It’s been a huge year so far for our friends and partners at Blue Bottle Coffee. From securing a new round of investment valued at 25.75 million dollars, to opening new cafes in Oakland and Brooklyn, to being called “The New Apple” by Slate, Blue Bottle is perched at a major moment in their company’s history. That moment now extends to Japan, as Sprudge.com is first to report Blue Bottle’s roastery and cafe expansion to that city’s Kiyosumi neighborhood, slated for late 2014.
It’s an exciting, busy time to be Blue Bottle, but the company’s founder and CEO, James Freeman, somehow made space in his schedule to sit with Sprudge for an extensive interview. We asked Freeman about expansion plans, tech, Japan, his farmers market roots, and what it’s like to play in a bigger sandbox.
Tell us all about your opening in Japan.
“We’re east of the river, in Kiyosumi–near the Kiyosumi Gardens and the MOT Museum of Contemporary Art. It’s not “glamour cool” Tokyo, more peaceful and residential, but still just a 10 minute drive from Ginza. The neighborhood reminds me of our roastery neighborhood in Oakland, a mix of residential and industry.
I like having a coffee bar in a roastery–it makes real estate a little harder, because roasteries arenโt very space efficient, but if you can find a balance then itโs worth not having tons and tons of space.
Over the years, I think many roasters have been approached with the opportunity to do licensed cafe openings in Japan, or franchised locations. For us it never felt right. Nobody loves your coffee more than you do. This is neither a joint venture nor a new license. Itโs a new company, actually–Blue Bottle Japan–thatโs fully owned by Blue Bottle USA. Weโre spending our own money on this (which is a little scary!) but I hope people will respect it as being authentically us.
When will you open? What will the facility be like?
The physicist Niels Bohr is quoted as saying “Prediction is difficult, especially about the future.” That said, we hope to open in 2014! Japan is awesome like that. You can get a building permit in no time at all. Architects are the ones responsible for hiring contractors–they just get stuff done, and things can happen very, very quickly in Tokyo.
The building is new-ish (from the 1980s) and itโs cool because itโs in Tokyo. The thing about Tokyo is thereโs no real zoning, so you wind up with stuff like 650-square-foot lots with three-story houses. The city is this crazy quilt of interesting things. The building itself is an anodyne but spacious 1980s three story warehouse, about 7000 square feet. Weโll be able to do a lot and have a lot of production. Itโs a little factory.
In total, the facility will contain a training room, cupping room, roastery, offices, pastry kitchen, and a retail cafe.
To us, this sounds like phase one for a larger presence in Tokyo. One does not open a roastery simply to supply a roastery cafe…is there more in the works for new spaces in Tokyo?
Weโre in negotiations for two other spots in Tokyo. Itโs early still, but one spot is in Roppongi, and the other one is down near Shibuya. Thereโs a lot of opportunities coming onโฆweโve had good luck with nice press in Japan over the years, and thereโs a lot of interest in Blue Bottle.
Will your approach and menu offerings in Tokyo be similar to what you’re doing here in the States?
Weโre not trying to hit a preconceived notion about what Japanese people like. The idea is for it to be like us, to feel like us, and that people in Japan will respond to that. But yes, there are some subtle differences you can expect. There might be some diminishing of portion sizes, for example, which I find thrillingโฆthereโs a Japanese custom of smaller portions. So weโre talking about slight adjustments. On the coffee side, there might be certain lots of single origin coffees that go direct to Tokyo, and weโll have a smaller sub-set of our blends to open.
Perhaps the biggest difference is that in Japan, we’ll be opening with a Loring SmartRoast coffee roaster, which is different from the style of roaster we use here in the USA. Our team here in the States has done a ton of QC on the Loring–we especially like it for its carbon footprint considerations, but you know, if at any point during this process we thought the machine made less delicious coffee, we could have shut the door. We’re getting very delicious coffee out of it.
The Loring stuff is culturally interesting because you know, some roasters get so bonded to a certain way, but Iโm fortunate that our roasting team is open minded. They want to make great coffee and they want the tools to make it. So we’ll be opening with a Loring in Tokyo and installing one in Oakland, too, so that our roasters at both locations are speaking the same language, exchanging profiles back and forth, just like we do now with our roastery in New York City.
On the food front, my wife Caitlin [Freeman, Blue Bottle’s head pastry chef] and the food team will be working out what from the States we want to carry, and what new products we want to offer in Japan.
Have you put out a call to staff yet? Are folks from Japan going to be back and forth to Oakland, and vice versa?
Thereโs going to be a lot of back and forth between our staff and the United States. Weโre going to send our people there, and weโll have our new employees at Blue Bottle Japan come here. Itโll be a little more expensive–we’re getting ready to fly people out from Japan for job interviews right now–but to do things right is expensive, and it feels great to have money in the bank to do this right.
People on our staff are really psyched to be part of this, to know that theyโll have the opportunity to work in Tokyo. Thereโs a lot of HR implicationsโฆwe want awesome Tokyo baristas to work here for a little bit, and we want baristas whoโve done a great job with our company to have a chance to work in Tokyo. I can tell you, some folks on staff here are already working hard on their Japanese!
Tokyo is such a knockout as a city. I love it so much. A decent two-bedroom apartment in Kiyosumi is only like $1000 a month, so we’ll be able to have our own toothbrushes there and the like. We want it to feel like us, you know?
James, you have a well-documented individual vision for Blue Bottle that kind of courses through the brand experience–mid-century modern flourishes, the choice of buildings like Morse or Mint Plaza for shops… so we’re wondering, how do you maintain that individual vision as you expand? How do you hold on to that?ย
Well I mean first of all, thereโs that word “maintain”–which I think is very interesting–because when we had our first round of investment in 2012, people were kind of apprehensivley using that word “maintain” in terms of our coffee. People would ask us, “how do you maintain coffee quality as you grow? I’m really worried that youโre going to suck.”
What I realized after thinking about it is, there is no maintain. Trying to grasp on and have things stay the same is futile. What is possible is to improve–to make tangible moves to be better. That is possible. Tangible, measurable, and beneficial measures to improve–and if you donโt see that, well, then you suck.
That being said, what we did after our investment in 2012ย was make some very key hires and promotions so that I can concentrate on the things that I like, and depending on who you ask, I may or may not be good at. I can concentrate on those things and do more of those things, and be less bogged down on operations things.
I try not to read too much of the internet when these things happens, but every once in a while I can’t avoid it, and you start reading about independence–this idea of “oh wow, youโve taken this investment, and now youโre not independent.” But to be honest,ย I feel more independent now with an investment in our bank account than I ever did when it was just me, and pay day was every other Friday, and I had to look very carefully at the bank account to make sure everyone got paid.
August 15th, 2002 was your first day at the Oakland Farmers Market. Set the scene for us.
I sold 12 pounds of coffee! At the time it was $10 a pound, and I kind of wished it was more, and so many people were just “Peetโs Peetโs Peetโs”–is this darker than French roast? That’s when it occurred to me–I was very excited and very naive, which I guess is short-hand for uneducated–thatโs when it occurred to me, oh, this might be pretty hard!
Why do you think the tech community has responded so strongly to coffee–not just as social spaces but as companies?
I have two theories.
First, one of the issues with coffee that weโve all faced is, how do you tell someone that has been making coffee their whole adult life that what theyโre making, and how they’re making it, could use a lot of improvements? That becomes like a personal thing.
In the tech community, thereโs like this hacker mentality, which says that basically kind of anything you do can be improved. You take it apart and you build it better, or you code all night to figure out a better way to do this thing or that thing. So I think this idea that, “Oh, how I make my coffee can be improved–I should weigh his or measure this,โ well, that is a thing thatโs embraced by the tech community.
Another theory is something I was just talking about with a friend of mine in the tech community. I have a 10-year-old son named Dashiell and he has a 12 year old son named Dashiell, and so we’re friends, and anyway… he said from his old “code all night” days, coffee was their fuel. If they needed to stay up all night, or 48 hours to do that, well then they’d just drink cup after cup. Itโs very much something thatโs part of the tech world to keep them going.
Does investment mean weโll see a bigger expansion of your bottled beverage program?
Yes! Thank god. Itโs been so arduous and long and difficult and expensive, I canโt even believe it, but weโre set to launch that in March. Itโs delicious and the R&D has been done and weโve got a plan for a debut and a roll out and weโre super excited. Iโm finally able to say weโll debut in march atย a big food trade show in Anaheim at Expo West. [Check out Eater SF for photos and more details]
So I imagine this will be a product that’ll have a home in grocery stores and retail outlets. The interesting thing about bottled coffee is that there are no instructions. You just have to open it and drink it–thatโs unlike anything else in our world. So I think it can go anywhere. Why not have it be in a lot of places where people might want to buy it?
Now that you’ve taken on more investment, do you plan on expanding your wholesale partners?
Weโre not like a lot of higher end coffee companies, because most of our revenue–maybe 75-80%–comes from our shop and our web store. Most other high-end companies I can think of, local or national, itโs reverse, and the primary source of revenue is from wholesale.
This wasnโt the result of a real plan. I really like shops. I like creating our own world. I honestly think nobody loves your coffee more than you do. Thereโs a Sisyphean quality to wholesale–ever read The Myth of Sisyphus? Thatโs your manual if youโre in wholesale. Especially now, when itโs getting very competitive in wholesale coffee.
I would like to grow [wholesale], but I still feel like for us it will always be a smaller, boutique arm of the greater business of what we do, which is selling coffee in our own shops.
Slate just ran an article comparing Blue Bottle and Starbucks. Do you think Starbucks make serious advances into the boutique coffee market share? We’re thinking of their new microroaster concept shop in Seattle, specifically.
20,000 shops that are a certain way is a tremendous ocean liner thatโs hard to turn. That’s what people think about when they think of Starbucks. Maybe theyโll have a shop thatโs a little bit different with a roaster there–theyโre smart, theyโll try out all these different things, and they have a long history of opening retail stores.
But in my opinion if theyโre super good at being Starbucks, theyโre not going to be good at things that arenโt like Starbucks. Iโm good at doing Blue Bottle stuff, but if I made a cafe that was like Starbucks, it wouldnโt be genuine. It would be premeditated and it wouldnโt be successful.
What about single-serve options like K-Cups, Starbucks Via, etc.–Starbucks is making way more money from this stuff than from any โnicheโ strategy.
I kind of painted myself in a corner when our book came out–I try to be above the fray and talk about things I love vs. things I donโt love, but I did have a catty little sidebar that said โA Special Place In Hell: Pod Coffeeโ.
If it were more delicious I could get behind it, but Iโve never had a single serve pod or an instant coffee that I thought was delicious. I just havenโt. So how do you get excited about that?ย Maybe itโs possible to do some sort of single serve device and itโs really delicious–and wouldnโt that be amazing?
The folks at True Ventures, one of your investors, have said: “We believe Blue Bottle Coffee is at the forefront of a ‘consumer movement’ or mega-trend in which consumers are moving to higher quality, artisanal micro-roasters of coffee, where quality, attention to detail, beauty and a distinctive experience are being sought over more mainstream alternatives.โ
We think thatโs right on, and that we’re seeing a consumer movement, a mega-trend. But do you see it that way as well? Are we at the dawn of something much bigger, or inching closer to hitting a wall?
I have two thoughts about that. The first one is, if you imagine the kind of olive oil or Parmigiano cheese thatโs in your cupboard now, and the kind of olive oil thatโs in your cupboard 10 years ago, you wouldnโt tolerate that olive oil now. Your tastes have changed.ย This has happened with various ingredients, and is happening with coffee too.
On the other side of that, I kind of feel lucky that I ย donโt spend a lot of time thinking about the industry. I hear people in coffee talk about the industry, and sometimes I feel a little left out. I donโt have sweeping pronouncements to offer, and sometimes I feel bad about that, but usually I donโt. I like to think about my shops, my bar stools, cupping, the stereos…
You asked rhetorically in your NYT โDealBookโ interview, โCould we be the first 20-store chain, or 50- or 100-store chain that doesnโt suck?โโWell, could you? What does that look like?
I sort of regret that quote because itโs casting aspersions.
Sure, but could you?
Well thereโs two responses–one is “maybe you suck already, James”–but the other one thatโs more interesting is, I wouldnโt be excited about this if I didnโt think it was possible.
I’ve had a Shake Shack burger in the Delta terminal in JFK and it was delicious. and I think if I went to Abu Dhabi and got a Shake Shack burger it would be really delicious, too.
Did you ever think this kind of growth would happen?
No. Itโs so improbable and so amazing and I feel so lucky, because I was very unhappy in my work before coffee, with so many near misses and moments of uninspiredness. This has just been so amazingโฆevery step, every year. Getting to work with the people I work with, trying to make interesting spaces, trying to see people coming into the shops…
If you had told me at the farmers market that I would need to monitor time zones on my phone, I would have said โWhat??โย It has been improbable and delightful and I feel so lucky.ย People like beginners luck. Maybe thatโs why people are coming to our shopsโฆone of the reasons, anyway.
Are you someone who likes to visit their own cafes? Do the little details drive you nuts, or can you enjoy that experience?
Yes! Today Iโve been to one, two, three of them, and soon to be four after this interview. Short answer, yes–but how can you not? Itโs tricky for me in New York because Iโm there every 4-6 weeks, but when I go I spend time, and thereโs more feedback.
I donโt have such a sense of my own importance that Iโm an ingredient for the success of these cafes. But I have things that I like to be a certain way, so if something happens, I can get to the bottom of it pretty quickly.
But I love it! So many of us are in coffee because we were such misfits everywhere else in the world, and the cafe was the one place where we didnโt feel like misfits. Thatโs how I got started, at least. So to be in a cafe that you had a hand in creating, and to see it busy and happy and creating good drinks, thatโs an amazing feeling. I like that.
Top photo is courtesy ofย Clay McLachlan.