How a suffering clarinet participant used $15,000 in credit card debt to release a $700 million logo. There are most effective things James Freeman has ever definitely desired to do: play the clarinet and make coffee.
Today, Freeman is nice referred to as the founder of Blue Bottle Coffee, the premium espresso chain with the easy, but fashionable, the blue logo that adorns greater than 75 upscale cafes around the world where you may purchase a roughly $five drip coffee crafted from awesome single-foundation, freshly roasted artisanal beans. In 2017, Swiss food massive Nestle bought a majority stake in Freeman’s employer in a deal that reportedly values Blue Bottle at more than $seven hundred million.
But earlier than Freeman become the founder of a company that is set to roast greater than 2.6 million kilos of espresso beans this 12 months, he was a suffering classical musician roasting his sparkling beans as a hobby.
An obsession will become a commercial enterprise
Freeman had lengthy been “involved” through coffee and became passionate about drinking most effective the freshest cup. That intended roasting beans himself — buying raw, inexperienced coffee beans and heating them at roughly 500 tiers Fahrenheit — because he felt that most retail coffee chains over-roasted their beans.
In 2002, Freeman became making simply sufficient money to pay his bills playing the clarinet at part-time gigs with regional orchestras in the course of Northern California. In his off-time, he nursed an obsession with sparkling coffee that inspired him to roast his raw espresso beans in the oven of his Oakland, California, rental. Freeman started out questioning if there might be an enterprise opportunity for a devoted espresso snob like himself to promote his model of the precise cup of espresso to like-minded caffeine junkies. While buddies warned him that the coffee marketplace became already oversaturated, Freeman also observed that, at the time, few coffee dealers in the Bay Area even discovered how sparkling their coffee turned into.
“At the time, there was not an area in San Francisco one may want to go to get a bag of espresso with a roast date stamped at the returned,” he says.
Freeman began ramping up his homegrown roasting operation by using renting (for $600 a month) a 186-rectangular-foot potting shed placed near his rental in Oakland’s Temescal district in which he could roast beans in 7-pound batches the usage of an old Diedrich roaster he’d pushed to Idaho to buy without delay from the producer. He decided to end his track career and attempt his hand as a barista, selling his very own home-roasted coffee beans, along with fresh side cups of espresso, at farmers’ markets round San Francisco and Oakland.
“In my profession as a clarinettist there have been moments of satisfaction. However they tended to be few and far between, and so I saw coffee as a place, a bit refuge, wherein I ought to work out the things I’m inquisitive about, however additionally this opportunity to no longer play clarinet anymore. So, something that could pay my payments, so I don’t need to go to gigs,” Freeman tells CNBC Make It.
For the next couple of years, Freeman got by way of on his exceedingly simple setup and business model, but Blue Bottle’s origins weren’t without expenses, from the roaster to condominium charges for the potting shed and the coffee cart’s spot at farmer’s markets, now not to mention the price of raw beans and paying a nearby photograph fashion designer to comic strip the logo’s simple, blue logo. Freeman says he poured the entirety he ought to into the enterprise. “Clarinetists don’t accumulate a whole lot of wealth, so I put in all of the money I had, plus a couple of credit score playing cards.”
That came out to approximately $20,000 in overall, which include as much as $15,000 in debt unfold across credit score cards.
Freeman still remembers one particular second “very intensely and particularly” while he realized phrase had gotten round about his fledgeling business. It became a weekend in January 2004, and dozens of clients had been lining up at his Blue Bottle espresso cart.
It had been receiving high-quality buzz from its most dedicated customers. But in this day, “it was like a pretty crushing line, 30 [to] 40 people in line,” he says. “This is the times earlier than Twitter, yet by hook or by crook word got out — and [I remember] simply feeling like ‘Whoa, some thing took place.’”
Freeman realized there was an opportunity to show this into a far bigger business. A year later, Blue Bottle opened its first full-time, brick-and-mortar location in a small, transformed storage in what Freeman has described as “a pee-smelling dead-quit alleyway” inside the heart of San Francisco. That area remains open nowadays, with Twitter’s headquarters now located only a few blocks to the east (former Twitter CEO Evan Williams is reportedly a number of the tech enterprise fanatics of Blue Bottle’s espresso, and he also invested in the corporation in 2014).
The enterprise does now not divulge its revenue, but Freeman notes that Blue Bottle’s stores have been worthwhile from the start, basically out of necessity. Freeman says that his loss of business knowledge forced him to be careful while it came to developing Blue Bottle, and he might constantly make certain that the business enterprise ended every month with “cash left within the financial institution account.”
“I didn’t comprehend that it’s possible to spend extra money than you’ve got,” Freeman tells CNBC Make It. “So the type of the quality aspect about now not sincerely knowing very a great deal approximately commercial enterprise is you observed you have to make extra money than you spend.”
Blue Bottle grew slowly from there, beginning additional locations around the Bay Area (there are a total of 18 cafes there nowadays) before expanding to New York City in 2010. Blue Bottle then opened its first cafe in Los Angeles in 2014 before increasing across the world a 12 months later with a location in Tokyo (there are now 14 Blue Bottle cafes in Japan and the corporation opened its first South Korean outpost in April).