From a Stumptown Roasters Press release today –
“At a time when it’s difficult to find the financing to grow, run and operate a quality driven and sustainable business, I am pleased to announce that Stumptown has found an investor to help us offer opportunities and take care of our employees, farmers and customers like we’ve never been able to do before. I have been lucky enough to find an investor that will enable me to continue to run Stumptown and focus on the coffee.
While Oregon’s economy struggles and the unemployment rate is staying high, we’re looking forward to employing more talented and creative people to help us grow and stay focused on the highest quality coffee and the service we are known for. After all, the success of Stumptown comes from the awesome individuals we have and the strength of our team.
Stumptown will continue to be about the coffee and the relationships we have – with our employees, our farmers, our customers and all the folks looking for the finest coffees available. Aleco, our head coffee buyer, now has more resources to find and work with the absolute best coffee farms and farmers in the world. We’re excited to continue to roast and prepare the finest coffees, support the neighborhoods where we do business and the countries where we purchase our coffees from.
A huge thanks to all our amazing staff for working hard every day and making sure that our coffee is perfect every time. We’re also excited and proud to continue to work closely with some of the finest restaurants, coffee bars and specialty grocers around.”
Some of the reasoning behind the whole deal was covered in an NY Times article this morning –
But the costs of making a great cup of coffee have never been higher. The index price for high-quality Arabica commodity beans was 62 cents a pound in 2001; last year, it was $1.96 a pound; on Monday, it was $2.77. Beans for these high-end coffee bars can be $30 or more a pound.
Adam Craig, an owner of Culture Espresso Bar on West 38th Street, has raised coffee prices once since the shop opened in 2009. Customers noticed. “Somebody came in and ordered the ‘I’ll have the 25 cents more than yesterday’s coffee,’ ” he said.
At the same time, financing for expansion has tightened up.
“If you want to grow your business you have to do it somehow, and if you can’t get a loan, you have to sell equity, unless you have a really, really well-off grandpa,” said James Freeman, the owner of Blue Bottle Coffee in Oakland, Calif. He said he’d met with two representatives from TSG in March, but would not say what they discussed.
Neither Mr. Panos, of TSG, nor Duane Sorenson, Stumptown’s founder, would comment for this article. But in an interview last week about TSG’s investment in Stumptown, Mr. Sorenson said the investment would let Stumptown put even more into its coffees. “It’s really exciting because we have the resources to move forward and make great coffee,” Mr. Sorenson said. He said they planned to have two more coffee bars in Brooklyn, add a bottling facility there for cold-brew coffee and add roasters in Chicago, San Francisco and Los Angeles
They were less forthcoming about long-term plans.
But some in the coffee industry warned that investors and roasters might not share the same goals.
“Any investment company is interested in return,” said Tim O’Connor, the president of the Specialty Coffee Association of America. “And that may not be where the coffee company’s greatest interest has been. There has always been that dynamic between the investment company wanting a return, and the coffee company wanting to do good in regards to the growers, the coffee and the customers.”