Stealth Starbucks: A Premonition of Modern Specialty Coffee

Roy Street Coffee & Tea, one of the Stealth Starbucks that opened in Seattle in the 2000s. via Wikipedia

In 2009 a Starbucks location in Seattle closed for renovations. When it reopened, much had changed: gone was the familiar mermaid logo, the baristas (er, partners) no longer wore their customary green aprons, and a new name adorned the shop front. No more a Starbucks; this was now 15th Avenue Coffee & Tea.

“In the spirit of a traditional coffeehouse,” the Seattle Times wrote at the time, “it will serve wine and beer, host live music and poetry readings and sell espresso from a manual machine rather than the automated type found in most Starbucks stores.” A company representative called these stores “learning environments for us to be innovative and push the envelope.”

It’s fair to say that the Stealth Starbucks, as the store and others like it were dubbed, were not the most popular. The company was accused of “local-washing” by some, and by other coffee shops in the area of ripping off their vibes. “The Goliath is coming at me under a new name,” Victrola Coffee Roasters owner Dan Ollis told the Chicago Tribune. “Are they going to go to Chicago and go against Intelligentsia? Is that what their new game plan is?”

The coffee industry has come a long way since 2009. High end coffee in particular has exploded in popularity—companies like Blue Bottle, Intelligentsia, and Stumptown have expanded rapidly and most towns in America now boast some kind of specialty roaster or cafe.

However those three companies now have more in common with a behemoth like Starbucks than they do with your local specialty coffee roaster. Blue Bottle is owned by Nestlé, while Intelligentsia and Stumptown are both subsidiaries of JDE Peet’s and, by extension, JAB Holding.

Local specialty facade with billion-dollar corporation backing: at this point, could they not be considered modern versions of Stealth Starbucks?

Commoditization of the Brand

The first decade of the 2000s was a weird time for Starbucks. One example: Starbucks Entertainment was a thing, wherein the company briefly got involved in funding movie projects and published books.

In 2009 the company was struggling as the world recovered from the Wall Street crash the year before, shuttering stores and laying off thousands of workers in a bid to cut costs after making a loss in 2008. The company tried a number of approaches to reverse its downward trend, from introducing instant coffee to launching an online suggestion box, My Starbucks Idea.

Then there was “the corporate version of re-education camp,” which is how the New York Times described the training that all US Starbucks baristas had to go through as part of the company’s “campaign to revive the intimate, friendly feel of a neighborhood coffee shop.”

In a leaked 2007 memo a year before he returned as CEO, chairman Howard Schultz lamented what Starbucks had lost in its rapid expansion, namely “the watering down of the Starbucks experience, and, what some might call the commoditization of our brand.” The company’s move to more automated equipment, Schultz wrote, meant losing “much of the romance and theatre that was in play with the use of the La Marzocca [sic] machines.”

In Schultz’ opinion, Starbucks needed to recapture some of that previous neighborhood cafe feel. “We desperately need to look into the mirror and realize it's time to get back to the core and make the changes necessary to evoke the heritage, the tradition, and the passion that we all have for the true Starbucks experience.”

Schultz returned as CEO in 2008, and in 2009 Starbucks opened the first of its Stealth Stores. These locations—officially designated “inspired by Starbucks”—soon spread to other US cities, with examples opening in Austin and New York City.

Experimental Laboratory or Shameless Trickery?

Melody Overton, who writes the blog Starbucks Melody, was one of the first people to visit the new-and-improved 15th Avenue Coffee & Tea in 2009. Overton noted the La Marzocco espresso machine, the long community table, the pages from Plato on the wall. CNN also clocked the decor, noting that “pages from Plato's dialogues decorate an entire wall” while “sweeteners sit on a bathtub converted into a table, beer and wine are for sale and employees dole out customized drip coffees along with advice on which are the best beans.”

Were these locations an attempt to trick the public? Or merely a place for the massively-recognizable corporation to try new things with relative anonymity?

In a 2010 interview, Schultz reiterated that these were “laboratory” shops that gave the company more scope to try things such as serving alcohol without potentially affecting (or damaging) the wider brand. “It wasn't so much that we were trying to hide the brand,” he said, “but trying to do things in those stores that we did not feel were appropriate for Starbucks.”

They were also, according to the company, an extension of Starbucks’ history and reputation as a coffee pioneer. “We’re continuing our commitment to delivering specialty coffee excellence while refreshing our store design approach with an amplified focus on local relevance,” a Starbucks spokesperson PR’d to Seattle Pi. “Ultimately, we hope customers will feel an enhanced sense of community and a deeper connection to our coffee heritage.”

Critics, however, speculated an ulterior motive. “Such locations were criticized as somewhat disingenuous attempts to use the ambiance and offerings of a neighborhood coffee shop to further corporate interests,” Eater wrote, noting that many customers would be unaware of the coffee shop’s corporate connections. A neighboring business owner in Seattle accused the coffee giant of copying her establishments’ aesthetics.

Whether or not it was the goal, local coffee shop proprietors definitely saw Stealth Starbucks as a threat. “What if Starbucks nails the ‘local vibe’?” wondered Austin-based Cuvee Coffee founder Mike McKim in a blog post. “I mean, what if they actually get it right? Will it render local shops’ precious single arrowed quiver useless? Is specialty coffee in danger of failing in the one area where it has the greatest chance to succeed?”

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Local-washing and Venture Capital

The concept of local-washing—big corporations latching on to the buy-local movement in order to appear friendly and approachable—was a big deal in the early 2000s. Localism was catching on, and companies from Unilever (Hellmann’s had an “Eat Real, Eat Local” initiative in Canada) to HSBC (“the world’s local bank”) wanted to get in on the action. At least one localism advocacy group linked Starbucks’ unbranded stores to this local-washing phenomenon.

Over the past few years, local-washing in coffee has taken on a more subtle hue. Instead of launching big ad campaigns to trick customers into thinking they’re local, big corporations have simply started buying up smaller, stylish companies. In fact, many independent-seeming specialty coffee companies across the country are actually owned or backed by big venture capital funds.

While presumably not their only motivation for doing so, Peet’s owning Intelligentsia and Stumptown offers them a ready-made entry point into the specialty market, along with the positive reputation that a local coffee shop brings. Peet’s doesn’t need to unbrand itself to trick corporate-wary customers into buying its coffee—Intelligentsia and Stumptown have already done the work for them.

The Stealth Starbucks didn’t last—the final one closed quietly in 2019—but the dream lives on with these corporations in specialty clothing.

Third Wave Cachet

In 1994, Starbucks bought the trailblazing Boston-based Coffee Connection chain from George Howell. Howell is widely considered one of the forefathers of today’s specialty coffee movement, and the Coffee Connection specialized in lighter roasts and farm-specific sourcing years—perhaps decades—before such practices were commonplace.

Starbucks rebranded all Coffee Connection locations to match the rest of its growing empire, something the company also did with a number of subsequent acquisitions such as Pasqua Coffee and Coffee People/Diedrich Coffee.

One wonders if, today, Starbucks might hold off on the rebranding. Such wholesale changes risk confusing and alienating the previous shop’s loyal patrons. “It is a lot more commercialized than Coffee Connection [originally] was,” one such customer said about the changes post-takeover. “The whole transition has been disappointing.”

On the other hand it’s probable that, after their favorites were acquired, many if not most Stumptown or Blue Bottle customers noticed zero difference whatsoever. The branding is the same; the coffee is the same; even the workers are probably the same.

It’s perfect: unaware customers, anonymous owners—the brands keep their third wave cachet and the money keeps rolling in.