Starbucks Buys Clover, LA Mill and Intelligentsia Respond

Starbucks will never be LA Mill, Alen Lin, 1/14/08

We knew Starbucks CEO Howard Schultz was trying to get Starbucks back in the coffee game, and closing for three hours to "retrain," giving out perks to repeat customers, and slashing prices is equal parts marketing ploy---every move Starbucks has made over the last couple months has made headlines---and business savvy. But the news that came out today is bigger than anyone expected: The coffee juggernaut bought The Coffee Equipment Company, makers of the Clover brewing systems. That means they hold the exclusive rights to the Clover and plan to use the machines in select stores around the country. What does this mean for independent coffee bars that use Clovers? We tracked down bigwigs at LA Mill and Intelligentsia to find out.

Clovers aren't the only reason why Silver Lake's Intelligentsia and LA Mill standout against Starbucks, but it was unique to have them. But it doesn't sound like the indies are too hard-pressed: "People come to LA Mill for the coffee but they also come for the experience," says Greg Torres, VP of Business Development for LA Mill. "Clover is just one of the experiences here. We have the Eva Solo, the Chemex. I don't know if Starbucks wants to be competitive with boutiques or if they want to stay on the cutting edge of the industry. So it's up to us to keep finding what else is out there." He adds that it's not so much that Starbucks will now have Clover, but whether they'll honor the warranties and supply replacement parts for everyone who has the $11,000 machines now (they will).

Intelligentsia CEO Doug Zell agrees: "What makes great coffeehouses great is great coffee. It's what we do at source, having great in-season coffees, that they're carefully roasted, and having really really top notch baristas. The Clover was a vehicle for featuring the coffees; the quality of the coffees speaks for itself. There are other vehicles to present them by the cup. [Starbucks] is just taking a tool out of a tool box, but it is by no means fatal." Since we had Zell, we asked if he would be opening another spot locally. "We will do more coffee bars in Los Angeles," he says. "We just want to find the right locations."

According to the Starbucks press release more "experiences" include a social networking site (natch) and fancy espresso machines. Now, if we can only get the barista at our local to stop being such a bitch, they might win us back.
· Starbucks Unveils New Strategic Initiatives [Starbucks]
· EaterWire Coffee Edition: Starbucks Acquires All Clover Coffee Systems [Eater NY]