How Minnesota Launched the Third Wave Coffee Economy

Move over, Seattle. The revolution that brought ethically sourced, small-batch coffee to your neighborhood café—and the rest of the country? It started in Minnesota—and the story keeps brewing.

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Let me tell you a surprising story about coffee. Let’s start in a coffee shop, one of the best ones in the country, Spyhouse, in Northeast. Here, owner Christian Johnson maintains a downstairs cupping room and private research library, and a vintage Probat coffee roaster that looks like a cousin to Marlon Brando’s Triumph motorcycle in The Wild One. This sexy beast roasted coffee from a farmer named Don Ignacio Gutierrez, who works 500 coffee trees in the mountains of El Salvador. 

Twin Cities roasters and coffee shops can stand shoulder to shoulder with the best coffee shops in the world. 

Don Ignacio is something of a superstar in coffee circles: He has won the Cup of Excellence—the Oscars of the coffee world—three times. And when Johnson insisted I take home a bag of his Spyhouse-roasted coffee, I discovered notes of rye-bread toast and whiskey on the heath in the sea mist, and began hoarding it from myself. If I had three weeks to drink the coffee before it went stale, was this morning good enough? Or was I too rushed to appreciate it? Was this morning Don Ignacio–worthy?  

You may know this part of this story: Coffee in North America, from Minneapolis to Miami, is better than it has ever been. What you almost surely don’t know: Some of the most important chapters in that story—how super-select beans from a very particular farmer ended up in your cup—originated here in Minnesota. But I’m getting ahead of myself. 

Yes, we drink well now, having survived coffee’s prehistory. Picture here that iconic American campfire scene, with cowboys or gold prospectors boiling a cup of joe. They bought raw, green coffee beans—the seed inside the red, undelicious fruit called a coffee cherry—and roasted it themselves. It was difficult to do well. So by the time folks figured out commercial roasting, grinding, and vacuum canning around the turn of the 20th century, we pinpoint that as the beginning of modern coffee and call it the First Wave. (Hey there, Folgers!) 

The Second Wave started in Berkeley, Calif., in the mid-1960s at a shop called Peet’s. Peet’s begat Starbucks (through employee defection), which eventually begat all the rest. (Minnesota’s own Caribou Coffee, founded in 1992, represents the biggest Second Wave player after Starbucks. But we can’t really claim it as Minnesotan anymore: After the company’s first sale in 2000, it ultimately landed in the portfolio of a German holding company, JAB, which also possesses Keurig, Peet’s, Intelligentsia, Stumptown, Panera, Krispy Kreme, Bruegger’s, 7Up, Dr. Pepper, and much more.) The Second Wave saw the popularization of coffee drinks like lattes, and the concept of “a third place,” a privately owned social space, built around coffee. Second Wave coffee buyers got their beans the same way Folgers and grizzled gold prospectors did: as cheaply as possible, from anonymous plantations in exploited former colonial possessions, whether in Africa, Central America, or South America. (Coffee loves an equatorial mountain.) 

It might surprise you, if you drink a lot of Second Wave coffee in airports, to learn that coffee is currently trading near an all-time low: less than $1.50 a pound. You might say: But my coffee hasn’t decreased in price whatsoever! It might also surprise you to hear that part of the reason we have caravans of migrants making a desperate pilgrimage to the border from Guatemala and Honduras is because of these farmer-impoverishing commodity coffee prices. 

Christian Johnson, from Spyhouse, never pays that lowest-possible price, and neither do any of the Third Wave coffee shops.  Peace Coffee doesn’t, Botany near Powderhorn Park doesn’t. Wesley Andrews, near Mia, where they serve coffee in blown-glass, infinity-shaped vacuum flasks: They don’t either. 

The reason nobody pays bottom price for anonymous coffee in Third Wave coffee shops? It’s because of hugely progressive trade policies and import practices that started with us.  

Surprise! The Third Wave coffee economy, in no small part, started in Minnesota. 

We invented much of fair trade as it exists today, with third-party certifying bodies. And Minneapolis’s own Peace Coffee—you’ve seen the turtle logo and beans-by-bike couriers—imported the country’s first container of fair-trade coffee. That’s a shipping container: the standard unit of trade in coffee, weighing roughly 40,000  pounds and appearing roughly the size of a train car.

We also invented a different shipping standard, micro-lots, which started treating coffee farms like wine vineyards. That is, localized farms, with a specialized crop that comes from a particular region.

Almost no one knows any of this stuff. 

Peter Giuliano’s job as chief research officer for Specialty Coffee Association, a nonprofit trade group, has given him an almost unequalled perspective on the American coffee trade. “I do think Minnesota plays a special role in coffee that’s often overlooked,” Giuliano told me. “If you asked people about important American coffee cities, civilians will talk about Seattle for sure, maybe San Francisco, maybe New York. And Minnesota wouldn’t come up. But the roots of fair trade are there for sure. Peace Coffee’s transformative mission changed a lot in the industry, a lot.” 

Giuliano also points to “quality-focused independent importers” that have sprung up in the wake of a groundbreaking Minneapolis company called Café Imports. “There are many now, and there didn’t used to be. That also changed a lot in the industry.” 

Giuliano’s verdict? “It would be true to say Minneapolis-St. Paul is the secret innovator, the unknown innovator.” 

***

What’s hot and dark and unknown all over? Minnesota’s importance to the modern economy of coffee. 

This story of Minnesota and America’s coffee economy largely features two men. One worked as a fine-dining waiter. The other was a boy-wonder Republican governor during the Great Depression. 

Let’s start with the second guy: the 25th governor of Minnesota, Harold Stassen. Today, we mainly remember him as someone who ran for U.S. president nine times. 

Yet in 1938, at age 31, Stassen had already experienced some of the century’s biggest horrors: World War I, the Dust Bowl, the Great Depression, World War II. Stassen believed successive crises were inevitable unless farmers could grow and sell their crops in a way that created stability, season to season and year to year. 

I should confess that I was Harold Stassen–ignorant until I spent almost three hours on the phone with Mark Ritchie, Minnesota’s former secretary of state and—more important for our purposes—the guy who some 20 years ago headed the organization that founded Peace Coffee. 

What I might find surprising, Ritchie told me, is that Stassen was a part of the post-World War II meeting that hatched the U.N., he helped write the United Nations charter, and he pushed the U.S. to participate in postwar international investment. 

Stassen’s administration helped pioneer everything that would appeal to a Whole Foods–shopping, LEED-certification-loving, Third Wave coffee-drinking modern consumer. The trade policies that produced the first certified sustainable forest? Look to Stassen’s influence. Certified sustainable fisheries? Also Stassen. The first policies outlining ideals in the North American market for fair-trade commodities like sugar, chocolate, and coffee? Guess who?   

Here’s how fair trade works, ideally, in brief. Commodity buyers meet with producers and find out what their real cost of production is: land, water, labor, processing, storage. Together, they calculate a price floor for their goods: a minimum the buyer pledges to pay for crops of a set quality. 

In this system, a Kenyan coffee farmer, say, can invest in raising a crop, secure in the knowledge that the harvest will lead to a profitable sale. But fair trade, in the coffee marketplace, has evolved from that basic arrangement to add price premiums for projects like safe disease management and sustainable irrigation practices. 

“The story is a lot more complicated than people really have time for,” Ritchie told me. He wasn’t kidding.  

In 1986, Mark Ritchie, working in trade and ag for the state of Minnesota, incorporated something called the Institute of Agriculture and Trade Policy. And IATP, in 1996, founded Peace Coffee. Working with farmers in Mexico, the Minnesota company imported the country’s first container of fair-trade coffee. The biggest secret about the company? The “Peace” in Peace Coffee comes from the churches where the company found some of its early customers. Think: “Peace be with you,” “And also with you,” and not, “peace, drugs, and rock ’n’ roll.”

Today, the import arm they eventually created, Cooperative Coffees, supplies around two dozen of the biggest names in North American fair-trade coffee. Just Coffee, of Madison, Wisc., with its cool Russian Constructivist logo; Larry’s Coffee, in North Carolina; Santropol, in Montreal. These coffee companies can all claim a direct lineage to our boy-wonder Republican governor. And Peace Coffee—recently certified as an ethical and sustainable B Corporation—sells fair-trade beans at Target stores from Michigan to the Dakotas. The company packages 4,000 pounds of coffee daily and plans to double production. 

Since Peace Coffee got into the game in the 1990s, almost no one in North America’s specialty coffee scene will cop to paying anything less than a fair price. (That said, some do, using wiggle words.) Since Peace Coffee got into the game, no farmer who has a choice will sell to a non-fair-trader. Would you?  

***

By the late 1990s, Minnesota had already fundamentally changed the world of coffee. And then a D’Amico Cucina server named Andrew Miller got interested. 

“At Cucina we had a wine list with $300 Barolos and $25 Chiantis, and you had to know the difference,” Miller said, when I caught up with him recently at the Northeast Minneapolis headquarters of the coffee company he founded, Café Imports. As we chatted, a young man with leather elbow patches on his sweater rushed in with a steaming Chemex carafe. “All I could think was: It’s the same for coffee as it is for wine, but no one knows.”  

Miller happened to be working side by side with a busboy, José Vido (now head of MorningStar Coffee), whose family, in Brazil, owned coffee farmland.  

The lack of interest in the origins of coffee galled them both. “I remember you’d get a dish and they’d tell you where the cheese came from, what farm the beef came from, but no one knew where the coffee came from,” said Miller. So he borrowed money from his mother-in-law, and imported a container of coffee from Vido’s family. He’d sell it direct to coffee roasters during the day, while still waiting tables at night. Convincing these roasters to pay premium prices involved the same sales techniques he’d use to move a guest from a utility Chianti to a fine Barolo. Tell them where it came from; help them develop a better sense of the flavors and quality. 

Then he started flying to coffee-growing countries, driving through coffee country, asking for the good stuff, and paying more for it. How did he know what to buy? 

“We were our own Robert Parker,” he said, referencing the iconic American wine critic.  

The company’s reputation grew internationally, as Miller persuaded American roasters to shell out far more than they’d ever paid before. He would direct some of that money to people on the ground in coffee-growing countries. Could they isolate a particularly fine parcel of coffee separate from the general supply, and then ship it to him separately? 

For years I’ve heard legend that Café Imports invented the “micro-lot”: those tiny, single-farm lots that are too small to fill a shipping container, which you read about on every Third Wave coffee menu. Miller is so modest that he will hardly admit to existing at all. But, with enough prodding, he confessed that it was likely Jason Long, the partner who joined him at Café Imports soon after it was founded, who came up with the idea, and the two soon put it into practice. Miller recalls, in 2001, presenting a PowerPoint deck titled “The Microlot Revolution” to a Specialty Coffee Association gathering. “We either invented it or pioneered it,” he said.

While we’re talking about firsts: Long and Miller also pioneered the adoption of a package called Grain-Pro bags that are less permeable than old-fashioned loose burlap. This, too, became an industry standard. 

You can see those bags (and the burlap that still goes over them) in the enormous coffee warehouse Miller and Long oversee on the suburban fringe of Northeast Minneapolis. I walked to the end of these canyons of this coffee, until the busy forklifts looked like toys.

Café Imports operates offices on three continents and sends coffee to all of coffee world’s bigwigs: Miami’s elite Panther Coffee, San Francisco’s Café Organica, Barista in Portland, Oregon, and so many more.

Peter Giuliano, from the Specialty Coffee Association, explains the way this market works. “A lot of roasters today like to create this impression that they’re buying coffee directly from farmers, and maybe some are,” he said. “But many are using Café Imports to do it. You have to know how to do the financial transaction, how to get the coffee transported, how to get through different bureaucracies. It’s not easy.”

While Café Imports hasn’t become a name brand for customers, someone like Jordan Michelman, who runs Sprudge, the specialty coffee bible, encounters the company everywhere. Michelman talked to me while taking a break from touring in support of his book, The New Rules of Coffee. “I can’t overstate to you the influence of Café Imports and the importance of what that company has done in providing raw material in the first place,” he said. 

Michelman insisted Café Imports will be growing in national importance, too. A growing army of micro-roasters has been buying small amounts of coffee from a Café Imports subsidiary called La Bodega, and big players like Starbucks want a piece of that Third Wave cred. 

In truth, though, you don’t need to wait for any of that to happen to sample the great coffee that came from fair trade and small-batch sourcing. You can find it at places like Kopplin’s, Spyhouse, Wesley Andrews, Botany, Quixotic, Canteen, Smith, Urban Bean, Dogwood, Northern Coffeeworks, Angry Catfish, Five Watt, Anelace, Peace Coffee, Blackeye, UP Coffee Roasters, Groundswell, and Roundtable Coffee Works. These Twin Cities roasters and coffee shops can stand shoulder to shoulder with the best coffee shops in the world. 

And the surprise at the end of this story? Whenever you visit a great Third Wave café in a great American coffee city and you order a great cup, you know something that barista probably doesn’t. You’re looking at a little bit of Minnesota, where we can’t help but try to make things better.  

Correction: This story has been modified to include Jason Long at Café Imports.

Mpls.St.Paul Daily Edit

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