Seattle: Its Coffee and Its Livability

What might have been a business story about the failure of a local coffee chain - and not a small one at that - to compete against the mighty Starbucks becomes more of a description of what Seattle is all about, and urbanity plays a major role.

The bankrupt, Seattle-based 200-store chain in the western U.S. is Tully's, which had been purchased by Green Mountain coffee in Oct, 2008. In addition to comparing the two chains - and why Tully's couldn't compete with the ubiquitous Starbucks, Kirk Johnson explores how coffee took-off in Seattle, of all places.

"Why Seattle became synonymous with coffee at all... is a chicken-and-egg question if ever there were one. Did coffee become huge here because the place so needed stimulants - a chemical restorative to the gloomy damp - or was it on some level a marketing creation that became real over time by force of repetition?

The ‘idea of Seattle' was, and is, an idea of urban livability that lives on in the DNA of every upscale coffee retailer, whether they think of it that way and acknowledge it or not," said James Lyons, a senior lecturer in the English department at the University of Exeter in England and author of "Selling Seattle," a book about how Seattle identity and Seattle products, from coffee to grunge music, was harnessed together for fun and profit."

"Every time I see a new, independent coffee store opt for outfacing window seating, so you can sip your latte and watch the world go by, the store owes a debt to Starbucks and its origins in Seattle," Dr. Lyons said in an e-mail.

For Tully's patrons - according to President and CEO Scott Pearson, "the company wil continue to operate and hopes to emerge from bankruptcy protection next year".

Full Story: Struggling Against a Venti Starbucks Tide



Irvin Dawid's picture

Clarifying Tully's bankruptcy - thanks to Wikipedia

If you were confused by a company selling itself to a larger company, and then declaring bankruptcy, here's the explanation. In short, it sold its BEAN DISTRIBUTION to Green Mountain, but apparently the stores remained separate. I should have provided the link to Tully's Coffee Shops as opposed to Tully's. Tricky, eh?

"Tully's sold its bean distribution business and brand to Green Mountain Coffee Roasters in 2008, earning $40.3 million in the deal, allowing them to pay off part of its balance sheet of 102.1 million dollars and expand its retail business.[2]

In 2010, Tully's Coffee International and DK Retail Co., Ltd. entered into a Master Licensing Agreement to develop up to 100 retail stores in South Korea.[3]

The founder of Tully's Coffee, Tom O'Keefe, retired in 2010 as chairman of Seattle's second-largest coffee retailer.[4][5]

Tully's Coffee filed for Chapter 11 bankruptcy in October 2012, citing low cash reserves and the need to renegotiate leases with landlords. At the time of the filing Tully's had recently closed or was about to close 17 unprofitable company-owned stores."

Irvin Dawid, Palo Alto, CA

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