Flying under our radar last month was a great cover story on the evolution and pitfalls of a quality local coffee business in Milwaukee Magazine: MilwaukeeMag.com – Coffee Wars.

As in many other mid-market cities across America over the past decade-plus, quality coffee has infiltrated even the most staunch communes of Starbucks drones. The Milwaukee coffee market is no exception, with Alterra Coffee serving as something of Milwaukee’s analogue to Blue Bottle.

Alterra, Inc. founders (from left) Ward Fowler, Paul Miller and Lincoln Fowler. Photos by Adam Ryan MorrisBut the story of Alterra Coffee could be the story of any pioneering quality coffee purveyor in America: local start-up business makes great coffee and changes local tastes and expectations, business success translates into growth of operations (roasting, retail, and distribution) and ambition, continued growth brings the company to a crossroads when they must answer where continued growth hurts product quality and company values, and the inspiration and spawning of newer, more nimble local competition.

Flavia packets take Alterra to MarsThat major crossroads for Alterra came in 2010 when Mars Corporation — the self-proclaimed “world’s leading petcare, chocolate, confection, food & drink company” (from their Web site) — approached them with an offer to include their coffee in Mars’ owned Flavia packets in exchange for revenue sharing and distribution rights.

Some 27 years ago in nearby Minneapolis, The Replacements’ Paul Westerberg croaked the words, “Time for decisions to be made: crack up in the sun, or lose it in the shade.” Do you reach for greater distribution and more revenues to expand your mission of good coffee? Or are you diluting your product and your brand, all the while inviting customer criticisms of going too “corporate” and selling out? (As the article quotes the local criticisms: “Alterra is the ‘Microsoft of coffee in Milwaukee’.”)

Like the Facebook status says: it’s complicated. And a cautionary tale worth the read.

UPDATE: July 29, 2013
As a result of Alterra’s deal with Mars, and its subsequent break-up, starting Monday they will be now known as Colectivo: Alterra Coffee brewing up a new name: Colectivo. The Alterra name will remain with Mars and whatever coffee-like substances they continue to peddle in hermetically sealed packets. The coffee folks behind Colectivo essentially staged their own death to avoid being associated with whatever filth Mars is now associating with Alterra’s once good name.

UPDATE: Aug. 3, 2013
The Milwaukee Journal Sentinel came out with a good piece on what Mars actually gets out of the Alterra deal besides a name that the owners even abandoned: Mars banks on Alterra name and symbolism. Mars bought a folksy, local story that a multinational conglomerate can promote — even if it has nothing to do with the products they ship that carry the old Alterra brand name.