When a handful of companies dominate a market, any new entrant to the space must find a niche.
That niche can become something big, but the effort is a great challenge that often ends in despair.
Take the fast food burger space for example. It is dominated by McDonald's, Burger King and Wendy's, but some smaller players have carved a niche for themselves in the market.
Related: Walmart store closing and auction of laptops and flat-screen TVs
Five Guys and Shake Shack may not be as big as the industry's big three, but they found an underserved model by offering a better product at prices that aren't dramatically higher than their lower-end rivals.
Still, those are rare cases of new players breaking into a market in a major way when established players dominate. That's hard to do in fast food, and it might be even harder for drinks, especially coffee.
Starbucks clearly dominates the business of people buying a cup of coffee or a drink made with coffee. It's a badge of honor for hotels, airports and restaurants to serve the brand, even if it's not top-notch coffee.
The ubiquitous chain also partners with another dominant brand, Nestlé, for ready-to-drink beverages that fill supermarket and convenience store shelves.
Starbucks, however, buys only about 3% of the world's coffee. Several major players you may not know about are in the market, including Neumann Kaffee Gruppe, a huge company that operates under dozens of brands and controls 10% of the world's coffee supply.
Coffee is a space dominated by players like Kraft Heinz, Nestlé, Keurig Dr Pepper, and a few others.
Breaking into it is a major challenge that an upstart brand with big ideas has struggled to achieve. He declared bankruptcy and now faces a new problem.
Coffee brand brought grain cultivation to California
Frinj Coffee of California had filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Central District of California. The company said in its late January filing that it expected to have funds available to unsecured creditors.
The Goleta, California, coffee company described itself on its website.
“Frinj evolved from a unique working relationship between its co-founder, organic farmer Jay Ruskey, and Mark Gaskell, PhD, agricultural advisor for California Cooperative Extension,” he says.
“Ruskey had worked with agricultural scientists since his college days in the early 1990s, collaborating on trials of tropical fruit plants with market potential. Gaskell had previously worked with the U.S. Agency for International Development in Panama, introducing crops, and wondered if coffee could be a viable crop in California.
Basically, the dream was to grow coffee in California, an area where it has not traditionally been grown. It was a long process to demonstrate feasibility.
“In 2002, Gaskell gave Ruskey 40 coffee plants from Costa Rican seeds. Taking the opportunity to explore the possibilities, Ruskey planted the coffee among his avocado trees, allowing the two plant species to share water and nutrients in a sustainable way” , according to the website. .
“It takes three to four years for a young coffee plant to bear fruit, and another two years before it produces a viable crop.”
It's been a long journey for the company, but it now supplies coffee to several restaurants in the area and sells directly to consumers.
Frinj Coffee, in chapter 11, faces another problem
At the time of its filing, Frinj reported $215,000 in assets and nearly $2 million in liabilities. It has since been operating under Chapter 11 bankruptcy.
“The company's former roasting director, Paige Gesualdo, is suing the company, as well as Ruskey and two other executives, for fraud, breach of contract and various employment-related claims,” according to a report from the Santa Barbara Independent.
That lawsuit alleges that Gesualdo invested $1.2 million in the company after Ruskey and other executives misled her about the company's finances. “Her father, Ralph Gesualdo, also loaned the company $200,000 and filed a second lawsuit over that unpaid note,” according to the newspaper.
Ruskey likened the lawsuits to a family dispute and hopes the company will move forward.
Sign up for the Come Cruise With Me newsletter to save money on your next (or first) cruise.
“Frinj opted for a strategic semi-pause, seeking protection through a reorganization to address these matters comprehensively and fairly,” he said.
“This step does not represent an end, as the company still sells coffee, trees and helps farmers, but rather a necessary interlude, and we are optimistic that we will soon return our full focus to California's pioneering coffee.”