Sunday, March 31, 2013

A short trip down retail coffee memory lane

"Those who cannot remember the past are condemned to repeat it"

                                                                   - George Santayana

Pure Retail

Starbucks Coffee, Tea & Spice opened its doors in 1971, and the first espresso machine wasn't installed in a store (4th & Spring, Seattle) until 1985. Those first fourteen years were hardly unproductive, and indeed from the perspective of both coffee/life quality and that of creating a customer culture of coffee appreciation those were arguably the golden years (or should we say the coffee years preceding the days of milk & syrup?).

The three founders of Starbucks: Zev Siegl, Jerry Baldwin & Gordon Bowker (newbies please note - Howard Schultz is nowhere to be seen)

I first moved to Seattle and became a Starbucks customer in 1977, though I wasn't able to land a job there until the early 80's, when I started off packaging coffee and sweeping floors despite already having a fairly extensive coffee background before becoming the 14th person to roast coffee there. 

Back then Starbucks was a pure - and purist - roaster/retailer operation, delivering just-roasted beans to its 9 (eventually 12) stores three days a week. A few stores offered drip coffee (reluctantly and occasionally), but otherwise you bought your beans and took them home to enjoy. A handful of restaurants were reluctantly allowed to serve our coffee but often had to deal with coffee and equipment being yanked when they failed to follow instructions (what did they expect in doing business with a company whose CEO referred to restauranteurs who used less than 4 ounces per half-gallon pot as "counter-revolutionary goons?"). Starbucks back then was, as Gordon Bowker gleefully put it, "a real have it our way" kind of place, and I was in hog heaven despite only earning enough money to live cheek-to-jowl with a bunch of roommates and bicycling to work year-round since even a beater car was out of reach. 

Prominent on the employment application (mostly essay questions!) was "describe the best meal you ever ate, in detail." It was routine back then for customers to ask whether the new-crop Kenya was a better choice than the Ethiopian, or to bemoan the substitution of Ethiopian Harrar for Yemen Mocha in our Mocha Java Blend (Jerry Baldwin called the fill-in "Revolutionary Mocca Java" - "what's "revolutionary is we actually tell you what's in it!"). Legendary stores like Pike Place and University Village maintained boxes of index cards full of customer's custom blends. Within perhaps five years of the introduction of the espreso bar into these stores that culture that knew and cared about the actual taste of coffee had pretty well been obliterated, both behind the counter and among consumers. 

Besides coffee, there were exquisite teas (Seattle was the first U.S. port to open to imports from the People's Republic of China, and Hao Ya A Keemun vied for shelf space with Yin Hao Jasmine and exquisite second flush Darjeelings bought at auction). And there were the spices: Tellicherry peppercorns, Spanish saffron, the infamous catnip ("thrills for your kitty") - in an era when fresh spices were as non-existent in supermarkets as fresh coffee.

Fast-forward to 1987, when former Starbucks director of marketing Howard Schultz had become the company's largest wholesale restaurant account, buying coffee for his homegrown cluster of Italian-style espresso bars called Il Giornale. By then Starbucks had grown to include a substantial wholesale business, the Caravali wholesale brand and, last not least, ownership of Peet's. Howard wanted to grow the espresso drink business, Jerry Baldwin was (and is) a product purist and wanted nothing to do with slinging caffe lattes and so decided to keep Peet's, Caravali was spun off and Howard and a group of investors bought Starbucks and began the process of merging its stores with Il Giornale and the fast-food culture of U.S. espresso they had created. I was there from the outset as the Coffee Specialist, in charge of everything that happened to the coffee from the time it left the roasting plant until the time someone drank it.

I really can't do justice to just how heady and inspiring the atmosphere was back then, but I can say that thanks to the momentum of the Starbucks culture, skilled leadership from Howard and the rest of the management team, far-sighted investors, and an utterly devoted, unbelievably talented team of employees, we had carte blanche to pursue coffee quality as an end in itself. Those of us honored with custody of the product basically had two questions: how good can it be? and how can it be better next time? It's hard from a 2013 vantage point to ever imagine that Starbucks was once as purely product-driven as it is now marketing-driven, but it's true. Then again, the same could be said of Folger's, which a few decades earlier was run by a small group of coffee tasters who bought the entire Guatemalan Antigua crop from Bella Carmona and really meant it when they said "mountain grown."

The inspiration for the original logo and Starbucks logos through their early history. Needless to say, what Howard Schultz derided as "the brown look" was in fact the high water mark of both aesthetic and gustatory good taste.

Culture Clash

The old Starbucks retail culture included a cast of brilliant characters that often made me think there couldn't be any starving artists or liberal arts graduates in Seattle left to hire. Wages were okay but the compelling reason to work there was the absolute integrity about and passion for excellence in coffee. Jerry Baldwin's mantric query still echoes in my mind decades later: "is it as good as the coffee?" Whether evaluating a new coffee maker, looking at an architect's design for a new store or looking at employee benefits, that question was raised and had to be answered.

Meanwhile, the Il Giornale stores were doing things with espresso that while inspired by Italy involved a level of employee skill and equipment use and abuse that was truly unprecedented. Espresso in Italy is all for-here, in either demitasses or 5-6 ounce porcelain cups and the steam wand is wiped dry by 10:30 a.m. and sees no further use during the day unless some ignorant tourist walks in and upsets the apple cart by ordering a cappuccino after appropriate hours.

In contrast, we had a handful of stores in downtown Seattle that served thousands of customers in a morning rush. A great barista (and we had many) would single-handedly operate a four-group semi-automatic La Marzocco espresso machine, making shots, remembering up to 25 drink orders at a time and keeping two 2 liter steaming pitchers of milk going at all times for several uninterrupted hours.

Questions on the Il Giornale employee questionnaire were rather different from the old Starbucks version, having to do with things like "do you drive a car/are you comfortable operating machinery?" and, essentially, are you a morning person possessing a great deal of fast-twitch muscle fiber?

It was perfectly obvious to me that what was being promoted as a merger of the retail coffee culture of Starbucks with the nascent fast-food cum espresso bar culture of Il Giornale was in reality going to be a steamrolling and obliteration of the coffee culture unless steps were taken.

Preventing that from happening was not purely a matter of romantic nostalgia for the way things had been.  The high-volume whole bean stores in Seattle even after the introduction of espresso bars still did over half of their sales in whole beans, and that business was and is far more labor efficient and ultimately more profitable than the beverage business, particularly when you allow for employee turnover and the beating that equipment and fixtures take in a busy bar. 

The Business You Work At vs. the One That Comes to You

Here are some of the early initiatives I tried in order to help keep coffee sales and some semblance of retail culture alive in the face of the milk drink assault:

Focused Coffee of the Day program: most stores had enough volume during prime time to support brewing two drip coffees plus a decaf. Rather than let the choices be dictated by staff preference or what was about to go past-date, we had a program in both Seattle and Vancouver stores that paired a Mild coffee of the day with an Intense one: Guatemala paired with French Roast; Ethiopian Yergacheffe vs. Sumatra, Colombia and Kenya.

This program resulted in considerable excitement and significant increases in whole bean sales, especially when accompanied by two supports:

1. Pre-packing half-pounds of each day's featured coffees and putting them next to the cash register.

2. While things were still busy but after the epic morning slam (so say around 9:30 or 10 a.m.) having an employee brew up French Press pots of the same coffees being brewed drip and taking them around and actively sampling customers on them ("would you like to taste our Yemen Mocha brewed another way?"). Needless to say, a lot of coffee and plunger pots walked out the door.

All we sell is perfect cups of coffee: This ideal is something I borrowed from the Nordic Coffee Association, who in turn took it from the U.S. Pan American Coffee Bureau. The idea is that a roaster-retailer should take responsibility for every variable that goes into a perfect cup of coffee, since it is only as a beverage that coffee can actually be appreciated and enjoyed. 

As a practical matter, this means selling the customer not beans and a brewer but an integrated system for making a perfect cup that is as simple, foolproof, aesthetically pleasing, pleasurable to use and inexpensive as possible. 

We were brewing some truly spectacular drip coffee back then using 3 gallon urns with massive doses of urn-ground coffee ground on old Hobart grinders with ideal particle size distribution, and already I was starting to hear "oh I'll just drink coffee here because I can never make coffee this good at home." 

I had a plan in place to completely rid the stores of Krups, Braun and other crappy brewers that sabotaged coffee quality along with fall-apart $100 "espresso" makers that couldn't even make stovetop quality coffee. Starbucks was going to be the only coffee retailer that could say "we only sell stuff that works." but alas it was not to be, even though I was successful in at least putting pressure on our vendors to provide coffeemakers that got the water to 200 degrees and finished their brew cycles in less than 6 minutes (most famously by replacing all of the Krups and Braun brewers with ugly-but-functional Bunns for a time). 

Retail Resurrection?

Thirty plus years later that opportunity is still there, and I dream of seeing a roaster-retailer savvy enough to sell primarily brewing "kits." The simplest would of course be the best: a Bodum blade grinder with an Aeropress or Clever dripper and complete brewing instructions, and  then an entry-level conical burr grinder and a Bonavita or one-liter Nissan Thermos and #6 filtercone for by-the-pot brewing. Retail walls of such a store, instead of only containing farm photos, would be organized more like a petting zoo for coffee: Wall 1: our farms, with samples of green coffee and pergamino. Wall 2: the water wall, with info on water for coffee and water filtration equipment for sale. Next, the grinding wall: why to grind at home, how to store, why a blade grinder's better than nothing and a burr one worth the investment. Finally the brewing equipment, a few choice items that work perfectly or your money back, and that, as much as humanly possible, are either being used to brew coffee in the store or demo'd relentlessly during non-peak times. 

I see bits and pieces of this happening in some newer retailers, but nowhere near as comprehensively as at, say, a Sharper Image store or, to use a food model (the food model, actually), Zingerman's Delicatessen in Ann Arbor. At Zingerman's you can walk past a wall of painstakingly-selected olive oils organized by country and region and there are trays hanging off the shelf with bits of great bread and little dishes of each of the oils (continually monitored and replenished by the exceedingly knowledgeable and enthusiastic staff). In 5 minutes you can taste the greatest olive oils the planet produces, sampling from close to $1000 worth of bottles, and you're sure to leave the store with one or more bottles, a loaf of that bread, and maybe more. Moreover, there are signs up everywhere in the store saying "ask for a taste of anything," and they aren't kidding (I thought I'd call their bluff my first visit by asking to taste the $200 hundred-milliliter 50 year old balsamic vinegar and not only tasted it but ended up spending that much and more before I got out the door). 

Creating a Customer Base that can taste the difference and is happy to pay for it

Anyway, the retail opportunity is still there but one has to realize that it's the customer buying drip coffee or the rare bird drinking straight espresso who's the potential whole bean coffee and/or brewing equipment customer. The espresso bar customer who pays the bills is perfectly happy with their concoction, which as we all know is produced by a highly skilled operator operating specialized brewing equipment that costs as much as a car. The point isn't that commercial espresso isn't readily downsized for home use; the point is that espresso-based milk drinks are antithetic to creating an appreciation for the flavor of actual coffee and the efforts of those who grow it. 

In order to reach a customer who does have some level of interest in coffee, it's vitally important to create and then reinforce at every opportunity their sense that they can taste the difference in flavor and that the differences are worth paying attention to (and thus paying for). You don't want subtle distinctions that a professional coffee taster would have trouble making (e.g. a light-roasted Costa Rican one day, a light-roasted Guatemalan the next). Rather, you want screamingly obvious, even polarizing differences in flavor to be offered on a regular basis, so that customers can learn the building blocks of country-of-origin flavor and begin to make intelligent, informed choices. 

One of  my favorite tastings to do for store managers and marketing folks alike at both Starbucks and Allegro was to cull through a couple of days of production roast out-turns and lay out about 25 trays of coffees with their identifying tags turned over. My instruction was this: "the difference between drinking coffee and tasting coffee is that tasting is about being able to say "this is good - but I don't like it" and using that knowledge to assess and meet customer preference. So taste all of these coffees. Some may be duplicates. Your mission, on pain of [imaginary] death, is to put a check mark only by those coffees that taste most vividly distinctive to you - that taste nothing like any of the others."

Invariably such tastings led to this selection: Kenya, Ethiopian Yergacheffe, Ethiopian Harrar or Yemen Mocha (we usually had only one of these two available at any given time), Sumatra, Sulawesi, Aged Sumatra (if on offer), Guatemala and occasionally Colombian or Costa Rican. Oh, and French Roast of course - unmistakable, though in one of the lasting ironies of the business I never met an employee at Starbucks or Peets who could stand the stuff. Anyway, that's more or less what a retail coffee lineup for someone interested in creating a consumer coffee culture rather than imposing their own preferences on consumers looks like. 

As for espresso, I'm a firm believer in using that venue for subversive purposes as much as possible, as long as one's realistic about the limitations. What I mean by "subversive" is going ahead and doing nothing but single-origin espressos, and if you have baristas with the chops to pull it off changing out said single-origin on a daily basis - all accompanied by a shelf talker by the machine and at the register that lets the few who will read it know what you're doing and why. 

That isn't to say I think putting just any coffee through the machine is a good idea. Screamingly-acid lightly-roasted coffees belong in a vacuum pot, or a drip brewer if you must, but Kenya or a washed Ethiopian in an espresso machine is a disaster unless you know how to roast it to corral its acidity (something Peets and Starbucks know quite a bit about). Still, I love the idea of featuring farm-designated flavor and thumbing one's nose at the mystique of blending (still promoted rather relentlessly by those like Peet's and Starbucks) in the very context where blends are said to be de rigeur. That said, the best single-origin espresso shots I ever had have been from coffees like Yemen Mocha and particularly perfumey Yergacheffe lots taken well into second pop - the kind of coffees one is even less likely to find than a balanced blend at most of today's third-wave outlets. 

On a broader scale, we're dealing with a consumer base with smartphone and computer driven attention spans and expectations for machine performance based on interaction with those same intuitively-designed devices. We're used to swiping a screen, pushing a button or speaking a few words into a microphone and getting things done. Coffee brewing technology, even at the most rarefied levels of commercial brewing, is laughably primitive by comparison. That's why I think that a very few choices (basically the Aeropress, Clever Dripper, 1 quart stainless thermos with filter cone and one great home auto drip brewer from among the 3 extant viable choices [Bonavita, Technivorm or Brazen], fully supported with accompanying grinder, grind sample and brewing instructions, are currently the best alternatives we have in the face of ultra-convenient mediocrity in the form of Keurig K Cups, Nespresso capsules, Via instant and the like. 


  1. Kevin,

    Thank you for the well thought out post. I work for Starbucks and am fairly frustrated on a daily basis by how little we actually focus on coffee in our retail stores. Sure, we have our whole bean targets we have to hit but, as you point out, so many of our customers come in for a drink that has more syrup, more milk, and increasingly more ice than coffee. I would love the opportunity to engage customers about coffee but instead I have to keep our transaction counts up. I hate to say it but in a lot of ways it feels like McStarbucks. If you ever launch the business model you outlined here, count me in.

  2. Hi David -

    The decision was made a very long time ago to cut labor to the bone (above 12% could get you canned even before I left - in 1993!) and let the place become McLatte's. Of course you'd never know that from the mail order operation, limited editions and the like, but those are mostly positioning tools at this point.

    Poignantly, Howard Schultz once told me that far from selling out to some multinational, "the death of Starbucks won't be selling out to someone else. The death of Starbucks would be mediocrity." By that standard, you're working for a zombie, sad to say.

    The good news is there's so much good stuff going on in coffee and lots of room for new entrepreneurial efforts. In this economy there are lots of customers that really need to be able to brew a great cup at home to save money, or would love to know that an Aeropress plus a $20 milk steamer and some great beans would let them make a caffe latte at home or at the office for a pittance that they'd enjoy as much or more as what they pay exponentially more for at the store. I wish I had the money and the partners to launch something myself, but I encourage you to use your experience and love for coffee to network and take some bold steps if you can.

    1. Thanks for the encouragement. I've been developing a concept that shares some of the same ideas you've put forth but I just didn't have the confidence in it to do much more than talk about it. You have managed to articulate what I could not and it doesn't sound so crazy coming from you. I'll definitely let you know if I can get it off the ground. Thanks again.

  3. It seems the only place you can find a good selection of the major coffees from around the world these days is Peet's, and it's a good thing that they do a good job with them --- I love their Ethiopian Supernatural and the Arabian Mocha Sanani.

    If you ever find yourself in London, the boutique coffee culture there is pretty different than America. There is actually more choice, and the atmosphere is closer to their pub culture than our heads-buried-in-laptops cafes. I liked Notes in the Covent Garden area who serve Square Mile coffee in Aeropress or the dreaded Hario, and Caravan near Sadler's Wells Theatre, which is a cafe turned bar that serves coffee by a very coffee-knowledgeable bartender. They roast their own coffee.

    You should also visit HR Higgins who has an impressive selection of coffees and teas from around the world, and you can even sample any of their coffees in a press pot in their little cafe downstairs before buying --- they sound a bit like your pre-cafe Starbucks world. And sure enough, I walked out with more coffee than I had intended to buy!

    In the meantime, it seems like even our biggest boutique coffee roasters in America are a bit myopic in how they find new coffee, especially when there's so much great coffee already out there. I recently saw a $12 cup of pourover coffee offered, because it was made from $160/lb Gesha grown in ... Colombia! Never mind the obscene price, but how blinkered are you to not only try to ride on the Gesha fad and grow it in a country with no provenance, but charging more for it than the Peterson farm which is known to consistently produce great Gesha?

    Here's an idea: why not make a trip to Ethiopia, and see if you can't find another heirloom varietal that might like New World growing conditions, and invent yourself another Gesha instead of aping a fad? Then you might be able to justify $160/lb prices for your efforts.

    And why did Esmeralda Gesha win its fame in the first place? Because it tasted like nothing else that country (Panama) produced (and was similar to a very good Yirgacheffe, except with the volume control turned up to 11). So it is ironic that some companies are imitating a fad whose raison d'etre was being unlike anything else.

    It's bad enough that all of the world's coffee outside Ethiopia is composed perhaps of 1 or 2 varietal clones (and their mutations and hybrids), when there are literally hundreds if not thousands of unclassified varietals in Ethiopia. If these boutique coffee roasters care so much for the downtrodden, why not divert their resources to a place where they will make a difference in both people's lives and the welfare of the crop? Give the Ethiopians some economic reason to not deforest their country, and get great unique coffee at the same time. Win-win!

    Thanks for letting me rant a bit.

    1. Great comments Andre. I've wanted to return to London for years but unfortunately it's not in the cards due to the expense of both getting there and being there with the Pound so strong against the dollar. The coffee retail you describe there sounds innovative and excitiing.

      I think you singled out probably the two most consistetently worthwhile Peets coffee offerings and I think that their green coffee and tea buyers have done a great job of trying to maintain standards in the face of both growth and some pretty boneheaded choices of direction by the powers-that-be there. Still for me much as I revere Peets I think there are fewer and fewer coffees available today that can withstand their roast and emerge with the plush, Port-like richness while still having varietal character. Still beats the hell out of cinnamon-roasted Kenya in a portafilter at $6-10 a pop with free attitude on the side at some of the newer places.

      I agree completely with your comments about Gesha. There should be a great deal more focus on Ethiopia, on Africa generally as wel as on semi-washed and natural coffees, but what you see in the 3rd Wave world sometimes seems to amount of a bunch of guys hanging out at Cup of Excellence cuppings and basing their buying and retail offerings on said hanging out. It's a lousy way to select and source coffees and a really terrible basis upon which to construct retail offerings, and the end result is a bunch of manicured washed coffees that are grossly overpriced, while their customers don't even have the opportunity to taste the range of truly great origin flavors that are available. At least those in the U.S. can buy a decent home roaster and peruse the offerings of Sweet Maria's, whose range of coffee selections sadly seems to have no roaster-retailer peers.

  4. Outstanding article. I enjoyed the contextual points you make and think it is a wonderful guide for those wanting to follow the craft of coffee. Thank you!

  5. Hi Kevin,

    I read with interest. I met Starbucks well after this period, well into their marketing phase and had no idea of their dedication. If you come to Chicago in a few weeks, on May 4 we'll be having CoffeeCON 2013, where two thousand coffee enthusiasts will enjoy cupping and sharing their coffee know how, also learning in in-depth classes taught by some of your colleagues.

    Keep up the good work. History serves as a motivator for a better future.

    Kevin Sinnott

    1. Nice to hear from you Kevin, as always, and thanks for the invitation. I can't afford a trip to Chicago, but kudos to you for what you're doing!

  6. In a stunning coincidence, you've pretty much nailed the points in my business plan (although without the french roast and with selling to restaurants in addition to my own retail).

    I'm laughing at the Kenya comments as I had an experience once that really made me shake my head. When I used to have my cafe, we once experimented with a lush Burundi SO with terrific up front plum, tamarind middle and port finish as espresso. It wasn't a dark roast, probably just touched 2C if that.

    So I told the roaster (one of the big 3) we were interested in using said Burundi for competition. They said, "Let us roast some specifically for espresso." So we said fine. They sent us 5 lbs and we tested it for 8-9 days. It was truly awful. Nothing that appealed to us in using the drip version was present. It was over the top bright, start to finish.

    Over their objections we tossed the "espresso roast" and competed with the standard drip roast. And if not for a mistake during the sig round that zeroed all the drinks, our barista would've been in the finals.

    We sold a ton of that Burundi.

  7. Kevin,
    Thanks for this trip down memory lane. Many beans have flowed since those pioneer days. I appreciate your articulate curmudgery. Do you have a copy of that old employment application? I've unable to find one in my treasure trove of memorabilia.
    May all good things flow your way.
    Jerry Baldwin

  8. Hi Jerry -

    I'm sad to say I don't have a copy of the old employment application. I wonder if Gay Niven or any or the other surviving old-timers might.

    Every good wish,