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Lets talk about COFFEE - Page 143

post #2131 of 2664
Quote:
Originally Posted by WiredandTired View Post

I didn't know blue bottle had such financial backing.

I am intrigued by the new nespresso machine. Cream topped coffee, hopefully the dose is scaled up from their regular coffee.

The capsules are considerably larger.
Quote:
Originally Posted by joshuadowen View Post

They just raised about $25 million. Not a bad way to start spending it.

At the prices they charge they shouldn't need financial backing.
post #2132 of 2664
Quote:
Originally Posted by patrickBOOTH View Post

At the prices they charge they shouldn't need financial backing.

 

I bet their current revenue numbers would surprise you. They get a lot of press but they don't have that many locations yet, and opening new ones is pretty expensive.

post #2133 of 2664
Well then I equate it to mismanagement. Their prices were always high, but they recently went up so much that it isn't worth it anymore.
post #2134 of 2664
Quote:
Originally Posted by patrickBOOTH View Post

Well then I equate it to mismanagement. Their prices were always high, but they recently went up so much that it isn't worth it anymore.

 

I dunno about the pricing, but the recap was clearly done to facilitate growth. Most of their business is retail, and they've only got about a dozen locations. I bet they are doing something like $15 million a year revenue. I'm sure their margins are really good, but that still isn't going to lead to enough cash on hand to fuel serious growth. 

post #2135 of 2664

I agree with Mr. Dowen.  The recap was for growth purposes.  Some people ITT are making incorrect assumptions regarding revenue and costs, even with great margins its tough and probably incorrect to try to fuel growth with only internally generated funds.

post #2136 of 2664
Blue Bottle is doing it with the capital backing going for the exponential growth. Were the recent NYC stores opened with the 25M?

Was Stumptown the only other place that went West Coast East Coast? Probably internally generated funds?
post #2137 of 2664
According to the WSJ, BB did between $15-20 million in revenue in 2011. No idea what their margins are, but they can't be that high. I'm just surprised that anyone would want to invest in coffee. Maybe $25 million is pocket change to VCs these days.

In other news, Peet's is expanding pretty aggressively into Washington DC, including a new flagship cafe.
post #2138 of 2664
Quote:
Originally Posted by A Y View Post

According to the WSJ, BB did between $15-20 million in revenue in 2011. No idea what their margins are, but they can't be that high. I'm just surprised that anyone would want to invest in coffee. Maybe $25 million is pocket change to VCs these days.

In other news, Peet's is expanding pretty aggressively into Washington DC, including a new flagship cafe.

 

The Peet's expansion isn't REALLY an expansion so much as it is a rebranding of the existing Caribou properties, right?

post #2139 of 2664
DC (especially the suburbs) could use some decent coffee locations. It's Starbucks as far as the eye can see, hardly any local places out in the 'burbs.
post #2140 of 2664
Quote:
Originally Posted by A Y View Post

According to the WSJ, BB did between $15-20 million in revenue in 2011. No idea what their margins are, but they can't be that high. I'm just surprised that anyone would want to invest in coffee. Maybe $25 million is pocket change to VCs these days.

In other news, Peet's is expanding pretty aggressively into Washington DC, including a new flagship cafe.

I was going to say. I don't see much growth in the industry. I see change, but certainly not growth. In 2006 I'd say yeah go for it, but interest in third wave coffee isn't what it used to be, even at the barista level. Back in 06-08 they were super excited about coffee, but now, they are jaded and just as cranky as long time waiters and waitresses whose art career hasn't taken off yet.
post #2141 of 2664
Quote:
Originally Posted by patrickBOOTH View Post


I was going to say. I don't see much growth in the industry. I see change, but certainly not growth. In 2006 I'd say yeah go for it, but interest in third wave coffee isn't what it used to be, even at the barista level. Back in 06-08 they were super excited about coffee, but now, they are jaded and just as cranky as long time waiters and waitresses whose art career hasn't taken off yet.

 

There's a lot of growth left yet. I think areas like New York and the West Coast are pretty saturated, but there's a lot of room left to grow in the rest of the country. At the same time, there's room for brands to grow even where the industry isn't. Blue Bottle buying roasters/cafe's down in L.A. is probably just the beginning. They'll be able to buy out more independents if they want.

post #2142 of 2664
Just because you are opening up new stores doesn't mean you are going to necessarily see growth. The New York market is saturated with third wave cafes. I can throw a rock blindfolded and hit a third wave cafe. I know I am not the only one who consistently goes out of their way to find something different. (Eatly is literally the only place I can find true Italian espresso). If third wave was smart, like somebody else said they would expand to the burbs, not the metro area. The market that just goes to Starbucks, or Dunkin is never going to switch to Blue Bottle for their needs because, of taste, time, cost, convenience (waiting for pour over) regardless of how many there are.
post #2143 of 2664
Quote:
Originally Posted by patrickBOOTH View Post

Just because you are opening up new stores doesn't mean you are going to necessarily see growth. The New York market is saturated with third wave cafes. I can throw a rock blindfolded and hit a third wave cafe. I know I am not the only one who consistently goes out of their way to find something different. (Eatly is literally the only place I can find true Italian espresso). If third wave was smart, like somebody else said they would expand to the burbs, not the metro area. The market that just goes to Starbucks, or Dunkin is never going to switch to Blue Bottle for their needs because, of taste, time, cost, convenience (waiting for pour over) regardless of how many there are.

 

I agree that the real growth potential is outside of New York and SF, both of which are pretty saturated. 

post #2144 of 2664
Has intelligentsia made plans to go east, or just to the west coast?
post #2145 of 2664
Quote:
Originally Posted by joshuadowen View Post

The Peet's expansion isn't REALLY an expansion so much as it is a rebranding of the existing Caribou properties, right?

No idea. I didn't even know they owned Caribou.

Stumptown is also expanding into LA.
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