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This show is in partnership with Airbnb. This past summer I took my family to Vienna, and it was incredible. We spent our days wandering the old streets, stopping for coffee and pastries, visiting museums, and just soaking up the history of one of the most beautiful cities in the world. And one of the things that made the trip so special was the home we booked on Airbnb.
It had tall windows, beautiful old details, and plenty of space for all of us. And being in that home on Airbnb, right in the middle of Vienna, walking distance from so much of the city made it feel less like a visit and more like we were actually living there. Plus, taking a trip is the perfect time to host your space on Airbnb. Your place with all of its personal touches and its amazing location could make someone else's vacation even better.
Your home might be worth more than you think. Find out how much at Airbnb.ca. Hey everyone, and Happy New Year! So this week we're running one of our favorite episodes.
It's the story of La Colom Coffee, and this episode is special because you'll hear a bit of an H.I.B.T. crossover. When the company's investors wanted to take the brand in a different direction, La Colom was saved by Hamdi Ulicaya of Chabani, who was also a past guest on the show. We first aired this episode back in 2020, and since then, the story has kept evolving.
Chabani has gone on to acquire La Colom Out, right? And today you can find their coffee, cold brew, and candilates in grocery stores all over the country. Anyway, it's a great episode, and I hope you enjoy it. We started the old investor discussions, and we landed on one.
We did the deal, and that lasted 52 days, to the first board meeting. I said, okay, I believe the cold brew is going to be a thing, and La Colom needs to be the father of it. And they said, nah, we don't want to do that. What'd they want to do?
They wanted us to build 200 cafes. So I just, I said, we're out of here. We're gonna buy you out. Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements.
Hey, built. I'm Guy Raz, and on the show today, how two part-time baristas in Seattle became best friends, moved to Philadelphia, and went on to pioneer the specialty coffee movement in the U.S. by founding La Colom Coffee Roasters. Tell me if this sounds familiar to you.
You're in your early 20s, and you don't really know what you want to be when you grow up. And one day, you're hanging out with your best friend, maybe sharing a meal, or a drink in their apartment, or at a dive bar, and then one of you says, hey, you and I, we should totally start something together because we are an awesome team, like a record store, or a beer bar, or a podcast company. Whatever it is, you both get really excited and start coming up with all kinds of ideas. The type of beer you'll serve, the kinds of records you'll play in the store, the podcasts you'll make, you can't stop thinking about it.
But then, a few months later, reality tends to kick in. You get a job offer with health benefits, your friend gets into a relationship with someone who wants to move across the country, and the whole idea fades away. Have you been there? I have.
So have Todd Carmichael and J.P. Bertie. Except, in their case, it didn't fade away. Back in the late 1980s, Todd and J.P.
dreamed of starting a specialty coffee shop. Well, it took a while, but eventually, they opened it up, and called the shop, La Calone. Now, this happened to be around the same time that two other coffee companies were starting up, one in Chicago called Intelligentsia, the other in North Carolina called Counterculture. And along with La Calone, these three coffee brands came to be known as pioneers in the so-called Third Wave Coffee Movement in the U.S.
The first wave was instant coffee and diner coffee, basically coffee that was cheap and generic, that people drank a lot of after World War II. Then, in the 1970s and 80s, places like Peats Coffee and Later Starbucks introduced Americans to the Second Wave, coffee with a more sophisticated flavor profile, and European-style drinks like Mespresso's and Latte's. And the Third Wave, well, it basically defines what most high-end coffee shops are today, places that source high-quality beans directly from farms, often roast the beans themselves, and have highly-trained baristas pulling your espresso drinks. La Calone started out as one shop in a rundown part of Philadelphia.
Today, you can find its cold-brew cans in tons of convenience stores across the U.S., and the company is now valued at around $1 billion. But to get there was a long, slow grind, as you will hear them explain. J.P. Eberti, the J.P.
stands for Jean-Philippe, was born in Southern France. His dad ran a business supplying fresh meat and produce to restaurants. But Todd grew up literally and figuratively a world away in Eastern Washington State, and at home, a lot of times, his mom struggled to put food on the table. My father left just as I was born.
My parents are both bipolar, and so that kind of really dictated a lot of their lives. But my father did kind of come in and out as folks who struggle with their minds do. But my mother was really the constant. What kind of jobs did your mom do to support the family?
Well, first, she couldn't maintain an office job for very long, and what was left for her was either typing pool, but typing pool is very difficult for a bipolar person because they're so inconsistent. You know, they could work for four straight days, but then they could not show up for two, right? And so it became cocktail waitress. And usually not in the glamorous places.
She was a cocktail waitress in, like, truckstop kind of places. So you were mainly raised by just your mom and presumably not a whole lot of financial security as a kid? Yeah, yeah, yeah. I guess they call that food insecure.
We just call it kind of hungry back then. And I had three sisters as well. And so we kind of took care of each other. And I knew I needed to leave my hometown.
I just didn't know how to do it. I had a globe that my grandfather gave me, and I studied it and studied it and studied it. And I started these dreams. They weren't monetary.
It was more like I wanted to live. I wanted to live a life. And I knew it couldn't happen there. What did you do for money to pay for your own, like your car and whatever?
Did you have, like, side businesses as a kid? Yeah, I did lots of different things. So I had one of my main gig was farming. And then I had side gigs.
I'm really good with my hands. I can fix things. And so I started buying equipment and refurbishing it and selling it. It started with lawnmowers and it got all the way to large equipment.
And so it was always the side gig going on. And then the main job was harvest. You got into this and running across country, I guess, in high school. And I guess it was a pretty good runner.
Is that right? Yeah, I was a state champion team. We won two or three years in a row. I was in top 10 and 5,000 and then I got a full scholarship to the University of Washington.
And bear in mind, I mean, so poor kids don't really get great educations for lots of reasons. One is that you just keep moving a lot, right? So by the time I got into the University of Washington, I still didn't know how to add fractions. I mean, I didn't know anything about the world.
I didn't know nothing. And so there was this big piece of makeup that happened once I was able to leave and start real school. So I didn't really start school school until I got into University of Washington. But it sounds like you were, like, really interested in learning.
I mean, maybe school was difficult for you, but it sounds like you really actually applied yourself. Oh, yeah. So bipolar disorder really takes hold of you in your early 20s, right? And, you know, I've seen it in my family.
And so I was against a ticking time bomb. You thought you, it was just a matter of time before you were diagnosed. Yeah, I was afraid it was coming. Yeah.
So I wanted to get as much in my brain before that happened as possible. So I was under a time constraint, I thought. I remember thinking that. And then I think the desire to apply myself at school that way, too, was just absolute fear.
Just the fear of failing and the fear of being the first to go and not being making it through. Or I don't want to be poor. Yeah. I just deep fear of being in a trailer.
And it was real to me. So in 1982, you are in Seattle, starting at the University of Washington. And you also have a part-time job, right? I guess at the time.
This is Seattle before, like, sub-pop and Starbucks and Microsoft. I mean, they were sort of there, but it's still like early 80s Seattle, totally different places today. And you've got a job at Starbucks, right? That's right.
So, you know, when I showed up, all I really knew how to do well is fix motors and harvest. And I couldn't really work where other students were working. And I looked into a warehouse, you know, just right off the bus line that would take me to school. And there were these guys dragging these grain sacks around.
And I thought, that's grain work. I could totally do grain work. I could help sacks all day long. So I got the gig.
And when I went inside, you know, the names on the bags were way different than I expected. You know, they were like Rwanda, Burundi, Uganda, Panama. And I realized that right then this was raw coffee. And you probably knew nothing about coffee, I'm assuming.
I knew zero. You know, I knew that, you know, from my grandfather drank instant coffee. That's just about all, you know. But what I liked about it was not only was it a gig, but the names.
That's the world that I had dreamt of. That these bags actually came from those places was just mesmerizing to me. Alright, so you get a job at this warehouse moving sacks of beans, right? But what happens to me?
Do you, like, I'm trying to figure out how you go from hauling bags of coffee at the warehouse to getting really interested in coffee? Well, what I really wanted to do, and this probably exposes the kid in me, but I wanted to be a barista. I wanted to be the cool kid, right? And Starbucks wouldn't let me do it.
You know, come on. I mean, I was a flannel wearing farm boy, you know, cut my own hair. It was just, I probably didn't present as well as they'd like. And so I changed teams.
I went over to a place called Espresso Roma. And they gave me a shot at it. Then I became this barista. And did you learn how to roast coffee?
Not, I mean, I did, but not to a degree that I would call it skillful. Like not like JP. JP is the master of that, you know. Alright, so this is 1982-83.
You're working on the coffee place. Your student at the University of Washington. JP, tell me about where you grew up. You are originally from France.
That's right. I grew up in Nice in the south of France. My dad was a purveyor of food and vegetable. He started the business and became pretty successful.
And my mom was a homemaker. So I had a good uprising. I have two older sisters that basically were out of the house when I was growing up. And I think my parents were over, I think, children when I was growing up.
I guess as a kid you were interested in aviation flight. Is that true? Yeah, yeah, that's from, you know, I wanted to be a pilot. I was fascinating by, you know, flying an airplane.
And my sister married an American guy from Seattle. So that was the connection to the northwest. Ah, got to that. So you knew about Seattle from him.
And then, and I read it, you basically, after I so went to Seattle to go to flight school, right? That's right. I did a lot of my flying out of a Boeing field in Seattle. And I went to a little cafe called Toe Fezion Italia, which was in Pinar Square.
First generation Italian family. And basically we became really friend. And one day they offered me the job. And I took it.
I became a barista. Okay. So you are in flight school and get this job at this coffee shop, this coffee bar in Pinar Square in Seattle. And Todd, how did you, like how did you meet JP?
Was it through the coffee shops somehow? So first, I'm hearing these rumors that this French guy is working for TI. We called it 25th of the Italian's TI. And how did you, how did you hear?
Why would you have even heard that rumor? Because you got to imagine that there's maybe six cafes in Seattle. Oh, I see. Okay.
And to be a barista by then and to be in coffee was like being like a DJ. You know, you were known. Yeah. And so TI was like, I have to say, it was, at that time was the best coffee roasting company in the United States of America.
Hands down. Well, that little shop in Pinar Square. Oh my God. Yeah.
Umberto was a very famous roaster in Italy, before he even started roasting in Seattle. So he came in with like top shelf knowledge that no one really had access to. And so there's this rumor that this French guy is around. And there's this new sound that was happening at the time, right?
But they called it was called grunge, right? Yeah. And there was a band called Green River that later would become Pearl Jam, right? Sure.
So there was this little venue called Oxford. And they put it at the stage and this band called Green River was going to come on. And so you can imagine the crowd and they didn't serve like beer in a glass. They'd serve, serve, bring your beer in a can.
Yeah. And I'm standing at the bar solo and this guy walks in. He's got a gold, like looks, I think it's silk vest over a white puffy sleeve shirt. And it's this French guy.
And he actually reaches over the bars is, I'm buying a breeze. So he orders the champagne. And I said, are you this Jean-Pierre guy? And he goes, Jean-Philippe.
And I was like, okay, Jean-Philippe, he rose for TI. He goes, yeah. And then the next question is he goes, do you have a stove? I see, I have a stove.
He goes, can I use it? And I'm, you know, I still have very little money. And I go, you could use it anytime as long as you cook for two. I thought I could get some free food out of this.
And that's how we met. And literally Thursday, Friday, Saturday night, every week for the next three years he cooked dinner at Miles. So JP, is that your recollection of what happened? Yeah, I'm not sure about the gold vest.
You know, I'm looking back and I'm not sure I ever owned one of these, but it might have had some, yeah, I'm not sure about the gold vest. You met Todd and you asked him if he had a stove, like a cooking stove? Like, didn't you have an apartment where you lived that had a stove? Well, I lived on campus and it was an electric stove, so it wasn't that great.
And, you know, until I left France, I didn't realize how food was important to me. You know, and 87 was a different time in America. I mean, coffee was getting here and getting good. But, you know, things like bread were not where we are today.
It was a different world back then. So food was important. And I wanted to eat. So, you know, we probably talked about food and, you know, back and forth.
And the question was, yeah, you have gas stove. And that's really the kind of beginning of your friendship. Yeah. And then from there we would eat and we would play cards.
We would drink whiskey sometimes, remember, JP, or like really cheap wine. And then we began dreaming about the world's best coffee company. Both of you guys start to hang out and you start to say, hey, we should maybe one day open our own place. Yeah, that's how it finished, how it started was with ideas.
Like, why don't we go directly to the farm? That's what your father did. And I know it's working from a farm that if you take the time to come to our farm, you would get the best stuff. So, we would talk about this whole concept that later on became coffee sourcing or farm to table.
And then later on we just made it. But meantime, JP, you were still starting to be a pilot. I was, but it was, you know, it was a good escape to dream, you know, about starting a business. And I was not committed this time.
You know, for me, it was still just a dream. You were just kind of spitballing ideas. People, yeah, two young guys just hanging out talking about, you know, wouldn't it be cool if we did this? Wouldn't it be cool if we did that?
Meantime, I'm tired. You have graduated from the University of Washington. Was that what you were doing working at the coffee place? Was that how you were making your living?
No. So I graduated. I'd applied for and got into business school. And so then I got a job as a tax consultant for a company called Ernst and Winnie at the time.
It was one of the big eight accounting firms. I was wearing a suit. I had a leather lunchbox and everything. And you do that job for a year from what I understand.
And then you took off. You left the US. Yeah. Tell me the story.
Why did you leave the US? Well, where'd you go and why? Well, I mean, the wise is multi-faceted. You know, part of it was it was becoming clear to me that I have a furnace in my brain, right?
So that I inherited certain traits from my parents. And that sort of environment wasn't safe for me. It was an environment of working in an office. Yeah.
I had a lot of confidence in my skill set. I had a lot of confidence in myself. It's not that. It's just that I needed to go and find a place that I could fit.
Right. I knew I needed to put together $95,000 so I could start this coffee company with my best friend. Wait, so you were totally committed to this idea. You really wanted to start a coffee company with JP.
And JP when Todd said, hey, I'm going to go overseas because he went to Europe. And then I'm going to come back and start this business. Did you take that seriously? Or did you think, okay, have fun?
Yeah, I mean, you know, this is closer to $89.90. At that point, I moved in working in the afternoon in a production warehouse. So, you know, I was really learning the whole thing about, you know, producing coffee, but also serving coffee. And I really liked what I was doing.
So, you know, I didn't mind the dream of starting our own place. Sure. But yeah, and Todd ended up going to the South of France, which where I'm from. So, you know, I connected them with all my friends, people I grew up with.
And I remember JP, you took that flight. We flew together, remember? Yeah. You both flew together that first time you went out.
Yeah, you accompanied me and then he spent a week or two with his family and then he flew back and I stayed. But when you were in France, you did not speak French going in there. You just like landed there and what did you start to do to earn a living? Well, right away.
It was pretty simple. I took a train into Monte Carlo and I interviewed and got jobs. I mean, accounting jobs right away. Because most of them were like shipping companies.
Yeah. A lot of companies that are there to avoid tax. So, they're not really part of the culture. And so, you know, the operating language is English.
Sure. And I did a lot of our jobs. That's for sure. Consulting, tax work, accounting.
No job too big, too small, kind of thing. Yeah. I found a little boat. I reconditioned it and I lived on it.
So, basically, I always kind of embraced the idea that, you know, you could save money by living in poverty. So, don't change that, right? And JP, what did you do for those three years? Just continue to work at the coffee place and study, maybe Asian?
Yeah. Yeah. I worked a lot in coffee. I mean, we were getting, opening more stores, getting busier and busier.
And the business was really blooming. So, I was becoming a big part of Toifa San Italia. And that was really, it really became my center. Coffee, my coffee profession, just took over.
This one I realized, hey, this is going to be my career. You know, my center was the university and flying for a long time. And then it shifted. So, Todd, while you were in Europe, I guess, you actually wrote down a business plan while you were there, right?
For this idea of a coffee company that you've been dreaming about. Yes. By hand, with the pen. Okay, so you sat down and what was the sort of the rough outline of the business plan?
What was it going to be? What was it? A coffee chef sells coffee and what else? Well, the idea, and it was both JP and I, is really just written down, is that we were comfortable being purveyors.
And we wanted purvey to the very best of the best of the best. We had a deep, deep belief that there would be this restaurant Renaissance in America. There was going to be this huge inflow of French and Italian high-level cuisine and that the coffee in America wasn't going to accommodate it. Coffee in America was just dedicated to, you know, fast-to-go business Starbucks style.
That they weren't bringing it to the culinary level. And we were that company. We wanted to be those people and we would work directly with the farms, we would work directly with the chefs, that we would bring coffee to a whole new level. It's not just like salt and pepper on the table, but it would be, we'd give it a name, a place, an identity.
In your mind, JP, do you think this guy's going to come back? Or was that, I'm just trying to, because it sounds like, Todd, you really had a very clear plan. Like, you had this plan, you knew you were going to do this one day. Were you kind of JP, were you just sort of waiting for this to happen?
I knew you were serious, you know, but I didn't say yes and I didn't say no, right? You know, I knew a lot about the kitchens. I knew a lot about chefs. I knew a lot about coffee and Todd had the business and the coffee experience as well.
And it was just clear. It was, you know, I knew that once we both said, hey, let's do this, it was going to be a success. All right. So Todd, after three years, you've saved enough money.
Did you just like move back to Seattle and say to JP, hey, let's do this. Like, was he ready to jump right back in with you? So I didn't move back to Seattle. I flew there and I squatted in his closet.
In JP's closet. Yeah, I had a closet that was big enough for me to lay in. And I told him I wasn't going to leave until he agreed. Although I did respect how hard that would be on him.
We had a long conversation. I could feel that he was leading because let's get real. You know, there could be no lack alone without JP. There could be no Todd without JP.
And I don't think there could be a JP without, you know, it's like, it's the key ingredients. And so JP had, it took you some convincing. How long do you think it took you before you said? All right.
I mean, I think it was a process. You know, it probably took me to all three years to get there. That's right as well. Todd was away.
Yeah. And really seeing, you know, when something happened with Toy Fassian Italia in 1993, it all came to a cross road. And Toy Fassian Italia was sold. And it was a strange time.
You know, I was like, oh man, this is the end. You know, I was going to be gone. All the people that, you know, I like family to me are going to be gone. So then at that moment, I knew that if I wanted to stay in coffee, I had to do something.
I mean, a friendship was already, you know, a brotherhood. You know, and it was clear that I was not going to do something on my own. Well, we come back in just a moment. Todd and JP walk into one of the top restaurants in the country, uninvited, and walk out with their first account.
Stay with us. I'm Guy Raz, and you're listening to How I Built This. Hey, welcome back to How I Built This. I'm Guy Raz.
So it's 1993. And JP and Todd have decided to start their own coffee business. But the first thing they need is a name. And JP finds inspiration in his hometown.
I come from a Lio town called Simple Divanos, who's very well known for the culture. A lot of painters, a lot of writers spend time there, you know, big name, Picasso, Matisse, painted there. And there's a Lio bed and breakfast that became really famous because the artist used to stay there. And instead of paying women, board, they just left sketches.
And it's called La Colón d'Or. And I have a connection to it because, you know, it was one of my father's account. You know, he served fruit and vegetable there. But we also knew the family very well.
The family that founded it were friends. And, you know, I ended up having a summer job there when I was 13, 14, you know, wishing dishes. And, you know, so I think the inspiration of the name is connected to the place. But it's also the symbol of what La Colón did, you know, internationally.
Because Colón means, it means dove, right? Yeah. And so that sort of evoking that kind of idea that La Colón was the idea behind it well. So here's the amazing thing.
This is 1993. You're back in Seattle. Seattle is the epicenter of U.S. coffee culture at this point.
I mean, this is ground zero for the explosion of coffee in America. And you guys are in Seattle. You make total perfect business sense to open up in Seattle at that point. But instead you start looking at cities on the East Coast and you end up in Philadelphia.
Why Philadelphia? So, Philly was a different place then. But we ended up walking the city. And it's a beautiful city architecturally.
The way it's laid out is an amazing city. And being European and walking and cycling everywhere, I still use my bicycle to go to work. For me, the fact that we could walk anywhere was just like, this is definitely making the top of the chart right now. And there was huge opportunity in terms of getting production space, warehouse space.
Just because the city was probably at the bottom. So the two main beautiful roads in the city right now is Walnut and Chestnut. They were pretty much closed down. There were no cafes in the city.
You know, the city of a million-some people. And there wasn't one cup of coffee. So, JP and I went and I said, hey, remember JP we sat and we had some beers together. And I chose to interpret everything that we'd seen this way.
That if you're going to take an elevator ride and you're looking to get altitude, you want to get in on the ground floor. And that Philadelphia was displaying that it is here on the ground floor and it can't stay this way and will not stay this way. This was, had you either of you ever been to Philadelphia at that point? Never.
He'd never been there. I mean, we saw great opportunities in Philadelphia. You know, we saw a city with great bones. And it was fine for what we wanted to do that the city especially after sundown, it was nobody in the streets.
But, you know, it didn't really matter because our idea was to be purveyors and to serve the kitchen. So, it didn't really matter. You know, and what's the thing that was important is at the time, the Bech Fahn was voted, which is a Philadelphia restaurant, was voted number one restaurant in the country. George Perry was the chef at the place right now.
And also the proximity to New York City. And also, presumably Philadelphia was cheap. Very. And, samely so.
So, you find a location on Rittenhouse Square, which is probably the most famous place in Philadelphia today, one of them. What was it? It was like a small storefront that you found? It was actually two.
You know, this area of the town was really suffering. Businesses would come and go so quickly that there was spaces almost everywhere. But they were all, you know, fill your spaces, so they're really narrow. So, we found two side by side.
So, we took them both. And we just smashed the wall between them and started working. And where did you just source the equipment from? You just bought a bunch of, I mean, you had some money to start out with because you'd save that money.
So, you used all this capital to buy roasting, like roasting machines? Yeah. Yeah. We took an epic trip during the summer.
We traveled from Nice. All through Italy. And we bought everything we needed. Roasting equipment, espresso machines, hand pendant, ceramic, grinders, everything that we needed.
We needed hand pendant ceramic because you served your coffee. I think you still do. I've been to that location offered in House Square. And I remember the first time I went there, I was struck by the hand, like, the painted, earthenware ceramic mugs that you got in the little, like, little saucers that they came on.
And that was from the beginning. That's how you served coffee there. Yeah. We were traveling all the way through Italy.
I always remember it because we had an envelope and we had travelers' checks. And we would go directly into a factory and begin negotiating, like, on the floor. And we went, okay, we'd like those two espresso machines. We'd negotiate, negotiate.
And we'd go, all right, take the box off. How about if we don't take the box? Like, we would hump these machines into his dad's car. Like, and we found the roaster in Northern Italy, paid for it, strapped it to a pallet and watched it ship.
So it's 1994. You've got a small occasion offered in House Square if you're roasting beans there. And by the way, I live in the Bay Area. So I pass by several roasters on a given week and you can smell that smell.
It is really strong. Like, when you're by a roastery, I mean, we're any of your neighbors and the other businesses, like, sort of, I don't know, complaining. It's a nice smell, but it can be overwhelming. Well, we ran our first load and it was clear that with that environment and that part of town, you couldn't roast in that cafe.
You had all this equipment in there. You realize you actually cannot roast in there. You personally didn't have the ventilation for it. We didn't have the ventilations.
It was not going to work. The way the building is formed, the way the wind comes down, and the barometric pressure. It was that moment where I thought, like, we were ready to open. I mean, we had now to spend all, I think we had maybe $500 left in the bank account.
I mean, there wasn't anything left. We needed to go. And we had all the green there. Everything was ready to fire up.
The green was the coffee beans, right? Yeah. And it was really clear that we were not be able to open. I mean, it was just this, the nightmare scenario in my mind was like, oh, they came this close, right?
So I went and rented a jackhammer. And I jack hammered a hole into a garbage chute that runs outside of the building. And I think it's about 20 stories high. Yeah.
And I then cemented the piping into the garbage chute and told JP to fire it up. And now it takes forever to get that whole chute heated up. But once you get hot air to rise, it just sucks it like a syringe. Up the garbage chute.
The garbage chute was your chimney. Yep. I'm assuming you did not ask for permission to do this. No.
No, no. In fact, we built a cafe with no permits. Like I did all the wiring, all the plumbing. Like we asked forgiveness rather than permission on pretty much anything.
But the big deal was if someone would force a giant bag into that chute, and it would get lodged. And so I would take the freight elevator up, go up on a roof, and we would drop bowling balls. Never give me a dislodge the trash. Didn't anybody complain in the building?
Yeah. We just get a lot of complaints. We got the fire department in, you know, about two, three tons a week. Oh, because somebody was like, somebody's burning.
Yeah, exactly. Yeah. Into the fire department. Say you or anything?
No. We would turn the lights off and hide behind the bar. We would hide totally hide. Yeah.
And then we rose there in the middle of the night, which helped but made the life just really, really rough. Yeah. How did you in that initial batch of coffee? Where did you get it from?
Where did you, was there like a distributor in the US that you went to and said we want, you know, a hundred bags of this and a hundred bags of that? That would have bankrupted us. Yeah, but only a few bags. And where did you buy it from?
I think the broker was, I think they're still around. I think it's called the paragon coffee out of New York. And how did you know which coffee to buy, like which one was going to be good coffee? We sampled a lot of coffee.
Oh. I mean, hundreds, hundreds. We have just behind me, obviously the podcast folks can't see it is the original roaster. It's a little cylinder.
It holds about a half a pound of coffee and you put it on a gas stove. You put your green coffee into it and you turn it by hand. And then you dump it all out to a colander and you use some kind of layer to cool it down. And if you would have gone to JP's apartment at the time up in Spruce Street before we settled on all that buys would make, we had hundreds of bowls of this coffee everywhere.
And we were hand grinding it and copying it and hand grinding it and we built up our first blends there. And in 1994, right, even though Starbucks was starting to kind of grow, it was in San Francisco and Los Angeles and people were sort of starting to develop a taste for that Starbucks Darker roast, which a lot of people for a long time hated. They thought it tasted burnt or bitter or how did you know what people would want to drink at that point? I mean, it was still, you know, our coffee pallet wasn't that sophisticated in 1994.
Yeah. But you see, we had the best audience. You know, we had chefs. Because you were going to restaurants.
You were focused on really trying to appeal to chefs. Oh, yeah. That was it. That was it.
And part of two is it's you. If you love it, then that's the one you should stick with. You know, so first we wanted to please ourselves and then you introduce this to some of the best pallets in the world. And they like it.
You're good. I think it's really hard to make food and beverage for everybody. It's like Kurt Vonnegut wrote for his sister. He wrote for one person.
And I think that when I make food and beverage, I have like one or two people I think about. How did you find the restaurants? How did you get into them? How did you just kind of pound the pavement and start to call and well, I'll tell you about the first one.
And then that started the whole kind of process. So it was October 15th. We walked on the street. We went to the number one restaurant in the country at the time, the big farm.
We went into the back of the kitchen, someone stopped and asked us, what are you doing here? We were here to make coffee for Chef. So they just assumed maybe that was an interview. So we went and we tore the grinder down, cleaned it, tore this breast machine out, cleaned that, put our coffee into it, made a beautiful, beautiful coffee.
And I said, where's Chef? We went upstairs. He was screaming. He was a screamer.
It was the 90s, right? Wanted to know. And we said, we're here to make coffee for you. And we just put it in front of him and just step back.
And so that's how we got the big fun. That day. You mean he said right then and there, okay, you can be my coffee supplier for my restaurant. He actually picked the grinder up with the old stuff and threw it all in the trash and said go get your shit.
In other words, bring your stuff now. It's the truth. Yeah. And you thought, all right, we've got to start with a little bit of a con because that is the best French restaurant in the United States.
And if we're in there, then other French restaurants or other high-end restaurants are going to want our stuff. Well, the second one was the same day was the Jean-Marie Le Croix extraordinary chef. Also in Philadelphia. It was the four seasons, right?
Yeah. Yeah. That's right. And we did the same deal.
We just walked in the back. So we're here to make coffee for Chef and he said, bring it today. So that night we were being brewed in two of the best restaurants in the country. And by the end of that week, we're getting calls from major players in New York and everyone would say, would you just go for you?
I went to try it. It was all the Frenchies. Yeah. And you know, the media were not what it is today, obviously.
And by then, Chef would only talk to Chef, you know, they wouldn't buy things because they saw it not somewhere. But once somebody finds something, they're eager to talk about it. And by the way, what was your price point higher? I mean, was it more expensive to buy your coffee?
When we arrived in Philly, coffee wholesale to restaurants was about $1.50 a pound. And ours was the mid-7s. So weren't some restaurants like, are you out of your mind? No.
They weren't. No, because we explained to them, I go, Chef. Coffee is a spice. And that's all I had to say.
Because you could buy saffron for nothing and you'd have to use like a bird's nest amount in your dish to make it tasty like saffron. Or you get the stuff from Pakistan or Afghanistan, or you use a pinch, but it's going to cost you. And they understood that. And was it pretty clear to both of you right away that you were going to have a sustainable business within the first six months that you were going to turn a profit?
Yep. Do you remember, JP? Yeah. And I don't want to look at it and say it was destiny or whatever, but it was so clear because the space between the food that these restaurants were serving, the level, was so high, the food was so good.
The coffee was in the dining room. It was such a void. They were so clear. Yeah.
And you know, we got one, two, three, and it started. We got no. It just burned. It just burned.
Let me come back in just a moment. How Todd and JP started to explore sourcing coffee beans directly from farmers all around the world. And later on, how a big private equity investment in the company turned into a nightmare that how Todd and JP managed to wringle their way out of it. Stay with us.
I'm Guy Ross and listening to How I Built This. Hey, welcome back to How I Built This. I'm Guy Ross. So it's 1994 in Philadelphia and Todd and JP are selling wholesale specialty coffee to more and more high-end restaurants.
But the idea of premium and expensive coffee still isn't mainstream. And Todd and JP find that it's a challenge just to describe to consumers what's different about the coffee they're making. Because espresso in America at that point was an abrasive liquid. It was not to be consumed without tons of sugar or milk on it.
And we wanted to break that mystique. So we were looking for something that was European, but like nine levels higher. We wanted something nutty, sweet that was like molasses. So that's what really guided us.
Yeah, I mean, the word I remember using describing the first coffee we did was balanced. We really wanted to achieve a soft, sweet finish because we felt like the American consumer, the public at this time, needed to be intruders to better coffee, but also not to scare them away. So it was important that the coffee were really clean. And this is something that we focused on and we had a role.
It was three words. I remember it was three words per blend to describe them. And that played a really important role in creating those first three, four blends that we made. I'm just curious why you were so focused on the cafe.
I mean, the ceramic cups and the service in that cafe. If you never intended to open cafes, if that was not your business plan. Street cred. Street cred, street cred.
We're serving some of the greatest chefs in the country. And if we were going to have a brick and mortar space, which we really felt we needed one to have some street presence, we needed to execute on a level that no one else could. And did you get beyond the North East and the Middle Atlantic, were you distributing to places beyond that? Yeah.
Yeah. It's a funny thing with kitchen. You know, a lot of people go into a kitchen and then move away to San Francisco, LA, Denver, Miami. We had such roots in the kitchen, we supplied that people ended up taking us with them when they moved.
So we did move from kitchen to kitchen, you know, and it went, when these started, then it went a lot faster. Meanwhile, in the 1990s, were you still buying your coffee from brokers or were you starting to buy it directly from farms? As the 90s, we started weaning off that because it was clear that, you know, at first we, you know, we were the only ones looking for that type of coffee. So we had, you know, everything was easy to get, easy to get.
No one else wanted it. You could pick whatever coffee you wanted at the beginning, but then became harder as high end roasters started to come online. Yeah. The demands started picking up.
And then it was, it was clear that we, our timing was right. So it dovetailed right into, let's go look for ourselves, right? How did you do that? Well, I mean, when the first ones was strangely enough, we met a Swiss guy who owned a farm in Brazil.
Remember that? What was that guy? Swiss guy's name? Ors.
Ors. Yeah. And you met him. We met him.
Where would you meet him? Oh, God. How do we meet him? We met him through a 19th street.
We don't know his cafe. You came in. Oh, that's right. So I think we met him through like chocolate.
I'm hungry for it. So you go to visit this guy's farm and he has a coffee plantation in Brazil. Yeah. Okay.
So you go there and what do you see? Well, then, you know, you spent time on the farms and we start figuring out right away exactly what's making the better coffee and what's making the inferior stuff, right? We start immediately getting interested in varieties and growing styles and all that, which is not a big giant leap. The real key is how do you get all these boxes from, let's say, a mountain in Rwanda to Philly?
This is the challenge and the process is that it has to go through. So that is the real big first step. It's like figuring out how to do that, how to put a supply chain together. Once you get that, then you go, all right, then you feel confident walking into Haiti and going up in the mountains and saying, all right, let's look for some farms.
So it was literally because the coffee business is very, very, I think, complex as an understatement, right? There are so many middlemen and when you go to the actual farmer, they're making pennies. They're not making anything. They're selling it to a little man who has a couple of connections in the bigger city and then sells it to somebody in the bigger city.
The bigger city person is. They're the ones who are selling it to a distributor in the US. So there's a lot of hands that goes through before it comes to the roaster and the people at the bottom of that chain get nothing very little. And you have an idea that that's what's happening.
But when you go and you visualize it, you see it and you see the eagerness that farmers have to work with you because that chain of events that you described can sometimes be 10 or more deeper than that. Wouldn't there be middlemen who would feel threatened by this? Who would say, you know, who would threaten the farmer or maybe even threaten you guys? Or that didn't that happen?
Well, in the case of Brazil, no, Brazil is a very sophisticated country when it comes to farming and you're not going to really run into it there. You can go directly to a farmer and say, I want to buy your beans and it's fine. But you say El Salvador? Oh, indeed.
Haiti. Oh my God. Haiti, there were times that I felt, yeah, this could be it. I'm probably going to not make it up here live.