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Coffee City

Melissa Allison follows the world's biggest coffee-shop chain and other Seattle caffeine purveyors.

December 10, 2010 at 5:05 PM

Last blog post from Coffee City: Author of coffee history book to read at Starbucks Olive Way

Posted by Melissa Allison

Mark Pendergrast, who recently updated his seminal book on coffee history, "Uncommon Grounds: The History of Coffee and How It Transformed Our World," will speak at Starbucks' newly remodeled 1600 Olive Way store on Tuesday, Dec.14, at 7 p.m.

And that's the last bit of news from Coffee City. Reporting for the blog has taught me more about coffee and Seattle's coffee community than I ever would have learned without it, but it's time to refocus my efforts on writing for the newspaper. Thank you to all of Coffee City's sources, readers and commenters for making the blog fun and informative.

There are a host of other sources for coffee information, among them Sprudge.com, StarbucksGossip.com, StarbucksMelody.com, CoffeeGeek.com, Oliver Strand at The New York Times, longtime West Coast coffee purveyor Jerry Baldwin's posts at The Atlantic, longtime East Coast coffee purveyor George Howell's blog, London barista and coffee purveyor James Hoffmann's blog, INeedCoffee.com and a bunch more on the blogroll at WhyNotCoffee.com, a site run by a few Seattle baristas who post irregularly.

Never forget the wise words (according to the interwebs) of Amazon.com founder Jeff Bezos: "In Seattle you haven't had enough coffee until you can thread a sewing machine while it's running."

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December 9, 2010 at 5:37 PM

Carly Simon case against Starbucks dismissed, again

Posted by Melissa Allison

Carly Simon's lawsuit against Starbucks was rejected by a federal judge for the second time last Friday, according to the Hollywood Reporter. Simon sued Starbucks after the chain announced it would leave the music business shortly before the release of her 2008 album, "This Kind of Love," which fared poorly.

Simon lost the case earlier this year, but filed an amended complaint with details about conversations with Starbucks executives. The judge dismissed the case, saying Simon had waived her right to hold Starbucks liable for alleged shortcomings of its distributor, Hear Music, the Reporter said.

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December 8, 2010 at 4:53 PM

Howard Schultz's end-of-year letter to employees: Dec. 2 saw record whole-bean sales in Starbucks stores

Posted by Melissa Allison

The whole-bean sales record comes just a week after Starbucks outlined a new strategy to investors, which features more whole-bean sales in grocery stores. Update: Starbucks spokeswoman Stacey Krum wrote to say the whole-bean record was just in Starbucks stores, not grocery stores.

To: All Starbucks partners
Date: December 8, 2010
Re: End of Year Thank You from Howard Schultz

Dear partners,

As 2010 comes to a close, I want to take a moment to wish you and your family a happy holiday season as well as share my thoughts as we end what has been a momentous year for our company.

As many of you know, last week was our biennial Investor Conference in New York. Members of the Leadership Team and I presented, with sincere confidence and optimism, an overview of our business and our vision for the future, which included our Blueprint for Profitable Growth. Our more diversified, multi-channel and multi-brand business model was extremely well received, as reflected in the rise in the stock price and many analyst notes, which further emphasized our global growth opportunities.

Following the conference, John Culver and I flew to Mexico where we celebrated the opening of our 300th store, eight years after we opened our first store in Mexico City. The leadership team and I have traveled around the globe these past few months, and the progress that our International business has made in 2010 as it brought new discipline, ideas and leadership to local markets and delivered record performance, speaks volumes about the efforts of so many partners around the world.

The company is wrapping up the calendar year on a high note. Although still early, the Holiday promotion is going strong. Christmas Blend in both whole bean and Starbucks VIA® are extremely popular with our customers. In fact, day two of our 12 Days of Sharing, December 2, was our single highest day for whole-bean coffee sales in our history--a testament to the delicious blend our Coffee team and roasting plants crafted this year, and the marketing teams that bring the coffees the attention they deserve.

Continue reading this post ...


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December 7, 2010 at 2:56 PM

Lynnwood cafe bought, renamed; dozens more coffee shops still for sale

Posted by Melissa Allison

photo.JPGThe recession has put a lot of Seattle-area coffee shops on the market, and one was bought this fall by former banker Steve Cousins.

The old Sip Coffee at 16108 Ash Way in Lynnwood reopened this week as Starling Coffee, a venture that Cousins, who was laid off by Seattle Savings Bank (now Seattle Bank), financed by converting his IRA into a self-directed 401(k). By putting the business inside the 401(k), he avoids the massive tax penalty of withdrawing retirement money early. Sounds like something a banker would know about, eh?

Cousins also did his due diligence at Sip, spending a month hanging out in the cafe and watching how the business worked.

It took about a month to remodel, and Cousins chose Bellevue roaster Kuma Coffee, whose owner, Mark Barany, is among the first in the country to disclose how much he pays for his green coffee beans.

Starling offers Kuma's Red Bear Espresso Blend and a single-source espresso that will rotate each month. This month it's from Ethiopia.

Consultant Sarah Dooley trained Starling's baristas, including Courtney Keane, who's in the photo above taken by Barany.

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December 6, 2010 at 1:04 PM

Kraft seeks preliminary injunction against Starbucks

Posted by Melissa Allison

In the continuing saga of Starbucks trying to end a 12-year relationship in which Kraft Foods has distributed its coffee to grocery stores, Kraft is seeking a preliminary injunction in the U.S. District Court for the Southern District of New York to prevent Starbucks from behaving as though their agreement has been terminated -- specifically, meeting with Kraft's grocery store customers to discuss a transition away from Kraft.

"Starbucks is proceeding with flagrant indifference to the terms of the contract and customary business practices," Marc Firestone, Kraft's general counsel, said in a press release.

Starbucks CEO Howard Schultz told investors in early November that the company was ending its distribution relationship with Kraft, which says the business has grown revenues from $50 million in 1998 to $500 million now.

Kraft says Starbucks must buy it out, which analysts say would cost $1 billion or more.

It says Starbucks made an offer in August to buy out the agreement, but Kraft rejected it as inadequate. In October, Starbucks sent Kraft a letter alleging breach of contract, which Kraft disputed in a letter on Nov. 4, the same day Schultz went public with news of the break-up.

Since then, there have been public statements about who did what wrong -- Starbucks alleging that Kraft hurt its brand, and Kraft alleging that the contract goes on indefinitely unless both parties agree to a buy-out.

"Frankly, after a successful 12-year partnership, it's difficult to understand Starbucks overt hostility and sudden change of view toward Kraft's performance," Firestone said. "Their latest allegation is that Kraft is not assisting in the 'transition plan' that they launched on their own. Of course, we would cooperate in a transition, if there were a valid termination. But that's the point; there hasn't been. For them to complain about this makes no sense."

Starbucks called Kraft's move for an injunction a delay tactic that will hurt customers. It has terminated its agreement with the company and will take responsibility for sales and distribution of its packaged coffee on March 1, the Seattle chain said.

"Kraft's self-serving and blatantly disruptive actions risk creating unnecessary confusion for our shared customers, and in turn their consumers," Starbucks said in its press release. It said it looks forward to presenting its case in arbitration, a separate proceeding that is not affected by today's court filing.

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December 3, 2010 at 2:39 PM

Weekend Wrap: Starbucks on the prowl, Cherry Street Coffee buys Seattle Bagel Bakery, Seattle Coffee Society plans debut meeting

Posted by Melissa Allison

Now that Starbucks has said it wants to grow through acquisitions, everyone is guessing who it might snap up. Starbucks says only that its expansion will be international and in sales to grocery stores, which makes speculation about the chain buying Peet's Coffee somewhat confusing.

Other ideas:

  • Dean Foods, per an interview I did with Smead Value Fund manager William Smead. It's cheap right now, and it sells milk, which Starbucks buys by the truckload.

  • Green Mountain Coffee Roasters, whose single-serve Keurig brewers have far outshone Kraft's single-serve Tassimo brewers, to which Starbucks was tied before it decided to fire Kraft as its coffee bean distributor. Morningstar analyst RJ Hottovy wrote, "Although a potential merger is by no means a certainty, management admitted that it's been intrigued by the growth potential of this category and has seen improvement in the quality of Green Mountain's coffee assortment."

  • A host of small food companies and distributors we've never heard of.

  • Who am I missing?

In other coffee news:

  • In the realm of real rather than speculative acquisitions, Cherry Street Coffee House bought Seattle Bagel Bakery, where it had been a customer for nearly 18 years. "When we caught wind that this 24-year-old bagel bakery had fallen on tough times and were leaning towards closing their doors, we had to do something about it. For the past 6 months I've been rebuilding the bakery from the ground up and as of the Oct. 1st, I own it," e-mailed Cherry Street's AJ Ghambari. Check out the video celebrating bagels by Mitch Mattraw at Cabfare Productions.

    Seattle Bagel Bakery from cabfare productions on Vimeo.


  • A new group called the Seattle Coffee Society will hold its first meeting at 6:30 p.m. on Thursday, Dec. 9, at Seattle Coffee Works on Pike Street across from Pike Place Market. "This is a club for coffee professionals and the most passionate amateurs," according to organizer Daniel Humphries. "We will brew coffee, look at some video from origin, and have a discussion on how different coffee origins distinguish themselves in the specialty coffee market."

  • Ezra Fieser's article in last Sunday's Seattle Times looked at how and why Starbucks ships green coffee beans from Central America to the U.S. for roasting, then back again. The company told Fieser, "The challenge we face is that many coffee-producing countries don't allow the importation of green coffee to protect their local industry. Given that we blend coffee from 25 countries, it would be difficult to offer our wide range of products with such restrictions." However, neither Guatemala nor El Salvador -- the countries he was writing about -- restricts green coffee imports, customs representatives in those countries said.

  • A judge in Illinois threw out a lawsuit that alleged Starbucks was to blame for a customer's tea burns, The Consumerist reported.

  • cascade.jpgStarbucks completed a pilot test in which it and International Paper converted used Starbucks cups into new coffee cups. That's one more hurdle cleared in the obstacle course toward a goal of having all the communities where it owns stores to be able to recycle coffee cups by 2015. The biggest challenge is convincing the recycling industry that its cups are worth recycling. (Photo of one day's recycling at Cascade Recycling in Woodinville by Seattle Times photographer Erika Schultz.)

  • Finally, I'm back from vacation and assignment, and I miss the coffee and fresh basil lemonade -- like fresh from the cafe's back porch -- at Revolutionary Grounds Books & Coffee on North Fourth Avenue in Tucson. Its beans are roasted by Gadsen Coffee in far-flung Arivaca, which gets its coffee from organic, shade-grown farms in Chiapas, Mexico. "Old Bisbee Roasters are also amazing," said Joy Soler (pictured below), who opened the leftist cafe and bookstore two years ago with her husband, Paul Gattone. Their ethos appears at Marxism study groups and on the menu with drinks like "Hot Sasha," a thick hot chocolate with cayenne pepper.

    tucson.jpeg


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December 2, 2010 at 11:44 AM

Nathan Myhrvold's chapter on coffee blows barista's mind

Posted by Melissa Allison

When it comes to coffee expertise, it takes a lot to impress barista Alex Negranza. He studies and tweets about the java bean and its accompanying libations day and night, including taking a part-time bartending job at Liberty on Capitol Hill that he hopes will inform his understanding of coffee.

But multimillionaire Nathan Myhrvold impressed -- maybe even slightly intimidated -- Negranza with his espresso knowledge at a recent meeting at Vovito Caffe & Gelato in Bellevue. Not knowing what a coffee whiz Myhrvold is -- and who would know, given the time he spends on physics, inventions, gourmet cooking, dinosaurs? -- Negranza started with coffee basics. Myhrvold and his team quickly clarified: They wanted to know about pressure variability on Vovito's sexy Slayer espresso machines, which they photographed for a six-volume $625 food science-slash-cookbook called "Modernist Cuisine" that's been repeatedly delayed and is now expected in March.

Then they sent Negranza a copy of their coffee chapter, which he says is one of the best treatises on coffee he's ever read. "I could use it as a training manual," he said. And this is the guy who's hard to impress.

Apologies for not getting a photo of Negranza, but here's Vovito, at the Bravern, which happens to be near Myhrvold's 20,000-square-foot laboratory in Bellevue:

vovito2.jpg

Update: And here's the sexy Slayer with its creators at their Georgetown factory:

2009295474-thumb-345x260-10745.jpgThumbnail image for 2009295486.jpg

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December 1, 2010 at 9:10 AM

Starbucks to triple stores in China, explore acquisitions -- possibly Green Mountain Coffee Roasters?

Posted by Melissa Allison

Starbucks has said for a long time that it expects China to be its biggest international market, and this morning it gave specifics: The coffee shop chain plans to more than triple its stores in mainland China from 406 stores now to more then 1,500 by 2015, The Wall Street Journal reported.

CEO Howard Schultz also said the company will look at purchases "large and small" to grow its grocery business, Bloomberg reported, which is tangling with Kraft Foods over distribution of Starbucks' coffee beans.

There are few coffee-themed products Starbucks does not offer in grocery stores -- coffee beans, coffee ice cream, bottled Frappuccino, Tazo tea, and Via instant coffee.

One area where it has lagged is single-serve disks for one-cup coffee machines. It has distributed disks for Kraft's little-known Tassimo one-cup coffee brewers. The biggest player by far in that category is Green Mountain Coffee Roasters of Vermont, which dominates the market with its Keurig one-cup coffee brewers and their single-serve "K-cups."

If Starbucks is successful in extricating itself from Kraft -- even if it costs more than $1 billion, as some analysts predict -- it could partner with -- or buy -- Green Mountain. I must be the only person who thinks so, though, because Green Mountain's stock is down 23 cents to $36.85. Its price remains a robust 71 times earnings, compared to 25 times earnings for Starbucks.

The news comes from Starbucks' big show-and-tell conference with analysts, which happens every two years and moved in recent years from Seattle to New York.

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