C2 LATIMES.COM/BUSINESS
BUSINESS BEAT
Benji Walklet recently re-
viewed the instant java sold
by California start-up Waka
Coffee. Walklet, who runs
the Coffee Concierge blog,
liked it but got a second
opinion from a trusted critic
— his wife, who has been
known to compare coffee she
dislikes to gasoline.
“It passed my wife’s taste
test,” he said, “and that’s
really saying something.”
Walklet typically drinks the
real thing but stocked up on
a 35-serving pack of Waka in-
stant. “If the day gets off to a
slow start or we’re in a hurry,
it’s great to have instant cof-
fee,” he said. “I wouldn’t buy
Nescafe or Folgers or Max-
well House. That’s the snob
in me talking.”
Instant coffee, often rele-
gated to brownie recipes and
steak rubs, is making a
comeback and even winning
grudging approval from con-
noisseurs. A handful of
start-ups including Waka,
Sudden Coffee and Swift
Cup Coffee have improved
the taste and are attracting
a new generation of conven-
ience seekers who are too
young to associate the prod-
uct with the stuff their
grandparents drank.
They don’t mind paying
up, either: A Sudden four-
pack sold at the Intelli-
gentsia coffee chain goes for
$13, or about $3.25 a serving.
Instant remains a niche
product, with just 6% of
Americans drinking it, ac-
cording to the National Cof-
fee Assn. But U.S. retail sales
of the category rose in the
year that ended in June —
the first gain after at least
three years of declines, ac-
cording to Nielsen data. Ris-
ing sales and instant’s popu-
larity among 18- to 39-year-
olds have prompted indus-
try stalwarts Starbucks
Corp. and Dunkin’ Brands
Group Inc. to reevaluate the
category.
“Instant is super conven-
ient and portable,” says Jim
Watson, a beverage analyst
at Rabobank. “You can
throw a couple in your bag
and travel everywhere. In-
stant has always been
weighed down by being seen
as a really low-end product.
These specialty guys are
making instant coffee cool
again.”
Developed by Nestle in
the 1930s, instant coffee was
made by spraying brewedliquid into hot air and drying
it into powder or granules.
Nestle, Folgers and Maxwell
House quickly became the
go-to brands for middle-
class people around the
world. A Folgers television
commercial featured a hus-
band complaining about his
wife’s coffee: “Honey, your
coffee is undrinkable,” he
says. Later, she serves him a
cup of Folgers, and marital
harmony is restored. “In-
stant Folgers,” an announc-
er says. “Tastes good as
fresh-perked.”
For those who had tried
the real thing, instant coffee
lacked the body and flavor of
a quality cup of joe. No mat-
ter, Americans were hooked
on convenience. Making in-
stant involved nothing more
than spooning crystals into
a mug and adding boilingwater, and then maybe whit-
ening the concoction with a
powdered creamer.
Everything changed
when Starbucks created the
cafe culture in the 1990s and
popularized Arabica beans
— the premium variety. A
snob ethos took hold, and
consumers thought nothing
of paying $3 or more for a cup
of coffee. In 1998, Keurig K-
Cups — single-use pods —
entered the mix. It wasn’t
quite instant, but it provided
a popular way for time-
pressed people to brew fast.
Instant was reimagined
1 0 years ago, when Star-
bucks introduced Via Ready
Brew packets in an effort to
sell more coffee in grocery
stores. Via was made with
100% Arabica beans, cost
less than $1 per cup and ap-
pealed to people on the go.Sales have been steady but
have never really taken off,
says John A. Quelch, dean of
the Miami Business School
at the University of Miami,
who has done Starbucks
case studies. “They didn’t
put a tremendous amount of
marketing muscle behind
it,” he says.
With K-Cup growth slow-
ing and Starbucks not push-
ing Via hard, a host of small
players have emerged, em-
ploying new methods they
say produce better-tasting
instant. They typically
freeze-dry Arabica beans
and sell their wares online or
in specialty coffee shops.
Sudden was co-founded
by a Finnish barista named
Kalle Freese, who pioneered
a technique in San Fran-
cisco that involves lowering
the temperature of brewed
coffee to negative 20 degrees
Fahrenheit and then heat-
ing it slightly to let the water
vaporize. The traditional
heating method can taste
“woody and burnt,” said
Josh Zloof, chief executive of
Sudden. “There’s no reason
from a science perspective
why instant coffee has to
taste bad.”
Sudden, sold in plastic
tubes containing 4.5 grams
of coffee, can be mixed with
hot or cold water. The com-
pany avoids the word “in-
stant,” choosing instead to
describe the product as
“crystallized.” The 4-year-
old San Francisco start-up
has raised $5 million and is
looking for more funding to
ramp up capacity. Zloof said
that he’s had talks with big-
ger companies and that it’s
just a matter of time before
Sudden inks partnerships.
Zloof said quality instant
solves the “second-cup”
problem — when people are
looking for an afternoon caf-
feine fix but don’t necessari-
ly want to head to Starbucks
or drink office-provided K-
Cups or Nespresso pods.“It’s not really replacing
lower-quality instant cof-
fee,” he said. “It’s also not
really replacing going to the
cafe or the morning ritual.”
David Kovalevski, who
started Waka last year, said
his products have landed in
“best instant coffee” lists
from major coffee publica-
tions and is confident sales
will improve as his company
educates consumers about
the merits of instant coffee
and differentiates itself from
traditional brands.
Instant coffee’s growing
popularity has prompted big
brands to take a second
look. Dunkin’ executives are
taste-testing prototypes
and working with partners
to create instant varieties to
offer in Dunkin’ stores.
“The quality has gotten
significantly better,” Dunk-
in’ CEO Dave Hoffmann
said.
Starbucks, meanwhile, is
looking to jump-start
growth for Via with new fla-
vors such as blonde roast,
iced coffee and pumpkin
spice latte. The company is
working on “more innova-
tion to the Via brand in the
near future,” a spokeswom-
an said.
When Bailey Manson
joined Intelligentsia seven
years ago, he didn’t think
he’d end up selling instant
coffee.
“We were naysayers for
quite a while,” said Manson,
who is the coffee chain’s edu-
cation and service program
manager. Then, last year, In-
telligentsia teamed up with
Sudden to freeze-dry a vari-
ety of single-origin coffee
from Colombia. It sold out,
despite a hefty price.
“What you’re paying for is
the convenience,” Manson
said. “Nobody wants to go
get coffee and have it be
hard.”Patton writes for
Bloomberg.Wake up and smell the instant coffee
Start-ups are brewing
up improvements in
taste and attracting a
younger generation of
convenience seekers.
By Leslie Patton
INSTANT COFFEEis making a comeback and even winning approval from con-
noisseurs too young to associate it with the stuff their grandparents drank.Spencer WeinerLos Angeles Times