Rise of Blue Bottle Coffee: From A Coffee Shop To A Blockbuster Subscription E-commerce Business

W. James Freeman founded Blue Bottle Coffee in the early 2000s in Oakland’s Temescal District. Freeman borrowed the name from one of Europe’s first cafes, The Blue Bottle Coffee House.

A freshly brewed cup of coffee has been used to fuel the lives of everyone globally. This popular beverage has gone from the basic beginnings of a 7-Eleven convenience store to gourmet high-end retail boutique coffee shops including Starbucks which propelled the coffee revolution. A greater emphasis on bean quality, roasting techniques, and refined preparations have significantly altered our perceptions of coffee and coffee culture.

Key Statistics:

• NCA report finds specialty coffee consumption up nearly 50%
• The NCDT further reports that in America, 656 million cups of coffee are consumed per day
• Specialty coffee sales are increasing by 20% annually and account for nearly 8% of the $18 billion U.S. coffee market
• Revenue in the Coffee segment amounts to the US $460 Billion in 2022

Founded in 2002, Blue Bottle Coffee has now moved to global coffee e-commerce from just a small coffee shop in Bay Area, California by converting store customers into online leads. But did they not stop there…they built a $700M e-commerce business by engaging new customers as well.

Blue Bottle sells fast and fresh coffee less than 48 hours out of the roaster that is ethically sourced, sustainable and delivers a brand experience. From seed to cup, they elevate the craft of coffee in everything they do. Now the Apple store of coffee in the US, Blue Bottle created a subscription e-commerce model where customers can get fresh coffee delivered online through apps anywhere globally.

About Blue Bottle Coffee

James Freeman, a freelance clarinetist and coffee enthusiast, founded Blue Bottle and began roasting beans in his garage. Later, Blue Bottle Coffee began selling fresh-roasted beans that were no more than 48 hours old at the Berkeley Farmers’ Market. The company’s shift to e-commerce business was shaped by that relentless push for freshness, and it’s a big part of why they’ve grown into an industry giant.

Over the next 10 years, Blue Bottle grew from a market stand to a kiosk and cafe, eventually establishing a network of Bay Area coffee shops. To kick-start their expansion online and into new markets, the company:

• Secured their first round of funding in 2012
• Raised $20 million in 2013
• Followed by another $25 million in 2014
• And raised another $72 million in 2015

Blue Bottle was a key player in the third wave of coffee, a movement aimed at elevating coffee from a mere commodity to a luxury good like wine or beer. They became one of the most passionate craft coffee evangelists with their in-depth barista training program, brewing guides, videos, etc. Customers who were smarter and more engaged appreciated the availability and quality of their products as their company grew.

E-commerce Business Strategies

From a high-end coffee shop to a subscription e-commerce model was a strategic move that can help grow your e-commerce business. A step-by-step guide to e-commerce business success includes:

1. Subscription E-commerce

Blue Bottle Coffee launched Blue Bottle at Home, an online service that delivers coffee to customers’ homes.

There are three types of services available through the Blue Bottle at Home service:

• Blue Bottle and Tonx find, roast, and distribute a fresh single origin coffee every two weeks as part of the Origin subscription.
  • Blend subscriptions include popular drip coffee blends such as Three Africans, Bella Donovan, and Giant Steps, which are shipped on a rotating basis.
  • A rotating supply of espresso, including blends like Hayes Valley and 17ft Ceiling, as well as a single origin standout, is included in the Espresso subscription.

2. Content Marketing

When Blue Bottle Coffee launched its e-commerce business, it educated its audience in order to bring the highest level of coffee connoisseurship to customers who had never visited a Blue Bottle coffee shop. It was accomplished through the use of a content marketing network. They created in-depth brewing guides, educational videos, and courses on buying, storing, and brewing great coffee. Blue Bottle was able to move beyond just selling beans as a result of this, and their higher prices were justified.

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