Episode 46: Blue Bottle Coffee

Oct 8, 2017 68m

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Episode Description

Today our heroes cover a deal that might have more impact on life in Silicon Valley than AI, wearables and AR/VR combined… Nestle’s acquisition of Blue Bottle Coffee. Will hipster entrepreneurs and the VCs who love/need them continue to line up around the block for their minimalist coffee experience of choice, now that it’s owned by the Nesquik Bunny? Is this the beginning of Blue Bottle pod machines filling the empty counter space left by Juicero’s demise in VC offices throughout South Park? We investigate.

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Topics Covered Include:

The rise of “Third Wave” coffee
Blue Bottle founder James Freeman’s “classical” (music) influences
Venture capital and the coffee business
Achieving liquidity when companies and founders’ don’t want to go public, and don’t want to sell their stakes
Nestle’s position in single-serve coffee market and potential brand impact of Blue Bottle

The Carve Out:

AI-Generated Summary

Nestle Acquires Blue Bottle Coffee

The hosts, Ben and David, explore Nestle's significant acquisition of Blue Bottle Coffee, highlighting its impact on the tech elite's coffee culture in Silicon Valley. The acquisition stirred conversations about how VCs and entrepreneurs will react to Blue Bottle now that it’s owned by a multinational giant. The discussion also references the presence of Blue Bottle’s minimalist coffee experience amidst the proliferation of alternatives.

The Legacy of Blue Bottle Coffee

Blue Bottle Coffee, founded by James Freeman, embodies a love for quality coffee and an artisanal experience, drawing significant inspiration from traditional Japanese coffee preparation techniques. The hosts draw contrasts between Blue Bottle's ethos and the corporate model of Starbucks, discussing the third wave of coffee which focuses on quality over quantity, leading to Blue Bottle's rise to prominence and subsequent investment from major tech investors.

Venture Capital's Influence on Coffee

The podcast delves into how venture capital has played a crucial role in the growth of specialty coffee companies like Blue Bottle. It discusses the significant funding rounds that brought in influential venture capitalists and highlights the unique positioning of Blue Bottle, separating it from more typical tech startups.

The Implications of Nestle's Acquisition

Ben and David share thoughts on Nestle’s strategy with Blue Bottle, raising questions about the brand's future as part of a conglomerate. They discuss potential paths for growth, branding impact, and the balancing act of keeping Blue Bottle's identity intact while integrating with Nestle’s expansive supply chain.

Tech Themes and Market Dynamics

The hosts reflect on the broader implications of Blue Bottle’s acquisition, pondering the challenges of integrating traditional retail experiences in an industry increasingly dominated by online and tech-driven models. They discuss the evolving nature of consumer expectations and how this impacts businesses that rely on physical presence.