Only months after Procter & Gamble bought Folgers, Coca-Cola jumped into the coffee fray, announcing a merger with Duncan Foods in February 1964. Coke already owned Tenco, the New Jersey instant-coffee cooperative, which it got as a bonus when it bought Minute Maid orange juice in 1960. Now Coke suddenly was the fifth largest roaster in the United States, with brands such as Admiration, Butter-Nut, Fleet-wood, Maryland Club, Huggins Young, and Blue Ridge, along with a healthy private label and institutional business. Just why the soft-drink titan would want to sell coffee remained a puzzle, since colas offered a much higher profit margin. Many suspected that Coke was more interested in acquiring aggressive managers such as Charles Duncan Jr. and Don Keough, who had come onboard with Butter-Nut. Both men would rise to the top at Coke.
The Maxwell Housewife
With the acquisition of Duncan Foods, Coca-Cola commanded a mere 5 percent of the regular coffee market and 1 percent of the instant. General Foods remained the coffee behemoth, with a 22 percent share of regular coffee and 51 percent of instant. It owned Maxwell House, Sanka, and Yuban, and it practiced the most sophisticated, high-powered coffee marketing, appealing to slightly different segments of the market with each brand.
In the early 1960s General Foods bought French, German, Swedish, Spanish, and Mexican roasters. Following liberalization of Japanese coffee imports, the company formed a joint venture with a local brewery and mineral water company in 1961 to produce instant coffee for the Japanese market. To solidify its new international image, General Foods paid for Maxwell House to become the official coffee at the 1964 New York World’s Fair, where it reminded visitors that it was good to the last drop on soaring sixty-foot-high archways.
In 1960 viewers first saw the now-classic Maxwell House percolator ad, created by famed adman David Ogilvy and destined to run off and on for years as it entered the subconscious of a generation. As coffee began to spurt sporadically into the glass knob at the top of a percolator, a syncopated beat accompanied it, then as the percolator settled into full boil the tune broke into a sprightly melody to signify the cheerful warmth of morning coffee preparation. It was a brilliant, evocative commercial, even though it celebrated a dreadful way to brew coffee.
In the first snob appeal to instant users, General Foods introduced instant Yuban the same year, with door-to-door sampling, advertising, and extensive sales promotion. Because it used all-arabica beans, this soluble product indeed was superior to other instants, although mediocre compared to regular coffee. Along with other coffee roasters General Foods switched to nonkey cans with plastic resealable lids. It coordinated a television campaign on The Andy Griffith Show with four-cup samples of Sanka bound into Family Circle and TV Guide magazines.
In 1964 the company introduced Maxim, the first freeze-dried coffee, a technological advance over spray-dried solubles that offered better flavor. “You are looking at something you’ve never seen before—the power to turn every cup in your house into a percolator,” Maxim ads promised.
In 1965 the company launched “the most powerful advertising ad promotion program in ground coffee history” for Maxwell House, featuring its first color-TV spots. Simultaneous print ads offered a 7-cents-off coupon and a free record, “12,000 Girl Scouts Sing America’s National Favorites.” The television minidramas, aimed at young married couples, urged women to “Be a Maxwell Housewife.” A typical ad showed a pert young woman surrounded by packing boxes in a new apartment. “Wife,” says the condescending husband in a voice-over, “pay attention, because I’m going to teach you to make coffee.” The ad never shows the husband, only his hands, as he makes coffee. He orders her only to use Maxwell House coffee. “Smell it. Now taste it. See? Always good to the last drop. So—no experimenting with my coffee. Be a good little Maxwell Housewife and I think I’ll keep you around.” He pats her on the head and musses her hair. Intended to tap the insecurities of young wives, this spot also undoubtedly offended budding feminists.
The Decline of Hills Brothers
In the brave new world of coffee conglomerates, Hills Brothers stubbornly held out as a traditional family firm. A 1958 opinion survey conducted for the firm showed that Hills Brothers suffered from an “old-fashioned” image, while Folgers was considered “modern and up-to-date.” Worse, the survey found that “the belief that its quality has deteriorated is given as a reason for deserting Hills Brothers.” The charge was true. Under immense competitive pressure, Hills Brothers compromised the quality of the blend.
In 1960 consumer interviews revealed that the Hills Brothers Arab was perceived as a tired, old-fashioned patriarch. Marketing consultants concluded that “the figure is seen as hopelessly out-of-date.” The report infuriated sixty-three-year-old Leslie Hills, R.W.’s son. “They throw the Arab off the label as though it were an old shoe.” He refused to budge.
Although the Arab remained on the cans, the firm made valiant efforts to maintain market share, including the now-standard coupons and special deals. It offered free coffee urns to churches and clubs that sent in a sufficient number of coffee labels. Hills Brothers cosponsored the 1960 Squaw Valley Winter Olympics, but with a total annual ad budget of $5 million, their TV spots appeared only in San Francisco, Los Angeles, Portland, and Chicago. At the same time, they sponsored local ads on Shirley Temple’s Storybook, Bat Masterson, and Walt Disney.
A new ad campaign urged consumers to “Head for the Hills!” asserting that the coffee was “just slightly richer, now—about 10 percent richer than other leading coffees.” It also introduced the absurd slogan, “Flavor so unbeatable, it’s reheatable!” Television spots showed an auto-body shop worker reheating his coffee over a blowtorch.
In 1964 Gray Hills, A.H.’s son, died at age seventy. The next year an internal Brand Image Study stated, “Throughout the Western Zone, Hills Bros. was seen as a poor quality coffee or a brand that was declining in popularity.” Folgers, with Procter & Gamble’s marketing clout behind it, was seen as “the good quality coffee.” Chicago, where Hills Brothers long had dominated, and the East, where it was newly introduced, provided the only bright spots, with a relatively favorable image.
The Creation of Juan Valdez
In 1960 the National Federation of Coffee Growers of Colombia invented Juan Valdez, a friendly, mustachioed coffee grower who, with his mule, trundled his handpicked beans down from the Colombian mountains. Played by actor José Duval, dressed in traditional peasant garb and wearing a sombrero, the proud-yet-humble Juan Valdez captured the American imagination. For once advertising hype matched reality; most Colombian coffee indeed was produced on small mountainside fincas by some 200,000 families headed by men such as Juan Valdez. Although railroads rushed coffee to freighters on the coast, the beans often did take the initial trip down the mountain on muleback. The Colombian beans really did make a fine cup of coffee, superior to most U.S. blends.
The initial ad campaign broke in January 1960 in ten major U.S. markets, using full-page newspaper spreads. “We don’t know who’s more stubborn—Juan Valdez or his mule,” read the caption underneath a picture of the coffee grower, arms folded, in front of his pack animal. “Juan has a finca (coffee grove) 5,000 feet up in the Colombian Andes. The soil there is rich. The air is moist. Two reasons for the extraordinary coffee of Colombia. The third is stubbornness of growers like Juan.” The copy went on to explain the importance of shade trees and hand harvesting. As a trade journal editor observed, the ads made consumers aware of the “costly care and effort poured into a good cup of coffee.”
The Juan Valdez campaign carved out a quality image for Colombian coffee and blends that contained it. Spending over $1 million the first year, the federation brought Valdez to television viewers, who could actually see him picking the beans and leading his mule down the mountainside. Five months after the campaign began, there was a 300 percent increase in the number of consumers who identified Colombian coffee as the world’s finest. By 1962 the federation had taken the campaign to Canada and Europe. The camp
aign was so successful that many roasters not only bragged that their blends contained Colombian beans but also began marketing 100 percent Colombian cans. By creating a value-added product, the Colombian beans could command a premium price. In addition, the federation provided free advertising support and the Juan Valdez logo on each can. A 1963 trade ad showed all-Colombian blends from around the world. “They’re bringing in markkaa, francs, kroner, guilders . . . and good old dollars too!” the copy bragged.
By the end of 1963 the television campaign had gone national, and Valdez now had a son. “See, Ramon,” Valdez said, “we always shade our coffee trees from the sun—so the beans will ripen slowly. And we pick the coffee beans one by one.” In 1964 General Foods switched its high-end Yuban brand to 100 percent Colombian coffee, proving that the campaign had triumphed even in Maxwell House country. Five years after the creation of the mythical Colombian coffee grower, over forty U.S. brands and over twenty European roasters featured all-Colombian brands.
In a Vortex
Aside from the Juan Valdez phenomenon, however, coffee had entered the vortex of a downward spiral. To stay in business you had to cut prices. To cut prices you had to narrow profit margins. To maintain profitability you had to cut quality.
In 1963 one green coffee broker analyzed the contents of “one of the finest blends,” probably Folgers. It contained 20 percent Brazilian beans, 40 percent Colombian, 30 percent Central American—and 10 percent African robusta. Only a decade earlier, no self-respecting blend would have contained any robusta beans. In such a mass-market, bottom-line, loss-leader, robusta-blended world, was there any hope for decent coffee in the United States?
Surprisingly enough, the answer was yes. But America’s coffee savior would not be a General Foods or Procter & Gamble man, but a disgruntled Dutchman running away from his father.
PART FOUR
ROMANCING THE BEAN
The late twentieth century witnessed a coffee revival. Much of Frasier, a popular television show, took place in the mythical Café Nervosa, where the neurotic brother psychiatrists sipped their lattes and cappuccinos.
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A Scattered Band of Fanatics
The person who roasts coffee should continue his development not only with skill and judgment but with a measure of love and devotion. . . . The coffee roaster turns alchemist when he transforms an unappetizing seed into the makings of a delicious, invigorating drink. His magic is genuine; he must interpret the beans’ secrets and reveal them to our senses.
—Joel, David, and Karl Schapira, 1975
Henry Peet set up a business roasting coffee in the Dutch village of Alkmaar in the early twentieth century. Peet considered the coffee business a trade, not a calling. He hoped for better things for his middle child, Alfred, but the boy disappointed him. Suffering from an undiagnosed learning disability, young Alfred did not do well in school—but he loved the smell and taste of his father’s coffee.
After apprenticing with a large Amsterdam importer, eighteen-year-old Alfred Peet went to work for his father in 1938. During the early years of the war, Alfred helped his father eke out a living with a faux coffee made from chicory, roasted peas, and rye, since the Germans confiscated their coffee beans. Alfred then was forced into a German labor camp, and after the war he returned to the family business. In 1948, eager to escape his domineering father, Alfred Peet went to Java and Sumatra, where he learned to love full-bodied arabica beans. In 1950 Peet left for New Zealand, then eventually wound up in San Francisco in 1955.
He worked at E. A. Johnson & Company, a coffee importer for big roasters such as Hills Brothers and Folger’s. Peet was appalled by what he had to sell. “Folgers bought lots of Brazils, Central American standards, and robustas. I couldn’t understand why in the richest country in the world they were drinking such poor quality coffee.” The public didn’t seem to care. “People drank ten cups of that stuff a day. You knew it had to be weak. If you drank ten cups of strong coffee, you’d be floating against the ceiling.”
In 1965 Peet was laid off. He decided to roast his own coffee—good coffee—and to sell it in his own store, using money he had inherited when his father died.98 With a used twenty-five-pound roaster and ten bags of Colombian beans, he opened Peet’s Coffee & Tea on April 1, 1966, on the corner of Vine and Walnut streets in Berkeley. Intent on selling whole-bean coffee for home consumption, he offered a small coffee bar to introduce his customers to good coffee. “If you are used to drinking Hills Brothers coffee and then try Peet’s, roasted darker and brewed twice as strong, you wouldn’t say it was terrific,” he admitted. “It was written all over their faces. ‘My God, is he trying to poison me?’” Expatriate Europeans, on the other hand, thought they had found nirvana, a taste of home.
Because Peet sold his coffee with passionate authority, his female customers began to take it home and bring their husbands back the next weekend. Peet hired two young women and taught them to cup (smell, taste, and evaluate) coffees. “It takes a long time to understand the language the bean uses to talk to you,” he told them. It would take years, he said, before they could hear that secret language. Still, they could at least convey something of this knowledge to customers. Swept up in the excitement of their newfound expertise, they sniffed, sipped, swooned, and sold.
Within a year and a half, lines stretched around the corner. Peet’s was hip. Peet’s was groovy. Peet’s was the place for hippies to hang out. Alfred Peet despised them. “I wanted an orderly business, and some of those guys were smelly.”
Only the owner worried about the odor of his unwashed customers. Everyone else inhaled deeply, high on the smell of the wickedly dark fresh-roasted coffee. Burlap sacks full of green beans lined the back wall. In the middle of a sentence, Peet would announce, “I have a roast!” and rush over to let the rich brown beans tumble out. At this dramatic moment, all conversation stopped. For Peet and his customers, coffee was a religion. Peet could be a difficult guru, however. He would yell at customers who told him they planned to brew in a percolator. “Why spend all this money for good coffee and then boil the hell out of it?”
Zabar’s Beans
In New York City Saul Zabar discovered the wonders of fresh-roasted beans. Zabar’s father, Louis, had immigrated from Russia in 1925 and started a small smoked fish department in a local store. After Louis Zabar died in 1950, Saul gradually expanded the store at the corner of Broadway and Eightieth Street to serve the upscale Upper West Side community, with an emphasis on fresh produce. Around 1966 he decided to supply whole-bean coffee. He found the White Coffee Corporation in Long Island City, which supplied the institutional trade—primarily restaurants and hotels—with a high-quality all-arabica blend. Every day for a year Saul Zabar showed up for two hours of roasting and cupping sessions. Gradually, the pupil turned into the expert. Zabar got White to order Kenya AA, Tanzanian peaberry, Jamaican Blue Mountain, Hawaiian Kona, Guatemalan Antigua.
Zabar prided himself on producing a much lighter roast than Alfred Peet. “I think beans should be roasted just enough to bring out their unique flavor elements of body and acidity.” Apparently, his customers agreed. Zabar’s fame spread beyond New York City, up and down the East Coast, where his mail-order business flourished.99
Mentors, Fathers, and Sons
Throughout the country a scattered, disparate band rediscovered or maintained the tradition of fresh-roasted, quality coffees. Many had roots in the old-style coffee business. Trained by Leon Cheek at General Foods, Peter Condaxis quit in disgust at the desecration of the Maxwell House blend. In 1959 he opened a small retail shop in Jacksonville, Florida, where customers could buy fresh whole-bean coffees from Costa Rica, Guatemala, and Colombia.
Donald Schoenholt grew up with the smells of Mocha and Java. His father, David, ran the New York-based Gillies Coffee Company, founded in 1840. In 1964 David Schoenholt had a massive heart attack, and Don, just shy of nineteen years old, took over the business. Throughout the rest of the 1960s, the young Schoenholt
struggled to maintain quality and keep the business going. “I developed this ideal that I was a lone craftsman, turning out fine coffee.”
Schoenholt’s friend Joel Schapira also carried on a family coffee tradition begun by his grandfather, Morris Schapira, at the Flavor Cup on Tenth Street in Greenwich Village in 1903. At the same location, Joel worked with his brother, Karl, and father, David, inviting favored customers to join them at the back room cupping table.
As one regional roaster put it, “We are the fungus that grows in the cracks between the big fellows.” In Long Beach, California, young Ted Lingle, fresh from the war in Vietnam, joined Lingle Brothers, started by his grandfather and great-uncles in 1920. Lingle grew up listening to his father worry about the state of the business. “The whole trade was lamenting the trend away from quality, but no one seemed to know what to do about it.”
Tourist Coffee and Other Problems
Passed in 1962, the International Coffee Agreement was not fully implemented until 1965 and was due to be renegotiated in 1968. To encourage increased consumption in countries such as the Soviet Union and Japan (“new markets” or Annex B nations), the quota system did not apply to coffee sold there, nor did it restrict sales to nonmember countries. As a result, a two-tier pricing system developed in which beans were sold for less money to Annex B or nonmember countries. Unscrupulous dealers then turned around and resold the cheaper beans in West Germany, the United States, or other major consuming countries. In Germany trade experts estimated that “tourist coffee”—named for its circuitous travels— accounted for 20 percent of the country’s imports in 1966. The same year, one expert estimated that $10 million worth of coffee was smuggled out of Colombia.
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