The contemporary specialty coffee movement, whatever you wish to call it, has long been entwined with what many people have viewed (and embraced) as groups that are outsider and indie. And while it's true that fancy coffee places haven't really been "for geeks, by geeks" for some time now—and some never were—the shifting sands of this once outlying culture had not, until this year, seen quite such bold steps towards mainstream.
While ardent coffee fans may have already noticed this shift, it was never more pronounced than October's headlines announcing Bay Area-based Peet's Coffee—themselves owned by the JAB Holding Company investment group, who control majority shares in Caribou Coffee and fashion house Jimmy Choo, among others—had purchased Portland's Stumptown Coffee Roasters, as well as Chicago's Intelligentsia Coffee Roasters. Stumptown, which had already been sold in 2011 to TSG Consumer Partners, is poised to extend Peet's boutique-market reach, particularly through Stumptown's rapidly growing grab and go cold brew vertical. The addition of Intelligentsia to the Peet's portfolio (Peetsfolio?) mere weeks after enables the Bay Area roaster to be even more competitive. As Peet's president CEO Dave Berwick explained in October, the moves guarantee Peet's a stronger foothold in the diversifying coffee industry: "To capture more than our fair share of this market, it's important that we offer differentiated craft coffee brands."
"They really didn't buy us because they wanted us to be like them, they bought us because they like what we do ..." -Doug Zell, Intelligentsia
Though it's not a new phenomenon in the haute coffee world—Oakland's Blue Bottle Coffee has raised multiple rounds of $20,000,000 plus financing in the last few years—a well-known, major chain purchasing two once-independent roasters almost simultaneously gave some people pause. But it shouldn't have.
"Honestly it's the natural process, it's the life cycle of a business," said Tracy Allen, president of the Specialty Coffee Association of America. "You build your company to a certain point, someone buys it. This gives us a look at what the ceiling is for true specialty coffee. $20 or $30 million seems to be the point where you get the attention of companies that are looking to put portfolios together of regional roasters with established brands."
Indeed, in the late aughts, that big-fish-little pond contempt was already building gently within the specialty world, as slowly, gradually, what were once mere cafes became full-grown brands. From Portland's heavy metal, antler-festooned, don't-give-a-fuck Stumptown to Chicago's always slightly preppy, midwestern connoisseur-affected Intelligentsia, coffee companies began to get mentally sorted by supernerds into an new category as these comparatively larger players began to stake footholds outside of their home turf—Intelligentsia in Los Angeles, and Stumptown in Seattle, then Brooklyn. Blue Bottle hung a shingle in Brooklyn as well. Coffee as we now knew it was working on a larger scale, and people with large checkbooks had begun to notice.
Naturally, Starbucks—after pioneering a landscape in which companies like Blue Bottle, Counter Culture, or Stumptown, could even thrive at all—was among the earliest to try and capitalize on the growing popularity of small-scale specialty. From their eerie faux-indie 15th Avenue Coffee and Tea and Roy Street Cafe brands in Seattle to the opening, in the same city, of the megalithic Starbucks Reserve cafe late last year, Starbucks knows what the trappings of a successful movement in coffee is and has sought to emulate and mass-market them. So, too, have new companies like Revelator—a swiftly expanding southern cafe chain backed by venture capital and executed in a recognizably post-indie style, right down to the denim aprons. These companies will continue to push their businesses on the wider terrain of contemporary specialty coffee, as will Peet's, if—as we're told—from somewhat of an arm's length.
"They really didn't buy us because they wanted us to be like them, they bought us because they like what we do and they wanted to take it to a bigger audience," said Doug Zell, co-founder of Intelligentsia Coffee and one time barista at Peet's in Mill Valley, CA.
Zell's assurance to his clientele, like Stumptown's before him, is that his company's essence and quality will stay the same under the acquisition.
"It just really gives us more muscle to continue to do what we like doing," said Zell, whose company was among the first to truly popularize ideas like single origin espresso, and the Direct Trade coffee model (which they'd once trademarked).
"If you look at what we introduced in the industry with no resources, look at what's possible with a lot bigger resources," he said.
"If you look at what we introduced in the industry with no resources, look at what's possible with a lot bigger resources ..." Doug Zell, Intelligentsia
While some people are resistant to these now-bigger fish—based on a preference to shop small, on aesthetics, or distaste for the homogeneity of chains—there may also be some historical foundation for the skepticism within coffee. Though deeper pockets and bigger capacity can be hugely good for coffee quality, the two have not always been correlated. In the past, the roasters who could afford the best technology—like machinery that helps prevent roasted coffee from staling too quickly on the shelf—have not traditionally been the roasters who bought the highest quality beans, said Allen.
"It's implied that anyone that pays that kind of money for technology is not using the beans the small guys are," said Allen, citing simply that it's a matter of return on investment for most companies.
But for many, particularly companies who have already gone quite far on their own, quality (both in production and purchasing) can steadily increase with added size and capital, as companies' purchasing power and ability to effect agricultural (and social, and environmental) improvements at origin increases, too. Equipment-wise, we've watched Stumptown go from bottling cold brew "stubbies" in a modest space in Red Hook to a proper, large-scale bottling line—"a full on Laverne and Shirley," says Allen—to meet the needs of its nationally distributed ready to drink cold coffee line.
On the little guy end of the spectrum, some cafe owners that once served these now-corporate brands have had a change of heart and switched to smaller or more local roasters—a move Doug Zell says hardly assures better or equal quality coffee.
Smaller roasters are "gaining the foothold simply by outsmalling us," he says. "But it's bullshit. You don't buy from the smallest phone producer, you buy from the one that makes the best product."
Smaller coffee companies, of course, have the ability to grow and carry out the principles of great coffee—seasonal freshness, good quality assurance, consistent training, etc.—and now have a little more room in the landscape to do so.
"It's a vacuum," says Allen, who also owns a business consultancy serving emerging coffee businesses, of the space created by these companies, freeing up a little room at the bottom.
"Blue Bottle's taken on cash twice, Stumptown's been sold twice, but now you think about Ruby and Heart and Panther and all the new next, I don't want to say wave, but the next bunch of poster children for what specialty coffee is is exciting," Allen said. "They've all got their own little nuances, and the cool thing is they're not all stacked up in the top left hand corner of the country."