Just like craft beer, specialty coffee is losing its edge

specialty coffee stumptown roasters
  • Celebrity-backed coffee brands have proliferated in recent years
  • A handful of multinationals have spent millions acquiring specialty coffee names
  • The sector can benefit from investment, but specialty must stay true to its values

THE NAME Snoop Dogg evokes a lot of things, from 90s rap music to food delivery adverts. But it wasn’t until March this year that coffee entered the fray.

INDOxyz is the 51-year-old rapper’s latest venture – a line of Indonesian cold brew coffees sold in bright yellow cans which he promises is “going to change the industry”.

But while Snoop Dogg might believe in the originality of the product, its launch follows an increasingly long list of celebrity-backed coffee brands, from La Colombe’s partnership with Leonardo DiCaprio to Hugh Jackman’s Laughing Man Coffee.

This is at the same time that a number of established specialty coffee companies are coming under the control of a handful of multinationals. According to the International Trade Centre’s Coffee Guide, “the ten biggest roasters control more than 35% of all coffee sales” and are increasingly acquiring specialty brands “as part of a strategy to establish a presence in all quality segments of coffee”.

For example, Nestlé’s acquisition of third-wave pioneers Blue Bottle Coffee took place shortly after JAB Holding Company acquired Intelligentsia and Stumptown Coffee Roasters, and Lavazza bought Carte Noire, Merrild, and Kicking Horse.

To many, this growing commercialisation points towards one conclusion: that “specialty coffee” has well and truly lost its edge.

specialty coffee

Diluting its original taste

When it first emerged in the 1990s, specialty coffee stood out for several reasons. Not only was it committed to improving quality, traceability, transparency, and sustainability across all aspects of the supply chain, it represented a clear break from the second wave’s focus on experience over the coffee itself.

Importantly, it put craftsmanship at its heart, subscribing to the notion that coffee was as complex as wine or a plate of food and should be treated as such. 

Specialty coffee also offered the promise of excellence, transparency, and ethical behaviour in an industry that thrived on mediocre quality, opaque business operations, and shady trade practices. It was a mini-revolution led by a well-meaning, tight-knit community.

“In the early days, specialty was a movement,” says the founder of Sweet Science Coffee, Sandra Wolter. “We had a mentality and value system, but no marketing strategy – just like you wouldn’t market punk.”

Its reputation as a niche product, distinctly separate from instant and commodity coffee, soon led to accusations of the specialty sector being “elitist”. If you couldn’t tell your Yirgacheffe from your Geisha, or you enjoyed a splash of milk to balance the acidity with some sweetness, you would be sneered at, it was thought.

Yet as consumers started to take an interest in the provenance of their coffees and became increasingly discerning about their quality, hallmarks of the specialty coffee sector filtered into the mainstream. In a 2019 survey by the National Coffee Association, 63% of respondents said that they had purchased a specialty coffee beverage in the past day, up from 48% in 2015.

This, according to Ryan Godinho who owns several specialty coffee brands in Dubai, became impossible for traditional coffee companies to ignore – and they started to adopt many of specialty’s characteristics. “Nowadays, the word specialty is being used more liberally, as a vague attribute rather than a quality grade of coffee,” he says.

Sandra says she has seen a similar trend, which has muddied the waters of what specialty coffee consists of. “Specialty needs a disclaimer these days,” she tells me. “When you google ‘Specialty coffee near me’ you get everything from convenience chains to local Mom and Pop delis – even grocery stores.”

Coffee isn’t the only industry to have seen its niche segment become diluted. Craft beer experienced a similar trajectory after emerging in the 1970s as a response to mass-produced beer that dominated the market at the time.

Initially focused on quality and its disdain for convention, the majority of the pioneering craft beer brands have been acquired by multinationals, such as Heineken who bought Beavertown and Lagunitas, and Sapporo USA, who bought out Stone Brewing Co.

Some argue that the craft beer industry has now lost its edge – diluting its original taste and branding to make its beers more palatable for a broader audience. This echoes the criticism currently being levied against specialty coffee brands that “sold out” to bigger brands, like Blue Bottle for example.

Is it so bad?

While some purists may view the commercialisation of craft beer as a sell-out, there are benefits to be found in the professionalisation and standardisation that come with commercial mainstreaming.

As investment capital pours into the sector, quality improves, and new tastes become accessible to a wider audience. But is it the same for a sector as complex as coffee?

“Everyone starts with this ethos of being completely niche,” Ryan says. “But as they grow, it gets to a point where the infrastructure can’t keep up with client demand. Few people are completely happy with having a niche segment as their sole source of income.”

Ryan has managed to maintain his ethical values and quality focus because he has other revenue streams and doesn’t rely on wholesale coffee as his main source of income. For other specialty coffee brands growing beyond a niche sector, once profit becomes a factor, two things tend to suffer: quality control and business ethics.

Sandra points out that on the positive side, multinational corporations have the financial resources to achieve better environmental and social impact at scale.

“The flipside of the coin is that the motivation is closely tied to profit expectations and an aim to preserve market dominance,” she says. “Overconsumption is a big problem, and high yield focused production tends to bring with it more damage to the environment, as well as higher production costs that translate to low margins per pound of green.”

Ultimately, mainstreaming specialty coffee comes with its fair share of opportunities and trade-offs. To protect specialty coffee in its true form, Ryan suggests that defining a new category of coffee for these new commercial, hybrid products could help distinguish the two and avoid any risk of false advertising.

But simply slapping the label on any old coffee brand, whether “fuelled by Snoop Dogg” or not, is no way to improve the standards of the industry. Thankfully, by now, consumers are a little too savvy to fall for that.