Business Profile: Whidbey Coffee

Beneficial Blend: Owner of Whidbey Coffee and Victrola Coffee Roasters Values Heritage Bank Relationship

Article by John Stearns

Dan Ollis has come a long way since his days selling coffee drinks from an espresso cart in 1989, just a year after graduating from South Whidbey High School on Whidbey Island.

Today, he runs two coffee businesses: Whidbey Coffee and Victrola Coffee Roasters (both operating under the umbrella of Vibe Coffee Group, Inc.), with 16 north Puget Sound locations between them, 134 employees, plus wholesale and online operations. Ollis is the sole owner of Vibe.

Heritage Bank has helped percolate his business growth since acquiring the parent company of Ollis’ previous bank, Whidbey Island Bank, in 2014. Whidbey Island Bank branches adopted the Heritage Bank name everywhere but on Whidbey Island, where Heritage does business under the Whidbey Island Bank name.

Dan Ollis, Whidbey Coffee

images courtesy of Vibe Coffee Group, Inc.

“When the transition happened, the team from Whidbey merged with Heritage and the Heritage team just scooped me up like you would not believe,” Ollis said, including featuring him in a 2015 TV commercial still viewable online today. “They’ve done a really great job of helping me.”

That relationship was especially important for surviving the initial onslaught of the coronavirus pandemic when statewide restrictions slashed business from pre-COVID levels.

“In the midst of the everything, I had stores closing, I had one store completely shut down,” and four locations in two hospitals were basically shut down, Ollis said. His wholesale division, which sells Whidbey and Victrola coffee to offices, hotels, restaurants and other coffee shops, saw business plummet as offices shut down and travel halted. “It was incredibly frightening.”

Ollis secured two rounds of Paycheck Protection Program (PPP) loans through Heritage. The loans were critical at a time when uncertainty about the future reigned.

“The only saving factor in all of that was, we had access to this PPP money,” Ollis said. “We didn’t know what we didn’t know, and it was so nice to have the bank being able to basically help me sleep at night. It was incredibly efficient in getting me to that level where I…can breathe a little bit, I can adjust the sales and I can keep running the business and keep the people employed and give them some extra bonuses when it was appropriate. So having Heritage step in and facilitate that the way it was done was incredibly helpful.”

The wholesale division, office clients of which include some big-name companies that had not returned many workers to offices yet, was still at about 60 percent of pre-COVID levels when Ollis spoke for this story in November. That’s significant because wholesale accounted for about 35% of the business pre-COVID but was hovering at about 5% in November.

Ollis’ retail locations include 12 for Whidbey Coffee—a mix of cafes and drive-thrus numbering four on Whidbey Island, including Clinton and Freeland, two in Burlington, one on Mukilteo Speedway, one in Anacortes, three within Evergreen Hospital in Kirkland and one in Skagit Valley Hospital in Mount Vernon.

Coffee ‘adventure,’ coffee ‘comfort’

Ollis describes Victrola as “the adventure in coffee,” and Whidbey as “the comfort in coffee.” Both serve pastries, snacks and other items, including sandwiches.

He describes Victrola’s customer base as typically liking a single-origin coffee, wanting to know the story behind the coffee, when and where it was picked, who picked it, maybe the elevation it was grown, and someone who typically prefers a 12-ounce cup.

The Whidbey customer is a little more into the 16- to 20-ounce drink, perhaps requesting a little extra chocolate, or a little extra vanilla, and maybe some whipped cream under the lid, he said.

“Neither one of them are right or wrong, it’s just a difference in perspectives, and we are able to pivot for each,” Ollis said.

While overseeing two different brands is challenging, it’s also beneficial to be diversified, he said.

When Ollis acquired Victrola 15 years ago, he wasn’t roasting his own coffee; it was being roasted for him under a private label. He was eager to learn about roasting and his purchase of Victrola provided that opportunity. Today, he roasts in four locations, two in Mukilteo, one in Seattle and one in Burlington.

The Mukilteo locations are bigger and are the roasting and production workhorses, he said. Their location near the I-5 corridor also helps with shipping out product, whether for wholesale clients or online customers who can buy bags of ground or whole bean coffee, coffee pods or single-serve packets for steeped coffee, mugs and gift cards.

Ollis experimented with opening a bakery in 1993 thinking it would supply the needed food items for his coffee shops. “But at that time, I only had five and there wasn’t enough volume from our own stores, so I overjumped,” he said, adding that he closed the bakery six months later.

“Now, with 16 locations, I’m probably closer to being able to support a modified bakery, but I didn’t know what I didn’t know then, except I was challenged with getting that fresh product from suppliers to me,” Ollis said. “So that was the goal—still is the goal, by the way—of always trying to bring the best to our customers.”

To that end, Ollis’ company does make some items in-house, including a few desserts, plus sandwiches, but it’s not producing one hundred percent of the stores’ food.

“We are actively trying to figure out a commissary or a solution to our food,” he said. “We want to improve our food program and we know that we have to do that ourselves.”

As for future growth plans, Ollis said the main focus now is returning to pre-COVID numbers. “We have growth in mind,” he said. “I’m not trying to exponentially grow the organization. I’m like a very solid, very consistent beating of the drum. If a location comes across my desk that has a story, I’m very much interested and I want to chase that, but to just open locations to open locations, that’s not for me. We want to be a part of a community. We want to be ingrained in that community. And we want to appreciate them as much as they appreciate us. And so that’s not something you do by just opening to open.”

Whatever Ollis considers, he’s sure to keep Heritage in the loop. Mentors told him long ago that the more the bank knows about him and his business, the better.

A banking relationship of openness

Whatever Ollis considers, he’s sure to keep Heritage in the loop. Mentors told him long ago that the more the bank knows about him and his business, the better.

“We really focused on communication with the bank, and I treated them like my unofficial board of directors and gave them an annual presentation and still do to this day,” Ollis said, guessing he’s done the presentation for 15 plus years, even before Heritage became his bank. “And so what that’s done is it’s improved my communications, it’s helped them and there’s full transparency there. It’s helped them and it’s helped me, and we have this common respect for one another.”

Ollis began his banking relationship with Whidbey Island Bank when he was about 19, getting a loan for his coffee cart and needing a cosigner to do so. He’s gotten many loans and different variations of advice since then, he said.

Asked how Heritage has played a role in his success over the years, Ollis said, “Heritage has just kind of always been there for me. It sounds a little awkward and quirky, but it’s really about the relationship and it’s about the people. I mean the banking is almost secondary to the relationship with the people, and because of the business that I’m in, the coffee business being about people, that really resonates well with us, our brand.”

He and Heritage connect on that level, he said, because it’s about people as opposed to products. “I mean, I gotta have a great cup of coffee or I don’t have people, but it really boils down to my staff, it boils down to their staff and the interconnections that we have,” he said. “So, it’s really about the relationship. I realize that’s an overused word, but I truly believe that.”

Added Ollis, “Heritage has always been about the person…I never felt like a number.”

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WHIDBEY COFFEE'S RELATIONSHIP MANAGER, DIANNA BODIN

Dianna has 23 years of experience in the commercial banking industry and has held various positions in relationship management, special assets, commercial real estate and credit analysis. Previously, she’s mentored others in commercial banking; served on a national relationship manager committee; participated in a supplier diversity group; and lead a women’s group focused on career development. Victrola Coffee Roasters, a preexisting business Ollis acquired in 2007, has four cafes in Seattle, including two in Capitol Hill, one in Beacon Hill and one at 3rd and Pine downtown in the former Macy’s building. That location was closed for a year and has since reopened, but business remains off about 75% due to the shutdown of offices in the building, he said.