Stumptown Expands With the Help of a Powerful Investor
Matthew Peyton for The New York TimesStylish baristas at the Stumptown Coffee Roasters cafe at the Ace Hotel.
By OLIVER STRAND Originally published in NYTimes' blog, June 2, 2011, 2:22 pm
It looks like a big year for Stumptown Coffee Roasters. The Portland, Ore., company, known for getting some of the finest coffee in the world and serving it with rock ‘n’ roll flair, plans to open two coffee bars in Brooklyn, add a bottling facility to its roaster in Red Hook for its cold-brewed coffee and, Duane Sorenson, Stumptown’s founder, says the company will try to open roasters in Chicago and San Francisco.
All of this is possible because of an investment from TSG Consumer Partners, a private equity firm that has invested in several successful brands, selling its stake in Vitaminwater for $677 million in 2006.
Stumptown Coffee Roasters is one of a small number of independent companies that set the standard for coffee roasting over the past decade. Its connection to TSG was first made public on Tuesday by Todd Carmichael in a posting on Esquire.com’s “Eat Like a Man” blog. In a piece titled “The End of Stumptown, America’s Hippest Coffee Brand,” Mr. Carmichael wrote: “Duane Sorenson, the founder of Stumptown, the Che Guevara of the rock-star barista movement, sold his life’s work to the highest bidder.” Mr. Carmichael is the founder of the coffee company La Colombe Torrefaction.
The post didn’t name TSG, but the next day, Ben Waterhouse of Willamette Week in Portland reported that Stumptown Coffee Corp., a new company that registered with the State of Oregon on April 28, listed Alexander S. Panos as president and secretary. Mr. Panos is TSG’s managing director.
Both Mr. Sorenson and Mr. Panos said the coffee roaster was not sold.
“I still own Stumptown,” Mr. Sorenson said in a telephone interview. “I’m still in control of Stumptown, the only thing that’s changed is that I brought in an investor, a buddy of mine, who brought in some money so that I can do the things I want to do.”
The two cafes in Brooklyn, which are expected to open this fall; the bottling facility, the company’s first outside Portland; and the two roasters would require a considerable investment.
Mr. Panos said he shared Mr. Sorenson’s vision. “If you’re Duane and you want to bring great coffee to San Francisco, how’s he going to do it?” he said. “Most of these companies don’t get past their home market. The fact that Duane came to New York is miraculous. He did it by his boot straps.”
Still, bloggers, coffee writers and denizens of social media expressed dismay that Stumptown, which has a devout following, would take on an investment partner known for scaling up – and selling – successful companies. The assurances the Mr. Sorenson was still in charge seemed to have cooled some tempers.
Mr. Panos said in a telephone interview that he was not, in fact, an officer of Stumptown Coffee Roasters and was listed as such only for filing purposes.
“Duane runs the show, no ifs, ands, or buts,” he said. “He controls the company. I’m just an investor.”
In filings in Oregon, he is named the president and secretary of Stumptown Coffee Corp., and as the authorized representative of its two subsidiaries, Stumptown Coffee and Stumptown Coffee Roasters Inc. Mr. Panos also said that he had no involvement with an entity registered in Delaware as Stumptown Coffee Corp. on April 11, even though it was originally listed under the name TSG Coffee Corp.
“We can’t disclose the structure of the investment,” Mr. Panos said. “What I can say is that Duane controls the company.”
What’s certain is that there will be more Stumptowns, and soon.
“Getting some money to grow your business is not evil,” Mr. Panos said.
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