In this occasional series we will look at old and new businesses and trace what went wrong along the way.
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Having a customer base before offering a product is a unique opportunity for a new business. That’s exactly what Black Rifle Coffee Company had when they first started up in 2014. Because of this, the company rapidly grew and became much more than just a coffee company, reaching nearly $400 million in annual revenue at its peak. But the path wasn’t entirely upward, and the company has seen a turn in fortune.
Why did a company with a loyal following lose its momentum, and can it get it back?
The Beginning
Black Rifle Coffee Company (BRCC) was founded by Evan Hafer, a Green Beret in the US Army who had a passion for coffee in exotic locales, long before selling anything. He had elaborate machines and a sophisticated palate that led to a fascination with all things coffee, refined during deployments around the world. As part of the US military, he also had a unique sense of style and humor, and after leaving the military, he began creating content that rapidly drew in a patriotic, loyal audience for what he and his friends were putting online. That audience was the key to what started out as a small-batch coffee roasting and distribution company.
Evan and his team used their unique style and connection with veterans and military culture to start with an initial investment of less than $ 2,000 and a run of 300 pounds of roasted coffee. The coffee sales were a byproduct of the content and culture that Evan and his friends were trying to build, at first. However, his loyal audience quickly demanded more coffee and more things BRCC. Because of their initial focus on culture over product, an immediate market awaited them, and they could sell almost anything they wanted. The coffee was the product, and the community that had evolved was the business that would grow to epic heights.
The Rise
Black Rifle immediately began growing, producing more humorous content tailored to their culture of coffee-loving Americans, keeping demand and the customer base growing. Business-wise, their process was simple. They created content that grew their follower count, made great coffee with a focus on taste over convenience, and sold it through a direct-to-consumer model on Shopify. They leveraged their massive following to sell coffee as a subscription, growing to more than 287,000 recurring subscribers to their coffee products, and built an online shopping site that also included merch that fit their patriotic and humorous swagger.
What the subscriber base did was give BRCC a solid revenue source, revenue that could be counted on and leveraged for expansion of the business. Their fame grew as their content shares exploded, and by 2021, BRCC had positioned itself as a nationally recognized private business with a lot of upward trajectory. They had niche branding and a base of ravenous customers, and decided to make the leap to a publicly traded company, going public through a special purpose acquisition company, or SPAC.
BRCC had a lot of momentum in 2021. They had a rabid fanbase, an uncomplicated sales-delivery process, and a business model that included everything the founders enjoyed. But scaling the business proved more difficult than expected for a variety of reasons, putting the brakes on their market takeover.
The Fall
When Black Rifle went public, they signaled to their competitors that they were becoming more than just a niche coffee club. They were angling to become a global coffee purveyor, challenging established chains such as Starbucks by opening dedicated coffee shops and selling their products through retail chains nationwide. To do that, they focused their customer acquisition efforts on product aisles in stores nationwide. Unfortunately, the customer who picks up a bag of coffee at a Walmart is typically there for the Walmart shopping experience. The online members of BRCC were dedicated to the coffee. The buyers at a retail store were typically not there solely to buy BRCC coffee, so sales were less reliable. To grow that relationship, focus had to be given to retail stores, robbing the loyal subscribers of focus. The recurring subscription numbers began to drop. BRCC subscriber numbers dropped by almost half, to around 150,000. Even though company revenue increased, retail sales spending was also higher, resulting in a tighter profit margin.
The company’s stock also dropped dramatically by 97%, due in part to a reduced profit margin and in part to the rapid growth of the stock price after it became publicly traded. Because of the rapid price increase, the bonus policy kicked in, resulting in the initial founders receiving large chunks of stock that flooded the market and raised concerns.
The Results
What Black Rifle realized was that they sacrificed loyal, recurring revenue with a simple purchasing and distribution strategy for a complicated and fickle retail model that increased costs, even though it increased overall revenues. They traded strong and simple for big and complex, and it bit them. They realized that even though revenue growth may look good on paper, it can come at the expense of weakening the underlying business model, and they needed to regroup.
What has saved BRCC from becoming another tale of business woe, ironically, is their initial customer base. The loyal fans who loved the brand for what they made: funny content and good coffee that they felt comfortable supporting. In 2025, BRCC revenue was approximately $398 million, and its wholesale business has continued to grow, even as direct-to-consumer sales have declined. Its profitability remains under pressure due to increased costs, global tariffs, and inflation. They have returned to Shopify sales and have shown signs of re-growth. Time will tell whether they can turn the corner, but it is clear that growth should never be the primary focus of a business built on loyal customer support. Maintaining the relationship with the people who fueled your growth should be the focus and should be leveraged only to support additional growth at a reasonable rate.
If you have a loyal fan base and want to step into entrepreneurship, give us a call.