Hitting The Mark
Conversations with founders and investors about the intersection of brand clarity and startup success with your host, brand strategist and author Fabian Geyrhalter.
EP073 – Intelligentsia: Doug Zell, Founder
Doug Zell is the Founder of Intelligentsia Coffee, a brand that established itself as a leader in what came to be known as third-wave coffee.
Intelligentsia embodies a quest for superior quality and sophisticated design, but it is furthermore about the overall impeccable brand experience that those of us who have visited one of the 15 US locations have come to expect.
Doug is a masterful brand builder and his insights from not only successfully building, but carefully expanding the Intelligentsia brand over the past 26 years is, just like the brand itself, rather illuminating.
Fabian Geyrhalter: Welcome to the show, Doug.
Doug Zell: Thanks for having me.
Fabian Geyrhalter: Oh, it’s a tremendous pleasure having you on “Hitting the Mark”. I frequently visit your LA locations for its superb coffee, it’s wonderful interior design and vibe, and I’m just a huge fan of the overall brand experience. Right. There’s something that you created with the experience that is so special. Let’s go back in time for a second here. In 1995, you co-founded Intelligentsia in Chicago and you turned into one the key players in what came to be known as third wave coffee, which of course these days we’re very, very aware of what that means. Your company got acquired by Pete’s, and I’ve been a huge fan of Pete’s for all my life as well, and today you have 15 coffee shop locations, two roasting facilities and two training labs.
Take us back to ’95 in Chicago, what made you open a coffee shop? Or what was even the coffee scene like at the time? Was it Starbucks only? Take us back.
Doug Zell: Yeah. 1995, I would say that Chicago was the second market that Starbucks was into and they were definitely gaining momentum, and I think that at that point in history, there really wasn’t anyone of note roasting coffee in Chicago. Having been a kid that grew up in Milwaukee and having friends in Chicago, I had been out and had one real job out of college and that was out in California. And I had started a Bottled Life tea company that went on for four years, with the Stevia sweetened iced tea and was way ahead of its time. For a number of reasons, we weren’t successful with this Bottled Life tea over the course of four years, and I went to go work in coffee, supposedly learning it from the ground up, interestingly enough, at Pete’s, and then another small roaster in the Bay area, and realized that there wasn’t this kind of coffee, essentially at that point that I perceived like competing with what Starbucks was doing.
There were independent coffee bars, but they were much more kind of like the show Friends, of that ilk. We saw Chicago with a large population, large city, without anybody really meeting that need of fresh, local coffee. I think at that point, we really just saw it as a coffee bar opportunity. To say that we perceived there to be this third-wave opportunity starting in 1995 would not be true. At that point, this premise of fresh-roasted coffee, roasted in-store, in Chicago, and seeing where that went. I’d love to tell you that we had some elaborate plan in 95 for Intelligentsia to become what it became, but a lot of those were really the function of doing something well and intentionally.
What we knew about coffee when we began and what eventually we knew later and what we applied were very, very different things. That was just honestly opening a humble coffee bar in 95 where we roasted our own coffee and making sure that the design was beautiful, given what we knew about design in 1995 at 29 years old, and taking some of the best influences we had seen in the Bay area and I guess applying them, although the weather is certainly different.
Providing as immersive of an experience as we understood it to be and I think that continuously evolved and became more focused and intentional. It really evolved from there in terms of the design and sourcing and barista piece. All of those things became incredibly, if you want to say influential, I think that’s the piece that surprised us. With the rise of the internet and the rise of the opportunity for national visibility, all of those things changed, but the premise from the beginning was always to get all the pieces right and consider all of the details and execute well. Over time from 1995, over the course of the next 20 plus years, what fantastic immersive coffee meant continued to change and actually it changed rapidly, I would say most rapidly as we went into the 21st century. It sounds funny, but a number of things coalesced at the beginning, around 2001 and thereafter that really changed the course of what coffee and how we all perceive coffee now.
I think we can take some credit for it, a lot of it was probably fortunate timing, but there was definitely an intentionality of what we were doing after we learned what it was we decided to chase after.
Fabian Geyrhalter: Super interesting. Yeah, and you touched on this a little bit, that you did your best that you could back in the day with design, but Intelligentsia and design, the two of them are synonymous. You have amazing packaging design. You’ve got beautiful interior designs. Back in 95, you had a different logo. How long after you launched, did you decide to rebrand and how much of an impact did you see it having on the overall brand experience?
Doug Zell: I want to say that we rebranded, I think it was around probably 2003, that we rebranded.
Fabian Geyrhalter: So it was quite a bit. It was like seven to eight years after you had your initial shop.
Doug Zell: That’s right, that’s right. Yeah. So, I believe it was in the timing of our third shop, which would have been the Millennium Park location, which, of course, that park was not actually open at the term of the millennium, so it was shortly thereafter and that was a big move to rebrand. It’s charming to see our original logo because we still use it in some things, and it has a wonderful, I don’t know what the right way to describe it is.
Fabian Geyrhalter: It’s got a retro feel to it.
Doug Zell: It’s got a retro charm like your buddy did it on his first Macintosh or something. It’s sweet, old-fashioned, which I kind of like, those things are coming around. I remember receiving a heavy amount of criticism for considering changing our logo to what you see now.
Fabian Geyrhalter: Interesting.
Doug Zell: It turned out to be one of the best ones we ever made. I think the premise, that change is the only thing that’s constant is a good way to evolve one’s business, although I would say, in hindsight, it does amaze me how long it takes for the public to realize that something has been changed and how long it takes for them to digest and embrace something.
Fabian Geyrhalter: Absolutely. And I mean the longevity of it too, right? I mean, now that new visual design of Intelligentsia is so ingrained in everyone and it’s so simple. Right? I mean, it’s the wing logo, it’s a single red star, and that just became your understated design for such a long time. It kept working. It’s pretty amazing. I just wonder when you make that push, and I heard you speak about this on a TedX Talk about branding. When you made the push, you said, yeah people weren’t too happy because it takes them so long to just get used to the old thing, right, which has been around for six or seven years, right? With the new brand, a couple years after you changed the brand and you became kind of what you are today from a brand perspective, can you put a finger on it and say, you know what, because of that rebrand, it just totally helped us on a lot of different levels? Or how did you see the rebranding a couple of years later? Did you see it as making a huge impact on the brand?
Doug Zell: Well, I think so, and I also realized too that the timing of that was fairly consistent with when we began to dig into a lot of other things that became representative of the brand, including the work that we did at Source in this development of the whole direct trade model. Not only that, but the whole craft of the barista and how that was rising simultaneously. So, to me a lot of it was a bit of good fortune that all of these things were coming to a head at the same time. So, you went from, frankly the branding before, I know the word I was looking for, it was quaint. It, again, looked like a friend of yours did it. It became something that was a bit more considered and polished, and had more of a global opportunity, if you will.
I think that, again at the same time, we were really digging into this premise of, we really should source our coffees and work directly with producers, which historically was incredibly novel, but is now the way that so many roasters of Intelligentsia, both smaller and larger have begun to do it, and really just developing this premise of a transparent, although overused word, supply chain where the producers that actually produce the coffee are rewarded and not the middle people. I think that that was an interesting development at that time. Then, along with the whole piece of the barista and that becoming a more professionalized profession where it wasn’t just somebody kind of slopping together dark roasted espresso and milk, but somebody that really actually took a bit of pride in the craftsmanship of pouring beautiful Rosetta and pouring the shots perfectly and knowing what a single origin coffee meant and understanding what the different cultivars are and how coffee got around the world, all those pieces.
So, I think that we were part of, and to call us a relationship here is always a good question, but just the elevation of what people were looking for in coffee. So, I think our brand was ascending at the same time. I think if you ask many entrepreneurials, they’ll say that they had a bit of good luck, and I feel like we did as well. But when all of those things coalesced became… and frankly with the rise of the internet, which makes me sound really old, but all of those things ascending simultaneously were a really perfect store in a good way for the brand to be impactful beyond its economic status, if you will. I think our brand was more impactful than our sales were at that point.
But because of the rise of all of those things and social media included, the work that we were doing and the work of roasters that were somewhat like us doing, it really spread out around the world in a way that frankly surprised me. Because with social media and the internet being if somebody’s turning on a roaster in El Salvador or Australia or New Zealand or China or Thailand, Turkey, fill in the blank, it could all be seen very quickly and it could all be emulated very quickly. I think that’s the piece that made it so profound at that time.
Fabian Geyrhalter: I think you hit it. I mean, so much happened at that same time of the rebranding where the brand really started to come together and it had a deeper purpose, right, over time. Now, Intelligentsia’s purpose, if I take the statement from the website, is not to make extraordinary coffee alone but it’s to make extraordinary coffee an agent of change. So, that in itself changes the way that a brand behaves and how people see the brand. I know that Intelligentsia is a change agent in many ways, but in which ways for you? Like that statement, that the purpose is to make extraordinary coffee an agent of change. In which ways do you make the change?
Doug Zell: Well, I think what’s fascinating, my wife, if you want to say after Intelligentsia has still involved coffee and it involves wine now and some other things that I love, found a couple of business that have had to do with those things and I think that the piece is consistently interestingly to me about coffee as an agent of change, it is odd in a good way, like social glue, that I think a lot of us don’t think about. Once you say to someone, like let’s go meet for a coffee. If someone says that to me, you’re kind of like, ooh that sounds good. Okay, so it will be this social opportunity. I’ll get to enjoy this beverage that I love. That in a real meaningful connects so many parts of the world in a way that no other beverage does.
Fabian Geyrhalter: Besides wine.
Doug Zell: You could argue that wine does in a way, or wine and beer. Wine more so just because of the global supply chain piece. With coffee, you’re not getting drunk or whatever. It is an opulent, psychoactive effect of alertness and whatnot. Honestly, every night before I go to bed, I think about how good that first cup of coffee is going to taste and that we share it as a social beverage. I also think it’s become an interesting vehicle for the story, frankly, of undervalued producers around the world of anything. It tells a story, perhaps as the best vehicle of any other substance, if you will. Any other, I don’t want to say commodity, but nobody’s like oh bananas, let’s talk about…they do but that suggestion of coffee has become elevated and I think the opportunity that this movement in coffee with transparent supply chain and rewarding the producers for their work and rewarding baristas for good work and elevating what the price is like and what the consumer is willing to pay has done so much good around the world.
Yes, there’s still a long way to go and yes, it can always be better, but essentially what one would pay for a cup of coffee over the past decade has gone up markedly. The people that are working in the direct trade, it’s not petroleum but it’s had a meaningful impact on those places. As an agent of change can look at the ways that it has done that and it really has. That barista can make a living around the world and have health insurance and have retirement funding, and that coffee has been a vehicle of something that was historically very lost cost and low price, to something that is now… I know when Intelligentsia first put out the four or five dollar cup of coffee, people were like that’s crazy.
Now that is very common. Now when you enter a shop your expectation is not that you’re going to find something that’s cheap. You want to find something that’s good and well sourced and well roasted and prepared carefully. So, it really has had an economic impact and maybe we still would like to see more of that from the producer to the roaster to the server pouring coffee. It’s not perfect by any means, but that really has created some meaningful change and I think that that’s exciting to see and it’s exciting to see that it’s really been a movement impacted by not large companies that were influential, that really caused this to happen. I think that the internet or social media has made it more possible for there to be an artisanal nature company, but I think coffee has really excelled in creating that opportunity.
Fabian Geyrhalter: Yeah, that is so fascinating, this story of how it came about. I think the way that people enjoy coffee today is so different, because of companies like yours. Back to your idea from before, if someone says, hey let’s meet for coffee, it says something to you. I would even take it further of oh, where do you want to have coffee? That says so much too, right? Like if it’s in your home or if it’s at Starbucks or if it’s at like a local, and then that enjoyment that you get out of not only the conversation but also the beverage along with it. Like you said, with the internet and then the next generations that came over the last 20-30 years, the whole idea of experience. It’s all about brand experience and experiencing life. Getting coffee became an experience.
It’s funny because I’m from Vienna, I’m from Austria, and in Austria, at the turn of the century of the 1800s through 1900s, Vienna was the hotspot for those little cafés where the literati came together. It’s so funny because that so reminded me of how you guys came up with Intelligentsia as a team because the name itself means intellectuals or highly educated people as a group, especially when regarded as possessing culture and political influence.
So, I mean, that name transports me immediately back to these little cafés in Paris or Vienna, like back in Europe where people went to experience intellectual stimulus or some sort of stimulus.
Doug Zell: Right, right.
Fabian Geyrhalter: How did you guys come up with that name? It seems like, again, going back to 95 in Chicago, it doesn’t feel like that’s the name that would be at the tip of your tongue.
Doug Zell: It came out of a conversation back when I had the tea company and there were some guys that represented our tea and they talked about the Cuban intelligentsia and just people that were thought leaders, and I was like, oh, that’s an interesting word. I dug into it and I thought that it had an interesting sound to it. I liked how it looked. As you suggest, I liked this premise that coffee was really where people went to have thoughtful discourse. I think that the premise of Intelligentsia has always been about illumination, whether you’re having interesting conversation or illuminating what coffee can be in terms of what it’s like in the cup, what the experience is like, and then what good reverberation it can have.
So, at first, I have to tell you that there’s a lot of pushback from so many people about the name, but I realized that it’s probably better to be a bit divisive than just call it like Joe’s Java Hut or something like that. I would rather have a name that you remember, although misspelled frequently, than one that is utterly forgettable and sounds like everything else. Again, your point about what it was derivative of is exactly what we were after. It’s a place of illumination where thoughtful conversations are had and not for the sake of feeling elitist, but frankly for the sake of sparking ideas and development and opportunity and possibility. I think that resonated with me personally, to create something that was different than what existed before and pushed on those ideas.
Fabian Geyrhalter: I’m sure, with a name like that, and with the crowd that you subsequently attracted, because that’s the beauty with a name, right? You say, this is who we are, are you like that? And it’s like yeah, I’m like that.
Doug Zell: People walk in and be like, if I drink this, will it make me smarter? We have a lot of those. Not you, but other people yes.
Fabian Geyrhalter: That’s not quite who I was referring to. I was more thinking, it’s like that idea that you look at your coffee places and you look at the people that frequent it and that are there and it’s a very, very specific audience. It’s amazing because they seek each other, right and, it doesn’t matter where you pop up your shop, if it’s at the High Line in New York or if it’s in Venice on the beach or if it’s in Chicago during turbulent weather, right? It’s the same crowd. I do believe and that’s because I drank the brands Kool-Aid for the last, God knows, two decades; I do believe that all of these decisions that you make from a brand level and, of course, how you run the company and your initiatives and all of that, that’s why there are those people. If you call it Intelligentsia, maybe subliminally it does something and people feel like they’re drawn to it because it is not Java Hut, right?
It already immediately feels interesting. Having a name that is descriptive for a coffee place is just silly. What is it about, right? What’s higher than that? What is an emotion that you feel? With Intelligentsia, you might not immediately get it, but you feel something, right? Now back to flavor, right, because flavor is everything with your coffees, I can absolutely attest to that, last night when I did some research which is always the most fun thing, meeting people like you on air, to actually read deep into the history. The Chicago Tribune said in 2008 and I’m going to quote it, “A decision to stop serving 20 ounce coffee and espresso beverages in stores was met with controversy. Zell stated that the proportions are altered at such large quantities and certain drinks become watered down, arguing the 20 ounce drinks end up masking and adulterating the pure intense flavors we work hard to source, roast and produce.” And then you said the following and I love that, “We don’t want this to just be a cafffine delivery device.”
It’s so true and it’s so brilliant, right? As an outsider looking in, watching the brand grow, Intelligentsia always had a purpose. It always had a vision, right? It knew it’s audience. It knew why people loved the brand. How did you derive that vibe? How long was it into the formation of the company that you actually started to write down on paper, say your values or mission to have all employees aligned around the brand for people who frequent Intelligentsia to understand what the brand means. How did you do it? Was it just something that was done over time and it was just a vibe that you created one shop at a time or was it something at some point, it was a thought and you were like okay, we have this thing going on and it’s only going to grow, we need to really put it together, like in guidelines, we need to write it down.
Doug Zell: I think that the guidelines continue to evolve, right. I think, at that point in history, the whole 20 ounce thing, like I said, we rose as Starbucks was ascending as well, so I think people thought we had to do whatever they did. That’s why the 20 ounce existed because we were young in our whole trajectory and decided that we wanted to go with these menus that didn’t have all the crazy choices that actually didn’t end up with a beverage that was of the highest quality and represented coffee. Those markers move around because what people are willing to accept at different times and different parts of their day and their lives and all those things, it’s constantly changing.
Even if you look at the art of going from dark roast to lighter roast or from Pilsner to like incredibly hoppy beer, back to Pilsner, right, the pendulum kind of swings. One doesn’t wish to be insensitive to that because I think that it really needs to be the best quality it can be of that ilk. I think if you watch the Ted Talk. It’s this premise of being intentional about what you hope to accomplish and making those moves unapologetically and understanding where you can meet your customer base, and also being able to push and have them come along with you as well. I think that’s the piece that we like to think we’re pretty good at.
That’s the piece that can be compelling because stuff does change over time. Just like the kind of Levis if they’re bell bottoms or boot leg or whatever it is, it moves around, and you don’t want to have your head in the sand. I would contend that there are coffee companies, breweries and wine makers that they think that wherever they’re at now is the only way that it will ever be and that’s just not true. Fashion changes, lifestyles change, so many things change all the time. It is being tuned into that but the core value of outstanding quality, a word which is kind of band-aided about, so much that it’s almost become meaningless.
I think that companies know when they are making compromise and I think that compromise is an actual choice. It is not something we said we ever want to do. So, when a decision is made, it’s because we want it to be representative of our values. I think that that remained core to Intelligentsia. I think that companies of all sizes, people say, well when you grow, don’t you have to compromise this or that, and my answer is always no. That’s a decision because you can put the resources behind not having there be a compromise and decide that that’s what you want to do and then you can do it. It requires investment of time and economic resources and effort.
To answer your question, the premise has always been this premise of chasing perfection with the hope of never catching it because we want to continuously make things better, right? Once you get to that prefaces where you think you have this thing wired, it should go a little further up the road. Then, you should say oh, well then we need to work on this and then we need to work on that. Because ultimately, for whatever anybody, at least in my experience, wants to tell you, I really think that the competition is yourself. You know what it is you need to get better at. You know what your weaknesses are, I think, if you’re running a great company.
The rest of it is going to happen anyhow. It’s not like you can have preventative measures from, stopping your competitors, your so called competitors, from doing their thing. So, I think that the premise of always competing with yourself to make it better is a really good starting point from product, to brand, to company’s design. I think that continuously being innovative and cover the thing that requires the most is just sustained effort and execution. That’s where a lot of places just can’t keep it going. To me, that comes back to building a culture that values it, that values contribution and says like, this isn’t going to be easy but this is what we do. Do you want to be part of it?
Oh, I think I’ve lost sight of the original question.
Fabian Geyrhalter: No, it’s not about the question. It’s about the answer. I love where you’re going with that because you went back into your TEDx Talk a little bit. There were a couple of key points. It was just for the audience, it was a TEDx Talk that you can find online, where you talk about what it takes to build a great brand and how to stay relevant over time. You give key examples of other companies including your own. Some of the points were conviction quality, authenticity and integrity, and then you also go on to talk about how you have to be always deliberate. I think that’s what we were just talking about, right? You have to know who you are, who you want to be and you have to keep pushing and keep innovating.
What I’m wondering though, it’s 2013, we’re in 2021, did any of your points change or would you even double down on any of them today? Or has brand building changed? Obviously since you first started from 95 to now, the way brands are being built online and from Insta to TikTok, in a way everything changed and in a way nothing changed at all. I’m wondering what your thoughts are of what you see happening in the world of branding because I know that you’re a brand fan also. You care, not only about your own brand, that’s why you’re so good at it.
Doug Zell: I think that what’s changed is how people wish to consume coffee in that the whole like ready to drink an iced coffee thing or cold coffee thing has blown up in a way that it hadn’t before. Consumption continues to rise, but people, they’re wanting to find better coffee in more places or different places. I think that’s great. I think that if the premise is we continue to buy more and more good coffee and create more opportunities for the people that are producing good coffee, that’s fantastic. Realizing that this format, it moves around. I think, to me, it’s like the premise of doing it very, very well in the categories you choose to be involved in and then also pushing those categories to be even better.
We have all of these, whatever you want to call them, single serve, whether it’s ready to drink or capsules or whatever it is, and I think that it’s wonderful the world is trying to make each of those that much better. Do some of them face inherent challenges? For sure, they do, but that doesn’t mean they’re not worth pursuing and trying to make better. It would have been considered heresy in 2005 to say oh, we’re going to have great instant coffee, but now such a thing exists from a lot of small “roasters.”
Fabian Geyrhalter: True. Yeah.
Doug Zell: And it’s so much better and it’s really quite good. If I close my eyes and you said, what’s this, I’m not going to argue that I am the supreme talent out there, but there’s a lot of really good versions of that being produced. The thing that I, I think, grapple with the most, just as the world is consuming more and more organic products, more and more “artisanal” products and what the world’s perception looks like, it’s change. I get what the influencer thing and I get all those pieces, but I still think that if one is sitting down to create a brand that will last and resonate and people love, you hear about this whole push-pull premise. I really think it’s still got to be a brand that people fall in love with, that creates desire and gives people a reason to pick it up.
Just because it shows up on every shelf, if it is not well conceived and it lacks heart and conscious, I’m skeptical that it will last. I still think the best day of your lives or the best night out on the town or the best New Year’s ever had, it comes with discovery, finding something wonderful that is a bit different than what you expected. To me, those are the most compelling brands that have the greatest run with, that will keep giving and where discovery remains constant. It’s like you open the door each time and you’re like whoa, I didn’t know that this could happen or that they would be doing this. To me, those are the desirable brands.
I don’t think that really has changed. I think that in the age of the internet and Instagram and all of these other things is that people can construct something to look like something, but frankly if it is not that something, it will be found out at some point. So, I think that integrity still is so important. I think some people will be fooled some of the time as they said, but I think ultimately the stuff that’s really going to resonate is still going to come from someone’s heart first and brain second probably. I’ve seen coffee brands come and go that were constructed simply on an economic model without any feeling and they just faded away. There was something about them that didn’t resonate.
I think there’s been beer brands that were constructed and didn’t work. So, this premise of having integrity about what you do and constructing something that is a desire and to me, in our coffee, a human that has humanity and is creating something that is derivative of something they love, I think it shows. One of the brands I talked about in that whole TED Talks and still impresses the hell out of me is Patagonia’s, like they live their values. It’s like buying up land for conservancy and well, any consumerism is really too much because we should recycle these jackets or we should make these more waterproof or more organic or all these things, we’ve got to work on supply chains and be better. And all of these brands that last, I think that’s what they do, like how do we make this better.
Fabian Geyrhalter: Absolutely.
Doug Zell: So, what the brand promises, the product has to deliver at some point. When a bag of coffee went over $20, this premise of oh, that’s ridiculous, it’s so expensive, and now it’s commonplace. Now it’s like if you don’t have one of those, what are you doing? So, I think that whole piece is how much the proverbial needle has been moved because people are, they’re like I know it costs this much and I want to do something well. You’re also seeing it in terms of what is now out there, if you want to call if fashion. Somebody doesn’t want just fancy couture for the sake of that, they want something that has integrity, crafted by an artist in Los Angeles or Brooklyn, Detroit wherever, pick a place now, right?
Fabian Geyrhalter: Yeah.
Doug Zell: But that has integrity and the stuff is well made. I do see a tendency towards younger consumers because I have a 19-year-old daughter actually in college in Los Angeles. They want stuff that they know is positive. They want stuff that they know humans were behind it and it may be imperfect but it’s still lovely in that sort of way. Those are the things that are going to ultimately resonate and win the day in terms of brand. They want to be buying something from a company that has a conscious. So, all of those things inform what the brand is and is worth. Yeah, that’s what we’re seeing. So, to answer your question, it has changed but to me the core of what makes you fall in love with something and is lasting and I’ve seen retail coffee brands that have come up and I won’t name any names, I walk in and I’m like I don’t really get this, who is this appealing to and for how long? One has to consider that. You don’t want to just be flavor of the day.
You want to be able to last and have something that frankly is lasting, that sustains its shelf and that is true to the values that the brand supports.
Fabian Geyrhalter: Well, and I think one thing that you added to your list from your talk back in the day is discovery, even though that was something that you’ve always worked on, because quite frankly, if you have the drive to keep pushing and to keep innovating and to keep doing new things, I mean now we can just tell when and how often exactly a brand innovates or creates something new and when exactly a customer can actually discover something new within a brand because it’s all on social media, right? We can literally, go through the timeline and see, okay, what has this company been doing, right?
I think that the discovery is such a great element to add to it and double on the line because you can’t be stagnate, you can’t be stale, you cannot stop, right? Once you launch something, you have to think about what will be the next thing, right? And not to force it, but to keep improving, like you said. I like that idea of the aspiring perfectionist, right, because he can never get there. You can only try, if you’re a true perfectionist, that’s why you can never call yourself a perfectionist.
Doug Zell: Sometimes the stuff you’re working on is simple, straightforward stuff, which comes down to perfect execution or excellent execution on various things, whether it’s the hospitality part of it or your new point of sale system, all of that stuff informs the overall experience in the café. It’s all important. I think that’s the piece, if you want to say discovery. There are certain small things each day that we’re charmed by and I think that’s really important and that’s a part of why people fall in love with their favorite café or restaurant or person or whatever it is. It’s, to me, the humanity. The discovery is like, to me, what gets you out of bed every day. As long as you can have that continuous feeling of being a kid and the world seems wide and wonderful and fascinating, if one can create a brand that gives a little bit of that, it’s impactful and lasting.
Fabian Geyrhalter: I totally agree. Wonderfully said. For a second, let’s talk about what happened during COVID? Your locations must have taken a huge hit, like any retail location. Obviously you sell, or maybe not obviously to everyone listening, but Intelligentsia sells beans on-line, you have national grocery store distribution. I think lately you’re also offering packaged cold coffee and oat lattes and you sell coffee subscriptions. So, there’s a lot of other stuff going on, but now that things are slowly getting back to, I guess, a new normal, how did you see your customers’ consumption habits change? I mean, was there any change that you saw before, during COVID to now?
Doug Zell: I think you squarely nailed it, which is it moved out of the café and to online, directly to the consumer, and then also grocery. That went up markedly. Went down in restaurants and other coffee bars that we wholesaled our coffee to and then down in our own cafés. But now our coffee bars are beginning to return to pre-COVID levels and all of that. So, it moved around, which demonstrates a level of loyalty, which is wonderful to see, just because it easily could have completely disappeared. We had to close some cafés for some period of time and some are still coming back on line. Essentially it moved but stayed with us, which is great.
Fabian Geyrhalter: That’s amazing.
Doug Zell: I don’t think that consumption went down. I think that subscriptions went up and fortunately we were nimble enough to, I don’t want to say instantaneously react, but react quickly and not have our head in the sand and push on those things that one needs to do for running a good business so one can stay around. Don’t throw your hands up and say oh gosh, what should we do now, but getting on it, and I think that was critical. But yeah, it just moved. A couple of our customers are coming back, as you said, as COVID is waning or however we interact with it, we’re just getting more comfortable with how we’re going to deal with it. It frankly just moved around, which is nuts.
Fabian Geyrhalter: Makes tons of sense. After we talked about the Intelligentsia brand now for a good 40 plus minutes, if you would take the entire brand, the ethos, and you put it through, I guess I should use a coffee word, you put it through a filter and slowly drips down your brand essence, like really Intelligentsia, in one or two words that really encompass the entire brand, what could it be? Everlane is radical transparency. Every brand feels like they stand for something and it’s rather easily described. But it’s not an easy thing to do, so I’m wondering, what could that be for Intelligentsia?
Doug Zell: Well, and it’s funny, it’s been our tag line, honestly, I believe from the beginning. It’s illumination, which to me is illuminating what coffee can be as a beverage, illuminating the supply chain, illuminating, if you want to say a brand experience. So just this idea of looking at something that can be perceived as so simple as a wonderful cup of coffee and illuminating everything that surrounds it. I don’t want to say it works with the name. But, really it’s always been about illuminating something.
Fabian Geyrhalter: I love that.
Doug Zell: And how that has to do with the coffee.
Fabian Geyrhalter: I love that and it so hand in hand works with your brand name too. It feels very sexy.
Doug Zell: Imagine that.
Fabian Geyrhalter: Imagine that how that works, right?
Doug Zell: Illumination is not distant from discovery, right, and I think frankly it’s part of why we’re alive. It’s why we wake up every morning, like what’s new today, what can be discovered, what can be illuminated? It’s a good way to live.
Fabian Geyrhalter: I 110% agree with you on that. What’s next for the Intelligentsia brand? What are you excited to see happen in the next six months or so that you can talk about publicly, right, because a lot of things are always hushhush.
Doug Zell: I think it’s some of the stuff I said. As you suggested, we just recently launched the ready-to-drink stuff, which took us a long time because we wanted to get it right, and choosing as if do we use plant-based enclosed milk, what do we do here. I think it’s all of those, just a way coffee can be consumed. I think that we are getting sharper and better at all of that, so there’s a bit of the old technical testing and innovation there. As I said before, I also think it’s unlocking some of these new places where we may need our potential customers. So, between the development of, I hate to use the word product because that sounds cold, but let’s say the development of coffee and how people are consuming it, I think it’s the continuous effort in those realms. And then where is it that these things can be found. I think that’s the step that I’m most excited about, it is starting to take hold. The beauty for us as a roaster is that it really does allow us to do even more work with the coffee producers that we’ve built relationships with now.
I’ve just accomplished 20 years of interaction, so it’s continuous. It’s been nice to be able to build these relationships in so many different places around the world that have been continuous and that we are able to reward the producers with better prices and really pushing on what coffee can be. In many of those realms, in the different forms, we’ve really just begun. I’d say stay tuned for more interesting stuff in that regard. I’m excited about that. That’s probably the biggest thing but it’s going to have the greatest impact. I think we will continue to show up in more places. I think that we’ll continue to be influential. All of those are good things.
Fabian Geyrhalter: Fantastic. Absolutely. I guess for my international listeners, which are a good amount of the bunch, they can find Intelligentsia online at, I guess, Intelligentsia.com and all over social media, to learn more about the brand.
Doug Zell: Correct. That’s right. Yes, yes, yes. There may be some other international opportunities that we will push on. I think we just want to have clarity about…we want to be intentional about that as well. There’s still plenty of work here to do in North America, but I do think that there are other opportunities other places with intentionality. We may eventually show up in those places as well.
Fabian Geyrhalter: That’s great. See, that’s how I get these things out of you. Now it’s on the air.
Doug Zell: I think, again, it really comes down to being intentional and being a thoughtful pursuit, not just, oh that seems like a good idea. It’s something that has to be considered and digested appropriately so that we can give it the level of attention and attention to detail in that pursuit.
Fabian Geyrhalter: Love it. Absolutely. Well, Doug, thank you so much for spending an hour with us today. I so appreciate your time and your insights.
Doug Zell: My pleasure. Have a great rest of your week.
Fabian Geyrhalter: Thank you, you too.