by KJ Fallon
Three years later, Peet’s Coffee & Tea was renowned as a popular place for coffee lovers to gather. The area became known as the Gourmet Ghetto where coffee lovers and foodies (although the term didn’t exist at the time) could meet up and take it all in, in the form of rich, deep coffee, exciting new foods, and stimulating conversation. This was a new era for coffee entrepreneurs.
Peet’s coffee devotees were known as “Peetniks.” Today there are close to 250 Peet’s stores in seven states and Washington, DC, and Peet’s is now part of JAB Holdings (more about JAB later).
Starbucks
Founded on the idea that people wanted great coffee, Starbucks began as a single store in the historic district of Pike’s Place in Seattle, Washington, in 1971 and has grown into many different things to many different people. They were at the forefront of getting consumers interested in, and educated about, really good coffee. The seeds for expansion from a single store to a worldwide phenomenon began in 1982 when Howard Schultz came onboard. Later, a trip to espresso bars in the Italian city of Piazza del Duomo—seeing firsthand the serious coffee culture with animated patrons relaxing and conversing—convinced Schultz that the coffeehouse ethos could be done and would do well in the United States.10 (And now Howard Schultz is taking the idea back to Italy with those Starbucks Roasteries.)
Over the years, Starbucks has offered beverages of varying sophistication and uniqueness, and customers have been eager to try not only delicious, gourmet coffees, but also to explore the different variations on the coffee theme that Starbucks offered. So, with the growing popularity and availability of the fine coffees that Starbucks served, an increasing number of coffee drinkers and coffee converts were becoming aware that the coffee that they drank didn’t have to be predictable or dull. Coffee held many possibilities for an adventure in caffeine imbibing.
Now with more than twenty-two thousand stores worldwide and more than thirty blends and premium single-origin coffees, Starbucks is firmly entrenched as a part of the coffee culture.
Revolution #3: The Coffee Bag—Making One Cup of Coffee at a Time
This might be a bit of a stretch, but think about it. It was in the 1980s that coffee drinkers started to wake up to the idea that they could have a cup of fresh-brewed—not a variation of instant—coffee and get on with their day faster. Now, this is more about being able to make a single cup of coffee at home. It would not be of the same quality as the coffee served in gourmet coffeehouse, but it would be fresher tasting than instant coffee. When opening a box of single-serve coffee bags, such as Maxwell House Singles, you would be met with the agreeable scent of fresh-enough coffee.
Folgers and Maxwell House introduced coffee singles, which were like oversized tea bags filled with coffee that, when placed in a cup with hot water, would steep and brew into a cup of coffee. This method followed the principle of the tea bag, and the coffee brewed fairly quickly right in the mug, but something was missing. While you could, in theory, brew your coffee in a cup á la tea bag, some thought there remained a bit of an aftertaste. It was coffee. It was pretty fast. And it was fresh brewed. But it wasn’t . . . great.
Coffee singles are still readily available and are convenient, for sure. There is a variation on this, a paper-filter-placed-over-a-cup method known as Japanese Pour Over Coffee, which is more of a drip method not unlike the cone filter pour-over that can be used with a pot or a single cup.
Cone filters produced by companies like Melitta offered the option of making drip coffee one cup at a time, but this was not always convenient and it did not save much time. If you needed to get going and out of the house, standing around waiting for the beverage to drip through the filter into your mug or cup took too long. If you had the wrong type of coffee grinds, the cone filter paper would either get clogged or the liquid that filtered down into your cup became too weak. And unless you were using a clear mug so you could see what was going on, the coffee could overflow onto the counter.
One thing is clear: once the option for making one cup at a time started to appear, the thirst for a better cup-at-a-time grew. And the need for continuously improving the results naturally followed. Coffee drinkers were starting to really like the idea of having their morning java fast and fresh brewed.
But there was something else stirring, seemingly unrelated to gourmet coffee. You might not think that the economy could be a driving force behind the rise of the popularity of gourmet coffee, but it was. The late 1970s and the beginning of the 1980s saw rising interest rates and inflation, and with that brought a shift in how coffee was traded and the size of inventories ordered.
A paper by the late anthropologist William Roseberry, “The Rise of Yuppie Coffees and the Reimagination of Class in the United States,” very effectively captures how coffee was affected by attitudes, marketing, and consumption, and how, in turn, coffee attitudes, marketing, and consumption over a period of about twenty years affected consumer behavior.
About forty years ago, by Roseberry’s account, selling coffee was all about the price. The cheaper, the better. Procter & Gamble and General Foods were behind most of the popular brands. Most people bought their coffee in cans in a supermarket. They had a brand that they liked and went with that. End of story.11
The turn to more specialized coffee—gourmet coffee—is, in some ways, a return to an even more distant past, when coffee beans were bought in smaller batches and small emporiums prepared the beans to their customers’ satisfaction.
The consumption of coffee was steadily declining. Brazil was, and still is, the world’s largest coffee producer. A very severe frost in July 1975 in Brazil wiped out two-thirds of their coffee crop and caused coffee prices to increase fivefold, and was widely reported in the news.12 Wholesalers and consumers felt the pain, and coffee drinkers launched boycotts to protest the extraordinary price hikes. Thus, coffee purchases dropped precipitously. The 1975 damaging frost was followed in 1981 by another that was not as severe but still, between 15 and 50 percent of Brazil’s coffee crop was damaged.13, 14, 15
Things were not looking so great for coffee at the start of the 1980s. But something else was beginning to percolate around that time. While the consumption of coffee in general declined, a relatively new niche market started to arise from the burnt grounds of the old way people thought about coffee—the specialty coffee market.
The Rise of Specialty Coffee
It would take an advertising executive to see where the coffee industry was going wrong, and looking back, it seems so obvious. Why did no one see this before? Kenneth Roman Jr. was the head of Ogilvy & Mather, one of the top advertising firms in New York City. Ogilvy & Mather happened to have Maxwell House as a client. Roseberry reports that in an interview with World Coffee and Tea, Roman detailed an interesting reason for the problems the coffee industry was having. He also, very helpfully, outlined some solutions.16
Roman had the brilliant observation that for much too long coffee had been marketed purely on price. What was the lowest price that coffee could command? Everyone was missing a major point. Why was coffee being marketed in terms of how much it cost? Like a true advertising professional, Roman said that coffee should be marketed based on its value, image, and quality. Roman understood that selling for price alone, on how low can the price go, was a lose-lose situation. How about, he asked, selling coffee on its taste, its smell, and its appearance, instead?17
Roman also astutely observed that that time period was the cusp of the “Me Generation.” Consumers wanted to know how coffee related to them and how coffee fit with their lifestyle, and so on. The coffee company that could answer those questions satisfactorily was the coffee company that would win the hearts and minds of consumers.18
Roman also took things a step further, as Roseberry explained. In 1981, speaking to the Green Coffee Association, a coffee trade organization, Roman emphasized the need to think of the coffee as a product not for the mass market but for a segmented market. He thought that it made more sense to think of t
he market in terms of generation and class. Roman thought that college students who were not yet coffee drinkers, as well as yuppies, should be the primary focus of specialty coffees. It would be more successful to target the yuppie couple with fine varietal coffees and aim at reaching college students through flavored coffees, which might help wean them off soda.19
Diversification and not standardization was what would work to get coffee out there in the future. That was very different from the perspective the coffee industry had been operating from for quite some time. It was obvious that things had to change. Trying to sell coffee to the multitudes as a product for mass consumption was not working anymore. Society was changing and the marketing of coffee had to change with it.
Roseberry muses that it was odd that coffee was ever marketed in a standardized way. Coffee just by its nature is a perfect fit for segmented marketing since coffee itself is a diverse product.
Coffee is a lot more than just a drink; it’s something happening. Not as in hip, but like an event, a place to be, but not like a location, but like somewhere within yourself. It gives you time, but not actual hours or minutes, but a chance to be, like be yourself, and have a second cup.
—Gertrude Stein
The time was right for the emergence of the specialty coffee sector. Coffee and coffee drinking were not only becoming culturally hip, they were also becoming a very smart and forward-thinking business move. An increasing number of gourmet coffee and specialty food shops popped up around the country. Who wanted to pay for boring, nondescript coffee when you could find a stellar gourmet brew down the block?
By their nature, the appeal of these small shops was that they offered thoughtfully chosen coffees in small batches. Coffee, on the other hand, was imported, stored, and sold in mass quantities. How would this work if the buyers of the specialty shops made their livelihood by purchasing a range of coffees in smaller quantities?
Enter the roaster. As Roseberry observed, the roaster was becoming more important to the smaller specialty coffee shops.
There were already smaller roasters around the country who supplied some restaurants, shops, and other locations. The roaster deals with the importer of the coffee beans, choosing the types of coffee and the quantities that his or her clients—the small specialty shops—would want to buy. Green coffee beans can be stored for quite a long time. It is only once the beans are roasted that the countdown away from freshness begins. The roaster can buy exactly the selection that the smaller shops require for their customers and roast as little as a few pounds at a time.
Since coffee deteriorates quickly after it is roasted, location of the roaster is everything. So more roasters meant more coffee shops in the area of the roasters and vice versa. Seattle and the San Francisco Bay area on the West Coast were some of the early hotbeds of these specialty coffee shops and their roasters. Sometimes a large roaster would set up a specialty roasting option to better serve the clients who wanted coffee in small and specialized batches. Known as regional roasters, they soon became an integral part of the expanding specialty coffee business at the retail level. It was the roasters who developed new roasts, different blends, and held sessions to better educate the retailers about the coffee they were selling. Everyone learned more about specialty coffee and everyone benefited because the result was truly the best cup of coffee possible.20
But there were some snags for the roasters when it came to procuring the coffee. The big importers and warehouse managers were not keen on breaking their huge quantities of coffee beans into smaller-sized bags.
The specialty coffee network of roaster and retailer was still pretty small in the 1980s. The New York City area was not as quick to embrace the tentative moves to a smaller and more specialized coffee market as was the West Coast. But the NYC area specialty coffee market was growing. In the latter part of the 1980s, the demand for specialty coffee that was roasted in small batches was greater than what could be supplied, especially in the New York area.
So the network of roasters and retail establishments that specialized in gourmet coffees had to be very tight, geographically speaking. Since once the beans were roasted they would start to lose their freshness, they had to get to the retail establishment from the roaster quickly.
Then came a little improvement known as valve packaging. You know those little hard round disc-shaped things on bags of ground and whole bean coffee? They are actually one-way degassing valves and were a pretty major breakthrough in the specialty coffee industry. The valves had been invented sometime in the late 1960s and were used in Europe, where coffee bags were widespread in the 1970s. This was a pretty important step, right up there with vacuum-packing, which began in the United States with the Hills Brothers firm packing coffee in cans in the early 1900s. The coffee can was still the choice of the big coffee conglomerates in the United States in the 1980s, but with specialty coffee growing in popularity in the United States, the bag became a preferred option and the little plastic valve ensured that the coffee inside the bag remained fresh for a lot longer.21
Coffee that has been freshly roasted emits lots of gas—CO2. It’s just the way it is. That gas has to go somewhere, and the valve allows the gas to safely escape from the bag. It is a one-way valve because oxygen is not good for the coffee inside of the bag. According to a producer of bags that use these valves, before these valves were invented, there were only two options for roasters—pack the coffee in paper bags that were porous and allowed the gas to escape (but then the coffee would not stay fresh for very long since the paper was permeable); or the coffee could simply degas for a certain amount of time before it was put into (usually) a can.22
The one-way degassing valve allowed roasters who served the smaller specialty coffee shops and gourmet outlets to widen the area to which they dispensed the product and to go even farther afield.23
At the same time that the specialty coffee sector was growing and more people were turning to gourmet coffee as their brew of choice, the number of people drinking coffee overall was declining. Specialty coffee was not just growing, it was booming. But, according to the research in William Roseberry’s article, the large coffee distributors like General Foods, Procter & Gamble, and Nestlé figured that the specialty coffee escalation was just a fad and would not last. (Later we will see how these giants would not let another innovation escape them.)
But those that followed the coffee industry noticed, and, in 1982, the Specialty Coffee Association of America was formed. The membership-based association changed its name in 2017 to Specialty Coffee Association (SCA) after merging with the Specialty Coffee Association of Europe. The SCA represents coffee professionals worldwide, ranging from coffee farmers to roasters to baristas, and offers education, training, and other resources to those in the specialty coffee industry. The SCA works to ensure high standards for specialty coffee throughout the world.24
While the coffee behemoths had been skeptical about the longevity of specialty coffee, eventually they came to realize that it would make good economic sense to join the specialty coffee trend. In 1986, General Foods and A&P both brought out lines of specialty coffees to be sold in—gasp!—supermarkets. General Foods offered the Maxwell House Private Collection.25 The ads for the Private Collection were very low-key and were aimed at the specialty coffee drinker. Television advertisement was not used, which was unusual. One print ad, for instance, featured no obvious signs that the ad was, in fact, for a kind of coffee. The magazine ad featured a man and a woman wearing white sitting in a wicker lounge chair and gazing out over inviting blue waters. The man says, “It’s wonderful to get away from civilization,” while the woman muses, “I wonder if I can use my credit cards.” The only indication that the ad has anything to do with some kind of hot beverage were the coffee mugs the couple were holding. As an article in the Los Angeles Times speculated at the time, was this an ad for a clothing line or an idyllic vacation spot? Looking closer, the reader sees a small picture of a bag of coffee beans.26 Maxwell House
wanted to reach the sophisticated specialty coffee drinker and so nothing loud or obvious would do. This line, as the company advertised, featured “Private coffees for all your private moods.” Maxwell House knew that the specialty coffee market had been growing over the previous four years even though the rest of the coffee market was pretty much flat. The popularity of gourmet foods in general was expanding during that time.
A&P was not going to stand by and miss getting a piece of the specialty coffee market. A&P, like General Foods, recognized that baby boomers wanted specialty coffee and other gourmet foods, and they would pay a premium price for them. Around this time A&P came out with the Royale Gourmet Bean line as a part of their Eight O’Clock Coffee line, which had been around since 1859.27
Both of these food conglomerates knew they needed to get serious about specialty coffee. In the meantime, though, the smaller specialty shops were not just sitting stagnant; they, too, were growing. Starbucks in Seattle was beginning to open more stores and not just in their own area. Starbucks was going national around the same time that the big coffee guys woke up to the huge market potential in specialty coffee. Things were really heating up in the gourmet coffee arena.
Another development that emerged around 1983 was flavored coffees. These consisted of adding flavors such as vanilla, cinnamon, hazelnut, etc., to freshly roasted beans. Some die-hard coffee lovers can’t understand why anyone would want to add flavors to coffee. They feel that the whole point of experiencing a good cup of coffee is to enjoy the flavor of the coffee. But lots of people are in love with flavored coffees.
The idea was to entice people who had previously shunned coffee. You know, those who drank mostly soda or carbonated beverages exclusively. It may be that flavored coffees are succeeding in getting the non-coffee, carbonated beverage drinkers to come over to the coffee side, at least every so often. An alternative to spraying flavors on the fresh-roasted beans was the addition of flavored syrups to coffee drinks. Several bottles of syrups, such as those from Torani, in flavors such as almond, hazelnut, caramel, crème de cacao, and so on, exponentially increased the types of coffee concoctions a small establishment could offer its customers.
