November 2015

Monthly Archive

If I must: late thoughts on Peet’s buyouts of Intelligentsia and Stumptown

Posted by on 08 Nov 2015 | Filed under: Barista, Beans, Café Society, Consumer Trends, Machine, Quality Issues, Roasting, Starbucks

Unless you’re wearing a tinfoil hat and staying off the grid (except for this blog), you probably know that Peet’s Coffee & Tea — through JAB Holding — bought out both Intelligentsia and Stumptown last month. Predictably, there was much hipster angst on social media (as if that isn’t the whole point of social media), and at first I didn’t see the need to cover the story again.

After all, it is essentially an updated rehash of a post I wrote four years ago. This time around there was an enormous amount of mainstream media coverage as well. But prodded some here, there’s probably another chapter on this topic.

Todd Carmichael once likened Duane Sorenson to Che Guevara, whom is now in a full-on T-shirt sales phaseSome of the mainstream media have come to the defense of the acquired, noting the dual standards of how an Instagram sells for billions of dollars to Facebook and its founders are congratulated while Intelligentsia and Stumptown are showered with “sellout” scorn on social media.

However, most Silicon Valley startups scale by merely replicating data and code. With many leveraging Metcalfe’s Law, these businesses naturally improve the customer experience with scale. Contrast this with the business of coffee, which scales through the much higher friction of skilled labor and quality coffee sourcing.

These two factors are subject to a sort of inverse Metcalfe’s Law: the bigger the scale, or the more customers they serve, the poorer the quality of what they serve. Starbucks didn’t dumb down their baristas and throw out their La Marzocco machines for brain-dead, push-button Verismos because it would improve their coffee quality. They did it out of the necessity to scale to thousands of outlets in the face of a dearth of skilled baristas to hire en masse (and less expensive ones at that).

Show me the hockey stick growthThus do not be fooled by any of the founder rhetoric about how joining Peet’s provides access to better supply chains and whatnot. I cannot think of a single coffee purveyor that has improved with scale — at least from the consumer’s perspective of a quality end product. Investors and shareholders are a different story, however. It’s also worth remembering that Starbucks’ scaling genius was in getting millions of people who don’t like coffee to believe that they did — through flavored milkshakes and the like.

But I don’t begrudge the founders of Stumptown and Intelligentsia for taking a great risk in the marketplace when much fewer cared as much about coffee quality, for making a great product, for working hard at it, and for growing their businesses. They deserve to be rewarded for their efforts and for helping to popularize better coffee. I thank them heartily, but make no mistake: effectively this is their stop. This is where they get off.

The House that Intelligentsia builtYou could argue Stumptown got off earlier than Intelligentsia. While Intelligentsia was still producing barista champions, Stumptown was already downgrading itself as a bottled coffee purveyor as its founder preoccupied himself with becoming a restauranteur. Stumptown counter-intuitively went beyond producing wholesome basics to embarking on the packaged foods path of processed, shelf-stable consumables — just as much of the food world was headed in the opposite direction. In other words: more pumpkin spice latte in a can, less Cup of Excellence.

Why the words “new” and “innovation” should never be associated with good coffee

In fact, the world of coffee today seems obsessed with the brewing-gadget-of-the-week and “new and exciting” coffee beverage concepts as a complete distraction from the basic quality of the fundamentals. These fads and come-ons hint at the side-show desperation of coffee in the 1980s when the emphasis was on faddish gimmicks such as flavored coffees (French vanilla, mocha creme, hazelnut whatever, anyone?).

When you see this associated with coffee, run!Every time I see the words “new” or “innovation” associated with coffee, I know they have completely lost the plot. Those are the marketing buzzwords of factory production and packaging. Coffee is an agricultural product, and there’s a reason why we don’t seek out “new” and “innovation” when buying other agricultural products such as asparagus or pork.

“New” beverage concept introductions such as cold brew and nitro coffee (another thing to thank Stumptown for) are just a page lifted from the Jack-In-The-Box food fad marketing playbook for the Spicy Sriracha Burger. May as well package nitro coffee in a cardboard box along with an action figure from the next Star Wars movie and call it a Happy Pack. Offer good while supplies last.

I do hope both Intelligentsia and Stumptown have a ways to go still under their new ownership. But then I look no further than Starbucks and how its buyout strategy of competitors with better product played out. Whether Torrefazione Italia, Teavana, or the Clover Equipment Company, Starbucks seems to have taken a deliberate scorched earth approach that ultimately eliminates consumer access to better end product.

Thus I recommend fans get their Intelligentsia and Stumptown fixes while they still can, because there really is only one direction for them to go from here.

Trip Report: Josuma Coffee and the Ancient Quest for Malabar Gold

Posted by on 01 Nov 2015 | Filed under: Beans, Consumer Trends, Foreign Brew, Home Brew, Local Brew, Roasting, Robusta

One of the greatest espresso blends on the planet has remained something of a Bay Area secret for the past 23 years. It is almost certain to remain such, as popular tastes have moved on to single origin espresso shots to the pour-over-device-of-the-month to today’s quality-regressive fads being heralded as the forefront of coffee: cold brew (hello, 17th century Kyoto, Japan), nitro coffee, and bored mixologists treating coffee as if it were merely a Torani syrup flavor.

Or to paraphrase Nick Cho: “Second Wave wolves in Third Wave sheep’s clothing“.

The non-descript office of Josuma Coffee Company (center) Melind John works their La Marzocco inside Josuma Coffee Company

All of which makes Josuma Coffee Company and their flagship Malabar Gold blend seem like dinosaurs of a lost age. But if you enjoy an espresso of balance and technical precision, Malabar Gold is a tall order that few American espresso purveyors have been able to match.

Disappointed by virtually all pre-blended green coffee supplies designed for espresso, I first encountered Malabar Gold about a dozen years ago as a home roaster. Buying from off-beat green sources such as Hollywood, CA’s The Coffee Project, the proprietary nature of the Malabar Gold blend strikes you as a false industry secret. For example, purchasing from The Coffee Project requires you to claim your status as a home roaster and not an industry professional.

This makes more sense when you understand Josuma Coffee’s business. Founded by Dr. Joseph John in 1992, they company pioneered the Direct Trade model with India coffee growers a good decade before Intelligentsia came up with the term (and two decades before Intelligentsia became Peet’s Coffee & Tea). They promote themselves largely through industry trade shows and today walk an even balance (i.e., 50/50) between their roasted and unroasted greens coffee businesses.

Josuma Coffee's Malabar Gold blend - roasted Monsooned Malabar from a family's kitchen in Bangalore, India

Visiting the Josuma Coffee Company

Over the summer Dr. John’s son, Melind John, invited me down to Josuma’s modest “headquarters” in a Redwood City office park. They had been importing approximately 6 to 7 containers of green coffee from India each year — which most recently has grown to about 9. They store their green coffee in some three different Bay Area warehouses (mostly in the East Bay) and roast in South San Francisco on Mondays.

Their coffee continues to be almost exclusively sourced from India, and most of their blends consist of 3-4 sources. However, Josuma has more recently started seeking out some coffee sources outside of India to aid the flavor consistency of some of their blends and to help round out their offerings to customers — many of them cafés — to provide them with a complete coffee sourcing “solution” as it were.

Pulling a shot at Josuma Coffee Company Naked portafilters at Josuma Coffee Company

The Josuma Coffee Company espresso The Josuma Coffee Company cortado

I’ve found knowledge about India’s coffee to be staggeringly poor in the West. For one, there’s often a presumption that India is purely a British-inspired tea-drinking nation. In South India, there are at least as many, if not more, coffee drinkers than tea drinkers — plus a tradition of it dating back to the 17th century. In 1670, India became the first location in the world outside of Arabia (i.e., Ethiopia, Yemen) to cultivate coffee when the Indian Muslim saint, Baba Budan, smuggled coffee beans from Mocha, Yemen to Mysore, India in what was then considered a religious act.

I joked with Melind that I had encountered the name “Malabar Gold” on multiple occasions around Mysore (officially Mysuru today). But instead of finding the mythical coffee blend, I only encountered locations of a popular chain of jewelry stores.

A photo I took of one of the Malabar Gold jewelry stores in Mysore, India Inside Bangalore's Coffee Board of India: a display featuring some of the local greens

The great majority of coffee consumption in India isn’t of the “specialty” variety, but that’s also true of the rest of the world. Even so, India — with the Coffee Board of India — have invested heavily in growing and testing quality coffee. That includes wet- and dry-processed arabicas, the unique Monsooned coffee, and some of the highest quality robusta in the world (something you learn as a home roaster if you like a little quality robusta in your espresso blends). And 98% of India’s approximately 250,000 coffee growers remain small growers.

David Schomer doesn't kid aroundMelind demonstrated some of their own roasts with the two-group La Marzocco FB80 they crate over to trade shows, complete with naked portafilters. Whether straight up espresso shots or Melind’s favorite cortado option, the shot quality was unmistakable.

As quality espresso pioneer and “dinosaur” David Schomer (of Espresso Vivace fame) said at the recent Portland Coffee Fest about Malabar Gold: “This is the only other espresso I’ll drink. And you can quote me on that.” So we will.