COFFEE NEWS

While Tully’s Coffee figures out how much cash shareholders will receive now that it has sold its wholesale operation, buyer Green Mountain Coffee Roasters is shopping for a bigger space between South Seattle and Olympia.

Green Mountain plans to move its roasting machines and about 85 employees from the old Rainier Brewery building in Seattle, where Tully’s plans to keep its remaining 45 workers to oversee the retail business.

On Friday, Green Mountain paid $40.3 million for the wholesale business of Tully’s, which changed its corporate name to TC Global. Tully’s will still operate its roughly 170 retail stores, including two that it opened in Singapore last year in partnership with another company.

“We’ve not made a final determination” about a cash distribution for shareholders, Chairman Tom O’Keefe said during a news conference Monday morning. The board will meet to determine that “in the next few weeks.”

About $26 million is going to repay Tully’s debt, and an undisclosed sum will help revitalize its retail operation, including adding about 200 shops over the next 12 to 18 months.

Green Mountain plans to make the Puget Sound area its third coffee-roasting and -distribution base, in addition to its home state of Vermont and a new 334,000-square-foot facility in Tennessee.

But it needs more than the 80,000 square feet that Tully’s occupies in the old Rainier Brewery, CEO Larry Blanford said Monday.

“It’s a great, historic location, [but] it’s just not conducive to supporting the growth we need,” Blanford said of the colorful old brick edifice beside Interstate 5 with the giant neon “T” atop it.

Green Mountain wants to move by this fall into a space with at least 120,000 square feet and room for expansion. In the next couple of years, it expects to need 200,000 square feet and an additional 40 to 80 employees, said Chief Operating Officer Scott McCreary.

Green Mountain plans to sell its light-to-medium roast in more Western U.S. stores and push the darker Tully’s roast farther east. Currently, Tully’s is not sold in grocery stores east of Chicago.

The new Seattle-area facility will also roast Newman’s Own coffee, which Green Mountain is licensed to distribute. In the Northeast, it sells a co-branded Green Mountain/Newman’s Own blend to 650 McDonald’s stores.

Unlike many coffee companies, Green Mountain does not have a chain of retail stores. Its primary businesses are whole-bean coffee and Keurig single-cup coffee brewers and the single-serve coffee cups that go in them.

Green Mountain, bought and built by Bob Stiller after he made a fortune in the tobacco rolling-paper business, has been one of the best-performing companies in the coffee industry and on Wall Street during the economic downturn.

Its profit rose 74 percent to $22 million last year, and its stock hit a new 52-week trading high of $50.49 last week.

Mark Pendergrast, an author who has written about Coca-Cola and the history and business of coffee, says Green Mountain could become the runner-up to Starbucks in the specialty-coffee category.

Although Starbucks “overexpanded and was overconfident, it’s almost impossible to destroy a brand once it is the first mover in the category,” said Pendergrast, who lives in Vermont.

“Coke has Pepsi, but Starbucks doesn’t really have a Pepsi,” he said. “There’s no runner-up in terms of specialty coffee. Now, Green Mountain in my backyard is doing so well, maybe they are going to be the runner-up.”

Source: http://seattletimes.nwsource.com/html/businesstechnology/2008951859_tullys31.html

It’s official. Diedrich Coffee is out of the retail cafe business.

The Irvine-based coffee company said it plans to sell its last cafe chain, Gloria Jean’s Coffees, to Praise International North America for $3.1 million. The deal, which includes 102 domestic cafes in 24 states, effectively ends Diedrich Coffee’s legacy as a cafe retailer.

Since selling several Diedrich cafes to Starbucks a few years ago, the company has focused on building its wholesale coffee roasting business. The Gloria Jean sale, announced after the market closed Friday, is another move in that direction,  Diedrich Chief executive J. Russell Phillips said during a phone interview Monday.

“We’re going to continue to stay the course of wholesale,” Phillips said. “This was certainly not a surprise to exit retail. It’s been our strategy.”

A decade ago, Diedrich Coffee pushed rapid growth via acquisitions of rival chains and expansion of its flagship coffee house brand. In 1999, Diedrich purchased Gloria Jean’s parent company, Coffee People, in a $27 million deal financed largely through a stock offering.

At the time, the mall-based Gloria Jean coffee retailer had 282 locations worldwide. But the company never appeared to recover financially from the rapid expansion.

It eventually sold off the international segment of Gloria Jean in 2005. A year later, it sold a bulk of the Diedrich Coffee and Coffee People cafes to Starbucks. The domestic Gloria Jean division was the Irvine coffee firm’s last remaining retail chain operation. (One Diedrich Coffee franchise kiosk remains at Crevier BMW in Santa Ana.)

Orange County is home to three Gloria Jean cafes in Brea, Mission Viejo and Westminster.

The $3.1 million deal includes a five-year roasting agreement that gives Diedrich the right to sell the Gloria Jean’s Coffees brand as part of its wholesale business. In the 2nd quarter, Diedrich said wholesale revenue increased $3.2 million or 32 percent compared to the same period a year ago.

Source: http://fastfood.freedomblogging.com/2009/03/30/diedrich-coffee-sells-its-last-retail-cafe-operations/16845/

Those of you who’ve sampled Thai coffee in Thai restaurants may be surprised to know that it contains corn and soy beans as well as coffee. You can buy Oliang powder, as the coffee is called, in most Asian groceries.

One of my favorites is Thai 888, just south of the Asian Center on South Federal. There are also several other Asian groceries in the area, including a couple actually in the Asian Center. In Aurora, Lek’s Asian Market, at 112 Del Mar Circle, is a great place to shop for all kinds of Thai, Filipino and other Asian ingredients. Other markets include Pacific Mercantile, at 1925 Lawrence downtown, Pacific Ocean International Supermarket at 2200 W. Alameda and many others around the city. Look in your local Yellow Pages under Groceries for more.

You can make traditional Thai iced coffee by mixing 4 T of the oiliang powder into 1 cup of boiling water. Strain the mixture into a glass of ice and add condensed milk to taste. Stir well.

Source: http://www.examiner.com/x-4213-Denver-Ethnic-Foods-Examiner~y2009m3d30-How-to-make-traditional-Thai-coffee

Even as timely pre-blossom showers hold promise of a better coffee crop for the next season starting November, growers are reportedly shifting to cultivation of robustas from arabicas.

“There seems to be no relief from the white stem borer, which has affected the arabica plants during the last few years. Growers are fed up of this and are, therefore, replanting the affected arabicas with robustas,” said a planter from Kodagu.

Plucking the plant from the soil and destroying it is seen as the best solution to overcome the stem borer menace.

However, despite best efforts, the problem is continuing, affecting arabica production. Usually, it takes four years for the first harvest from a coffee plant.

Growers will have to replant the crop that is plucked and it is here that they are going in for robustas.

“Though some of the estates may seem to grow arabicas, in many, robustas are grown inside,” said the planter.

Downslide

Arabica production touched a record 1.21 lakh tonnes (lt) in 2001-02. Since then, it has been on a downslide. The last time it topped one lakh tonnes was in 2004-05, when the production hit 1.03 lt. During 2006-07, it almost touched 1 lt but since then it has been on a downhill ride.

For the current year, the Coffee Board, in its revised estimated, had projected arabica production at 90,050 tonnes but actual production is reported to be lower.

“Growers are switching over to robustas on a smaller scale, not on a large scale,” said Mr Ramesh Rajah, President of Coffee Exporters Association.

Mr Bose Mandanna, a planter in Kodagu, said growers were switching over to robustas and effects of it could be seen soon. From making up 73 per cent of the total area under coffee in 1950-51, arabicas now make up 47 per cent with robustas comprising the rest.

However, areas under robustas and arabicas have been increasing consistently every year.

Output

In terms of production, since 1990-91, robustas’ output has been consistently higher than that for arabicas.

Meanwhile, arabica production this year is feared to be the lowest since 1998-99.

“We hardly got 50 per cent of our usual production in our estates,” said Mr Mandanna.

Other growers reported much lower output and some exporters are reporting lower arrivals of arabicas. Mr Rajah said the actual production of arabicas, though lower, was yet to be ascertained.

“Arrivals may be lower because growers could be holding on to their produce,” he said.

Better crop

The Coffee Board has pegged this year’s production at 2.76 lt (1.875 lt robustas) against 2.62 lt last year. However, there are hopes of a better crop next season. “We have had good pre-blossom showers and could be getting a very good crop,” said Mr Mandanna.

“The timely showers are a good news,” said Mr Rajah.

Source: http://www.thehindubusinessline.com/2009/03/31/stories/2009033151121800.htm