Of Human Beings & Coffee Beans

The Irvine office of Diedrich Coffee’s “chief coffee officer” looks like the dorm room of an overenthusiastic World Cultures major. The couch has the rump-feel of a garage-sale bargain. A travel poster of a Mayan ruin hangs on one wall. A miniature hand-painted Costa Rican oxcart sits beside his desk. At the moment, in fact, Martin Diedrich, the 39-year-old scion of a $23-million-a-year Southern California coffeehouse family, is talking like a college student--the sort of elliptical, deep-thought conversation that often takes place in a dorm, usually after something more potent than the dark Antigua brew in Diedrich’s cup.

“The coffee bean is the seed of the coffee tree, that tree’s hope for new life,” says Diedrich, his blue eyes intent beneath remarkably lush brows. “And that seed struggles to integrate itself into the cycle of life. In that sense, it’s a very living and organic thing. And no matter whether it takes root in Sumatra or Guatemala, it’s a product of its environment. The environment pumps life-giving energy into that bean.”

Diedrich holds up his cup. It is emblazoned with a Diedrich Coffee logo, the center of which is the Diedrich family crest. “You know, a cup of coffee has no nutritional value at all, yet it’s one of the most traded products on earth. And 98.5% of it is local water. The remaining 1.5% of it is really that energy and effort that the parent plant put into that bean. What gives it flavor is the living life force.”

The Diedrich company is known for hyping its “passion” for coffee. But today Diedrich seems particularly worked up. A moment later he blurts out what’s really on his mind: “My wife and I are expecting our first child in five weeks.” Make no mistake: This baby, a boy, is serious stuff for the contemplative Diedrich. And if this newest bean on the Diedrich family tree is a product of its environment, there’s a good chance he’ll continue a legacy that has survived upheaval and migration, rebellion and reconciliation, not to mention two World Wars. Oddly enough, the Diedrichs, while unique, are only one of several California coffee clans that have survived the Starbucksification of America.

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Not so long ago, most Americans viewed coffee as a quick caffeine jolt or as something to wash down eggs and bacon. It came in two varieties, regular and decaf, and most people bought it in grocery stores in vacuum-sealed cans that opened with a pleasant pfffft. In some cases, that familiar sigh may have been the most satisfying part of the experience. Those granular, bulk-roasted coffees often are made from spongy, lower-grade beans, and the resulting beverage sometimes tastes as if you’d poured boiling water over a brown crayon, then let it steep. That was fine for a coffee-swilling public that didn’t know Kona from cappuccino. But in the mid-1970s, true connoisseurs began following their noses into small retail coffee storefronts where beans were roasted on the spot and sold by the pound, fresh out of the roaster. This was not your father’s Folgers, customers realized. Fresh-roasted beans offered a heady whiff of heaven mixed with the peaty aroma of earth, and there was no denying the pull of places such as Peet’s in the Bay Area, Nicholas Coffee in Pittsburgh or a little shop called Starbucks that opened in 1971 in Seattle’s Pike Place Market.

By the mid-1990s, Starbucks had become the 600-pound gorilla of modern coffee retailing. Its stunning corporate advance left a trail of more than 1,400 retail locations in North America and the Pacific Rim, and the company planned to open another 350 North American stores in fiscal 1998. Starbucks may not have a store on every corner, but it seems that way. During a recent episode of “The Simpsons,” the animated characters strolled through a shopping mall consisting of nothing but Starbucks coffee bars and vacant stores fronted by “Coming Soon!” signs for more Starbucks.

Many industry experts assumed that smaller vendors would be crushed beneath the Starbucks steamroller, and Martin Diedrich says the dilettantes often are. But “serious” specialty coffee retailers are thriving, he says. “What Starbucks has done with its advertising and marketing is convert a lot of institutional coffee drinkers to specialty coffee, and that has helped a lot of the smaller players.” In fact, despite increasingly slick marketing of specialty coffee, the coffee business in many ways still runs on ancient traditions and long-standing relationships. Ted Lingle, for instance, grew up in the family that still operates Lingle Brothers Coffee Inc. of Bell Gardens. He no longer is involved in the wholesale coffee business his grandfather began in 1920, but as executive director of the Long Beach-based Specialty Coffee Assn. of America, an industry trade group, he has contact with many Southern California coffee companies that have survived into the second and third generations under a family name. Third-generation family members still run Apffel Coffee Co. of Los Angeles, which Edward Apffel founded in Oakland in 1914. Four siblings run F. Gavina & Sons Inc. of Vernon, which traces its family’s coffee history back 125 years to a Cuban plantation. And family members continue to play a role at publicly held Farmer Brothers Co. in Torrance, one of the country’s largest coffee vendors to the food-service industry.

Lingle’s organization puts the total value of the world coffee trade at $14 billion a year, with production of mild Arabica coffees--the basis of high-end specialty coffee sales--accounting for $6.7 billion of that. The number of retail coffee cafes, coffee bars, kiosks and espresso carts selling specialty coffee and coffee drinks is expected to reach 10,000 nationwide by next year, an increase of 7,000 outlets since 1994. One recent study estimated that nearly half of all Americans over the age of 10, or 109 million people, drank coffee on any given day last winter, and many of them drank it in one of the endless variations of Italian espresso or in American hybrids such as blended iced mochas. The numbers, however, don’t really explain how extensively coffee has insinuated itself into the national consciousness. With Starbucks’ 1997 revenues flirting with the $1-billion mark, the phrase “coffee culture” no longer seems adequate to describe the transformation of coffee from a beverage to a social phenomenon.

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In Orange County, the rich, warm aro-ma of high-quality beans first arose from a small Costa Mesa garage in 1972. That’s where Carl Diedrich, Martin’s father, plugged in a telephone and his hand-built roaster and started doing business. He never intended to sell his coffee retail, but neighbors who followed the scent soon persuaded him to sell a pound here, a pound there. “They’d never experienced anything like it,” Martin recalls. “Dad loved to tell stories, and he had a little espresso machine there. He’d make them a cup and sit down on the bags of beans and tell them stories about his life’s adventures. That was the beginning of Diedrich Coffee.”

In truth, the Diedrich coffee legacy began in 1916, in the family’s native Germany. That year, Charlotte Diedrich, Carl’s mother, inherited a Costa Rican coffee plantation from a distant uncle. She kept the plantation through the 1930s and visited occasionally, but it slipped from her possession during the turmoil of World War II. Charlotte’s passion for coffee survived, though, and she passed it on to her son. After serving as a conscripted infantry soldier in the German army, Carl followed his adventurer’s instincts and his mechanical engineering career to all parts of the world--including some of the world’s great coffee centers. He studied roasting in Naples, Italy, and visited the thriving coffeehouses of the Middle East to try to understand their appeal. According to family lore, he even followed the coffee trail back to its starting point, the Yeman Mountains on the southern tip of the Arabic peninsula, and lived for a time among people whose ancestors supposedly began growing coffee in the 6th century.

After returning to Germany in the early 1950s, Carl married Inga Zeitz, whose family operated a coffee, tea and cocoa business. Spurred by Carl, the growing Diedrich family became somewhat nomadic. They traveled throughout Central America, and in 1966, Carl and several partners bought a 45-acre coffee plantation in Antigua, Guatemala, where the rich soil and the 5,500-foot elevation created beans that were very dense--the mountain-grown Arabica beans.

For the next six years Carl reconnected with many of the Central American coffee traders who’d dealt with his mother, and the real coffee culture percolated through all five Diedrich boys. They learned how to prune trees and till the soil. Dinner conversations involved weather and how it affects the beans. They learned to roast coffee on a jury-rigged device that their father built on the family’s back porch--a contraption that still sits in the lobby of Diedrich corporate headquarters. In retrospect, it was on that mountain farm that the torch actually passed to the third generation of Diedrichs. But not before it flickered and nearly died.

In 1972, Carl Diedrich had an idea well ahead of its time: importing gourmet coffee from his other Central American growers’ plantations into the United States. He moved his family north to Costa Mesa and set up a wholesaling operation in a one-car garage in the heart of a county just beginning its primary growth spurt. Within three years, he needed more space and moved his fledgling business into a larger shop on Irvine Avenue. Still, he had no aspirations beyond simply roasting and selling the best beans he could find. Every two months he climbed into a 1962 Volkswagen Microbus and began a grueling two-week round-trip through Mexico to Guatemala to fetch another load.

At the time, Carl’s sons were pursuing their own destinies. The oldest, Michael, was headed for a career selling body-care and cosmetics products in Germany, and the second son, Bernhard, for a career with United Parcel Service in Washington state. Today, a smiling Martin Diedrich dismisses his two older brothers as “tea drinkers,” but at that time he and his two younger brothers, Stephan and Carl, also lacked their father’s passion for coffee. Then, in 1982, at the height of political turmoil in Guatemala, Carl decided to sell the family’s coffee plantation, and a year later, Martin had what he calls “one of the greatest epiphanies of my life.” Carolyn Tate, who studied with Martin at the University of Austin in Texas in the early 1980s, recalls the moment, on a trip they took to Chiapas, Mexico. They were studying hieroglyphics depicting the importance of ancestors. Read amid the Mayan ruins, the values expressed in those ancient texts had power. Martin decided that working with his father was his “duty and his challenge,” Tate says. He became the first of the younger Diedrich sons to return to the fold. And he hated it.

“I didn’t feel like I belonged in Orange County. I grew up in Latin America, where there’s a strong sense of community. I felt displaced here and had constant longings to leave and go somewhere else.”

Stuck in hectic Southern California, Martin searched for a sense of community. Town squares didn’t exist. Bars weren’t quite right. “That’s when it occurred to me that we had an important role to play here, because thousands of other people were longing for the same thing,” he says. “That was my second epiphany.”

In 1985, Martin persuaded his father to let him open a coffeehouse, in Costa Mesa, where they could not only roast and sell beans but also offer customers a place to enjoy their coffee, read, play games, listen to live music and maybe get to know a few like-minded souls. Even before that, the youngest son, Carl, had begun tinkering on roasters with his father, using the Microbus as a tool shed. Young Carl eventually talked his mechanically inclined brother, Stephan, into abandoning a career in aviation and take the lead in the roaster business. When Martin opened a second coffeehouse in Tustin a year after the first, one of Stephan’s roasters churned away in a corner. Since then, Stephan and Carl’s independent, Idaho-based Diedrich Coffee Roasters has become one of the world’s leading makers of coffee-processing equipment. Martin, meanwhile, kept opening coffeehouses. “I realized later I was building the kind of places that I found missing in Orange County. They were the fulfillment of my desire to make a home for myself here. At the same time, the community embraced what I was doing. The two came together like hand in glove.”

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Eight-and-a-half pound Kean Diedrich was born to Martin and Karen Diedrich at 3:48 p.m. on April 29 of this year. He has his father’s mellow disposition and hair the color of French Roast. Martin Diedrich insists that their new son will be allowed to choose his own path, just as his father and grandfather did, so no one can say at this point whether he’ll follow them into the coffee business.

If he does, though, he’ll benefit from coffee knowledge passed down through the generations. He’ll learn not only how to plant, prune, pick and roast but also that growing involves risks--a 1751216740Martin Diedrich pushed his family’s company into national competition with Starbucks and strong regional competitors in Colorado, Texas and Southern California beyond the Orange County borders. As the company expanded to a peak total of 48 shops, the stock price slumped from a high of more than $11 to a low of just under $2.50 a year later. Diedrich concedes that “perhaps the management end wasn’t in order.” In November 1997, he entrusted leadership of the business to two veteran fast-food executives, John Martin and Tim Ryan. In April, the company announced its fifth straight quarter in the red--a loss of $745,625 on $5,923,361 in sales. But Diedrich insists that the future is promising, and as of early July, the company’s stock, which had lost 70% of its value in the months following the initial public offering, had rebounded to about $7.50 a share. “We went through a lot of fumbling and growth, and we learned a lot,” Martin Diedrich says. “But we survived all of that.” Someday he’ll tell his son how--making sure he benefits from lessons already learned.

Now, with his father getting old, Martin says he finds solace in that continuity hinted at in the Mayan images. Speaking for himself and two younger brothers, he says, “‘The interesting thing is that, after raging against the world and pursuing our own passions, we came back to the family fold. I’m sure there were years when my father was sadly disappointed because I stubbornly refused to listen. But I think he’s pleased and proud that his sons have made so much out of the seeds he planted.”