Case Study – The Spice & Tea Exchange

Franchise Perfects a Unique, Full Sensory Shopping Experience

Step into any of The Spice & Tea Exchange franchises, and you’ll forever remember the exotic aromas waiting behind their doors.

Founded in 2008, The Spice & Tea Exchange was formed by a group of talented individuals with a passion for life and food. The Spice & Tea Exchange’s mission statement, “Creating & sharing the experience of a more flavorful life,” is the cornerstone of the company which strives to provide guests with quality products and flavorful memories.

Inside, the store’s interior is reminiscent of an 18th Century Trading Post with apothecary-style jars lining the shelves. It’s an interactive shopping experience where guests are encouraged to “smell the spices,” and watch Spice Masters create hand-mixed blends before their eyes.

The Spice & Tea Exchange launched as a single store in Florida in 2005, with the intent to lure foodies among Florida’s east coast. As the concept developed, customers wanted to get into the business themselves, leading to the company’s first franchise in 2008.

The Spice & Tea Exchange has since grown to 54 franchisees, all successfully replicating the company’s original vision. Customer reaction has been positive, and the model has worked so well, growth appears to be accelerating, with The Spice & Tea Exchange expanding its footprint by 25% in 2016 alone.

Growing Pains

The company had one problem. Its growth in footprint and sales were outpacing its original accounting software solution, while growing complexity in its supply chain meant it needed an inventory management solution to keep costs under control.

“We were looking for a more modern accounting and inventory management system. Preferably, a scalable cloud based solution flexible enough to grow with us,” says Kessenich. “Due to the complexity of our requirement list our search began with a focus only on what I call the traditional established ERP solutions.”

They originally decided that JD Edwards EnterpriseOne would work best, but implementation turned out to be cost prohibitive. They went back to the drawing board, migrating to Xero for general ledger accounting, while continuing the search for an inventory management solution.

“We realized pretty quickly that a combination of Cin7 with Xero would accomplish 85% of what a $200,000 system could do for us, but in a more flexible cost effective way.” says Kessenich.

18th Century Mystique Meets 21st Century Technology

Using Cin7, The Spice & Tea Exchange has introduced efficiencies throughout its relatively complex supply chain, from vendors, to warehouse and production, to its franchisees.

“We source from a list of over 80 different suppliers,” Kessenich says. “Creating the one of a kind products, and overall experience, we provide to consumers requires casting a wide net and it leaves us with a lengthy supplier list that can be challenging to manage efficiently.”

Prior to Cin7, it was difficult for the company to keep track of which vendors received purchase orders and what commitments it had made.

“Our previous system couldn’t provide the tools we needed to efficiently manage our supply chain. With CIN7, we can quickly identify our needs and produce purchase orders using the Smart Buyer tool and have the PO sent directly from the system,” Kessenich says. “The detailed communication log CIN7 keeps allows us to efficiently track the order and follow up as needed without hunting down paperwork from half a dozen different locations.”

Cin7 has made warehouse operations easier, too.

“Our primary distribution facility is housed within our St. Augustine Operations Center,” Kessenich says. “This is where all the magic happens as we bring in raw materials from many sources, convert them for sale, and distribute them out to our Franchisees who then prepare products and make the final sale to customers across the country.”

Handling orders in the DC for hundreds of SKUs going to dozens of stores was far more labor-intensive prior to Cin7. Warehouse staff had to print out paper orders and pick lists, and after pulling products for those orders, they would enter information into the shipping software to print labels. Finally, someone had to enter the orders off the paper pick list into the accounting system for transaction processing.

“With Cin7 we now complete fulfillment electronically on tablets. We are able to track, in real time, the flow of product from receipt of raw materials through printing of shipping labels for packed boxes.” says Kessenich. “This process allows us to capture far more information than ever before and find ways to create new efficient processes for order fulfillment and inventory management.”

Producing custom blends required a similar level of administrative work.

“Previously, we had to track the use of ingredients and materials in our production processes by hand on paper. Once we completed a production process we’d have to manually enter that data into the accounting system to track usage.” Kessenich says. “With CIN7 we can complete their production processes electronically in real time allowing us to closely track usage and understand out production process better.”

The integration provides visibility and efficiency to franchisees who want to know what products are available or who want to place an order to replenish a product.

Return on Investment

Cin7 has given The Spice & Tea Exchange not only full management of its supply chain, but saved time and increased accuracy in order fulfillment.

“We’re able to fulfill orders quicker with better accuracy, and comfortably serve our franchisees while carrying less inventory,” Kessenich says. “Not having to manually track and log each process allows us to focus on responding to the needs of our franchisees and find new ways to improve operations. Time previously spent tracking down paper can now be shifted to creating value for the company.”

The company also has been able to add a level of quality assurance to its franchisees and customers.

“We’re using batch tracking now, so that we can carefully trace the origins of each product we sell,” Kessenich says. “For any consumable, it’s extremely important to provide end users with a clear chain of custody all the way back to the purchase order from the original supplier and doing that on paper was a major challenge. CIN7 is more cohesive and has allowed us to create this tracking data much more efficiently and accurately than ever before.”

“Cin7 provides such depth of origin tracking that, for just about any product our franchisees sell, they can feel confident that we can trace it all the way back to its original source production lot should there ever be a problem.”

The Spice & Tea Exchange

Spice & tea exchange

Industry: Franchise Retail, Food

  • Business Benefits
  • Comprehensive view and control over complex supply chain
  • Less expensive and easier to use and implement than $200,000 ERP system
  • Order processing time cut down by a day in some instances
  • One system instead of three to process and track purchase orders
  • Streamlined processing for production and warehouse staff
  • Batch Tracking gives chain-of-custody quality assurance
We realized pretty quickly that a combination of Cin7 with Xero would accomplish a good 85% of what a $200,000 system could do for us, but in a much more flexible and easier to use platform.Matthew Kessenich, Director of Finance, The Tea & Spice Exchange