Coffee, Rumor and Innuendo
Wednesday, June 1, 2011 at 4:00PM Last Friday, I posted a link to what I said was a sign of the impending rapture—that Stumptown Coffee was in negotiations to be bought out by Starbucks. There was absolutely no truth to the rumor whatsoever, so you can imagine the surprise I felt today when I went online to read the latest coffee news and one of the first things to come up was a story claiming that Stumptown had been sold (though not to Starbucks).
Todd Carmichael, the founder of LaCombe Torrefaction, an East Coast-based coffee company, wrote an article for Esquire that Stumptown’s Duane Sorenson had “sold his life’s work to the highest bidder.” Needless to say, this caused quite a stir in the coffee blogosphere and Twittersphere. Could it really be that Stumptown, Portland’s most famous coffee company who seemed to be everything but corporate, could be ‘selling out?’ What would that mean for Portlanders who cannot stand the idea of supporting a “corporate” coffee company? The idea seemed an anathema to many people.
There were several reasons to be skeptical about the article’s accuracy. Carmichael likes to make fun of the hipster coffee culture, as evidenced by this article, so it is not surprising that he took a shot at Stumptown. Also, the tone of the article and lack of evidence in it, lead one to believe that Carmichael, whose company is a direct competitor to Stumptown, does not like the fact that Stumptown is expanding on the East Coast and was looking for a way to give his rival some bad publicity among the anti-corporate crowd.
In response to the news, Willamette Weekly dug up a document showing that Stumptown Coffee Corporation, which is a separate entity from Stumptown Coffee Roasters, did apply for an amendment to authority with the Oregon Secretary of State at the end of April. The new agent for the company is Alexander Panos, a managing director at TSG Consumer Partners, a private equity firm based in New York. In other words, there was a small bit of evidence behind the rumors.
However, the document does not address any questions about any relationship between Stumptown and TSG. It is impossible to tell from that document what Stumptown’s plans are, and Carmichael’s speculation is premature, unless he has other information. Esquire, if it wants to be taken seriously, needs to make sure there is more evidence before an article like this is published, especially when the author has a financial stake in a rival company.
Update: In the latest news this afternoon, also from the Willamette Weekly, Stumptown responded to the article, saying that it did open itself up to some outside investment to help fund its expansion, but that Duane Sorenson, Stumptown’s founder, is still in charge. Therefore, Portlanders can relax—Stumptown has not sold out. You do not have to worry about losing another local chain to corporate America.
Update 2 (June 2): Stumptown did allow for some investment by Panos (Sorenson still controls the company) and the plan is to expand into Chicago and San Francisco. The NY Times has the story here.
Update 3 (June 6): Willamette Weekly is today reporting that Stumptown sold 90% of the company to TSG, though it seems like the source is Carmichael. It's hard to know what to believe. . . You can read the story here.
My question is, if Stumptown had sold out, so what? It is Sorenson’s company, after all, and the last time I checked, we still live in the USA, where capitalism is the economic system. If someone wants to build a company and sell it so that he or she can fulfill other dreams, that should be his or her right. There is nothing especially noble about starting a company and staying with it until you die. Times and people change—we have to accept it. Unless, of course, the news is just a rumor or a blogger’s attempt to be funny.
