Can Revelator Coffee Be the Next Blue Bottle?

In October 2014, a sleek, stripped-down coffee shop called Revelator appeared in Birmingham, Alabama. A year later, four more Revelator shops were up and running in New Orleans, Atlanta, Nashville, and Chattanooga, Tennessee. By November of 2016, Revelator was running eight coffee bars across the Southeast. Now, less than two and a half years after brewing its first single-origin cup, Revelator Coffee Company is making its biggest move yet: acquiring Atlanta’s beloved Octane Coffee and its six cafes in Georgia and Alabama.

Like that of a number of specialty coffee’s more dramatic movers and shakers in recent years, Revelator’s aggressive expansion is funded by outside investment — Berkeley-based venture capital firm Roble Partners has poured millions of dollars into the young company, and it is moving fast. In addition to the Octane deal, Revelator recently acquired Wired Puppy Specialty Coffee & Tea in Massachusetts, and it briefly considered buying the acclaimed but troubled Bow Truss Coffee Roasters in Chicago.

Following the close of the Octane acquisition next week, 17 cafes will fall under the Revelator umbrella, and around 75 new employees will be added to the 80 to 90 already on its payroll. By comparison, Octane, one of the biggest names in Southern coffee, opened its sixth location last August, some 13 years after owners Diane and Tony Riffel began service in Atlanta’s then-sparsely developed Westside neighborhood.

Once the dust from the Octane purchase settles, Revelator will begin seriously planning its next round of growth, which will focus on cities with smaller, less-developed coffee scenes, particularly in the South. It hopes to become the premier Southern coffee company, a “Hey Y’all”-tinged answer to fancy coffee juggernaut Blue Bottle, which has nearly three dozen stores and is backed by more than $100 million in venture capital.

Jonathan Phillips

What makes Revelator Southern, exactly? And what does “Southern” even mean, beyond geography? Revelator’s design aesthetic — clean, sparse, straight out of Scandinavia by way of Silicon Valley — doesn’t drip with antebellum imagery or nods to down-home anything, unlike, say, Hugh Acheson’s Spiller Park. For Revelator president Josh Owen, it mostly means trying to offer a hospitable experience. “To be successful, particularly in the South, I think we have to be a hospitality company first and a coffee company second,” Owen says. “This is about providing an experience to our customers. And that experience comes in a lot of forms.”

Owen, a former attorney, has no problem admitting he is not “the coffee guy.” Chat with him about his business’s future, and he’ll hardly mention coffee; his primary concerns are growth, acquisitions, real estate. To the extent that Revelator’s coffee receives positive reviews, it’s because of Sarah Kluth, who is in charge of green buying and oversees the company’s roasting operation out of a facility in Birmingham.

After getting her first taste of specialty coffee culture as a 16-year-old barista at a vegetarian coffeehouse in her hometown in northern Wisconsin, Kluth found herself at Intelligentsia in Chicago for nine and a half years. Two years ago, following some time away from the coffee industry, Kluth reached out to Owen. “I've been in specialty coffee now for 17 years and I remember, even at Intelligentsia, I would say to the owner, ‘Hey, what about the South?’” Kluth says. “Like, ‘No one's in the South, why isn't anyone going to the South?’ So I was always very, very curious, and when I saw Revelator really active in social media I was like, ‘This is cool, someone's doing it. Someone's trying this.’”

All Octane and Wired Puppy cafes will be rebranded and begin serving Revelator in the next 12 to 18 months, according to Owen. Along with its new brick-and-mortar outposts, the company is about to make a serious push into wholesale. Revelator beans are already sold at five Whole Foods stores in the Southeast, and the plan calls to bump that number up to 40 this spring; supplying coffee to more hotels, restaurants, and smaller cafes is an immediate ambition for Owen.

Matthew Wong

Revelator also wants to be more than a coffee brand. One of the primary drivers behind the Octane acquisition was that it had successfully expanded into selling beer, wine, and totally respectable cocktails during evening hours, and Revelator is currently combing Atlanta’s restaurant industry for a bartending professional to update the beverage program across the company. Owen also touts the impending Octane purchase as a chance to significantly improve the dining experience at Revelator: With seven locations in Atlanta, the company has enough density to build a central kitchen, staffed by cook types and not coffee types, to supply food to its cafes around town. Once that process has been fine-tuned, it will be deployed in Birmingham.

All of this, Owen says, will make any Revelator outpost the ideal place to “have an experience,” any time of day. “I think a lot of coffee companies, what they'll do is they're too focused on coffee as the product instead of experience as the product,” Owen says. “Everything else becomes secondary to the coffee, so you have a food menu that is sort of there and sometimes it's pretty good but it's always secondary to the coffee. You have alcohol. You have all these other things that play second fiddle because it's a company founded by coffee guys who really care about coffee the most.”

Despite serving good coffee and having what seems to be a goal of making everyone happy all the time, Revelator still has to win over detractors. When news of the Octane deal broke, the immediate reaction from Atlantans voicing their opinions on the internet was not too positive. Some of those bad feelings stem from the fact that Revelator is a new company and still relatively unknown in Atlanta, where Octane has been a fixture of the community for more than a decade.

Even to the extent that Revelator is “Southern” right now, it is already looking at expansion outside the region — Owen is particularly keen on the American Southwest. “I think Phoenix is a really interesting city; there are a lot of good elements,” Owen says. “It's one of the biggest markets in the U.S., and the big VC money and private-equity money doesn't really think about it, because it's not — and I'm using air quotes here — ‘cool.’”

Opening new cafes will always be an option, but the model that is most attractive to Owen is acquiring small companies that have already become community establishments: Owners who have been in business for 10 or 15 years, but are ready to move on and looking for an exit strategy, are prime targets. Owen sees behemoths like Peet’s Coffee & Tea scoop up businesses worth $100 million to $200 million, and he wants to do the same with those valued in the $1 million to $2 million neighborhood.

“It's important for me to say, everything I've said can be taken in a really predatory way, and that's not what we're doing,” Owen says. “There are situations like that where we can come in and we can fold you into Revelator, and then you can help us build what we're building and that's good too.”