Ownership of Blue Bottle Coffee Changes Hands

Photo by Piotr Redlinski for The New York Times 

Diner Journal
By OLIVER STRAND

originally posted October 17, 2012 and updated October 18, 2012

Blue Bottle Coffee, the respected California coffee micro-roaster that introduced the Japanese-style siphon bar to San Francisco before opening shops in Chelsea, TriBeCa, Rockefeller Center and Williamsburg, Brooklyn, has a new owner.

According to a filing made with the Securities Exchange Commission, Bryan Meehan is the new president and chief executive of Blue Bottle Coffee Inc., heading a group of investors who purchased a controlling stake in Blue Bottle Coffee LLC for more than $19.6 million. Kohlberg Ventures, which invested in Blue Bottle Coffee in 2008, no longer has a stake in the company.

 The news was reported in TechCrunch, The Wall Street Journal and other news-media outlets.

Mr. Meehan is the Dublin-born entrepreneur behind Fresh & Wild, a London chain of organic markets sold to Whole Foods in 2004, and Nude Skincare, a line of natural beauty products. He now lives in Marin County, Calif., and the Blue Bottle Coffee investment group he leads draws from the Bay Area’s high-tech executives. It includes Tony Conrad, a founding member of True Ventures and the founder of About.com; Kevin Systrom, the co-founder and chief executive of Instagram; Kevin Rose, a general partner at Google Ventures and the founder of Digg; and Mike Volpi, a partner in Index Ventures, formerly of Cisco Systems.

But not all of Blue Bottle’s new investors made their fortunes with keyboards: the skateboarder Tony Hawk is listed in a post published on the True Ventures blog last week.

Reached on the phone in Dublin, Mr. Meehan said that James Freeman, the founder of Blue Bottle Coffee, would continue to occupy a central position in the company. “James promised to me that he’s going to spend the rest of his life growing his business,” Mr. Meehan said. “He’s the founder, and he’s still running things. My role will be chairman of the board.”

Ownership and management can be a touchy question in the coffee industry. Many respected roasters were started by coffee enthusiasts who spent years pulling shots and working long shifts. For some, selling a stake in a company is seen as an act of disloyalty.

What happens after the papers are signed depends on the company, of course. Last year, Stumptown Coffee Roasters reached a deal with TSG Consumer Partners, a private equity firm, and the company has steadily expanded since then. Then again, after Doug Zell, the founder of Intelligentsia Coffee and Tea, announced last year that he would become a co-C.E.O. with a former real estate developer, Robert Buono, the company shed most of its senior staff.

Mr. Freeman, who is in New York to promote his new book, “The Blue Bottle Craft of Coffee,” said the company he founded would remain the same, only with deeper pockets. “I’m still going to make decisions about where or if we open new shops, what the new shops look like, what the new shops feel like,” he said. “I’m still going to be in charge of what kind of coffee we should buy, how much should we buy.” Mr. Freeman said that he structured a deal that encourages him to remain with Blue Bottle Coffee. Every year, his stake in the company will increase. “It’s an incentive to stay,” he said. “I gave myself a really good job.”

Oct. 18| Updated The board of directors of Blue Bottle Coffee Inc. announced that James Freeman is now President and CEO of Blue Bottle Coffee Inc. Bryan Meehan is now Executive Chairman. “We want to clarify any misunderstanding about who runs the company,” Mr. Freeman said. “I’m going to be the one showing up to Webster Street every day and answer emails, cup coffee, talk to the troops and do everything I’ve been doing, only hopefully better.”