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Blue Bottle Is Trying to Be the Next Peet's

Scott Lucas | January 31, 2014 | Story Ingredient

Blue Bottle Coffee, the beloved—if controversially sour—local coffee chain, announced today that it has received a $25.75 million dollar round of funding from Instagram co-founder Kevin Systrom, Twitter's Evan Williams, and a group of mutual funds and private investors. The company's founder, James Freeman, says that it plans to use the money to go big. Blue Bottle has major expansion in the works, including new cafes in Oakland, Palo Alto, Los Angeles, Manhattan, and Brooklyn.

It's not just cafe expansion that the company is eyeing, either. Freeman also wants to produce sustainable packaging so that its coffee can be sold in bags to take home, as well as a bottled iced coffee drink.

So is Blue Bottle the next Peet's? That is to say, the onetime indie darling that got big fast and now relies on fading memories of past glories. It's the age-old artisanal dilemma: Whether to be big or to be good?

On its blog, Blue Bottle said that although the funding round would allow the company to grow significantly, that it would "remain committed to [its] central principals as a company [...] deliciousness, hospitality, and sustainability." But it may not be a matter of intentions that govern Blue Bottle's changes—but logistics.

In a 2011 story for the East Bay Express, current San Francisco staffer Ellen Cushing outlined how Peet's had become "a far cry from what it had once been." She quoted Miles Small, editor of the trade publication Coffee Talk, saying "I think the bigger they get, the more distance they put between them and their founding philosophy." According to Cushing, as Peet's expanded, it lost its ability to do quality control. After all, "The original Peet's model—which placed a premium on small batches, extraordinary attention to detail, and extreme freshness—is very difficult to replicate on a large scale." If this problem sounds familiar, it's because it's the very same one that Blue Bottle now faces.

So what does the future hold for a bigger, if perhaps not better, Blue Bottle? How will it be able to scale up with a business model that prizes the freshness and limited supply of its coffee beans? Also, what about those bottles of iced coffee? It's not hard to imagine them being sold alongside Starbucks' offerings in grocery stores as the American Spirits to the Frappucino's Marlboro.

Cheer up, though. In a few years, you can impress people at parties by telling them how you were totally into Blue Bottle before it got all mainstream.

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