A new piece from Reuters deftly explores the emerging trend of venture capitalist investment in progressive coffee shop chains such as Stumptown and Blue Bottle, while also suggesting that independent coffee companies such as Intelligentsia represent a new model for coast-to-coast craft roasteries/retailers.
The piece draws comparisons to the craft beer and boutique wine markets in the United States, reinforcing the concept for craft specialty coffee professionals that their industry will continue to see growth as interest is piqued among forward-thinking investors.
“The difficulty about this market is that no one really tracks it,” Reuters correspondent Lisa Baertlein says in this video preview for the story. “How big the market can get is anyone’s guess, but because of the popularity of things like craft beer and boutique wine in the U.S., this is the way the American consumer is moving. These companies are the first ones out of the gate and the first to go bicoastal, so they have a first-mover advantage in what is the next evolution of coffee.”
Nick Brown
Nick Brown is the editor of Daily Coffee News by Roast Magazine.
Comment
3 Comments
Comments are closed.
As with beer and other common consumables, venture capital is bound to find great disappointment in coffee. There’s little leverage in these business models, which are the drivers of all the valuations that VC firms ultimately seek for exits.
All are laden with heavy friction in sourcing, supply, and distribution. And virtually every coffee outfit that has grown has seen both its quality standards and the perceived exclusivity of its brand plummet, devaluing the investment as it grows.
This also explains why so many coffee pros turn to the likes of Kickstarter, the investor of last resort, as a desperate Hail Mary pass to hope for more charity than reasoned investment. It’s an easy business to get into at the low end, but to scale it you essentially join the fast food market for competition.
I also don’t see this as a positive, look at the craft beer market and give me one beer that got better much less maintained quality over the long haul. When one s focused on profit, quality can be quickly compromised.
Go look at the American Homebrewers list of top 50 beers in America…these are all good and have been for some time now. Plus the guys that make it big inspire other ppl to get into homebrewing and beer in general and keep quality important. Those guys that focus on producing only the “best” whatever, and don’t make profit important, go out of business and disappear. I think it would be great for coffee to go the way of craft beer to show people that Starbucks is no longer the standard of quality.