Larry's Beans founder finds cause in sustainability

Larry Larson will tell you he has always been a coffee geek. Growing up in Tacoma, Wash., he saw the gourmet coffee movement rise from the ground up.

But even though he's always had a deep love for coffee and has built a multimillion-dollar coffee business, Larson said he's really a crusader for sustainability.

"Coffee is the component we sell to make income, but it's not what we're about," said Larson, 44. "We're about what a business can look like."

Indeed, Larry's Beans has been a model for sustainability almost from the get-go. It built its reputation for roasting and selling fair trade coffee - which ensures that growers in countries like Ethiopia are paid a fair price for their product.

But Larson didn't stop there. The company's office off Whitaker Mill Road in Raleigh could be a guide to how to go green:

Worms are used to compost biodegradable items.

Rainwater is collected to use in the bathrooms.

The building is designed to utilize natural light and heat to cut down on energy bills.

The company's school bus runs on recycled vegetable oil.

It keeps a biodiesel pump in front of its office. The pump is part of a network owned by Piedmont Biofuels, and members of Piedmont's co-op can stop by and fill up using the pump.

Now, he's crusading to get more businesses - and individuals - on board with such practices by opening the company's headquarters to the public for free tours.

The first tour was in February; others will be offered periodically throughout the year, Larson said. He wants them to be "kind of Willy Wonka," but also informative. The March 20 tour isalready full, and reservations are being taken for a tour in May.

Larson hopes to educate those on the tour not only about what Larry's Beans does but also about how they, as consumers, can effect change.

"If I can use coffee, this universal beverage, to show the consumer what it looks like to prove you care about sustainability, then what if that consumer then says, 'Hey, Mr. T-shirt maker, teenage boys in Indonesia are making these shirts and not being paid fairly.' That could change things."

How he started

Larson had planned to be an economics professor and was studying to get his Ph.D. in economics at the University of Tennessee, Knoxville. In 1991, he followed his then-girlfriend to Raleigh and transferred to N.C. State University.

He soon found that he missed Seattle-area coffee, so he got a part-time job working at Cup A Joe on Hillsborough Street, but even working in a coffeehouse was not enough.

He ended up dropping out of school and opening Larry's Beans in 1994.

Larry went into business with his mom, who moved from Washington to Raleigh to help her son with his startup. The two of them operated both a coffeehouse and a roasting operation for awhile, but soon it became too much. They split the business, with his mom taking over the coffeehouse. That freed Larson up to focus on coffee roasting.

Along the way, Larson brought on friend Kevin Bobal, who is a half-owner of the business and now serves as the company's vice president of operations.

In an effort to find more unusual and flavorful coffees, Larson investigated fair-trade coffee. A buying trip to Mexico made his commitment to fair trade resolute.

"I got to see what life was like for these people I'm buying from," he said. "So I go from being a coffee geek to being more than that."

Since then, he has worked to promote fair trade coffee and sustainability through his business. In 1999, Larson and Larry's Beans became one of seven founding members of Cooperative Coffees, a co-op of coffee roasters committed to fair trade.

Current co-op President Bill Harris recalled his first encounter with Larson: "He and Kevin were business partners. It was just the two of them, and they were operating in a location that was less than 1,000 square feet. I actually watched Larry and Kevin unloading green coffee beans off the back of a truck. They were bear-hugging these 150-pound bags of coffee and walking them up the stairs. I'll be honest. I waited until they were done before I went up and introduced myself."

The biodegradable bag

Being a model for sustainability can be a hard thing to stick with, Larson acknowledged. Sometimes doing things the right way costs more. And sometimes it can conflict with the competitive nature of business.

In 2008, Larry's Beans switched to a bag that was the first airtight coffee bag designed to biodegrade in commercial landfills. The innovation attracted a lot of attention from the packaging industry as well as competitors who wanted to know how Larry's did it.

"We struggled with that for about a week here," Larson said. "It was like, 'It's our secret!'" But in the end, we want others to change their packaging, so we told them."

Over the years, Larry Bean's has formed several partnerships with other area companies and also is a big contributor to local charities. The company gives coffee to the Raleigh Rescue Mission. There also are some more unusual partnerships, like one with Raleigh's Big Boss Brewing Co., which makes a holiday-time coffee stout using Larry's beans.

"The year we introduced it, it outsold the regular holiday ale two to one," said Brewmaster Brad Wynn. "It's been a returning favorite every year since then."

Yet, somehow between balancing his environmental principles and his business ones, Larson has managed to consistently increase sales by 15 percent to 20 percent annually. The company now employs 16 full-time workers.

It now sells 38 varieties of coffee, which it distributes to coffeehouses and wholesale customers that cover 20 states. The company has a distribution deal with Earth Fare and is also in discussion with another grocer, Larson said.

"We set this space up to grow," he said. "We could triple the capacity and do $30 million a year out of here."

Despite his focus on the environment, Larson said he is still focused on big business goals.

"When we hit $10 million, I'll feel like it's OK," he said.