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  • Tomas Lee

Two Of A Kind: Philz Coffee & Blue Bottle Coffee


For this round up, we are going to have the two rising stars in coffee roasters business - Philz Coffee and Blue Bottle Coffee. Even though they may come from different origins, but share the same passion in serving the best cup of coffee to their customers by creating their own unique, fresh blends.

The Founders of Philz Coffee, Phil and Jacob Jaber, and me have very similar mind in liking to tour different coffee shops. Visited more than thousands of coffee shops before they created their own 30+ unique flavorful, complex, rich, smooth, and low in acidity blends. Furthermore, per their web site, Phil designed an unique station allowing for every coffee to be crafted one cup at a time.

On the other hand, the story of Blue Bottle Coffee began from a tale happened in the late 1600s, the first Central European's Coffee Shop - " The Blue Bottle". Its founder, James Freeman, in 2002, followed the same philosophy of the Turkish coffee tale to create his brand which only sells coffee less than 48 hours out of the roaster to its guests for enjoying the peak flavor of coffee. There goes also the reason why the Blue Bottle Coffee's logo designed a lot like an ancient ceramic jar.

Let's go and check out both businesses to compare their products, service and business model.

PHILZ COFFEE | PASADENA, CA

Products Score: 85 Service Score: 75 Store Score: 75

Final {verdict}: ⭐️⭐️⭐️⭐️ 4/5

Always fall in love with the 'Philz' and I believe many others do as well. I love them not only because of their large selection of drips and beans and friendly customer service, but their unique business model attracted me the most, which also drew my eyes wide opened. As stated in my previous blog, there're more than a total of 55,246 coffee and snack shops in the U.S. 2016. To survive, you must have a very distinctive business model standing out from your competition. It's not limited to product or service differentiation, but most importantly, the business model must be scalable to keep your survival. For Philz, those golden rules are absolutely all met. If you've ever been visiting the Philz Coffee, you know they have a wide range of coffee blends to choose, from lighter blends to medium, to darker. Their coffee bean naming are even more impressive, available from "Decaf Columbia" to "Canopy of Heaven", to something more exotic, "Ambrosia Coffee of God". I always scratch my head when seeing those names, and wonder where they are from and how they taste. Their products are now diverted into tea and pastries serving to catch on the demand of a different demographic.​ For a company started up in 2003, with only 14 years old history, it's a little staggered that the Philz had already expanded into 43 stores spreading throughout the San Francisco, Sacramento Valley, Los Angeles, San Diego and Washington, DC. areas. Since May 2013, with their successful sales traction and social proof, they were able to attract 32 investors in 3 funding rounds to raise a total $75M for their venture. This's a splendid achievement. Besides that, each cup of their coffee is freshly hand-dripped by Baristas but not pre-brewed. So, many may question how their business could be able to scaling up and maintaining their quality in a heavily manual production. The magic is in the special coffee station the Jabers created. To fulfill their commitment that every cup of coffee to customers has to be freshly dripped, the custom station allows a Barista to drip multiple orders at a time. The only two critical elements needed to be strictly controlled are the Quality of Blends and Water Temperature. Contrarily, a single commercial graded expresso machine can only manage to make 2~4 cups max. under the same amount of time. Also, Philz model is more effectively reducing the capital expenditure and production expenses such as electricity and water utility, cost of machinery maintenance and staff training cost, and furthermore, it has lower job requirements in recruiting talents. For dripping coffee in Philz, the production process can be standardized without requiring strong brewing technique or even hiring certified Baristas. On the other side, brewing an expresso is a more complex production. You may have the best Baristas hired, but there ain't 100% guarantee in consistent quality production due to the emotion or absence of the Baristas. Keep in mind that human factor is always a big variable to any business. Alike the popular coffee-joints, each Philz store design generally accustoms its corporate theme but moderately decorates with their own style. As mentioned in earlier, their hiring requirements may be less than competition, but their service is definitely up to par of the entire coffee roaster industry. Their staffs are friendly and greeted me with the excellent knowledge of their products (blends). This specific store I visited is good for studying or working in group. "Cal Tech" students or white-collars in nearby office buildings were noticeably their regular there. I ordered my usual, Philharmonic, and it's smooth and rich in aroma flavor. The flavor of their blends is undoubtedly consistent like the Jabers pledged. This visit was another pleasant experience for me, in which I spent the entire afternoon there to finish my work.

BLUE BOTTLE COFFEE | Hayden TrACT, CA

Products Score: 80 Service Score: 80 Store Score: 85

Final {verdict}: ⭐️⭐️⭐️⭐️ 4/5

Blue Bottle Coffee, or I shall instead call them the "Nestle", with a valuation of 700M, raised more than $120.66M funding in 3 rounds, has its majority stake recently acquired (Detail agreement didn't disclose to public). With 41 stores over the world in the Bay Area, New York, Los Angeles, Washington, D.C, and Tokyo, Japan, expected to reach 55 stores by the end of 2017, this specialty coffee shop becomes an iconic brand known for offering high quality of coffee, "with an uncompromising attention to taste, freshness and sustainability." Their brand has been known for their modern, elegant, contemporary store decoration; Each store has its idiomatic design to cede an unique, memorable experience to customers, in additional to the high quality of products (coffee & savory) and service delivered. On their menu, besides a list of the usual products offered in any roaster, like expresso drinks, drip, pastry and breakfast, you may be surprised to also find wine available in selected stores. Whenever you visit their store, you'll often feel like walking into a designer store, featuring gift items as clothes and books. You just can't resist the attraction to pick up one or two of their merchandises. Moreover, their full of positive attitude staffs will give you their recommendation if you couldn't decide your order. During this visit, I ordered an unusual for myself, a Pour over with their anniversary blend Alma Viva, to tryout for quality examination. It served along with a petite dark chocolate packed in their simple branded wrap. Very thoughtful and an excellent foil. With their cup of rich aroma flavor, delightful blend, sitting on the wooden staircase to enjoy the scenery outside the glass wall was a joyful experience. To me, their customer experience has been deliberately designed from day one. This has given the opportunity to attain strong word-of-mouth from customers (viral marketing). And their particular coffee experience is a perfect product/market fit to Japanese market, which gained them a great success. Their web portal is one of the few coffee roasters very well sketched - simple but informative. Good branding does help their success in selling coffee, but also aided to create another key revenue stream of theirs in retailing freshly roasted beans and branded merchandises. But their business isn't without any weakness. The Blue Bottle Coffee's business model is very capital intensive in store decoration, hiring and training cost and product packaging, which caused them more consistently raising funds from investors, especially comparing with the Philz Coffee which founded in only a year apart. At the end, they couldn't escape the death of fate of a startup (M&A) to be bought out by a corporation. Moving forward, I wish they can keep their independence and culture from their new parent company, Nestle.

An important conclusion, their success has proven my recent statement - Retail Never Dies.

Thanks for reading! :) Please comment and press ⭐️ below if you liked this article. Your responses would help me to improve the quality of content and other readers.

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