Jerry Baldwin, Starbucks co-founder, explains coffee roasting's chemistry: moisture, the first crack's carbon dioxide, and the Maillard reaction. He recalls the 1973 Brazil frost that spiked prices and a failed barley venture, plus how the Surgeon General's cancer scare about decaffeinated coffee was later debunked by epidemiological studies.
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How long did it take you to develop that?
Well, I won't say that I was ever a master at it, but Jim Reynolds certainly was. And he just, you know, put his head inside the beans. And, you know, coffee talks to you when it's being roasted. You can listen to it. You can smell it. You can see it develop. First of— the first part of the roast, you're just driving off moisture. But if you dry it off too fast, the water inside boils and you'll see, you know, white tips on the surface of the bean. And you'll definitely have flat flavor if you try to do that too quickly. And so there's that. Then after you've driven off the moisture, then pyrolysis, heat changes the bean and it pops, kind of like popcorn. It expands and forms carbon dioxide inside of it. So at that point, the aromas change considerably from vegetative, more like hay, into this Maillard reaction browning, the same way that browning sugar in baking puts off this phenomenal aroma. If you walk into a bakery, you know you're there. From the aroma. Same thing with coffee at this point. And the aromas develop in tow.
And then what about roasting barley? I read something about trying to roast barley.
Yeah, wow. Well, in 1973, there was a frost in Brazil. And commodity prices are still a big factor in our costs. And as the prices rose, we were really— I was Frightened. When a pound of coffee exceeded $2 in our store, I thought this was gonna be lights out.
You guys are feeling the heat at that moment.
Yeah. So, as a way to develop more business, we were roasting barley.
As a coffee alternative?
Well, some people used it for that. I mean, we didn't.
Yeah.
So we did it, but it was difficult to roast. And we didn't do it for very long.
Did it help make it through the tough times of the increased prices?
There were a few dollars there, but it didn't really— I don't think it made any significant contribution. I would say, you know, there's another lesson. Just do what you're doing. Do it well.
And then that same year that the frost happened, apparently, or maybe it was a little afterwards, the Surgeon General came out and said that drinking coffee Is contributing to cancer. I don't know if you remember that affecting you guys or not.
Well, let's see, this is '70s, so I'm gonna guess that was decaffeinated coffee and a decaffeinating solvent. One of them is trichloroethylene. They all have, you know, really scary names, you know, methylene chloride.
Scary name.
Trichloroethylene, dihydroxide, that's probably the worst one. That's the worst. Thank you very much. Yeah, because, you know, it sounds safe, but there's no flavor. That's water, for those of you who didn't take chemistry. Anyway, so that's probably what you're referring to. But there was no question some— there were lots of Let's see. Let's say data poorly interpreted about coffee and cancer and other bad health things. The worst actually was a very good study, the Framingham Heart Study, which still goes on, which has a giant cohort of over 20,000 people. But they got the bright idea later on, maybe from another clue from the Surgeon General, to divide the smokers. So when they took the smokers out, the problems with coffee went away.
Ah.
So if you smoke and drink coffee, you could get cancer. If you just drink coffee, today it's health food. Actually, if you go online and do health risks of coffee or health benefits of coffee, I mean, it's just, you know, drink up.
And from the— so as all these challenges are hitting the There's a big frost, Surgeon General's warning of cancer, the store in the north isn't doing well, the 3rd store. How are you feeling from a business side of it? How are you and Zev and Gordon interacting at this point?
Well, let's see, 3rd store, '73, so through the mid-'70s. Well, we started another company, a tea company.
A tea company?
And it was to do flavored teas, which were big at the time. And once again, we proved we didn't know what we were doing. Because this was going to be in grocery distribution, we very cleverly introduced the same week that Lipton introduced theirs. They killed us. I mean, it was a short death. Painful but short.
And then there was another business too, like a grocery, Blue Anchor?
Blue Anchor Coffee. We said no to no one, basically. You want to buy our coffee? Yes is the answer. Now let's figure it out. Safeway was just starting their huge superstores. I don't know if that's what they called them, but this is an acre of supermarket and they wanted good coffee. So we said yes. We packaged it and took it there, but it became clear early on that they didn't really care what was in the bag. They only cared whether the bag left the store and people paid for it, which was not exactly the business we were in. And so we developed a second brand, Blue Anchor, so that we wouldn't tarnish the first one.
And that was going well or not so much?
Well, it actually went very well. But although, again, we were rookies, we had a distributor who was taking care of it for us. But someone else who really knew the business, Millstone Coffee, they had about 2/3 of the business and we had a third. I mean, it was profitable, it was good, but we didn't— but it wasn't central to what we were doing. As things developed, We, you know, by this time we had closed the tea company and a couple of other things that we were doing, and Zev sold his shares.
I was going to say, is this around the time that Zev decided to exit?
Right. And so we bought him out, but then we had 7 discrete divisions in this tiny little company that was doing a couple of million dollars. I'm starting to learn a little and said, maybe we should narrow this down a little bit. So we sold, closed the tea company, sold the Blue Anchor Coffee Company.
Do you remember the conversation with Zev about him leaving?
Well, it was just, I mean, Zev has gone on, I mean, I couldn't possibly count the number of businesses he started. And he just likes the beginning.
He just likes the beginning. He's the starter and you're the carrier.
Right.
And then once he left, how does your role shift within Starbucks at that point?
Well, I think that— well, Gordon didn't work full-time in the company until 5 or 6 years later. So I was alone. I mean, I was already handling all the stuff that wasn't— the tea business, so there was nothing new, but it put more responsibility on my shoulders as the only active partner to figure out and to lead. So that's what I tried to do.
And you keep saying that you were rookies in it. Were you pretty rookie at leading as well? And did you kind of learn on the job, or were you—
Well, I think that fortunately My personality suited itself to being accessible and approachable and, you know, easy to get along with. I can't say I was a great listener, you know, when people would ask for things. I also can't say that I was as responsive as I could have been to some suggestions.
Mm-hmm.
But I was trying to think probably at a more I mean, if you'll forgive me for saying, at a more strategic level. How big should the company be? What things should we be doing? What do we like? So we had a wholesale division that Gordon and I changed the name of with the idea of selling it separately.
Mm-hmm.
So that Starbucks again wasn't tarnished by, we're selling this coffee. And when someone says, oh, I bought a pound of your coffee in You know, I don't know, Everett. And then told me what coffee it was, and we hadn't roasted it in 3 months. I knew that—
