The document summarizes the operations of Mystic Monk Coffee, a business established by Carmelite monks in Wyoming to fund the construction of a new monastery. Father Daniel Mary has a vision to expand the monastery by purchasing a nearby 496-acre ranch for $8.9 million. While the monks have received some donations, coffee sales through Mystic Monk Coffee are their main source of funding. To increase profits, Father Daniel plans to buy a new coffee roaster that can produce more beans per hour and expand distribution through local stores and churches. The objective is to generate enough money from coffee sales to realize the vision for a larger monastery complex.

1. Mystic Monk Coffee

2. Mystic Monk Coffee
Submitted to:
Mohammed Sohail Mustafa
Ashraf Al Mamun
Professors of
Dhaka School of Bank Management
Submitted by:
Group no. 1
Name ID
Sihanuk Mustafa 150301
Mosammat Fatema Akter 150302
Nusrat Zahan 150303
Bahauddin Ahmed Bahar 150305
Md.Matiur Rahman 150306
Date of Submission: 24th
August, 2016
Case Study
On
Mystic Monk Coffee

3. Mystic Monk Coffee
The Carmelite Monks are often best known for roasting and selling gourmet coffee under the
name Mystic Monk Coffee. Their coffee has won awards from famous coffee reviewers and is
known for its small batch quality and freshness.
Mystic Monk Coffee was established for founding and maintaining the Carmelite Monks'
monastery in the mountains of Wyoming. The symbol of Mystic Monk Coffee shows the monk
drinking coffee at the New Mount Carmel where the monks are currently building their
permanent monastery.
Introduction

4. Mystic Monk Coffee
Near the Rocky Mountains in Wyoming, there are 13 Carmelite monks living in a small house
serving as a makeshift rectory in Clark. These monks live a cloistered religious life and are
dedicated to a life of prayer, silence and worship; along with following the vows of obedience,
chastity and poverty.
With more than 500 inquiries from young men within the community asking to join the
Carmelites, Father Daniel Mary realized that a larger more permanent location was needed.
Desiring property that would house a monastery, including a Gothic Church, 2 retreat centers, a
convent and accommodations for approx. 30 monks definitely proposed some concerns. After
looking around, Father Mary found a 496 acre ranch that including some buildings that could be
used for the buildings outlined above, but the $8.9 million dollar price tag was a financial
obstacle.
The Carmelites have a $250 thousand dollar donation that could be used toward the purchase of
property. They have also been roasting coffee for the past year. Under the name of Mystic
Monk Coffee the monastery has earned close to $75 thousand dollars. Currently the roasting
business uses high quality, fair traded, organic Arabica beans. This coffee is sold mainly to
coffee drinking Catholics via word of mouth and internet sales. With average sales of $56
thousand a month, and expenses totaling 89% of revenue, this leaves a net profit of 11%.
Without compromising on their way of life, Father Mary is looking for a way to maximize the
coffee roasting business to realize his dream of a full fledge monastery.
Summary

5. Mystic Monk Coffee
As the Prior of the Carmelite Order of monks in Clark, Father Daniel Mary has established a
future direction for the Carmelite Monks of Wyoming. He has a clear vision that he wants to
expand the monastery by buying a 500-acre ranch, which can enable to build a Gothic church, a
convent for Carmelite nuns, a retreat center for lay visitors, and a hermitage including 30 monks.
Father Daniel Mary cannot make the vision come true unless he can collect enough money to pay
for the $8.9 million listing price of that ranch. In this circumstance, the vision for Mystic Monk
Coffee (MMC) is to sell more coffee to fund the Carmelite Monks of Wyoming. Therefore, the
mission of the Carmelite Monks of Wyoming is to develop an action plan that would enable
MMC to minimize the effect of its cloistered monastic constraints, maximize the potential of
monastic opportunities, and realize Father Daniel Mary’s vision of buying that ranch. In order to
obtain more market share and increase the profit of MMC, Father Daniel Mary should cooperate
with local groceries and other Carmelite churches to distribute its coffee packages offline and use
social media to enhance its brand awareness.
Even though the Carmelites has received a $250,000 donation and the monastery has earned
nearly $75,000 during the first year of coffee roasting operation, the fund of fully buying that
ranch is far more way from the listing price. As Father Daniel Mary notices, the sales of MMC’s
profit is the main support to finance the purchase of the ranch, he has set a definite objective that
is to increase the production of coffee. His strategy for achieving his vision is to use the website
to generate orders of coffee packages for increasing sales of MMC to help him buy the ranch.
Father Daniel Mary established his own vision for the future of the Carmelite Monks of
Wyoming. He envisioned a new monastery that could accommodate 30 monks, a retreat center
for lay visitors, a Gothic church, a convent for Carmelite nuns, and a hermitage on a large
portion of land called Irma Lake Ranch that costs $8.9 million. The vision for the Mystic Monk
Coffee is to expand its operations through the purchase of a new brewery which would be
capable of producing more coffee therefore generating more funds for the vision for the new
monastery. The mission of the Carmelite Monks of Wyoming is to live a life of solitude and
prayer while working to earn profits in order to make the vision of Father Daniel Mary a reality.

6. Mystic Monk Coffee
Since the acquisition of the Irma Lake Ranch posed something of a financial obstacle thus
creating the need to set objectives and performance targets. Considering that Mystic Monk
Coffee failed to generate enough money needed for the payment of the Irma Lake Ranch it was
decided that the first objective was make the production of coffee higher which meant investing
in a larger roaster since the older roaster they had been using had limited capacity. Buying a new
roaster would be the performance target, the new roaster would greatly increase the production;
in a day the average roaster produced about 540 pounds of coffee, but with the new roaster this
would increase to 780 pounds (6 hours of work X 130 pounds per hour= 780).
Aside from the increase in production capability, they also decided to improve the distribution
of the coffee; initially it was through word of mouth that people heard of the Mystic Monk
Coffee, but majority of their sales were made through their website.
Objective

7. Mystic Monk Coffee
The vision for Mystic Monk Coffee is to make enough money to buy a nearby ranch that is listed
for $8.9 million in order to re-create Mount Carmel in the U.S. Rocky Mountains to do this they
plan on selling more coffee. Besides this idea to increase coffee production in part by buying a
new roaster that will produce 130-pounds-per-hour there is no long-term or short-term goals for
Mystic Monk Coffee. The coffee sales are their only means of support from the outside world
that would be able to help them provide financial resources to purchase the land along with any
donation that they receive.
vision

8. Mystic Monk Coffee
Mystic Monk Coffee’s strategy by targeting the catholic population is a good way to making
profits for now, but the operation will need to expand if they want to reach their fund raising
goal. Its business model is selling to individuals on its website and occasional phone orders. It
has recently just expanded its business model by selling wholesale to churches and local coffee
shops. Mystic Monk Coffee’s customer value proposition is based on the top benefit to its target
customer stating that “ they can use their Catholic coffee dollar for Christ and his Catholic
church.” They are also receiving high value coffee beans that are bought at fair trade value.
MMC’s strategy is a money-maker because they have a niche target market – US Catholics;
although it does not generate the required amount for Father Daniel Mary to reach his goal for
the monastery. MMC’s current business model involves a two-part plan. The first by investing in
a new coffee roaster that will be able to roast 130 pounds per hour instead of per day and the
second by being able to set up wholesale sales to churches and coffee shops.
MMC’s customer value proposition is good because the product itself is of high quality and is up
to par with the target market’s standards. Having a wide variety of flavors is also another plus.
The profit formula is positive but then being limited to having only 6 hours a day is one of the
major constraints MMC has for their plan on reaching their goal. Limited manpower work hours
and marketing strategies are also part of the constraints.
The strategy of Father Prior to achieve his vision of creating a new Mount Carmel was through
generating profit from the Mystic Monk Coffee. To generate more profit, Father Prior plans to
Strategy

9. Mystic Monk Coffee
purchase a larger roaster that could produce 130 pounds of coffee per hour, since the current
roaster they have could only produce 540 pounds of coffee a day.
A competitive advantage of Mystic Monk Coffee is the high quality and wide array of coffee
blends. Brother Java roasts high quality fair trade and organic Arabica beans into four popular
flavors namely Chants of Carmel, Cowboy Blend, Royal Rum Pecan and Mystic Monk Blend.
Their marketing strategy is another way to achieve the vision. People hear about Mystic Monk
Coffee through word of mouth, and their customers could avail of the coffee conveniently by a
phone call or online through a website. The competitive advantage this strategy produced makes
it easy for customers to avail the coffee. And since their coffee is promoted through word of
mouth, there is a niche target market for the product.
With regards to earning a profit, MMC has a winning strategy. With regards to earning enough to
reach MMC’s goal, it is slowly winning. The strategy wins with the external situation by having
loyal customers in the long run but loses internally because of missed opportunities with how
much MMC could have been produced. Although only some year has passed, the ‘sustainable
competitive advantage’ is slowly getting there based on the fact that sales of coffee grow every
year and by the time MMC gets more recognized, a lot more US Catholics will be familiar with
the brand. Since the main goal is to acquire enough funds within a reasonable amount of time,
MMC has failed in the last category for a strategy to be considered winning. An 11% profit
margin per month isn’t enough because it would take decades before the funds reach $8.9 billion.

10. Mystic Monk Coffee
Let First Talk about pros:
1) Their strengths or good sides of strategy are in the fact that they use high-quality fair
trade/organic Arabica coffee beans.
2) They offer a variety of blends, roasts, and flavors and are able to appeal to wider range of
coffee drinker preferences.
3) The opportunities that Mystic Monk Coffee has in its unique approach toward coffee in that
they are marketing towards the U.S. Catholic population who drink coffee and want to support
the monastery’s mission
4) The other prospect is presented in other coffee drinkers who are not necessarily Catholic, but
are concerned about their health and social concerns. Since about 30 million coffee drinkers in
the United States preferred premium-quality specialty coffee there is a huge opportunity for sales
there.
Now come to the cons:
1) Their weaknesses include the fact they are limited in production to 540 pounds-a-day until
they get the new roaster.
2) Another issue is that they are limited by time that is devoted to prayer, silent meditation and
worship which only give each monk the potential to work for up to six hours a day.
3) There is basic competition and some people may not want to purchase Mystic Monk Coffee
based on its religious background and meaning.
Pros and Cons

11. Mystic Monk Coffee
4) We do see a lot of problems with its current sales and 11 percent net profit margin as not
being able to generate $8.9 million in earnings within a reasonable enough time frame in order to
purchase the property that they want.
5) The last point implies that Mystic Monk Coffee does have somewhat of a basic business plan
it is severely limited.
By revising the business plan and by relying on about half of the purchase cost of the $8.9
million to come from donations. Father Daniel Mary should also utilize the resources available to
him from the Catholic Church to find major donors willing to contribute in the creation of the
New Mount Carmel.
Its profit formula = Sales – (total cost of goods sold + operating expenses + affiliate
commissions). Currently without the new larger roaster they make an average net profit margin
of $6,215 per month. The 540 pounds-per-day could be put in 12 ounce bag this would average
about 45 bags of coffee per day that could be sold. These 45 bags could give profits up to $448
per day.
With the purchase of the new roaster this would increase to 780 pounds-per-day based on the 6
hour per day work limit. This level of production would allow Mystic Monk Coffee increase its
sales by a factor of 6. By taking their current annual profits of $75,000 and multiplying it by the
factor of 6 we could project an annual profit of $450,000 provided that demand could be
increased to match the 6-hour capacity of the larger roaster. With this increase in production
Mystic Monk Coffee should be able to negotiate better terms with suppliers, shippers and the
coffee broker to get the costs of goods sold to go down from 52 percent to about 48 percent
because of this volume increase. Economies of scale will play in role in lowering operating
expenses from 37 percent to about 33 percent since the overall cost per unit will be decreasing
with the new number of units being produced.
An increase in production would cause the net profit margin to increase from 11 percent to 15-19
percent this improvement in the margins would result in an annual income for Mystic Monk
Coffee of $566,000-$717,500. In regards to the 18 percent commission that is paid to affiliate
Web sites it would be beneficial for Mystic Monk Coffee to stop doing business with these sites
or drastically reduce the commission percentage paid since the current 18 percent commission

12. Mystic Monk Coffee
cannot be supported. Other ways to gain business is to send e-mails to Catholic churches in the
U.S. asking that Mystic Monk Coffee be used for their church events and that parish members be
told of the Mystic Monk Coffee Internet coffee sales. Provide churches that purchase Mystic
Monk Coffee with a sign that promotes their website that can be placed near a coffee urn. Mystic
Monk Coffee could even obtain permission to place banner ads or links on church and parish
websites. Promote the Wyoming Carmelite’s vision of a new Mount Carmel and try to get
Mystic Monk Coffee served at Catholic religious conferences.
While they were unable to get the property near Irma Lake they were able to obtain a different
property due to the support of donations and coffee sales.

13. Mystic Monk Coffee
To be able to reach their goal, MMC should take time on how to go about their new strategy. The
idea of investing on a larger roaster will only work if the work hours and workforce will be
increased. The brothers can’t rely on the consumers alone because they themselves have to
sacrifice prayer/reflection time to be able to produce more products. Roasting and packaging can
take loads amount of time to accomplish. MMC shouldn’t rely merely on their website because
with delivery fees alone, MMC spends about $128,820 per year ($56,500*0.19*12=$128,820).
MMC should diversify and spend more time reaching out to different stores and churches to give
consumers more options on how to purchase their coffee. A means of marketing and advertising
will also play a big role in helping improve their current status.
- Purchasing new coffee roaster will increase the production of the Mystic Monk Coffee
due to the large capacity it can produce.
- For the future increase of demand, the monks would be more equipped.
- They can hire outsiders as employee of coffee production because they have to busy with
prayer and religious work also, that will increase the working growth.
-
Recommendation

14. Mystic Monk Coffee
Mystic Monk Coffee is not just coffee, by good souls monks are trying to make people happy
and by this way want to gain the vision of them. Separation from the world for contemplative
prayer is essential to the life of the Carmelite Monks, their monasteries are founded in the
mountains to ensure geographical enclosure. In modern times where noise abounds, the monks
desire true silence and an atmosphere of natural solitude. But for natural requirements of
fulfilling their demand for property brings them here to engage with business. And till now they
are providing very good quality coffee to the society.
Conclusion