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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.

 

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

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

Things Won’t Be Great  

  Photos 

 

Eric Resch of Stone Creek opened some of the city’s first high-end coffee shops, beating even Alterra.


Mars could have picked any coffee roaster in the world as a partner, yet it approached Alterra a few years ago after an international search that touched on some of the biggest names in coffee roasting. Alterra was one of three finalists, all taken from “the upper echelon of specialty coffee roasters,” according to Lincoln. Of the three, Alterra was the Cinderella asked to attend the ball, but its founders and others in the company were skeptical of their suitor’s intentions. Still, they must have felt validated. Their early work in sourcing beans directly from coffee farmers, thereby boosting both coffee quality and benefits for growers, was a big part of what’s now referred to as the “third wave” of specialty coffee in the U.S. It’s based on such ties and micromanaging the supply chain from bush to recycled-cardboard cup. Ex-Alterra employees are all over the U.S. coffee scene, at companies that include Stumptown Coffee Roasters in Portland, Ore., and FourBarrel in San Francisco.

The Milwaukee coffee company was a prize, and Mars wanted to buy it outright. But Alterra’s founders resisted. “We knew that an organization like that didn’t have a whole lot of interest in what was going on locally,” Lincoln says. After about 24 months of internal talks and external negotiations with Mars, the two companies reached the pact announced in early 2010, the one to partner on packets for Mars’ Flavia machines.

The agreement’s full terms have never been reported, but company officials confirmed that they lost partial control of the Alterra brand and how it’s presented. After the deal, the company’s multifarious logos were whittled down to the single gold star emblem that’s now so recognizable. Sources say employees had to take down for-sale merchandise using the old logos, and only T-shirts and other items using the star-centered design survived the fallout. In exchange for these limitations, including a new minimalist website bearing the “Mars Drinks” logo and a promise not to open cafes outside of Wisconsin and Illinois, Alterra received an unspecified financial incentive.

The agreement also led Alterra to resign from a large business league, Local First, which it helped start in 2006 along with Outpost Natural Foods and Beans and Barley. These locally focused companies wanted to slow the colonization of Milwaukee turf by national chains. Now 200 members strong, the group, originally called “Our Milwaukee,” promotes Milwaukee businesses at local events and does some public relations.

Pam Mehnert, general manager at Outpost and president of Local First, says Lincoln called her in 2010, sometime before the Mars agreement was announced, to resign voluntarily. Members were puzzled by Alterra’s exit. “I remember people asking, ‘Hey, what happened?’” Mehnert says. But allowing the coffee company to stay wasn’t an option. “Rather than to cause a scene, they thought it was best to resign,” she says. “Our organization is made up of independent businesses, and that means franchises, even those that are operated locally, aren’t included.”

Alterra bowed out of Local First, Lincoln says, because the Mars deal conflicted with the group’s bylaws, though he reiterates that the Milwaukee company and its cafes are still “100 percent locally owned” by the three founders.

On the upside, the deal has provided Alterra with some fiscal breathing room. The influx of revenue was enough, Lincoln says, to secure financing for the ambitious Bay View project. The building’s projected appraised value fell more than a million dollars short of its cost to build, he says, but the stream of funding from Mars bucked up bankers’ confidence in the coffee company.

In the early days of the Alterra-Mars partnership, the former trained the latter in the ways of sourcing and roasting coffee. Now, the candy company does all the work itself – the coffee in the Flavia packets labeled “Alterra” doesn’t come from the company’s Riverwest roastery. This arrangement elicited both criticism and confusion from within Milwaukee’s coffee scene, and in the fall of 2011, Alterra hired its first-ever marketing director, Scott Schwebel.

Schwebel is tall, stylish and plays drums in the famous local rock band “The Gufs,” which had national hits in 1996 with “Smile” and “Crash (into Me).” (The band still gets together from time to time to play Summerfest.) Schwebel later became a brand man as executive creative director at Hanson Dodge Creative, a nationally known advertising firm based in the Third Ward, but he’s still something of a rock star, wearing Ray-Ban sunglasses perched high in longish hair that sweeps this way and that, jeans with sewn-in denim patches, and one of Alterra’s “Day of the Dead”-style skull T-shirts.

He says the Mars deal came at the right time “to corral a bunch of things and put a new layer of focus on the brand.” He’s been around the Alterra vibe – known for being earthen, Latin-inflected and based on the concept of “work” – since before he organized a photo shoot for Harley-Davidson in 2000 outside the Prospect cafe. “It had not only this beautiful design but a wonderful sense of whimsy,” he says. “I recognized it, because I came out of the brand world, as an instant classic.”

Nowadays, Alterra’s administration is looking inward to “make sure the character that has been built on this brand while it’s still a very small company is maintained as opportunities continue to present themselves.”

Yet competitors say Alterra is not so small anymore and has already betrayed its homegrown DNA. Resch alleges that Alterra is no longer a “local” company, as it has assured its clientele, and that’s “a little surprising,” he says, “because these guys always preached local. What I think they lost – and what I would lose – is the authenticity of what we stand for as a Milwaukee company. It’s a choice they made. They got a bunch of money, and they gave up something. I don’t fault them for that. I just wish they’d be a little more honest about it.”

Aaron Guenther, vice president of sales at Sheboygan-based Torke Coffee (which serves a long list of wholesale customers in the Milwaukee area), says restaurant and cafe owners are still chatting about the Mars deal. “The consumer will make a decision on if what they’re buying is congruent with what they believe in,” he says, choosing his words carefully. Torke has been family-owned since 1941, he adds, when the roaster started by delivering door to door.

All this flak adds up to a PR pickle for a company that would rather be seen as an exemplar of local commerce. It doesn’t want to hear people say, “Alterra is the Microsoft of coffee in Milwaukee.” That comes from Jeff Browne, former president of the nonpartisan Public Policy Forum, which he left in 2008 to start a consulting firm, Vietnomics, that helps U.S. companies break into markets in Vietnam. He’s doing the same with Temple Hills, a startup that sources Vietnamese coffee.

The beans, roasted under a contract with Stone Creek, are carried in a number of Sendik’s locations and at Grasch Foods, where Browne says they’re positioned under imposing rows of Alterra bags. “The coffee aisle would make a good Where’s Waldo? picture,” he says. “Can you find the Temple Hills coffee discretely hidden beneath a wall of Alterra?”

Browne says his efforts to elevate Temple Hills’ shelf placement have so far failed. “Alterra is a genuine local entrepreneurial success story, a well-managed company that makes good products,” he says. “But like many dominant corporations, Alterra intimidates the competition, whether intentionally or not.”

He’s not the first local roaster to chafe at Alterra’s primacy. Resch and Stone Creek’s vice president, Steve Hawthorne, say Alterra tends to undercut competitors when bidding for a cafe or restaurant’s business.

“They tend to price low to get accounts and then raise up over time,” Resch says. “They can be pretty aggressive.”

Lincoln emphatically denies this. “We don’t do business like that,” he says. Buying in larger volumes may win a wholesale customer “a more aggressive price,” he says, but not in a way that’s out of step with the coffee industry at large.

There’s chafing, and also paranoia. “I doubt they’re sitting around the boardroom thinking up ways to squash Temple Hills,” Browne says of Alterra. “On the other hand, maybe they are.”

And up in Thiensville, where Fiddleheads Coffee Roasters has roasted since 2008, owner Mike Wroblewski looks southward and tracks Alterra’s methodical expansion, expecting it to lead to a location in the North Shore village or somewhere nearby. Fiddleheads is well-established on the North Shore’s northern end, with cafes in Cedarburg, Mequon and Thiensville, where the first opened in 1996. Alterra skipped over these towns in 2007 when it opened its first cafe outside of Milwaukee County in Grafton.

“Gaining market share is becoming more and more challenging,” Wroblewski says. “You really have to be on your game.”

Still, Alterra insists it has little interest in the suburbs. “Dense urban environments” are much preferred, according to Lincoln. “We’ve become aware in the past several years that we want to locate in top-flight locations, partly because the way we build our facilities is that we tend to overinvest in them. … None of us wants to be in a company that’s throwing out locations every other week from a take-over-the-world perspective.”

Despite these comments, Alterra is growing at perhaps its fastest pace ever, with the Bay View location coming online and new cafes opening in eastern Wauwatosa and Madison – likely the first of multiple stores in the state capital – either this fall or in spring 2013. The company also has a dedicated sales rep on the ground in Chicago, where the golden Alterra star is becoming a common sight. The founders may even try to break into the Illinois city’s cafe scene. Such a move is “certainly on our radar,” Lincoln says. “We match up really well down there.”

Could Alterra overextend? It vows not to dilute its roasting experience by attempting to produce coffee in other cities. All would be shipped from Milwaukee. But the company’s union with “the huge candy giant” could leave it vulnerable in its home city, according to Wroblewski. “Maybe other roasters are feeling the time is right.”

Valentine’s Joe Gilsdorf (left) and Robb Kashevarof roast to “the apex of sweetness.”

In 1992, Eric Resch loaded up his Toyota Camry and drove to Seattle, where grunge was ascendant. Retreating in the rear view mirror was Chicago and the Midwest, where he’d graduated from UW-Madison with degrees in sociology and business management. But “the corporate life,” he’d decided, “wasn’t going to work for me.”

In the coffee city, he drank many, many lattes in independent shops, taking long notes on what he would emulate if he ever opened his own. With papers in hand, he moved again to Chicago, where his sister was living, and commuted from a one-bedroom apartment in the Lincoln Park neighborhood to jobs at a couple of the first Starbucks locations ever founded outside of the West Coast. He met Howard Schultz, the company’s CEO. (“Schultz would fly in every quarter and sit in a room, and we’d ask him questions about what we were doing.”) But Resch, who’s boyish and animated, grew restless.

At some point, he attended a coffee trade show in Boston, conferred with roasting pro Sherman Dodd and ordered his first roaster. Now he had skin in the game. He moved up to Milwaukee, found space in an old mill for roasting and filed the papers for Stone Creek, which is officially “Giri Corp.,” after giri, a Japanese tradition of honor and obligation. A 20-something Resch had come across it in the Bushido samurai code. In 1993, Giri opened its first Stone Creek cafe in Whitefish Bay using a commercial loan from Associated Bank and Resch’s own beans. Meanwhile, the Fowler brothers were making their first moves and still wondering if they were going to lose their shirts on a kiosk in Bayshore Mall.

Alterra now has about a dozen outlets (with more to come), and Stone Creek owns eight, with a ninth scheduled to open soon at its Fifth Street headquarters. The building, a renovated 22,500-square-foot warehouse dating to 1898, was dim this summer and smelled of the green coffee bags that were piled atop pallets on the main floor. Workers were installing a freight elevator so Resch and his staff could move the bags to the basement to make room for the upcoming Stone Creek Factory store. And on the second floor, construction was underway in a still-bare space that will house a new kitchen for the company’s latest hire, a “coffee chef.”

This spring, Stone Creek lured a talented young chef, Aaron Patin, away from SURG Restaurant Group, where he was slated to run the kitchen at the new 8-twelve MVP Bar & Grill (an eatery endorsed by Ryan Braun and Aaron Rodgers). Instead, Patin, just 26 at the time of his hire, will command Resch’s new Stone Creek Kitchen line. It’ll make muffins, scones and cookies, but not soup or other expected items, as Patin tries to put a new spin on how coffee shops serve lunch.

Meal-worthy fare is alien to how Stone Creek has operated in the past, suggesting the company is recalibrating in the face of Alterra’s latest expansionary phase (though Resch denies this). His cafes have long sold items from City Market and C. Adam’s Bakery, but they’ve never blurred the line between restaurant and coffee joint for fear of destabilizing the company’s regimented dedication to its coffee products. Stone Creek is even reluctant to sign restaurants as wholesale customers because they rarely employ dedicated baristas.

Inside the company’s “cupping lab” – a dark room for tasting coffee that has counterparts at the Alterra and Anodyne headquarters – a rainbow-hued “flavor wheel” for coffee tasters rests on an easel. Flavors listed descend from the general, such as bitter, to the hyper-precise: nippy, tart, delicate, alkaline, phenolic, creosol, piquant. Possible “aromas” are tea rose, dark chocolate, camphoric, burnt, butter, charred, lemon, coriander seeds, onion, toast, pipe tobacco and Swiss vanilla. There are 24 others.

To cup, Resch and Hawthorne measure ground coffee into small glass cups and add water. After steep time, they peel back the layer of coffee floating on the water’s surface with a spoon. As they’re scraping, they fan the rising steam to their noses with their free hands. This is to register the aroma. Dipping in the spoons, they sip a small portion of the coffee into their mouths, making a loud sucking sound as they mix it with air. The aerated coffee lands on a variety of flavor receptors on their tongues and steams into their nasal passages. They take notes.

This kind of flavor list can be bewildering in its precision. In late June, the results of an Alterra cupping session were scrawled across a whiteboard in its lab: cacao, almonds, spice, butterscotch, hot sauce, molasses, mango, strawberry, stonefruit, root vegetables, sugary sweet, chocolate, evergreen and menthol.

Coffee can also take on “taints,” marks of a bad cup. These include astringency, saltiness, a general flatness, a powerful earthiness or a flavor like a stewed tomato, according to Steve Kessler, Anodyne’s director of wholesale operations.

Each of Stone Creek’s stores is undergoing a renovation between now and the end of 2013 to accommodate the new food line and, in many cases, move the cafes’ barista stations to “center stage.” Surprise, surprise, the Bay View cafe got an early facelift in July, just in time for Alterra’s planned grand opening across the street in August. Many of the other renovations will be done during the post-holiday lull that hits just about every coffee shop in January, February and March. Typically a hot drink, coffee is actually most popular in summer months, when streetside foot traffic is heaviest.

South of the Alterra/Stone Creek coffee “nexus” in Bay View, Hi-Fi Cafe and Sven’s Cafe serve their own loyal followings on Kinnickinnic Avenue, and the latter just opened a new shop Downtown in the old Steamers space. Add plans by a group of six East Coast franchisees to open 20 to 25 new Dunkin’ Donuts locations across the metro area in the next three years, and Milwaukee may be entering an Age of Caffeine.

As the city’s coffee landscape becomes ever-more cluttered, Alterra and Stone Creek run a higher risk of impinging on their own customers’ livelihood. The big local roasters could lose customers like Ryan Mason, owner of Roast, an espresso bar two blocks south of UW-Milwaukee. He began in 2004 by serving weary students, professors and TAs brewed Alterra coffee and espresso from Anodyne, but around the time Alterra’s Riverwest roastery went online, he dropped its coffee in favor of serving only Anodyne.

“I really didn’t feel comfortable with Alterra’s expansion,” he says. “I didn’t like that they had two locations a mile away from me. It was like they were playing both sides of the fence.” The other location, the Prospect Avenue cafe, is a short stroll down Maryland Avenue.

Neither Alterra nor Stone Creek apologize for opening cafes within walking distance of wholesale customers.

“If we execute really well in retail,” Lincoln Fowler says, “it only helps the perception of our coffee when it’s sold at another cafe or restaurant.”

Resch says Stone Creek tends not to seek out wholesale buyers near its stores, though sometimes they crop up in a neighborhood after a cafe opens its doors. “If we have any,” he says, “we have that discussion to make sure they’re comfortable and we’re comfortable.”

The Stone Creek founder believes in “respectful” business, he says, even when opportunities land in the company’s lap. “We try to stay away from our competitors as much as possible,” Resch says. “We’re trying to show that you can all be successful.”

For Stone Creek, that seems to mean amping up. “We’re going through another vertical growth phase,” he says. “Once we get through this, after next year, we’ll probably take a year or two to make sure the business is stable, to make sure my employees are healthy, to rest, to reflect and to decide what’s next. It’s not like being a hamster on a wheel. But when we go, we go hard.”

Charging alongside Resch is married duo Vice President Steve Hawthorne and Retail Director Kendra Barron, who take a more bullish attitude vis-à-vis their competitors.

“I have a one-half-percent fear that Dunkin’ will steal any customers from us,” says the quietly confident Hawthorne.

And Barron, the extrovert, is ready for Alterra. “We always welcome the person across the street and challenge them with our culture.”

She gestures with her pointer-fingers, as if she’s saying, “come on.”

“Sure,” she says, “I’ll make a latte for you.”

Mike Wroblewski says Fiddleheads started roasting in 2008 to make better beans for its fleet of cafes.

One of the city’s youngest coffee companies, Valentine Coffee Roasters is pitching itself as a roaster without cafes. The two-man operation sells to cafes, grocery stores and especially restaurants. “What we don’t do is compete with our customers,” says Joe Gilsdorf, one of the partners.

Both men have a nose for wine. Gilsdorf was a partner in the popular Riverwest restaurant Nessun Dorma as it got off the ground in the early 2000s. In 2008, he moved to the Napa Valley, spent a couple years managing wine tasting rooms, and moved back to Milwaukee in early 2011 to rejoin longtime friend Robb Kashevarof, another wine nut who had gotten into coffee. Kashevarof was roasting eight to 10 batches a day on a half-pound roaster he’d rigged up in his garage, testing roast time and temperature while working part time tending bar.

Kashevarof sold his first cup in 2009 at a farmers market in Menomonee Falls. But once he was rejoined by Gilsdorf, a tall, young-looking man who sometimes wears a heavy black apron while roasting, Valentine’s growth curve sharpened dramatically. Both men tapped into their connections in the restaurant biz. They moved their shiny red Diedrich-brand roaster into an unused space in the rear of the Bartolotta Restaurant Group headquarters, near the border between Milwaukee and Wauwatosa. (Kashevarof used to work for Bartolotta.)

As of June, they were maneuvering tubs of coffee around empty boxes and mothballed kitchen equipment. Kashevarof pulled a tub labeled Ethiopian Harrar, roasted April 17, from a metal shelf next to a desk strewn with papers. The dark beans smelled like blueberry pie. He and Gilsdorf went through more than 20 blind cuppings to pinpoint a recipe for the African coffee. Another tub of roasted Brazilian beans smelled like smoky chocolate. “We roast to the apex of sweetness,” Kashevarof says.

In mid-July, the partners announced that they had leased a former dry-cleaning store in western Milwaukee, a few blocks from their old location, to use as a roastery. And they even hinted at a “tasting room” to come, given the storefront’s streetside footage, though leaping into the retail fray still seems unlikely for the pair. For now. “We’re hesitant to get into the cafe business,” Kashevarof says.

He calls Valentine’s position in the market a “David and Goliath situation,” but says nonchalantly of companies like Alterra and Stone Creek, “We all started the same way. They may have had an 18- to 20-year head start, but we’ll catch up.”

There are a lot of “friends” in Milwaukee’s coffee industry, even among fierce competitors. Lincoln says he counts Resch as a friend, and Resch has kind words for Alterra, too. “I have a good amount of respect for those guys,” he says, noting that he wants to be “a friendly competitor” with them.

“Competition,” Resch adds, “makes things fun.”

Hawthorne will occasionally share beers with Steve Kessler, Anodyne’s director of wholesale operations, and Kessler’s been known to hang out with an Alterra luminary or two.

Such is the split-personality of good old-fashioned American capitalism, where competition is healthy and even welcomed, but actual competitors had best beware. Still, these Milwaukee coffee companies, eager to be seen as model businesses, seem caught midway between bare-knuckled free enterprise and something more communal. Most of them, including Alterra and Stone Creek, rarely advertise, preferring instead to donate coffee to events or even sponsor Little League teams as ways of boosting their visibility. Alterra is a common sight at bike-related affairs – Bike to Work Week, the UPAF Ride for the Arts, the Downer Classic – where employees give away coffee. Sometimes these are paid assignments, and sometimes they’re “volunteer-based.” Alterra workers are encouraged to donate a certain percentage of their time each month and “look at that as a way of giving back,” according to Schwebel.

Lincoln says flatly that Alterra views itself as a group of “socialists/capitalists,” though no coffee company in Milwaukee is as laid-back as Anodyne Coffee Roasting in Bay View, on the southern end of Kinnickinnic, where its headquarters/roastery/cafe made from tan-colored bricks and faded red roof tiles is easy to roll right past. The building, which could belong to any number of businesses, vacant or not, is around the corner from the house of its owner, Matt McClutchy, who got his start in the coffee biz as wholesale manager for Alterra during the company’s early, early days.

Anodyne started on Brady Street, in what is now Brewed Cafe, with McClutchy bent over a 5-kilo roaster in a sweltering back room. He’s soft-spoken, holds the city’s first license for backyard chickens (for which his son was featured in the The Bay View Compass) and picks the banjo. He and his family moved to Bay View in 2003, leaving a duplex on the East Side, and a few years later, Anodyne’s headquarters moved with him.

What was ample space then is now becoming cramped: A 30-kilo roaster runs days (and sometimes nights) to meet orders. Another move is probably inevitable, but McClutchy doesn’t relish the thought. In the current cafe, there’s a steady sound of rushing air from the roaster, and most of the tables, surrounded with mismatched chairs, are branded with the stoutly serif’d A’s of Anodyne’s logo.

“We are very, very neighborhood-supported,” says cafe manager Carla Zacher, another ex-Alterran. “Bay View is kind of like Mayberry. You have the same people next to the same people in the same line every day.”

Anodyne pushes pour-overs, a popular “manual brewing method” in which water is poured directly through a coffee-filled paper filter and into a cup. Mason’s Roast is rolling out a similar program highlighting different ways to brew, and Scott Johnson, the Fuel owner, says he met with folks at Alterra this summer to brainstorm such a program for the Center Street cafe.

Amid all these coffee competitors, Anodyne is Switzerland, the one party that best approximates neutrality. Credit McClutchy’s minimalist style of management. Not long after moving the company’s headquarters south to Bay View, he sold the Brady Street storefront, saying a second cafe was just too much.

“I’ve never really had a vision,” he says. “I just want to roast my own coffee and go from there.”

 

* * * 

It’s late June, and summer is reaching a plateau of intense heat. In a few days, July 4 and 5 will set all-time records of 102 and 105 degrees, and the Alterra headquarters is hot to the point of claustrophobia. The Probat roasters, like big laundry dryers, don’t make working back there any more pleasant, but the company’s cozy administrative wing, in a loftlike space on the second floor, is gently air-conditioned. Lincoln Fowler’s office here is carpeted with red, maroon and blonde squares, and the chairs are made out of what look like narrow tree limbs. Lincoln’s long desk, originally rescued during one of the company’s many salvaging operations, is monumental, workmanlike. On the walls are a container filled with leftover electrical components (not from Fowler Audio, he insists), a painting of a man tugging a bag of green coffee between piles of other brown, burlap bags, and a drawing of Alterra at the Lake.

The door is closed. Lincoln’s speaking to a reporter, who asks about leaving Local First, the locally focused business league, and how that happened.

“That’s more of a footnote,” he says and adds, using the group’s old name, “It’s important to note that we are looking forward to rejoining Our Milwaukee shortly.”

“How would that happen?” the reporter asks. Only a major shift at the company would allow it to rejoin. “Are they revising their bylaws?”

“They’re not changing anything,” he says. “Um, it’s not a story I can tell right now. But it’s an exciting story.”

“Can you give me a sense of what the outline of that story might look like?”

“No.”

“Or a timeline?”

“I’ll tell you we’re looking forward to rejoining shortly.”

“Would this mean leaving your agreement with Mars?”

He laughs. “Refer back to previous statement.”

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