Starbucks acquires Coffee Equipment Company, Clover

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Starbucks acquires Coffee Equipment Company, Clover

Postby tonx on Wed Mar 19, 2008 10:32 am

congratulations Zander and crew

A big day for Clover, much deserved. And Zander sounds calm and composed in front of an audience of 6000. Congratulations guys!
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Re: congratulations Zander and crew

Postby phaelon56 on Wed Mar 19, 2008 10:38 am

Tonx - can you inform us... the great unwashed masses in the boonies.... what event you refer to that involves Clover and an audience of 6000?
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Re: congratulations Zander and crew

Postby Alistair Durie on Wed Mar 19, 2008 10:51 am

Starbucks Coffee Company today announced that it has entered into an agreement to acquire The Coffee Equipment Company and its proprietary Clover® brewing system.

http://www.starbucks.com/aboutus/pressdesc.asp?id=848
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Re: congratulations Zander and crew

Postby Matt Milletto on Wed Mar 19, 2008 11:09 am

uhhh ...
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Re: congratulations Zander and crew

Postby Sebastian Sztabzyb on Wed Mar 19, 2008 11:34 am

Wow. Is anyone else in a weird state of shock?

Besides the crazy publicity that this will generate for the Clover, what does it mean for quality focused cafes who currently sport a Clover as one of many vehicles to create differentiation? One of the aspects that appealed to me about Clover as a company was its size and ability to take the community's feedback to work towards a brewer that is finally capable of showcasing the coffee's true potential. What now?
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Re: congratulations Zander and crew

Postby andynewbom on Wed Mar 19, 2008 11:38 am

awww shucks.... there goes the Clover for the rest of us. Apparently Schultz is serious about putting up the image of quality coffee. Too bad their coffee is so nasty.

I guess we will not be gettign our next few Clovers after all since Starbucks will be getting them all now for the next year or so. Guess we will all have to go back to less automated brewers and making stuff by hand.
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Re: congratulations Zander and crew

Postby Matt Milletto on Wed Mar 19, 2008 11:39 am

i also posted this on bX ... and yes, in a weird state of shock ... will be good to hear more details ...

first off, from a business standpoint I do want to congratulate Zander and all at Clover ... they are excellent entrepreneurs and should be rewarded for their innovation and hard work ...

second tho ... OMG is this for real? I can't tell you how many times in our classes, when giving a Clover demo, I have told our students ... "A Clover will really set you apart from your competition, it is something Starbucks will never have in their stores." Guess I was wrong. Curious how this will effect independents who also want to serve Clover. Will we have to buy from Starbucks now? Wow.

- Matt
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Re: congratulations Zander and crew

Postby phaelon56 on Wed Mar 19, 2008 11:44 am

Hmmmm.... I can't see a big market for Clover Coffee in Starbucks stores per se but I can see why Starbucks would want to acquire the intellectual property and the people behind it. Is it possible that the 'bucks wants to raise the bar on the quality of their drip coffee by somehow developing their own brewing system that would be faster and better than what they use now? And would include networked connections to every brewer that would allow it to be monitored and tweaked remotely?

I doubt that Fetco, Bunn or others are remotely close to having the goods in that department but I can see the folks at Clover as being easily able to execute such new products with the right resources behind them. Once upon a time Starbucks tried to buy La Marzocco but were unsuccessful in their efforts. I'm not at all surprised to see this development and wish all involved the best of luck.
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Re: congratulations Zander and crew

Postby Sandy on Wed Mar 19, 2008 12:05 pm

http://www.tradingmarkets.com/.site/new ... s/1221296/

wow. :shock:
i recommend that ya'll read this article all the way through.
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Re: congratulations Zander and crew

Postby nick on Wed Mar 19, 2008 12:25 pm

Big congrats to everyone at CoEq for sure!

A couple items from the Q&A of note (I'm assuming Schultz answered these questions on stage)

Q: Re: Latte Art - Allowing partners to do that?
A: Through the espresso training, the ability now to create velvety foam should allow partners to do that. However, many of our customers are about getting in and out.

Q: Regarding Clover Machines - Price Point - $7.00 or less?
A: Its not something we are going to do, but I was definitely encouraged by that price point (laughter). We are looking at about $3.00. It does take more coffee to make it.



During his speech, Howard Schultz spoke of his first encounter with a Clover brewed coffee... and it was in NYC. I've gotta assume it was at Grumpy. He talked about the cup being $7 (hence the question above), that drew laughter from the crowd. :?

Fascinating stuff. The talk of the industry! :D
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Re: congratulations Zander and crew

Postby Mark Prince on Wed Mar 19, 2008 12:28 pm

On a business side too, I want to congratulate Zander, David, Anastasia, everyone at Clover (I assume they all get paid lol). Huge monies no doubt, and a boon as an entrepreneur.

On most other fronts, I'm in shock as well, though I've heard rumours about this for a few weeks.

And there's been other companies that the Big Green has tried to buy, but the companies have refused to sell, simply because they felt Starbucks' mission and their own missions in quality coffee did not cross paths. Apparently, Clover isn't one of those companies, for good or bad.

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Re: congratulations Zander and crew

Postby Matthew Brinski on Wed Mar 19, 2008 1:06 pm

Despite how one feels about the Clover, despite how one feels about Starbucks, this is the smartest thing from a marketing and branding angle that Cloverbucks - I mean Starbucks - has done in recent years. They basically just flexed their corporate muscle to the rest of the coffee industry while continuing to convey to the public that they are seriously attempting to increase their coffee quality.

Although I'm waiting for smoke to subside from torching my Clover t-shirt, I really do think that this and the other moves Starbucks has been making recently are good for the coffee industry as a whole. I believe that quality focused independent shops, both with and without the Clover, have the potential to benefit from this.
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Re: congratulations Zander and crew

Postby onocoffee on Wed Mar 19, 2008 1:16 pm

Considering the discussion over the past several weeks - is this really that surprising and shocking???

I split most of my day between the restaurant, The Spro and Home Depot, and found myself at the bookstore where I've finally gotten around to purchasing the seminal The Zuni Cafe Cookbook and the newly-issued-in-America 1080 Recipes when the famous Nick Cho calls me from out of the blue (and yes, unlike many of you, I don't chat with Famous Nick everyday).

"Have you heard the big coffee industry news?" he asks. No, I've been away from the computer all day. "You mean no one has texted you about the news?" No, no one has texted me anything.

Geesh, I wondered, who's dead?

In the middle of our conversation, I receive a text message from Lindsay Parker about the sale of Clover Equipment to Starbucks.

I know there's a whole cadre of people who will refuse to believe this is sincere, but congratulations to Zander and his crew at Clover. I hope you've made yourself and your investors a nice return on their investment - one that hopefully has at least seven zeroes behind it. For my money, I recommend a month holiday in Phuket to savor your success and ponder your next venture.

Alistair and Robert -
You two and myself have had quite a bit of a row over this thing for quite some time now. You've stayed loyal to Zander and the Clover and I hope Elysian is rewarded as the distributor of Clover for Starbucks in Canada. It's time that you got paid for your loyalty.

That said, I can see the crew at Barista Exchange is up in arms over the deal with the usual cries of "sell out" and the diminishing return on the clover investment for the indie shops that defined the hype and proved the validity of the clover to Starbucks. What once set you apart now makes you part of the company. In the not too distant future we'll be hearing from the public: "Oh a clover? You mean like they have at Starbucks?"

Just the other night, at a cigar event, an acquaintance wanted to talk things clover since he'd heard about it on the news. Of course, I told him that I won't be having one at The Spro, but there were a few places nearby where he could try it. I'll be happy to tell him that soon he'll be able to check one out at the nearest Starbucks.
Last edited by onocoffee on Wed Mar 19, 2008 2:39 pm, edited 1 time in total.
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Re: congratulations Zander and crew

Postby malachi on Wed Mar 19, 2008 1:21 pm

SEATTLE; March 19, 2008
Starbucks Coffee Company to Acquire the Coffee Equipment Company and its Revolutionary Clover® Brewing System Company Offers Customers Personalized In-store Customer Experience with Individual Brewed-to-Order Specialty Coffee Capability


Starbucks Coffee Company (NASDAQ:SBUX) today announced that it has entered into an agreement to acquire The Coffee Equipment Company and its proprietary Clover® brewing system. The Coffee Equipment Company is a privately held coffee equipment developer and manufacturer based in Seattle, Wash. Terms of the transaction were not disclosed.

The Coffee Equipment Company is best known for developing the revolutionary Clover® system, one of the most significant innovations in coffee brewing since the espresso machine. The Clover®’s specialized brewing process allows a barista to quickly deliver one freshly brewed cup of coffee at a time. This technique, which blends the best of the vacuum pot and coffee press methods, further develops and unlocks the unique flavor nuances of specialty coffees.

“Strategically, this acquisition will demonstrate our commitment to provide Starbucks customers with individual brewed cups of the rarest and most exotic Starbucks coffee using the Clover brewing system,” said Howard Schultz, chairman, president and chief executive officer. “In my over 25 years at Starbucks, the Clover machine unquestionably delivers the best cup of brewed coffee I have ever tasted and we want to share this experience with our customers.”

“Coffee is as complex, rich and distinctive as fine wines," said Zander Nosler, co-founder of The Coffee Equipment Company. “The Clover brings out amazing and distinctive coffee flavors - like the earthy, woodsy flavors of an Aged Sumatra or the bright citrus tones of an Ethiopia Yergacheffe - with the depth of the coffee press and a clarity that was formerly only found at the professional coffee grader’s cupping table. It puts the coffee front and center.

“We are thrilled to be a part of Starbucks Coffee Company, given its brewed coffee heritage and passion for specialty coffees,” Nosler said. “Personally, I’m delighted to unite our innovative technology with Starbucks’ amazing influence from origin to consumer. Starbucks is uniquely positioned to change the way the world thinks about brewed coffee.”

“The Clover brings drama and theater to the brewing process and enables our baristas to have emotionally rich conversations with our customers,” added Schultz.

Starbucks expects to accelerate the roll out of the Clover® machines to select domestic and international markets. Currently, they are in use in some Seattle and Boston area stores.

The Coffee Equipment Company was founded in 2004 by Zander Nosler and Randy Hulett. In 2007, the Company was the recipient of both the Specialty Coffee Association of Europe (SCAE) “Coffee Excellence” and Specialty Coffee Association of America (SCAA) “Best New Product” Awards. Additional information on The Coffee Equipment Company can be found at http://www.Cloverequipment.com.

About Starbucks
Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting the highest quality arabica coffee in the world. Today, with nearly 16,000 stores and more than 170,000 partners (employees) in 44 countries, Starbucks is the premier roaster and retailer of specialty coffee in the world. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup. To share in the experience, please visit us in our stores or online at http://www.starbucks.com.

Forward-Looking Statements

This release includes forward-looking statements about certain company initiatives and plans, including the future roll out of Clover® machines. These forward-looking statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties. Actual future results and trends may differ materially depending on a variety of factors including, but not limited to, coffee, dairy and other raw material prices and availability, successful execution of internal plans and initiatives, fluctuations in U.S. and international economies and currencies, the impact of competition, the effect of legal proceedings, and other risks detailed in the company’s filings with the Securities and Exchange Commission, including the “Risk Factors” section in Starbucks Annual Report on Form 10-K for the fiscal year ended September 30, 2007 and Starbucks Quarterly Report on Form 10-Q for the quarter ended December 30, 2007. The company assumes no obligation to update any of these forward-looking statements.

###




Contact Information:

Valerie O’Neil
Starbucks Coffee Company
206-318-7100
press@starbucks.com

Rebecca Mosley
Duo PR for The Coffee Equipment Company
206-957-6550
rebecca@duopr.com
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Re: congratulations Zander and crew

Postby andynewbom on Wed Mar 19, 2008 1:55 pm

reminds me of one of my favorite phrases from a musician friend of mine...

"I WISH I was good enough to sell out!"

:D :D :D congrats to the whole Clover team. You all rock and I hope you all made out like bandits! I bet there are some nasty non compete clauses so I bet we will not see any clover peeps doing anything new for a while. :P :P :P

it does firmly put the Clover in the place of a sweet little automated brewer....

damn Jay was right!!! :oops:
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Re: congratulations Zander and crew

Postby Jim Saborio on Wed Mar 19, 2008 2:24 pm

This could be Nick Cho's most elaborate April Fools joke ever!
-JIm

...aaannndd the Starbucks down the street just got a Clover
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Re: congratulations Zander and crew

Postby andynewbom on Wed Mar 19, 2008 2:27 pm

hopefully my last clover order this week go through...
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Re: congratulations Zander and crew

Postby IanClark on Wed Mar 19, 2008 2:56 pm

This is a blessing. It took Starbucks to normalize the specialty coffee house. Now we can thank them for normalizing coffee prepared by the cup. I'm pretty excited right now.

The big question for me is if Clover will become a Starbucks exclusive. If not, we'll all be celebrating affordable clovers in the next couple of years. If so, at least there is now a huge incentive for another company to come forward with a similar product for the rest of us.
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Re: congratulations Zander and crew

Postby Emily Oak on Wed Mar 19, 2008 3:15 pm

Does this mean Clover brewers are now exclusive to Starbucks? I have a friend here who has 3 on order....
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Re: congratulations Zander and crew

Postby andynewbom on Wed Mar 19, 2008 3:20 pm

my belief is that they will be exclusive at least for along time.

would you sell them to anyone else if you were starbucks?
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Re: congratulations Zander and crew

Postby Rich Westerfield on Wed Mar 19, 2008 3:22 pm

IanClark wrote:The big question for me is if Clover will become a Starbucks exclusive. If not, we'll all be celebrating affordable clovers in the next couple of years. If so, at least there is now a huge incentive for another company to come forward with a similar product for the rest of us.


It's time for Mr. Scace to quit his day job. :lol:
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Re: congratulations Zander and crew

Postby IanClark on Wed Mar 19, 2008 3:29 pm

Yeah, I'm unsure if they would actively prevent Clover from selling to anyone else, but I do expect Starbucks to have priority over Clovers coming off the production lines, effectively shutting us out.
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Re: congratulations Zander and crew

Postby Dave White on Wed Mar 19, 2008 3:55 pm

Oh man... I bet they are proprietary to Sbux for sure now. No question. Vacpots for all.

And yeah Greg come on. Hook us up.



Rich Westerfield wrote:
IanClark wrote:The big question for me is if Clover will become a Starbucks exclusive. If not, we'll all be celebrating affordable clovers in the next couple of years. If so, at least there is now a huge incentive for another company to come forward with a similar product for the rest of us.


It's time for Mr. Scace to quit his day job. :lol:
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Re: congratulations Zander and crew

Postby ryan brown on Wed Mar 19, 2008 4:15 pm

andy, what makes you think starbuck's suddenly has a problem selling equipment?
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Re: congratulations Zander and crew

Postby Dave White on Wed Mar 19, 2008 4:22 pm

I don't think it is about selling equipment I would think it is about being exclusive with hot technology.
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