How Blue Bottle Coffee turned one coffee shop into a $700 million eCommerce business

Sixty years ago the landscape of coffee would be unrecognizable to most of us. Coffee was still just a utilitarian beverage, used to fuel the workday of everyone from farmers to CEOs. Since that time, an increased focus on the quality of beans, roasting techniques, and refined preparations has fundamentally changed how we view coffee and coffee culture.

The artisanal, or specialty, coffee market has been on the rise since the early eighties. With more knowledge, availability, and a newfound focus on the craft of brewing coffee, more and more people are seeking out a product that is ethically sourced, sophisticated, and, to be frank, an experience.

By educating their customers about the craft of brewing a good cup of coffee, Blue Bottle created a brand that people want to talk about.

One of the biggest names on that scene, Blue Bottle Coffee, emerged in 2002 and has since grown their company from a favorite local shop in the Bay Area into a global and online eCommerce brand.

By educating their customers about the craft of brewing a good cup of coffee and finding ways to build stability into what is essentially a retail market, they’ve created a brand that people want to talk about. Blue Bottle Coffee has translated their chic coffee shop ideas into a wildly successful online brand. 

Blue Bottle was founded by James Freeman, a freelance clarinetist and coffee enthusiast, who began roasting beans in his garage. Obsessed with the perfect cup, Freeman started honing his craft five pounds of beans at a time. This passion led to opening a stand at the Berkeley Farmers’ Market, where Blue Bottle Coffee started selling fresh-roasted beans that were no more than 48 hours old.  That relentless push for freshness helped shape the company’s later approach to eCommerce and is a big part of why they’ve become a giant in the industry.

Blue Bottle’s first location via Instagram.

Blue Bottle expanded from a market stand to kiosk and cafe, building out a network of Bay Area coffee shops over the next 10 years. All this led to their first round of funding in 2012. The company raised $20 million to kick-start their expansion online and into new markets and followed up with another $25 million in 2014 and $72 million in 2015.

Considered to be one of the major players in third wave of coffee, a movement aimed at uplifting coffee from mere commodity to a luxury good like wine or craft beer, Blue Bottle played a big part in making high-end and artisanal coffee as popular as it is today. With their in-depth barista training program, brewing guides, and videos, they became one of the most impassioned craft coffee evangelists. 

Using content marketing to get buy-in from customers

Blue Bottle Coffee is exacting in their pursuit of the best possible cup of coffee. Their roasting and brewing methods are developed with an eye toward freshness and flavor. Freeman made a vow back when he started Blue Bottle, “I will only sell coffee less than 48 hours out of the roaster to my guests, so they may enjoy coffee at peak flavor. I will only use the finest, most delicious, and responsibly sourced beans.”

A selection of Blue Bottle’s in-depth customer education guides.

This meant that customers who came into their shops were always provided with a coffee that had essentially just been roasted, using beans that were meticulously sourced. Well-trained baristas would brew their product with painstaking care, coffee weighed to the gram, and timed perfectly to let the flavors bloom. This ethos was built into every aspect of the Blue Bottle cafe experience and informed how the company expanded online. 

Unfortunately, that level of perfectionism was still relatively new in the market when Blue Bottle launched their eCommerce business. The number of consumers who appreciated it enough to pay for it was small, especially for an online business trying to reach a wide audience and justify a big VC investment. To bring this level of coffee connoisseurship to customers who may never have set foot in an actual Blue Bottle coffee shop, they needed to educate their audience. 

They did it through content marketing. By creating in-depth brewing guides, educational videos, and courses on buying, storing, and brewing great coffee, Blue Bottle was able to make their brand synonymous with third wave coffee, and indeed spread appreciation for artisanal coffee to new customers. This helped Blue Bottle move beyond just selling beans and legitimized the higher price for their products.

Organic keyword data shows how these guides are not only providing information to their customers, they’re acting as an acquisition method as well. If a newbie coffee drinker is looking for more information on “how to make pour-over coffee,” the Blue Bottle brand will be there to show them the way. In other words, this content is working both for pulling leads into the top of Blue Bottle’s sales funnel, and retaining existing customers with continuing education that turns coffee drinkers into true coffee fans. 

They’re also on the first page of Google for keywords like aeropress, french press coffee, and coffee subscription, as well as their branded keywords. Their guides are estimated to generate incoming search traffic in the thousands, which brings more potential customers to their site every month.

Alongside their free guides, Blue Bottle started selling brew kits, AeroPress, Chemex, and their branded pour-over ceramic drippers. Not only were customers coming to their site to learn about great coffee, they could pick up everything they needed to make it at home. Blue Bottle wasn’t just selling coffee to their customers, they were selling connoisseurship. They became a brand that provided exhaustive information on proper brewing as well as the tools one needed to do it right.

Find predictable revenue through eCommerce subscription

As Blue Bottle grew, they expanded their online product offerings from wholesale-only to coffee subscriptions and direct-to-consumer options. This subscription model not only allowed Blue Bottle to deliver the freshest beans possible, which is tied to their ideas on how they think customers should consume their coffee, it gave them a predictable revenue stream to help scale their business more effectively. If they had stayed with retail-only locations, Blue Bottle would not have the same kind of consistent revenue useful for projecting company growth. Introducing a subscription service also gave them a way to scale their business and supply chain to offer more products to their customers.

Through Blue Bottle at Home, they offer a number of different subscriptions for regular coffee drinkers, each designed to bring in monthly recurring revenue. Customers receive regularly timed shipments of six or more ounces of coffee that is no more than 48 hours old.

Adult specialty coffee drinkers via Specialty Coffee Association.

As daily drinkers of specialty coffee increase, their need for better quality and fresher beans naturally increases as well. Being able to provide this product to a growing market on a recurring basis is fundamental for Blue Bottle. Their diligence in providing fresh beans to customers as quickly as possible is a core tenet of their brand and a way to bring in predictable income on a recurring basis.

With a more predictable stream of revenue, Blue Bottle is putting the mechanics in place to sell to a wider audience. They regularly open roasters close to their cafe locations and partner with other companies that can help them scale production of their direct-to-consumer line. For their New Orleans Iced Coffee product, they partnered with dairy producer Clover and Fort Point Beer Company to produce their coffee at a much larger scale. The coffee is brewed by Fort Point and shipped to Clover where it is mixed with their organic milk and sugar, then pasteurized and packaged in cartons for shipment.

Blue Bottle now has a way to supply their stores with freshly roasted beans, they can ship faster from the location that is closest to the customer, and they can provide direct-to-consumer, value added products at scale.

Blue Bottle New Orleans iced coffee packaging.

Boost organic interest with a social media worthy experience

Walk into any Blue Bottle Coffee shop and it will feel familiar. Every one of their physical locations has the same clean and modern aesthetic you’d expect from their brand. From the Bay Area to New York City, Tokyo to their online shop, whenever a customer interacts with Blue Bottle, they’ll find a consistent design experience. That experience extends to their product packaging as well.

In a world where Instagram shots of your morning cup raise the awareness of a brand, Blue Bottle built their design aesthetic to be high-status but also inviting.

The chic and modern design of their cafes was a way for Blue Bottle to differentiate themselves from their competitors. In a world where Instagram shots of your morning cup raise the awareness of a brand, Blue Bottle built their design aesthetic to be high-status but also inviting. When a customer snaps a picture in a Blue Bottle cafe, they’re boosting their status to their followers, which translates to how the brand is perceived on social media.

Fostering this well of organic interest in their brand via physical locations was a great way for Blue Bottle to capitalize on social media when moving their company online. The consistently growing interest in their brand meant that Blue Bottle was able to connect with an already existing audience and promote the sharing of their company across the country.

Interest in Blue Bottle Coffee via Google Trends.

Key takeaways

Moving from high-end coffee shop chain to an eCommerce subscription service might not seem like the most likely path for Blue Bottle Coffee. As their company grew, they found that smarter and more engaged customers appreciated the availability and quality of their products.

► Make your revenue predictable

Moving to a subscription model can give your company a steady stream of revenue that you can use to scale the business more intelligently. Your company will be able to make smarter decisions based on the predictability of the subscription income.

► Market yourself as a subject matter expert

Blue Bottle Coffee built themselves up as a one-stop-shop for everything artisanal coffee. By establishing yourself as an expert in the market, you’ll be able to acquire new customers more easily when scaling the business online.

► Educate your customers

Smarter customers make smarter decisions. When your customers are educated in your market, and you can provide them with the tools to accomplish their goals, they’ll be more likely to rely on your company for the products they need to do so. Especially if you’re the one they came to for their education.

► Establish a strong brand

Social sharing is a great way to increase awareness of your company and your products. By maintaining consistency in your branding and encouraging customers to share their stories, it becomes easier to be successful to a wider audience.

► Make smart partnerships

Supply chain logistics probably isn’t the most fun topic, but when you’re growing a company, it’s important to know how easy it will be to provide the same experience on a larger scale. Find partners that can help you scale the business in an intelligent way.

Sam Hollis
Sam Hollis is a writer at Jilt. When he's not writing about high growth eCommerce startups, he likes to play the piano and cook. See more his writing at his Contently page.

3 Comments

    1. It\’s a testament to how huge the coffee market is. :) Starbucks itself was founded to compete with Peet\’s, so every coffee company starts with someone else dominating their market. My favorite thing about Blue Bottle has been their focus on customer education, and their content taught me to try inverting my Aeropress, which indeed led me to buying their coffee, so it\’s really need to see that content marketing and brand building in action. ☕

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