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Coffee Wars
With major changes afoot at Alterra, other Milwaukee-bred coffee companies ready themselves for an opening. Step inside the city’s most visible drug war. Escobar’s got nothing on these guys.

Alterra, Inc. founders (from left) Ward Fowler, Paul Miller and Lincoln Fowler.
Photos by Adam Ryan Morris

The bullet hurtled through Art Bar owner Don Krause’s liver, intestines and gall bladder, and lodged somewhere beside his spine.

The next day, it blew hole after hole into his clientele as local TV news played security camera footage of the sidewalk-patio shooting again and again. And again.

“I survived,” he says, “but my business didn’t.”

In Art Bar’s dark hour, a still-recuperating Krause started selling coffee brewed using Alterra beans. The specter of the 2005 shooting – of the kind, bearlike tavern owner getting gunned down outside his own establishment by a teenage boy – kept many customers away after dark. But they came at 6 a.m., he found, for 16 ounces of joe.

“It was our saving grace,” he says.

All the while, he knew Alterra was coming. He was already deferring to the city’s preeminent coffee company. “I wanted to compete alongside them with the same product,” he says. But he turned into a mouse under the feet of an elephant. When the company’s new headquarters and cafe, more like a warehouse than a mom-and-pop, opened down the street in 2007, his lucrative clientele of early-risers collapsed.

“Less than a month after it opened,” he says, “we decided to get out.” Art Bar beat a quick retreat, reinstituting its old weekday hours and bowing out of the hard-fought a.m. coffee market.

Alterra’s entry into the coffee biz was no less shaky, but a lot more successful. In 1993, two young men from Shorewood – Ward and Lincoln Fowler – went in with a friend, Paul Miller, on a venture to sell independently roasted coffee at a kiosk in the old Bayshore Mall. Securing a lease took longer than expected, and Miller had to sit the anxious Fowlers down to say: “Guys, we’re not doing this with the anticipation that we’re going to fail. We’re doing this with the anticipation that we’re going to be very successful.”

But that was almost 20 years ago. Since then, the trio’s collective vision has grown grander and grander. The busy Bayshore kiosk led to another at Mayfair Mall. A hit cafe on Prospect Avenue led to other stores in the Fifth Ward, Shorewood, Wauwatosa and Grafton. Alterra at the Lake became a city icon. The impressive headquarters-cum-cafe in Riverwest, styled after a midcentury factory, opened in 2007, and a new 15,000-square-foot bakery, commissary and cafe was set to open in August astride Bay View, Milwaukee’s latest “it” neighborhood, at perhaps the city’s only intersection with 11 crosswalks.

Meanwhile, Alterra’s two vintage roasters, hulking old Probats dating to the 1960s and 1930s, are cranking out 25,000 pounds of roasted coffee a week. Wholesale orders go out to customers around the country. New locations in Madison and maybe even Chicago are on the horizon. The future is big and bright for Alterra, as it always seems to have been.

Like Art Bar, Milwaukee’s other coffee companies labor in Alterra’s shadow, measuring its advances and searching for corners of the “locavore” market it has yet to seep into. Manual brewing programs. Light, citrusy roasts. Vietnamese beans or coffee roasted with the assistance of a wine connoisseur’s nose. Although no one seems prepared to knock Alterra off its perch, it’s intriguing to watch companies try. There’s brainy, philosophical Stone Creek Coffee Roasters; mild-mannered Anodyne, the Switzerland of the coffee wars; and a couple of young upstarts, the two guys who launched Valentine Coffee Roasters in a back room at the Bartolotta Restaurant Group headquarters.

The output of these companies, in both coffee and new development, has a surprisingly large bearing on public space in this city. Eric Resch, Stone Creek’s founder, says coffee shops “are the glue of our neighborhoods. They are the anchors. The core of what it means to be human is to be connected to somebody, and that connection – while Facebook and our digital life are valuable in certain ways – is a smile. It’s a touch. It’s a hug. And coffee gives us opportunities to create those connections.”

Starbucks has 50-plus locations in the Milwaukee area, but they’re low-profile. “Alterra has the lion’s share of the highly visible coffee shop landscape,” says Scott Johnson, whose Fuel Cafe, located in Riverwest, was one of Alterra’s first wholesale customers. “There are a lot of independent operators out there, but it’s hard to get out of the shadow of Alterra. You really have to cultivate a clientele and do what you do really well.”

True enough, but in this lopsided battle for the soul of a city, local roasters may have found a chink in Alterra’s armor. In 2010, candy king Mars, the third-largest private company in the U.S., announced a head-turning deal to use Alterra-brand coffee in packets that plug into its Flavia-brand machines, space-age coffee makers used in offices around the world. To wed Mars, Alterra signed over its “global distribution rights,” which seemed harmless enough. But the partnership, in practice, has had deep ramifications for the Milwaukee company.

First is a PR lather that could force Alterra, which has long traded on a local-guy image, to reverse course. Competitors are alleging that Alterra is the “Microsoft of coffee in Milwaukee,” an intimidating competitor and something less than a local company. At the same time, these antagonists claim to be friends with Alterra’s leaders and with each other. Customers, for their part, either don’t know the Mars deal happened, don’t care or feel jilted. Others aren’t sure what to make of it. “It was sort of strange to me,” Johnson says, “but if they can do a deal like that and make money on it, why not?”

Krause, these days, is at peace with Alterra. Art Bar still opens early on the weekends and pulls shots of the company’s espresso for caffeine-crazed bar customers, right into the wee hours of the morning.

“Their product is everywhere,” he says. “Who wouldn’t want to emulate that success?”

* * *

In 1993, “Full House” was airing new on ABC, Bill Clinton had just taken office and Kurt Cobain was very much alive. Starbucks had fewer than 300 stores in the world, only a handful in Chicago and none in New York. Alterra was incorporated, officially, right before Thanksgiving, and a space probe headed for Mars went rogue and stopped responding to signals from NASA.

The Fowlers were understandably nervous. To boot, their last venture, a high-end speaker company called “Fowler Audio,” had not gone well. They never supplanted Sony or Bose but had to dedicate 50 and 60 hours a week to the business anyway, cutting pieces of PVC pipe to exacting specifications and tuning each “box” so it resonated like an organ pipe. Lincoln cut off his left thumb (and sold a pair of speakers to the surgeon) in the process. To make ends meet, he tended bar, and Ward waited tables at Elsa’s on the Park.

Worries aside, the Bayshore kiosk was a hit, and so was Alterra’s first bricks-and-mortar store, which debuted in 1997 on Prospect Avenue. But the company came of age with the opening of its Alterra at the Lake cafe, a rare case of a private business allowed to operate on the northern end of the Milwaukee lakefront. The cafe was one of three projects pitched to the Milwaukee Metropolitan Sewerage District in 2000, in response to the district's request for proposals to renovate the 1888 Milwaukee River Flushing Station. In years past, it had been used to pump water into the river and wash sewage downstream, but by the 1990s, “It was basically a storage shed on the lakefront,” says Kevin Shafer, MMSD’s executive director.

Alterra’s competition was a similar proposal from Starbucks and a third for a roller skate rental shop. Alterra, the easy winner, went way over budget on the building, its first coffee shop on an epic scale, spending thrice the project's original allotment. “The lakefront kind of represented the first time that we raised our sights and tried to engage more holistically,” says Lincoln Fowler, who has a deliberate and resonating manner of speaking. “What was this building? What are we building? What is the larger context in which we sit, which is park land? What does this building mean? How can we use that to inform our larger construction process?”

Lincoln’s short hair and stubble-short beard are silver and dark brown. His shorts, short-sleeved shirts and sneakers are often muted green and an earthy brown, and he holds his chin at a subtly proud angle. He cracks self-deprecating jokes but seems slightly withdrawn, like he’s thinking about tomorrow, next month or last year. He heads up project management at Alterra, having emerged in the company’s early days as its “tactician,” he says. Paul Miller, who used to sell Milwaukee-themed T-shirts in malls, knew retail, and Ward Fowler was great with people.

In the months before Alterra at the Lake opened, Lincoln fretted mostly over the future. “This project was going over budget in a dramatic way,” he says. Then, the company’s headquarters was in the back of the Prospect cafe, where East Sider and restaurateur Karl Kopp, of Kopp’s Frozen Custard and Elsa’s, stopped in for many double cappuccinos, very dry. “I buttonholed him one day near the front door, and I told him I was getting a little bit nervous at the lakefront,” Lincoln says, “and he said he understood. He summed it up by saying, ‘That place could be great, or it could be a complete albatross around your neck. Who knows?!’ and he turned on his heel and went out the door.”

Again, the founders’ worries were unwarranted, and the new lakefront cafe was a sensation. Business in the winter months didn’t dip as far as they’d feared, and during peak times, the rambling cafe attracted something like 2,000 visitors a day. Competitors griped that MMSD had blessed the coffee company with an unfair advantage: Rent for the facility was just $21,000 a year until MMSD raised it to $144,000 in 2008.

“We told them we wanted more money,” says Shafer, otherwise the agency could have sent out another RFP. And that, officials knew, “would have gotten much more interest.”

“[Alterra] got a pretty sweet deal down there,” says Sheila Pufahl-Bettin, owner of Brady Street’s Brewed Cafe. “They fell into a very good opportunity, and who wouldn’t take advantage of that?”

Alterra changed up its game in the early 2000s, Johnson says, around the time Alterra at the Lake opened. “Initially, they were going to be a wholesaler,” he says. “Their whole thing wasn’t to open up a million cafes. That didn’t really start until after 2000. They were in these really out-of-the-way locations, and they really tried hard not to infringe on any of their wholesale customers’ territory. But I think after a while, they were just like, ‘Fuck it. There’s no way that we’re not going to be able to do that.’”

Alterra doesn’t just put up cafes, it builds cathedrals of coffee folded into dense neighborhoods. Lincoln says the company came upon the Bay View spot while “basically looking for warehouse space but in a really good retail neighborhood.” The Foundry cafe opened in 2006 in a tall brick box that once housed an actual foundry. Here, broad-leafed plants hang from a high ceiling, and seating spills onto a patio of greater dimensions than those of many competing cafes. This is not how coffee shops are normally built. According to Eric Resch, the Stone Creek owner, you can turn a storefront into a mom-and-pop for a slim $20,000.

As Alterra’s footprint enlarged, the founders refused to shy away from difficult projects. At the Humboldt Boulevard site in Riverwest, they first tried to save the pre-existing structure, but it proved untenable. After workers peeled off the old building, the company had to dispose of some 16 million pounds of soil contaminated by fuel oil, gasoline and dry cleaning chemicals, all left by past occupants. The cleanup, and hitting rewind on Alterra's lengthy design process, put the company about two years behind in moving into its new headquarters.

“People think we’re extraordinarily bright business people,” Lincoln jokes, “but if you look at what we did here, you might start to question that.”

In Bay View, the founders ran into a similar morass. The stately Maritime Bank building, originally targeted for renovation, became another burden due to damage from past fires and lingering asbestos. The location, however – at the confluence of Lincoln, Howell and Kinnickinnic avenues in the resurgent Bay View neighborhood – could hardly have been better. (This is where the crosswalks total 11.) So Alterra tore down the bank, saved a variety of its beams and other bones, and used them in a shining new construction.

Quite dramatically, the Bay View Alterra sits kitty-corner from Stone Creek’s Bay View cafe. The former’s outdoor patio is but a Frisbee-toss away from the latter’s, which is dotted with canary-yellow parasols. This close encounter of the coffee kind was “purely happenstance,” Lincoln says, and Resch is equally diplomatic, saying he expects Stone Creek’s sales to go up, not down, as the surrounding neighborhood grows.

The crossing is a new nexus of coffee in Milwaukee. Cafe Lulu, to the northwest, serves Stone Creek, and Stone Creek, positioned on the northeast corner, serves its own brand, of course. Cafe Centraal to the southeast and the new Alterra to the southwest serve the big “A” in large volumes. A line is drawn.

Coffee Intel 
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Lincoln Fowler Posted: 9/5/2012 3:34:15 PM
 9   8    

hello- this is lincoln, one of the owners of alterra. i normally don't weigh in here, but one of the commenters is misinformed and misrepresenting me. for clarity: alterra is 100% locally owned by ward, paul and myself. it has been that way since we founded the company in 1993 and it remains so today. he got the part about the bay view project kinda right...we did reinvest a ton of money into our neighborhood in bay view. and it took our commitment to the bank to make it happen. the author of the article spoke to this and got it about right. that might be worth re-reading. appreciations to everyone who took the time to read all the way to the end. best- lincoln
Noodle Posted: 8/9/2013 4:44:27 PM
 0   0    

Replying to: Lincoln Fowler
If you are still 100% locally owned why are you changing your name? Alterra was a great earthy name that was locally recognised. Colectivo is stupid, it reminds me of the Borg from Star Trek. The Borg are cool, but I wouldn't want them making my coffee.
P modjeski Posted: 9/2/2012 9:23:44 PM
 4   9    

Check your facts. Alterra is a subsidiary of Mars. They are not a locally owned company. The sole reason to sell to Mars was stated to me by Lincoln himself: We couldn't get a loan to build Bay View. Anyone who thinks they're in business for any other reason then money has fallen for the deception.
Noodle Posted: 8/25/2012 4:21:15 PM
 1   0    

I've always loved Alterra coffee & have frequented their cafes for many, many years. I'm fine with the company globalizing, but they should be more upfront about it. Some people believe they are still supporting a 100% local business, which is an important factor for some, and is not strictly the case anymore.
Tom Slezak Posted: 8/20/2012 12:21:24 PM
 7   10    

Ironic... the artist mentioned on page 16 does virtually nothing for the local economy, yet... he's not labeled a "sell out" ~ he is merely globalizing his business and says that, becuase he is still doing what he loves, he's not a sell out. The three founders of Alterra, have saturated the local economy on a philanthropic level, the creation of jobs and opportunities (two individuals previously employed by Alterra are referrenced as owners and mgt of one of the other roaters listed), helped countless cafes get off the ground with their generosity of equipment and training, yet when they go to globalize, they're labeled as "sell outs". I promise one thing... Paul, Ward and Linc love what they do and continue to do with Alterra and the pride that comes along with it. I know all three men personally and I can assure you, they are all laden with integrity and have the local economy in mind with darn near all of the decisions being made for their business. And... they happen to make the right moves at the right time and as a result, have made some money. Those who equate their success to selling out rather than thanking them for what they've done for the city of Milwaukee, only wish they could have done it first.
Tom Slezak Posted: 8/20/2012 12:24:12 PM
 0   2    

Replying to: Tom Slezak
I forgot to mention how proud I am of all three of them and how neat it is to read about their past, present and wonder what lies ahead for them and the "coffee world" at large in the city I call home.
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