Hendricks County Flyer, Avon, IN

Community News Network

March 25, 2014

Coffee's third wave? The Apple to Starbucks' Microsoft

NEW YORK — Do you remember when Starbucks was cool? It opened in Seattle in the 1970s as a local specialty roaster, a trendy alternative to the prevailing generic swill. Then former employee Howard Schultz bought it in 1987, and with help from investors, embarked on an ambitious national expansion. Starbucks conquered the country, then the world, and turned coffee in America from a commodity into an obsession.

But the price of conquest is cachet. What was once novel — the warm décor, the gentle music, the faux-Italian lingo — has become banal. Today's coffee snobs would rather snort Sanka than set foot inside a Starbucks.

Their search for a better cup has given rise to a new crop of roasters whose reverence for coffee borders on religious. Stumptown of Portland, Ore.; Intelligentsia of Chicago; and Counter Culture of Durham, N.C., don't just sell "dark roast" and "light roast." They sell coffees like Stumptown's Indonesia Sulawesi Toarco Toraja, which is grown by smallholder farmers whose faces you can see on the Stumptown website. The beans come with descriptors like "fair-trade," "single-origin" and "shade-grown," and sport "flavor profiles" that would make Robert Parker blush. They're roasted and brewed with obsessive attention to details like the extraction rate and brewing ratio, which are separately optimized to bring out the best in each bean.

The question investors are asking now is: Can coffee's "third wave" produce a Starbucks of its own? A group of big-name Bay Area techies — including Kevin Systrom of Instagram, Twitter co-founder Ev Williams, Flickr co-founder Caterina Fake, and venture capital firms like Google Ventures and True Ventures — believes it can. Over the past two years, they've been pouring tens of millions into a San Francisco favorite that just might be the Apple to Starbucks' Microsoft.

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