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Business
Farmer Brothers buys Portland's Coffee Bean
JONATHAN BRINCKMAN
The Oregonian
425 words
1 May 2007
The Oregonian
Sunrise
D5
English
2007 Oregonian Publishing Company. Provided by ProQuest Information and Learning. All rights reserved.

 

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.

Document POR0000020070502e3510002o


 

 

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