Coffee Bean International, an independent
specialty coffee roaster founded in Portland in 1972, was bought
Monday by Farmer Brothers Co. of Torrance, Calif., for $22
million.
The two companies are very different.
Publicly traded Farmer Brothers, with 1,100 employees and 2006
annual sales of $207 million, focuses on institutional markets
such as hotels, convenience stores and hospitals.
Privately held Coffee Bean International,
with 110 employees and 2006 annual sales of $30 million,
specializes in high-end, gourmet coffee, roasted in small batches
and sold mostly to neighborhood cafes.
The president of Farmer Brothers said
Monday that his company has no plans to change what Coffee Bean
International does or move it from Portland. The company is based
in Portland's Northwest industrial area.
Rather, Rocky Laverty said he sees the
purchase of Coffee Bean International as a way to move into the
fast-growing niche of specialty coffee. Sales of traditional
coffee, which account for about 90 percent of U.S. coffee sales,
are growing by about 2 percent a year by volume, according to
research compiled by Farmer Brothers. Sales of specialty coffee
are growing by about 11 percent a year.
Coffee Bean International's name won't
change either; the company will become a division of Farmer
Brothers.
"This acquisition allows us to take
advantage of their expertise in specialty coffee," Laverty said.
He said Farmer Brothers would use its distribution network,
including 100 warehouses in 30 states, to expand Coffee Bean
International's distribution in the U.S.
Patrick Criteser, president and chief
executive of Coffee Bean International, said he and other top
managers will stay with the company. Coffee Bean International's
majority owner was Svoboda Collins, a Chicago private equity firm.
Criteser had been a minority owner.
"It's a very positive event for us," said
Criteser, who said he expects Farmer Brothers will invest more in
Coffee Bean than the private equity firm did. "We were able to be
acquired and stay in Portland."
Still, the purchase is worrisome to some
fans of independent coffee roasters.
"There's a twinge of sadness when it feels
like something is going to be molded into uniformity," said Julie
Beals, editor of Portland-based Fresh Cup magazine, a nationally
distributed publication for specialty coffee and tea-house owners.
"It sounds like that's not going to happen here."
Farmer Brothers shares, traded on the
Nasdaq Stock Market, closed Monday at $21.45, down $1.45 or 6.33
percent.
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