The Coffee Visionary by Jasper Houtman

Author:Jasper Houtman
Language: eng
Format: epub
Publisher: Roundtree Press
Published: 2016-08-19T16:00:00+00:00

TWO COMPANIES

It was my lucky day,” Starbucks cofounder Jerry Baldwin said, when he heard that he could buy Peet’s. In 1984, thirteen years after the founding of Starbucks, he was offered the opportunity that he had previously missed out on. He was given the news during a lunch with Sal Bonavita and tried to hide his excitement by going to the bathroom.

Back then, Starbucks and Peet’s were comparable companies: They sold coffee beans predominantly, as well as coffee makers and other coffee-related accessories, and they only had a few shops. In Seattle, there were five locations for Starbucks and the Bay Area had four locations for Peet’s.

Another cofounder of Starbucks, Zev Siegl, had left the company already when the negotiations for an acquisition began. Later he’d admit that he felt more at ease in a start-up. Starbucks, in the meantime, had become more of an established company where the pioneering of the three founders had made room for the managing of a larger company with dozens of people.

At the time of the acquisition, Howard Schultz, the future CEO of Starbucks, was working on his dream of an espresso bar. In a new Starbucks shop in Seattle, he was given the opportunity in 1984 to experiment with the serving of espressos and cappuccinos, which he had come to love during a trip to Italy. “We were all enthusiastic about serving coffee in the stores in the future,” Baldwin says. “All of us liked the energy that was generated by people drinking coffee in the store.” He says Schultz and Bowker, “who had become enamored of espresso during a trip in 1963 to Italy,” set out to develop the idea of the espresso bar, and he himself supervised the design and construction of the store. It became the sixth store of Starbucks. Before Starbucks had served coffee, just like Alfred had done, to give people the chance to taste the coffee.

Soon, cappuccinos and lattes became a popular addition to the Starbucks menu. According to Schultz, he was the one who introduced the latte to the United States—a combination of espresso with milk, which he supposedly discovered in Verona, Italy. That statement may have to be taken with a grain of salt. It’s highly likely that the latte was already served in Italian-American restaurants and cafés, and people have pointed out that Café Allegro in Seattle, the business of Dave Olsen, was a precursor to coffee drinks, based on espresso. Nonetheless, at Starbucks, Schultz turned “latte” into a household name for coffee drinkers in the United States.

BORROWING MONEY

When Starbucks and Peet’s had the same owners (they kept their independence as separate stores), Ronald Reagan was president and the American economy grew by leaps and bounds. Alfred would show his admiration for the Republican president, although he did this partially to provoke his liberal friends in Berkeley. Banks and other financial lenders were eager to advance money to companies with acquisition plans in the Reagan era. In hindsight, those loans happened all too easily,

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