Archived Posts from this Category
Archived Posts from this Category
Sometimes the headline gives all the spin you need to know. Our spin here is on the same story published yesterday in the NY Times Business section: Starbucks Prospers by Keeping Pace With the Coffee Snobs – The New York Times. Except we’d like to think our spin has a slightly different, less investor-relations-for-PR take.
The good news for Starbucks is that they’ve returned to financial growth after years of stagnation. But make no mistake about Starbucks’ brand extension failure after failure in getting here. They’ve failed at virtually all of their major market expansion attempts beyond coffee: movies and books, music, beer & wine, food (ZOMG, BBQ?). These failures are major blows to Starbucks’ continued growth plans. Because just like their mature fast food brethren, Starbucks has reached a saturation point with their core (coffee) products.
For example, let’s compare Starbucks with Taco Bell. Starbucks is expected to maintain same-store sales through the old marketing hack of continually introducing new products, such as cold brew coffee or the Chestnut Praline Latte. (Hence why the words “new” and “innovation” should never be associated with good coffee.) This is their equivalent of when Taco Bell introduces DareDevil Loaded Grillers in Mild Chipotle, Hot Habanero and Fiery Ghost Pepper flavors. But to truly grow their business, Starbucks needs to do more than just coffee. In Taco Bell terms, this is akin to their recent mad foray into breakfast menus.
Thus reading that “Starbucks Prospers by Keeping Pace With the Coffee Snobs” through their Starbucks Reserve program is akin to defeat. Eight years ago we pondered Starbucks introducing “Starbucks Select” concept stores as part of their eventual desire to claw their way back into the quality coffee market — the very market they so wantonly abandoned for the mass-market race to the bottom over a decade ago. This would be like Taco Bell saying that they are going to focus more on up-market tacos for growth.
Thus instead of expanding into new categories, Starbucks is retreating to its original basics. But with the commodity-quality coffee market already saturated and its growth stagnating, Starbucks is now seeking growth by going up-market and competing with smaller, more nimble, and ever-more established independents in a higher quality market they conceded long ago. Except since it is Starbucks we’re talking about, it is more likely aiming to compete with the indie-turned-corporate darlings of Stumptown or Intelligentsia.
Keep reading the NY Times piece, and you’ll encounter absurdities such as, “Starbucks’s size gives it an edge in securing the best beans. They can do what the smaller competitors can’t.” Oh really? As a bigger company, they are actually at a disadvantage at dealing with smaller family farms producing higher quality beans. For them, working with Starbucks is akin to trying to do business with NASA. And for Starbucks, dealing with such small, piddly providers is grossly inefficient and expensive compared to the supply chains they’ve optimized to supply tens of thousands of global coffee shops with near-identical products.
The piece even ends with an ode to mobile payments and delivery services — which have nothing to do with quality and everything to do with quantity, convenience, and transaction volume.
It just goes to show you how the same data can be interpreted so differently, depending on your perspective. Even if Jim Cramer would be proud.
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.
Some 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).
Thus 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.
You 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.
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?).
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.
Blue Bottle Coffee‘s attention to details and quality should have fueled its growth under most any circumstances. But the interest from, and infusion of, venture capital have given that growth a nitro boost: new cafés are opening around the world, and various related services (e.g., Handsome Coffee and Tonx Coffee) and small business chains (e.g., Tartine Bakery) are being gobbled up in the vortex.
That venture capitalists most familiar with the “virtual” tech world (e.g., Google Ventures) are also investing in very brick-and-mortar coffee businesses doesn’t entirely add up to me. Why not Krispy Kreme donuts for that matter?
Of course, the tech world believes it has a special and unique relationship with coffee, identifying with coffee-fueled programmers as it does. But coffee is weird in that 83% of American adults drink coffee, and yet just about every social group seems to identify with coffee and claim it as their own unique and special secret: cyclists, salesmen, radio DJs, writers, chefs, physicians, police officers, etc.
Unlike the virtual world where the word scalability almost knows no bounds, the very physical world of coffee is much more challenging. At one end, its roots are in the ancient art and science of farming. And at the other end, despite all the robotics and artificial intelligence brought to bear through superautomatic coffee brewing systems, the best stuff served in a cup still requires the efforts of a lot of human hands.
So what happens when investors seek hockey stick growth projections for a coffee chain when they are otherwise used to scaling metrics such as billions of selfies and Facebook likes? The pressure and expectations of these growth projections frequently leads to quality trade-offs. Before Starbucks coped with their growth demands by essentially becoming a global fast food chain, with push-button-automated machines operated by an ever-growing army of low skilled button-pushing employees, recall that the original coffee they often produced by true baristas operating La Marzocco machines wasn’t all bad.
Hence the big question for Blue Bottle remains: for how long can they march towards world domination before the quality tanks? James Freeman firmly believes its a fate he can avoid. But as you take on more and more investors and give away more and more ownership of the company, a tipping point edges ever closer as the VC interests in money inevitably weigh down the scales against coffee idealism.
That strange bedfellow relationship between VCs, tech, and coffee is on full display at one of the latest Blue Bottle Coffee Co. openings in Palo Alto. This former Varsity Theater (and Borders books) has been revived as the “SAP Hanahaus” workspace with an attached Blue Bottle Coffee service.
The historic building offers a unique outdoor courtyard in front, with various secluded café tables and benches, leading to a hall of merchandising (home brewing equipment, bags of roasted coffee) before you reach the front service counter and bulk of the interior tables. Past the service counter is the leasable workspace by the hour for all your start-up needs.
Using a two-group La Marzocco Strada, they pulled a thick, shorter shot with a mottled medium-brown crema. It had a potent aroma, a good body and mouthfeel, and a rich and complex blend of flavors that included dark chocolate, molasses sweetness, and some honey. The shortness of the pull brings out concentrated complexity: this is not your typical pale, narrowband, watery single origin shot pulled by Third Wave sheep. Served in designer logo Kinto cups with sparkling water on the side.
So has Blue Bottle reached the tipping point yet? Based the quality of the espresso here, not in the least bit. However, an espresso-loving friend (whom I converted years ago into a home roasting devotee) was not impressed by it, saying he’s often had better.
Based on that one shot, I rarely have better. But it is extremely rare that you find shots consistently pulled of this style and density, so this will require repeat visits to verify if this just wasn’t a one-off.
Read the review of Blue Bottle Coffee at Hanahaus, Palo Alto, CA.
Yesterday’s New York Times surely went for a low-hanging-fruit holiday cheer story in covering the hackneyed caffè sospeso in Napoli: In Naples, Gift of Coffee to Strangers Never Seen – NYTimes.com.
However — unlike the untold copycat fluff stories over recent years that bought into Starbucks‘ corporate co-opting of the practice as their Pay-It-Forward viral marketing campaign — the Times did some actual research on the history, cultural context, and economic backdrop of the gesture. This is, of course, what we love about the New York Times. (Though certainly the comments on the Times article suggest that Starbucks’ campaign continues to strongly influence laymen coffee consumers.)
First there’s the context of coffee culture in Napoli, visiting a classic Napoli gran caffè in the Gran Caffè Grambrinus, interviewing the legendary Andrea Illy, and referencing La rete del caffè sospeso (the “Suspended Coffee Network”).
It’s a reminder of how much work it sometimes takes to get it right.
There are a few great things about the Seattle-Tacoma International Airport (or SeaTac). One is a SubPop retail shop that opened in May 2014. Another is a Beecher’s Cheese shop. And next door to Beecher’s is a full-on legitimate (not just for the airport-weary) Caffé Vita.
This ain’t your ordinary airport espresso. Ignore the Hall of Shame Starbucks alley of Concourse B and head for Concourse C, near Gate C3. Surprise!: no superautomated Schaerer machine with barely employable baristas under airport union contracts and under a licensed Caffé Vita brand name.
Here there are legit baristas and a three-group Synesso machine. They sell baked goods and coffee only here with stand-up kiosk service only — so keep a free hand while lugging your luggage.
They pull shots with a picture-perfect reddish brown tiger-striped crema of solid thickness and mouthfeel. The cup has a decent body and a great balance of some herbal pungency, citric brightness, and heavy body elements. Served in a white Caffé Vita logo Nuova Point cup. The milk-frothing can be a bit dry and airy, but it’s even and good — albeit only available in paper cups.
This is a coffee oasis for any airport in the world. While my intel has it that the Klatch Roasting at LAX can seriously compete for the title (and I have yet to visit), this is arguably the best airport espresso I’ve ever had to date.
Downtown Seattle is something of an espresso wasteland compared to most other city downtowns, especially around the touristy Pike Place Market. Which is ironic, given that it is the birthplace of the biggest coffee quality movement America has ever experienced (i.e., Starbucks).
However, that’s also part of the problem: independent specialty coffee retailers grew successful because of their craft, attracted investment, attracted expectations of scale and reach, and now many of them have evolved to become corporate coffee giants — which is now what dominates downtown Seattle. This evolution differs from most downtowns where the “corporate” part of the local coffee scene invaded from afar rather than transformed in place.
When Seattle’s coffee quality pioneers turned corporate, I fully believe that their quality has declined with that scale, as the quality bar was lowered each time with every additional 100 jobs they needed to fill and each process automation they had to adopt to meet the demand. (I still contend that the individual barista makes up 50% of the end quality in a retail espresso beverage.) Others might argue that newer independents have simply stepped in, stood on the shoulders of their predecessors, raised the quality bar further, and became the new standard-bearers of their time.
All of which sets an interesting stage for Seattle Coffee Works — a small company established several years ago by California expats. Their story suggests an arrival amidst Pike Place Market’s coffee scene with big expectations, only to encounter serious disappointment. A long story short, the team eventually opened this location right in the shadow of Pike Place Market as an expression of quality coffee, more direct relationships with farmers (they post photos of farmers on the walls and a “Coffee Manifesto” beneath the front counter/register), and trendier (i.e., post-Seattle-espresso) brew bar offerings from a “Slowbar” that offers Chemex, Hario pour-over, Aeropress, and syphon brewing.
With a Diedrich roaster in back for their on-site roasting, they produce mostly single origin roasts for retail use and retail sale. They offer an outdoor seating patio sectioned off from the sidewalk traffic. Inside it’s a wider but spare space with a bare, darker concrete slab floor, worn wooden tables and chairs, and a rear wooden bench for seating. There are shelves of antique coffee brewing equipment, which is a nice touch, and near their Slowbar there are shelves of merchandising: Aeropress, Baratza grinders, kettles, French presses, etc.
For espresso they offer their “award-winning” Seattle Space blend along with a single origin option from their two-group Synesso. With the Space Blend, rated here, they pull a shot with a very even, non-descript medium brown crema. It’s filled rather high in their Espresso Supply Cremaware demitasses from China.
As a result, the body — like the crema — is a bit thin. It has a pungent flavor with some sharper acidity of apples, some cinnamon, and other spices. It’s a classically redundant Third Wave stereotype espresso lacking much body, richness, or breadth of flavor. Served with sparking water (what the locals call “soda water”) on the side.
I had a surprisingly better shot with their single origin Panama Carmen: richer in flavor depth with more rounded, body-friendly notes. Perhaps the Slowbar is the way to go here — if not the single origin shots. The Space Blend here, despite its claimed awards, tastes a little too much like “California Third Wave” as far as my taste preferences go.
Just when you thought I was ready to fawn over every old school coffeehouse in Seattle, here’s something to keep me honest.
Caffe Ladro has been around in Seattle since 1994, and this downtown spot has been one of their now 14 locations for at least what seems like a decade. It resides in a corner office building with a curved, glass surface. Upstairs from the sidewalk level there is some patio seating among tables and chairs and under parasols in front.
I entered on a weekday around 6pm, and it was dead save for a lone employee and a lot of disco music played on the sound system. What a difference a couple of hours makes. Once the regular office workers left the building, what remained was a Nighthawks-inspired scene where the only other patrons seemed to be shady locals who only came in to borrow cigarette lighters and the business phone.
But it would be unfair of me to characterize downtown Seattle after dark as being a little, say, dubious. Three days later I came upon a scene at the BART-level San Francisco Centre Starbucks where a woman, who was clearly out of her mind wearing only one shoe, saddled up to the condiment bar and tried to pour an entire pitcher of the free creamer into her empty 12.5-ounce plastic Coke bottle. I say “tried” because virtually all of the creamer wound up on her hands and on the floor. The poor Starbucks employee could only grab the pitcher from her hand and give one of these before mopping up:
Back to Caffe Ladro: despite the circumstances, the barista was exceptionally friendly. Though note that “ladro” means “thief” in Italian. It’s what you yell as a tourist on the #64 bus in Rome when some scugnizzo makes off with your purse or wallet out the back door. Credit to Caffe Ladro’s closing-hour patrons: I can attest to not leaving anything there unintentionally.
Inside, beneath the large, curved panes of glass overlooking the intersection, there are squat stools along a long, black countertop. In back there’s limited seating among leather chairs. The space has a high-ceilinged, loft-like feel with exposed dark wood on one wall, a darkly painted ceiling and vent ducts overhead, and some large orb-like light fixtures.
Using a three-group La Marzocco Linea, they pull shots with an even, medium brown crema that’s more typical of newer coffeehouses around the country. The body is a bit thin for its looks, and it tastes of spices, some pungency, some acidity, but a limited amount of sweetness or range in its flavor profile. In that sense, it reminded me of Flywheel Coffee Roasters in SF.
Served in classic black Nuova Point cups with a glass of sparkling water on the side. Signature drinks include the Medici, Gibraltar, and Shakerato. The resulting cup is surprisingly “modern” for the chain’s 1994 pedigree — though they have been roasting their own only since 2011. Note that my use of the word modern here isn’t necessarily a compliment.
Read the review of Caffe Ladro on Pine St. in downtown Seattle.
How about that for a title?
Living a modern life immersed in so much technological wonder, we are often shocked by those triggers reminding us of how very little we have evolved from the rest of the animal kingdom. Typically these responses originate from our fight-or-flight lower brain in response to threats that we perceive and yet don’t fully understand.
Now I’m no fan of ISIS. But last month I was listening to an NPR talk show where investigative reporters from the Wall Street Journal reported — with breathless incredulity, I might add — that ISIS employed people in its ranks to do something so mundane as direct traffic. The journalists acted as if they observed a zombie apocalypse when shockingly some zombies arrived in trucks from Streets & Sanitation to take care of garbage collection.
We get that ISIS is evil incarnate. We also get that the first victim of war is the truth. But it’s as if the Wall Street Journalists were asking where does ISIS find the time — between their overworked schedule of beheading journalists and raping Kurds 24×7 — to take care of directing traffic?
Point is that while it’s important to recognize the threat, and to recognize that psychological warfare may have both its foreign and domestic casualties, is it really better to distort the reality of such threats into the territory of paranoia and cartoon caricatures?
Which brings us to our title subject. We all know the horrible reports of the Ebola virus in West Africa. High mortality rates, impoverished communities ill-equipped to combat the virus, and even superstitions and distrust that has made affected communities physically attack medical aid workers risking their lives to help them. Here in the U.S. there are many reports of people being treated as social lepers just because others believe they’re from Africa. This despite the fact that 56,000 Americans die every year of the flu, but there is only one recorded death from Ebola.
Last week the Benin-born international singer, Angélique Kidjo, publicly spoke (and performed) on the tragedy. She even went so far to say that the paranoid response to Ebola was rooted in racism. But there are plenty of convenient boogeymen that mask the real problem, and that real problem resides in the fear response of all of our lower brain stems ever since the time of our lizard ancestors. Just as this Harlem preacher claims that Starbucks stores are ground zero for spreading Ebola: CONTROVERSIAL VIDEO: Harlem Preacher Claims Starbucks Flavors Coffee with “Semen of Sodomites” « KRON4 – San Francisco Bay Area News.
Now much of the public learned earlier this year that the Starbucks Pumpkin Spice Latte (or PSL, for its religious followers) contains no pumpkin. That news in itself might have started a few new doomsday cults. But to claim Starbucks makes a semen latte?
Not to give any nut job on the planet a bigger platform than they ever deserve. But it’s important that we recognize these responses and remind ourselves of the real motivators behind why these crazy things happen — and why they are said and believed — in uncertain times. Better to arm ourselves with the truth than lizard brain fantasy.
It’s no wonder why some our country’s most vocal religious leaders don’t believe in evolution … they’re still waiting to experience it themselves.
Not unlike Carmel, CA, Half Moon Bay is a smaller oceanside community that serves as something of a test of quality coffee penetration. Located only 30 miles from San Francisco, and possessing its own Peet’s and Starbucks (unlike Carmel), Half Moon Bay remains surprisingly isolated and remote from many of the coffee fads and baseline standards that the cityfolk up north have grown accustomed to.
Thus finding a solid espresso in town is a real challenge. Half Moon Bay is fraught with many wrong turns and dead ends that lead to an over-extracted, watery ash flavor that many San Franciscans might recognize from 1988. But there are some mild exceptions — such as Blue Sky Farms.
This roadside café, coffeehouse, and nursery (yes, nursery — the plant kind, that is) constitutes a rather dark wooden hut that you might miss if you drive up Highway 1 too quickly out of Half Moon Bay towards El Granada. There’s a parking lot with a main entrance to the rear of the building, right alongside the nursery and gardening supply.
Inside the simple wooden frame building, it has a typical rural café feel. It might seem a little like a family-run spot, but it’s more together than that. They serve baked goods, breakfast items (eggs, burritos, weekend waffles), and other light dining fare. There are several indoor metal-topped café tables — and some worn wooden picnic bench seating in the rear patio outdoors.
Using a three-group Conti machine in the service area, and Moschetti coffee (Moschetti makes their service area presence well-known in Half Moon Bay), they pull shots with a pale to medium brown mottled crema served short in a shotglass-sized cup (Romania ceramic from IKEA). It has a healthy body and a smoothed-out flavor of mild spices.
For milk-frothing, they can be a bit irregular and frothy — but they will ask if you want your cappuccino wet or dry. Their milk-based drinks are deceptively large-looking and come in white or blue IKEA cups. All things considered, you will hope for something better — but this is one of the better coffee options in this outpost town.
Read the review of Blue Sky Farms in Half Moon Bay, CA.
When not on my best of days, I’ll be the first to admit that I can sometimes be a sarcastic jerk. But even the most acrid sarcasm can be neutralized by a shocking dose of absurd reality. Case and point with this story in today’s Daily Mail: Grower’s Cup, World’s first DISPOSABLE ‘coffee machine’ lets you brew on the move | Mail Online.
You see, there’s long been a lot of consumer environmental angst when it comes to single serving coffee made from pods and capsules. That angst is not at all misplaced, but it’s largely viewed from the wrong end of the telescope. Virtually all discussions that cite the environmental impact of coffee pods obsess exclusively over recycling. Meanwhile, they throw “reduce” and “reuse” under the bus — completely ignoring them.
If we remember our Environmentalism 101, the ranked order of efficacy is this: reduce, reuse, and then recycle. Thus the great environmental atrocity of pod coffee machines isn’t throwing the pods away. It’s that, by design, these coffee systems seem to maximize the amount of materials extraction from the earth, materials processing, machine energy consumption, manufacturing waste by-products, excess packaging and shipping weight, and additional transportation fuel consumption with each and every serving of coffee. The introduction of coffee pods created incremental new demands for all of these, where none existed prior for “traditional” coffee formats.
To sarcastically illustrate this point over the years, I often go from zero to ridiculous in one sentence: that if they manufactured an entire life-sized, pop-up, disposable Starbucks with every coffee serving, the entire system would earn a green “pass” by most consumer definitions if the disposable Starbucks were made of recyclable materials. Imagine a cardboard Starbucks with 1,800 square feet of indoor space, including cardboard men’s and women’s bathrooms, thrown away with every serving of coffee. Can you recycle it? Say “yes” and planet earth and a choir of bluebirds will thank you.
So imagine my shock and horror — and the death of my sarcasm — when I learned that the first step towards creating the disposable Starbucks had already been made with the 2012 introduction of the world’s first disposable coffee machine. Sure, you could say that the proliferation of pop-ups marked the first introduction of the disposable café, but the holy grail here is the single serving disposable café.
Homer facepalm indeed…