The barista, almost anonymously, works behind the machine – grinding beans, stamping the grounds and brewing the espresso. The customer is left to wander and wait.

But the Modbar system is different.

Resembling a stereo system circa 1975, the components of the brewing equipment are modular, a rectangular silver box filled with sensors, temperature gauges and water lines. It sits underneath a counter, on a shelving system of the café owner’s design, and the espresso is dispensed through a tap – much like beer at a bar. Multiple modules can be installed based on the shop’s needs or preferences.

Customers can, step by step, see their drink being made, and skilled baristas are able to set the temperature and water flow to control the flavor of the coffee.

“It really changes the experience of the café owner and their customer,” Staats says. “It becomes much more social and much more of an engagement. People who are building their cafés with this in mind are selling more than just coffee; they are selling the experience of coming to my café.”

Nick Stolle was introduced to Modbar while working as a service technician in Brooklyn, New York. The cafe where he was working had bought the equipment, which can cost upwards of $30,000, and Stolle was sent to Fort Wayne to learn about the system and how to fix it.

As a relatively new and unique product, Modbar relies on café owners to have someone trained to service the equipment. Larger companies, like Starbucks, might have regional technicians.

“There just, honestly, are not a lot of machines designed like it,” says Stolle, who does quality control. “The aesthetics of the machine, the design, the compactness; ... the fact that this machine does everything a machine about five, six times its size does – arguably better – is pretty cool.”

So the Illinois native left New York and moved to Fort Wayne.

“Modbar is doing something cool here, and if they were doing it in New York, it would be cool there,” he says.

Cross-training

The pull on the Modbar tap begins with a block of walnut that’s cut down and then cut to shape. It’s sanded and riveted and polished and assembled before it becomes a part again for the workers in the cell.

Components of the brewing system are either made in house or sourced from northeast Indiana. The castings are from a Kendallville company, boilers are welded at the Leesburg Road site and water-heating vessels are electro-polished in Warsaw.

On a September afternoon, Austin Hammond wears safety glasses as he lines up part of the handle to be drilled for the rivets.

Hammond began working at Modbar in 2015, starting with assembly work – “mostly wiring, because I had some wiring experience, and working more on the electronics side of things,” he says.

But for Staats, it’s important that employees are well rounded.

“Everybody is multifunctional. Everybody knows how to do everything,” he says. “Some are better than others.”

So Hammond was moved from assembly to the shop, learning metal polishing, fabrication and welding – things he had never done before.

“What you do well, they don’t just stick you there and leave you there to do that. They want you to learn. They want you to do other things as well,” he says. “It’s definitely an environment of improvement.”

Crucial boost

It was just Forbing, a Fort Wayne native and South Side High School graduate, and Waldron working when Modbar got its start. Forbing had the design and engineering background, and Waldron had worked as a barista.

The two had made a go at a product similar to the Modbar system, but it was underfunded, Forbing says.

But thanks to a deal with La Marzooco, an Italian company with a long history in the espresso industry, Modbar had the financing and time it needed to develop the system.

“We had our suspicions that we were on to something,” Forbing says.

Waldron, who owns Conjure Coffee, is no longer a part of Modbar.

Empowered staff

A gift from La Marzooco, a foosball table occupies center stage in the employee break room, which doubles as a training area. During break or after hours, the sound of machine work is replaced with a whack of the ball hitting the game’s tiny players. There is a cooler with beer along the wall.

Other companies might see these as a distraction or temptation, but Modbar’s focus is on more than creating state-of-the-art espresso equipment. Cultivating an empowered workforce is high on the priority list.

Staats, who comes from a manufacturing background and has worked in a big steel mill, was employee No. 7 when he joined the company in 2014. He says he’s been open about wanting to create a worker-driven company. While he has seen various iterations and attempts during his career, he says what’s unique about Modbar is that it’s working.

“I expect them to take initiative and ownership of what they are doing, and so far they do,” he says. “I don’t know how really we do it. Hiring the right people is key.”

The first crop of employees, of which there are now 18, were hired from within his network, Forbing says.

“We were fortunate to know a lot of the people we hired and build a crew that way,” Forbing ays. “It’s been really neat seeing how that’s all come together.”

Even now, many of those employed at Modbar had some previous connection. Hammond says Forbing was a family friend and when he was hired, he went through a two-hour working interview where he was introduced to the crew.

Benjamin Perry, who has worked at the company for a year and a half, calls the hiring process stringent – but a “neat process” – because everyone has a say in who is brought in.

“(The employees) feel very empowered,” Staats says. “If they have an issue with a potential employee, they say so.”

Great potential

A Modbar unit takes three days to make, from start to finish, and the company has the capacity to produce 20 machines a week.

“If I add two people to that cell out there, I think I could double capacity because of the way we structured our operation,” Staats says.

For now, though, the hiring is at a plateau until the orders from Asia start rolling in, Staats and Forbing say. They weren’t able to offer projections on sales as the market is a bit of an unknown.

“It’s pretty exciting because those places have pretty vibrant coffee scenes, possibly more vibrant because (the) coffee culture hasn’t been entrenched as long as it has been here,” Stolle says of the Asian market, which has been traditionally dominated by tea.

“So they’re very excited about that and they’re very excited about higher-tech equipment, so it’s a good spot for us.”

According to a 2014 report from the International Coffee Organization, since 1990, Asia has experienced the most dynamic growth in coffee consumption in the world, growing by an average rate of 4 percent per year. From 2000 to 2012, the growth increased to 4.9 percent.

The increased interest, the report states, represents a significant potential market for the coffee industry.

For Staats and for Modbar, that potential is limited only by its ability to produce the machines.

“This is a pretty small operation that’s on the cusp of being known globally,” Stolle says, “and that’s pretty cool.”