Blue Bottle Coffee, Nestlé and why brand success isn't a bad thing
When Blue Bottle Coffee Company was founded in an Oakland, California, potting shed by classically-trained, professional clarinetist, James Freeman, the year was 2002. Hipsters were still in middle school, and the high-end of coffee was Starbucks. The idea of a small batch roast, of the crafting of a latte, of coffee as more than fuel wasn’t even new. It just wasn’t a thing at all. Today, every city, every small town, every random spot on the map seems to have a local coffee company. Ethically-sourced, small batch, locally roasted. But, in 2002? Not so much.
Back in 2002...
Blue Bottle Coffee started and the idea of a small batch roast, of the careful crafting of a latte, of coffee as more than fuel wasn’t even new. It just wasn’t a thing at all.
I remember going to the Blue Bottle stall at the San Francisco Ferry Building during the Saturday Farmer’s Market, recognizing the people who worked there, having them say hi to my then infant son. It was intimate, personal. A little bit of a secret that others, even San Franciscans, didn’t know was there. When we eventually moved back east, we had bags of coffee shipped twice a month, allowing us to savor the coffee we’d become accustomed to.
Blue Bottle Coffee's Linden Street kiosk
That was a decade ago and Blue Bottle was, itself, still a bit of a newborn. Then came the 2nd tech boom. The denizens of Google, Facebook, Ebay and the like all needed their caffeine, and Starbucks just wasn’t going to cut it. It needed to be special, it needed to feel cutting edge, it needed to feel designed. Blue Bottle Coffee fit the bill, and it didn’t hurt that the coffee was really good. Lots of people liked it and Blue Bottle was able to raise over $120 million from the VC community to fuel its grown. Today, Blue Bottle has over 50 shops around California, New York, Washington and even as far away as Tokyo. It’s not the 24,000 that Starbucks has, but it’s a far cry from the potting shed where it all began.
Today, Blue Bottle has over 50 shops around California, New York, Washington and even as far away as Tokyo.
Blue Bottle Coffee bags...as they once were.
And Blue Bottle Coffee's bags today
So, when the news came out earlier this month that a majority stake in Blue Bottle was being purchased by Nestlé, the Swiss food giant, it was a very big deal. Estimates are pegged at upwards of $500 million for a 68% stake in the coffee company. Naturally, reactions were mixed. Some chided Blue Bottle founder James Freeman for selling out. Others tweeted that this is the end for Blue Bottle. Some even stated flat out that they would never again drink a Blue Bottle Latte. Me? I just chalked it up to a successful brand.
Few brands remain the same over the course of their lifespans. In fact, the most successful ones evolve rather dramatically, pushing in new directions, evolving their meaning, resetting their role in people’s lives.
Few brands remain the same over the course of their lifespans. In fact, the most successful ones evolve rather dramatically, pushing in new directions, evolving their meaning, resetting their role in people’s lives. If they don’t, they die. Don’t believe me? Look at Sears. The world of retail changed, Sears did not, now it is as good as gone. We used to get our music at Tower Records. Today, we pay for subscriptions to Spotify, Pandora and Apple Music. But, companies like GE, Microsoft and even American Express have evolved in big ways over their lifespans, shifting the scope of their offerings, finding new ways to be relevant to ever-evolving customers.
What tends to get in the way are the people. When brands change, they inevitably leave some folks behind.
What tends to get in the way are the people. When brands change, they inevitably leave some folks behind. While focusing on a different, often broader, audience can be good for the business – more money, greater stability – it can also mean that the very things that made the brand appealing to its historic fan go away. The consumers who bought into the brand as it was must decide if they’re going to buy into it as it will be. For something like coffee – a commodity where so much of its appeal is subjective – brand matters a lot.
It’s not enough to rest on the laurels of past relevance and success. Sometimes a brand’s most diehard fans aren’t the fans it needs.
With employees it can be even more challenging. When they join, many become hyper-committed to the brand as it was when they signed on, and, when faced with changes, some may leave. If this makes leaders less inclined to entertain change, it can become a limiting factor in a brand's growth. It’s not enough to rest on the laurels of past relevance and success. Sometimes a brand’s most diehard fans aren’t the fans it needs. Sometimes there are people who will pay more, buy more often and help you expand operations beyond them. Sometimes the business changes and the brand needs to catch up. Sometimes the world changes. Whatever the reason, being open to the idea of change is the first step to making sure that you don’t find yourself inadvertently clinging to something that once was, even if it means that you lose some of the people who got you to this point.
So, to James Freeman, I raise a cup of joe and toast you. Sure, I stopped buying your beans when you traded hand-stamped brown paper bags for professionally designed modern ones, but no hard feelings. After all, there’s still a place in my heart for a well-brewed cup of Giant Steps.
An actual Blue Bottle latte, circa 2014