
Nestlé Takes Majority Stake in Blue Bottle - joshcarr
https://www.nytimes.com/2017/09/14/business/dealbook/nestle-blue-bottle-coffee.html
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pdog
_> The rapidly expanding niche accounts for 15 to 20 percent of coffee
consumed in the United States, according to the Specialty Coffee Association._

One in every five or six cups of coffee is Blue Bottle or "third-wave
specialty" coffee? This simply can't be true considering the scale of
Starbucks, McDonald's, and Dunkin' Donuts, let alone brewing at home and
coffee consumed at diners and non-specialty restaurants.

I'm surprised the _Times_ would cite the SCAA so uncritically.

~~~
subnaught
I think it's pretty clear that the article intends "rapidly expanding niche"
to refer to all of "third-wave specialty coffee," not just Blue Bottle.

~~~
sergers
That is still hard to fathom 20% of coffee sales

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biggc
Maybe by dollar amount spent?

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david-cako
Hard to believe. Specialty coffee costs the same as whatever shit you can buy
at Starbucks.

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grrrtttt
While many of us do recall soundbites of the former Chairman and CEO of Nestlé
about water, it should probably be noted that he is no longer in either role
and is not a member of their Board of Directors. The new CEO (Mark Schneider)
was brought in as an 'outsider' and while he also remains under some activist
investor pressure is making some effort to clean shop and modernize their
business. I'm interested to see what comes of this, and particularly whether
Blue Bottle can actually benefit from Nestlé's technical expertise in coffee,
which so many of the 'third-wave brands' struggle with.

~~~
diogenescynic
This is the first comment you've ever made and it's basically PR handwaving
away Nestle's history of human rights atrocities. I wouldn't be surprised if
this is a shill account.

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mattl
The Wikipedia article about the 40 year boycott of Nestle has some more
details:
[https://en.wikipedia.org/wiki/Nestl%C3%A9_boycott](https://en.wikipedia.org/wiki/Nestl%C3%A9_boycott)

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dylanz
Nestlé has been one company I've consciously put effort into "not" buying
products from, due to their track record concerning their formula in Africa
(and other similar issues). That said, they are a beast and I probably buy a
lot of Nestlé products without even knowing it. I still buy Nestlé Holloween
candy for kids during the holiday, and I definitely eat my fair share of
Butterfingers and Kit Kat's.

That said, I'll most likely pass up Blue Bottle now even though their
affogatos are amazing.

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scottlegrand2
There's always Verve...

[https://www.vervecoffee.com](https://www.vervecoffee.com)

~~~
ovao
There is! But not within walking distance of my office, unfortunately (I'm in
L.A.). Blue Bottle is just down the street, and Stumptown is _just_ too far to
realistically walk to on a short coffee break-type timetable.

So this news is a little disappointing, but I'm hopeful nothing at my local
cafe will drastically change for at least the next several months. I am,
however, curious to see what impact this will have on the bean and roast
quality.

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dochtman
There's a great episode of the Startup podcast (which is generally quite good,
particularly the early seasons) about one of the artisanal coffee producers
that sells to Blue Bottle:

[https://gimletmedia.com/episode/building-perfect-cup-
coffee/](https://gimletmedia.com/episode/building-perfect-cup-coffee/)

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fonnesbeck
Good coffee does not scale.

~~~
ovao
I think it's reasonably fair to say that so far it hasn't, but _could_ it? If
not, to what would you attribute the fundamental roadblock?

I'd argue consumers themselves, but I don't know if that's really just a cop-
out or not.

~~~
cwkoss
Even if you buy the best X% of a crop, as scale increases, quality will go
down.

Unless a significant portion of profits are directed towards the improvement
of farming methods, scale tends to decrease quality.

~~~
tetrep
Are you saying that supply can't scale to demand? Because what you've
described, a limited supply and increasing demand, is commonly solved by
increasing supply. Unless we're at 100% coffee output for the Earth, which I
don't think we currently are.

~~~
cwkoss
I'm saying that supply of highest-quality coffee may be less elastic than
demand.

Certainly we could grow more coffee, and that would likely increase net output
of high quality coffee. However, if a company is buying the 'best 10%' of
coffee and need to double their output, it is more likely that they buy
80th-90th percentile coffee than reinvest their profits into increase the
quality that tranche of coffee to meet that of the top 10%. Even if a company
chose to do this, the amount of time it takes to deploy capital in agriculture
(~1yr+) is likely much less than the amount of time it takes to deploy capital
in manufacturing (months), which effectively would cap growth rate.

~~~
ovao
An interesting argument I hadn't considered. I wonder, though, how genuinely
impactful bean quality is for the end product. It's well understood that it's
impactful to some degree, but do premium roasters need the top 10%, or is,
say, the better half of arabica produced sufficient to yield effectively the
same brewed product?

Said another way, is the slope of quality distribution that severe?

~~~
cwkoss
Good question, I'd also be interested in the answer.

I'd guess its a long-tailed distribution something like this
([https://qph.ec.quoracdn.net/main-
qimg-3b21f991d3f0446ce30b9b...](https://qph.ec.quoracdn.net/main-
qimg-3b21f991d3f0446ce30b9b33496e87ab)) (quality on x axis, volume on y-axis)
However, I know little about the complexities of coffee agricultural and
manufacturing process, mostly just speaking in abstract armchair economics
terms.

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utopkara
Thanks for the heads up. I guess it is other coffee shops for me from now on.

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codecamper
Sort of defeats the point of visiting your friendly neighborhood non corporate
cafe. I was even willing to drink coffee that came out of a rodents butt to
show my willingness to be non corporate & local. Forget that! It's Dunkin
coffee for me from now on.

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SandersAK
All the people in this thread arguing about the "right" of water should sign a
waiver of liability, then abstain from water for a few days to show how it's
not a right, but just "a nice thing someone should have."

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mrleiter
As this thread will ultimately will end up discussing the corporate evil that
Nestlé apparently is, I want to, for the sake of the discussion, point out the
reasonableness of the CEOs statement regarding water as a human right:

He argues water should have a market value so that it is treated more like a
resource that should be well managed. Of course a state can also do this and
in my opinion should, but of course as a company they want to fill this role.
If water is treated as a market asset then more investment will happen (which
can also happen through a state entity) - a good thing. In a later video,
after the 2005 video was a total PR disaster, he tries to clarify his argument
by saying that water should be a human right to humans who need it for living,
but not for gardening or washing a car. To me that seems like a valid case.

~~~
ErikVandeWater
And I don't get exactly what it means to declare water a human right. There
are certainly people in the world not getting the clean water they need. But
how do you solve this? You set up an international agency to acquire water for
them. But where do you get the funding for this agency? If it really is a
_human_ right, is this agency above local laws? What are the restrictions on
this agency? Can this agency ban the building of a dam that would deprive even
one person of a suitable source of water?

It's weird because other rights are what others _can't_ do to you, but this
right is what others _must provide_ you. Who and how just aren't clear.

~~~
dna_polymerase
Exactly. I often hear this whole "water a human right" argument from the left
and when asked about what would change they really can't answer that. I think
everyone knows how water is essential for the human life but declaring it a
human right won't change anything. After all what would we do the next day
after making it a human right?! Send the US Army to Malawi bearing Super
Soakers?

~~~
Lewisssss
Capitalist institutions like the US Army can't deliver what the human needs,
only another social system can deliver it.

~~~
KGIII
As a Marine, I delivered food, water, shelter, medical supplies, and even
entertainment to refugees. I'd then aid in their defense.

It's not a long-term solution but it was effective.

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diogenescynic
That's a major bummer. Nestle is one of the most evil companies there is--
their CEO once said water isn't a human right. Nestle uses cocoa from slave
labor and bottle water in drought stricken communities and national forests on
expired permits, and do shady stuff like hiring the regulator who gave them
their water license. Very few companies are as vile and amoral as Nestle.

Unfortunately, this will taint Blue Bottle's 'premium' experience for me. I
guess I'll go to Philz instead.

~~~
throwaway0255
Counterpoint:

Saying water isn't a human right is different than saying not everyone should
have access to water.

I generally agree that water isn't a right. I think it's a misuse of the word
"right" and a misapplication of the concept of a "right".

Rights define what you're free to do for yourself, and the various ways in
which those freedoms can't be infringed upon by others. For example, you have
a right to free speech and people can't infringe on that. You have a right to
not be tortured and people can't infringe on that. In the US, if the
government is going to take your property or jail you as punishment for a
crime, you have a right to a fair trial first before they can do that to you.

There's a distinction between that and things like water and healthcare. One
is a list of rights, and the other is a list of things people generally need
to live a happy and healthy life. If we're going to dilute the definition of
"right" down to that degree, why don't we just throw in housing and free trips
for vacation and a loving partner while we're at it?

South Africa has housing as a right in their constitution. They also have
200,000 homeless people. So who's infringing on their rights? Every citizen of
South Africa?

The UN General Assembly declared water a human right. The world also has close
to a billion people who don't have access to clean drinking water. Who's
infringing on their rights? Are you?

Rights aren't about what resources (time, money, commodities, services, etc)
you're free to take from others. When you start defining rights that way,
rights all start contradicting each other. What about a doctor's freedom to
choose who they perform surgery on? What about your freedom to live a life not
solely dedicated to plumbing in Gabon?

~~~
cwkoss
I think the key point of contention is about rainwater harvesting.

Making rainwater harvesting illegal (and thus forcing people to overpay a
monopolized water system) is arguably a violation of human rights. It is a
prohibition of what you are 'free to do for yourself', that forces people to
pay for something they need to survive (and could otherwise get for free).

However, I agree on the haziness around the issue. Mandating that everyone
receives X amount of drinkable water may be expensive to implement,
economically unsustainable and create perverse incentives.

~~~
njarboe
In the US people have mineral rights to the earth under the surface of their
property. This can be separated from the surface rights and sold off. If one
buys just the surface rights, then the entity that has the mineral rights can,
in most cases, access your surface to extract their minerals. Not reading the
fine print on your title and having someone want to exercise their mineral
rights is a serious issue in the US. I would definitely be very wary of buying
land without the mineral rights.

But the right to use water that lands on your property? Never heard of "rain
water rights". Unless it was previously declared somehow, forcing you not to
collect rainwater would highlight the need for the right to bear arms. I would
like to know more about how that came about in those cases.

~~~
cwkoss
Apparently it's technically illegal in Nevada. Thankfully, sounds like it
isn't practically enforced. [http://www.rgj.com/story/news/2015/05/26/ask-rgj-
can-nevadan...](http://www.rgj.com/story/news/2015/05/26/ask-rgj-can-nevadans-
collect-rain-barrels/27983037/)

I believe are some serious injustices around water privatization in South
America, however.

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what-no-tests
Coffee is cultural appropriation.

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TaylorGood
Well, and how many are conscious of the fact Nestle owns Nespresso? You're
basically drinking mediocre folgers in a pod and paying the premium. No amount
of branding will divert from the fact that local, organic alternatives can be
had for less.

~~~
giarc
Just because a company owns two of the same thing, doesn't make them the same.
Using that logic, Blue Bottle is now just Folgers.

