Article

Alterra Coffee owns Milwaukee

Alterra Coffee has created a cult-like following within the large Midwestern town.

March 12, 2006

When Spc. Sara Roeske was stationed in Mosul, Iraq, she requested Alterra Coffee in her care packages. The Milwaukee resident said the coffee reminded her of home and "there's not a better brand out there."

Roeske is one of thousands of loyal Alterra coffee drinkers who've contributed to the success of the independent-Milwaukee coffeehouse and café. Starbucks employee Jessica Bethke is another Alterra regular.

"I am down with supporting local businesses over corporate America," said Bethke, whose Starbucks is a mile away from an Alterra. "I don't think the widespread corporate stores need as much support as the local businesses."

Alterra uses two Probat drum roasters. (Photo by Alterra)

The Starbucks employee admitted she preferred Alterra coffee over her own company's. Alterra co-owner Lincoln Fowler finds it hard to believe that his company's coffee has such strong penetration in the Milwaukee market, but the company has created a cult-like following within the large Midwestern town.

During any daypart, Alterra's two-story Lakefront store, which overlooks Lake Michigan, is packed with mothers, college students, bikers, retired couples and just about any other demographic. One may argue people visit Alterra's Lakefront store because the closest coffee shop is half a mile away and it's another Alterra, which sits in the middle of Prospect Avenue, a trendy area known as the "East Side."

The company is successful during the cold Wisconsin winters, too. Throughout the year, the cafe's average check ranges from $3 to $4. Fowler wouldn't reveal Alterra's exact earnings, but said the independent generates $10 to $15 million in total revenue from six cafes, a wholesale coffee business and its commissary/bakery.

Aside from coffees and lattes, the Alterra menu includes an array of sandwiches and desserts that range from a whisky bread pudding to a vegetarian quiche to a grilled asparagus sandwich.

During any daypart, Alterra attracts a wide array of people. (Photo by Alterra)

"We saw there was significant opportunities to fulfill a broader consumer base by offering a wide selection of food, but we have remained focused on our core, which is coffee," Fowler said.

The company competes with 17 Starbucks. But Bethke said her Starbucks store is never as busy as Alterra. Starbucks spokesperson Rob Eiseman said Starbucks does not release regional sales figures.

Caribou Coffee and Stone Creek are two other competitors in the Milwaukee market, but Fowler said the more competition, the merrier.

"I think you're seeing the coffee industry going into two distinct realms. Starbucks is more of a commodity and the other side really focuses on quality," Fowler said. "But at the same time, Starbucks has done a lot for the entire segment and obviously helped us."

Milwaukeepride

Alterra's business model is not easy to define.

"Elements of our brand are difficult to summarize in a set of bullet points," Fowler said. "We are dynamic and continue to subtly shift our presentation to keep our look and feel fresh."

Rather than advertising, the café supports local charities and businesses.

Aside from the exceptional strong coffee, it is the company's emphasis on urban redevelopment, community investment and environmental sustainability that make it one of the most solid examples in our city of responsible corporate citizenry.

-- Tom Barrett Milwaukee mayor

Alterra is a major sponsor of Al's Run, which in 2005 raised more than $1 million for Children's Hospital of Wisconsin. In addition, the café is a community partner of The Pabst Theater, a legendary edifice built in 1895 by brewer Frederick Pabst.

"You will never see our brand on a billboard or on television," Fowler said. "If we do any advertising, it's done through our involvement in the community."

And 10 years ago, Alterra teamed up with the Metro Milwaukee Sewage District to place a coffee house in the old Milwaukee River Flushing Station. In 2002, the once boarded-up sewage facility was turned into the Lakefront store, which is also a quasi "river flushing" museum.

The East Side Alterra is a 14,000-square-foot facility where the company's coffee is roasted. With more than 20 different varietal coffees, Alterra

displays its 150 pound burlap coffee bags for customers to see. Patrons can observe workers roasting thousands of pounds of coffee, some of which is packed and sent into the cafe via an overhead trolley system.

Environment first

Instead of suggestive selling on the recycled paper cups, Alterra educates its customers about alternative energy on its java jackets. Alterra encourages customers to enroll in the "Energy for Tomorrow" program, which allows consumers and businesses to purchase renewable energy from the local utility.

Alterra's Prospect store.

And all six Alterra locations operate on 100-percent renewable energy, according to the Environmental Protection Agency. According to the EPA Web site, Alterra even plans to create a 6-foot wind turbine display model.

While Alterra is one of the few cafés with 100-percent green power, alternative energy is a popular trend among coffeehouses. (Wind powers 20 percent of Starbucks' company-owned North American stores. The EPA said that Starbucks alone eliminated 237 million pounds of carbon dioxide in 2005.)"Our dedication to being 100 percent powered by renewable energy is emblematic of our interest in being a good corporate citizen and working for positive change in our community," Fowler said.

Fair trade

Alterra's Lakefront location.

Alterra's Fair Trade involvement dates back to 1998 when the company initiated a long-term partnership with the Kulaktik cooperative in Chiapas, Mexico.

Today, Alterra works with 167 growers from the area, and it all began when an Alterra customer traveled to Mexico to visit a "sister parish" of a Milwaukee church. After several visits to the parish, the customer enjoyed the product of local coffee growers. The customer brought back coffee beans for Alterra's sampling, and long story short, Fowler and other Alterra representatives visited the Chiapas farmers. The two groups have partnered ever since.Alterra now roasts enough Fair Trade coffee to be counted as one of the top ten Fair Trade Roasters in the country.

In addition to Alterra's Fair Trade agreement, the company earmarks 25 cents for every pound of the Kulaktik growers' coffee sold to help build the farmers' infrastructure and increase quality control. It's thoughtful actions like this that keep Alterra customers coming back, Roeske said.

"Milwaukeeans are proud of Alterra Coffee Roasters for a number of reasons," said Milwaukee Mayor Tom Barrett. "Aside from the exceptional strong coffee, it is the company's emphasis on urban redevelopment, community investment and environmental sustainability that makes it one of the most solid examples in our city of responsible corporate citizenry."