Starbucks Coffee Company to Acquire the Coffee Equipment Company and Its Revolutionary Clover(R) Brewing System

Not sure what to think about this ... still in shock a bit. Will post more later.

Starbucks Coffee Company (NASDAQ:SBUX) today announced that it has entered into an agreement to acquire The Coffee Equipment Company and its proprietary Clover(R) brewing system. The Coffee Equipment Company is a privately held coffee equipment developer and manufacturer based in Seattle, Wash. Terms of the transaction were not disclosed.

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Comment by Dave White on March 19, 2008 at 5:17pm
Yeah well those of with Clovers... If they offered a buy back do you take it?
Comment by Anthony Rue on March 19, 2008 at 5:16pm
As someone who has a new clover sitting in a box, waiting to be installed next week, I'm rather ambivalent about this whole situation. My primary concern is about parts/service a few years out. Just like espresso, the Clover is all about the 5 "M"s:

-La Macchina
-La Miscela
-La Macinadosatore
-La Mano
-La Marketing

Starbucks has the machine and the marketing. Howard's already said that he's targeting $3 a 12oz cup for drip, which should be good news for everyone. In the end of the day, the machine is just a machine, and without great coffee to show off or a dedicated hand at the till, clovered coffee can be crap-- just like any coffee made with any other method. From Starbuck's perspective, I see it as a way to bully the market: they've taken away one of the quality independent operator's ways of differentiating themselves in the marketplace. That said, if you do have a clover, you can and will benefit from a massive marketing campaign sure to come, with the full force of Sbux's money and resources behind it. I can't say I'm thrilled by today's news, but I can't help but game ways that will benefit my shop. And in the end, it will create market leverage for charging an appropriate amount for an outstanding brewed coffee, regardless of the brewing process.
Comment by Dave White on March 19, 2008 at 5:07pm
This is really really bad news. This will undoubtedly remove Clovers from everyone but Sbux's reach. Damn. Lots of people have moved to making brewed coffee only with Clover.

If you bought a Clover you can feel fairly fortunate that it will probably work for quite a while and lots of parts are available.

Lots of folks are left out in the cold... I wonder what will be said about all that.
Comment by Ed Kaufmann on March 19, 2008 at 5:03pm
We don't really know what is going to happen with this especially those of us who work at shops with these machines. If Hitler owned the company that produced the Clover, I would still say that it allows us to bring out some of the best flavors in a quality coffee bean. I don't know how much I would want to support that company and I am not trying to compare Zander or Sbux to Hitler but that fact remains. 3rd wave shops do their best to source amazing coffees and maintain the quality held within the bean using certain devices to serenade them out. Sbux may ruin the indy view of the Clover but look at Mazzer and La Marzocco. They aren't dedicated to the indy coffee market granted they have furnished their machines with features that allow the SKILLED hands of a TRAINED barista to make the best cup possible with the best coffees possible. We still use these machines though. My worry is that the tech and parts support will not be as good. I don't think Bucky's does the best job of source and roasting their coffee. You can polish a turd but that doesn't mean it will turn into a diamond. My point is, we are all working our asses off to source great coffee and treat it how it deserves to be treated. If we are able to use a machine that allows us to do so, let's go with it. Bucky's has done some good things with this industry but some bad things too. Let's keep kicking ass and whoever said, "Is this the beginning of the end?" I would like to think of this as the beginning of the beginning. Let's make some good coffee!!
Comment by Joshua Boyt on March 19, 2008 at 4:52pm
Clover for the independents is no more. For sure this is the much needed perception of quality that Howard Schultz would spend any amount of money to acquire. Look at the Clover. It is a quasi-new specialty coffee invention that has taken brewed coffee to the next level. The Clover machine only having produced a couple thousand units to date is still an untouched resource to many. With Starbucks purchase of the Clover, the only place you will be able to purchase this amazingly high quality brew from this day on is at your neighborhood Starbucks. There is no way they would share the spotlight with this equipment. Nobody can go out and buy Starbucks superautomatic espresso machine, and I don't see this being any different! What is next the siphon bar!!!! Watch out Blue Bottle!!!
Comment by Shawn on March 19, 2008 at 4:51pm
Starbucks appears to have nullified our unique advantage of using the Clover as a process to brew coffee.

One strategy I'd like to employ is to promote our roasters to obtain a unique advantage. For example, I feel it is important to take advantage of Paradise Roasters reputation and promote them (and our use of their coffees) rather than private labeling their coffee. Essentially, the selection of green coffee and the roast is where our emphasis will be. I can see roasters becoming "brand names".

Secondly, it is important for each shop with a Clover to position themselves as the "Authority" in their community and that Starbucks is behind in the game... though we commend them for their effort to improve their coffee experience.
Comment by Andy Atkinson on March 19, 2008 at 4:42pm
It saddens me when people simply worship the almighty dollar. Screw you blind capitalism!!! What ever happened to selfless ideals that didn't revolve around one's net worth? Sad man, Sad.
Comment by Dale Harris on March 19, 2008 at 4:40pm
sbux have been making esp based drinks for 20(?) years now and with a variety of great equipment yet people who want to have been making better drinks with old mc's and finding their own place in the market through service, personality and honest love of coffee.
If every site has a clover AND every member of staff in SB has great training AND they develop their roasts etc to use these tools as well as possible AND sell cheaper than indies can they still won't be able to say 'you gotta try this new costa rican - John from our roasters, who only buys beans from farmers he's met, snatched up the (micro)lot and has spent the last week perfecting the roast just for us - it's awesome in your chemex'
they'll be offering you soy, or syrup or pastries or CD's and the majority of their staff will still be telling you theirs is the best espresso ever whilst they drink their venti caramel machiatto
Comment by Jason Calhoon on March 19, 2008 at 4:29pm
Ahhhhhhhhhhhhh!
Comment by Shawn on March 19, 2008 at 3:59pm
To echo the previous comments.... Wow. I recently parted ways w/ Starbucks after 3 years as an SM and continuous "coaching" regarding my ideas of how to improve the brand. I did not see this bold of a move coming.

As a reformed "Indie", I'd like to try and make this conversation constructive and focus on how can we collectively, and individually in our shops, counter-act this? Is the Clover still a feasible option for a 3rd Wave shop? Is there another, newer technology out there? How do we educate our customers that "our" use of the Clover is superior to Starbucks' use? Will we be able to price our Clover coffees according to the market when Starbucks charges a flat $2.50? Please pass along ideas and concerns.

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