San Francisco residents have an abiding love for Blue Bottle coffee. Since its founding in 2002, it’s become as much a symbol of the city’s third wave coffee movement as Starbucks is of Seattle’s Italian coffee craze.
As Blue Bottle got bigger, it justifiably became ripe for a combination with a bigger company. And on Thursday, that acquirer turned out to be Nestle, the Swiss food giant, which purchased a 68 percent stake.
Although you might think that Blue Bottle was too tiny to merit Nestle’s attention, there actually are Blue Bottle cafes now in San Francisco, Los Angeles. New York, and Tokyo. That cosmopolitan reach may turn out to be a good fit with its far-bigger coffee businesses, Nescafe, and Nespresso.
And the move definitely has the business world thinking: what will be the next hot coffee brand?
The purchase of Blue Bottle opens up opportunities for a wide variety of coffee roasters and brewers across the United States, even smaller than those that already have been snapped up.
Like Blue Bottle, many of the brands that have been acquired began as local companies. That includes Peet’s Coffee, another Bay Area mainstay, and Caribou Coffee, beloved by Minnesotans. Both are now part of the German JAB empire (which recently added Panera Bread).
Likewise, JAB also has a majority stake in Intelligentsia Coffee, which was founded in Chicago, and Stumptown, which is native to Portland, Oregon.
These previously boutique brands have brought their strong followings to their new owners. And, there are a few more that might be interested if the investment bankers come calling.
In New Orleans, one visible brand is French Truck Coffee, a locally roasted coffee known for its vivid yellow buildings with blue trim. It started with a single location, and has since expanded to Baton Rouge and Memphis.
Across the South, Revelator Coffee has made a strong charge, with locations in Atlanta, New Orleans, Birmingham, Chattanooga and Charleston, S.C. It is funded by Roble Partners of Berkeley, and it recently snapped up Atlanta’s Octane Coffee.
Ann Arbor, Mich., has a variety of coffee competition (so much that when Garrison Keillor brought a Prairie Home Companion to the college town, he changed the lyrics of his theme song to “I smell the coffee…”). Local names include Roos Roast, known for fanciful blends like Lobster Butter Love and Rich French Neighbor.
There’s also Mighty Good Coffee, with four cafes across the city. And the local coffee behemoth, Zingerman’s Coffee, part of the community of businesses that include Zingerman’s Deli, is present in its own outlets and Plum Market groceries.
Despite the overwhelming presence of Dunkin Donuts outlets, New Englanders also can sip Blue State Coffee, with cafes in Massachusetts, Rhode Island and Connecticut.
Many of these smaller coffee brands have something in common: customers can find their beans and other products beyond their shops. In New Orleans, for example, groceries like Breaux Mart and Whole Foods sell a bottled version of French Truck’s standout iced coffee, which stores across Ann Arbor stock beans from Zingerman’s and Roos.
The New York Times speculates that one likely takeover target is Philz, another California brand that has plenty of capital (it received a $45 million influx from TPG last year).
So, savor your independent coffee while you can. And don’t be surprised if it’s gulped down by one of the big drinkers.
More Info: www.forbes.com