Stumptown Coffee Plot Thickens; All Signs Point to a Sale

on June 06 2011 2:35 PM
Stumptown
Reports have emerged that contradict Stumptown's earlier denials of a sale Flickr via Creative Commons

Emerging reports on the Stumptown Coffee investor mystery call into question last week's insistent claims that Duane Sorenson is still in control. As of yet, neither Sorenson, Stumptown's founder, or Alexander Panos, the investor who it now appears may have purchased a majority share, have come forward to modify earlier denials of a sale.

But Willamette Week, who has been on top of the story since it broke last Wednesday, reported yesterday that Stumptown has backed away from denials after probing from the Oregon-based newspaper. Matt Lounsbury, Stumptown's director of operations, declined to comment on whether or not a majority stake in the company had been sold. Lounsbury had previously told WW that an incriminating liquor license filing  - which reported a change in ownership -  was an error. And today, The New York Times reported that TSG Consumer Partners, where Alexander Panos is a managing director, has been courting several high-end coffee companies for a controlling interest.

Given the certainty that details of an ownership shift would eventually come to light, why would Sorenson and Panos repeatedly and publicly deny a sale?

Todd Carmichael, CEO of La Colombe, ignited a digital firestorm last week when he wrote in an Esquire blog that Sorenson had sold his life's work to the highest bidder. Although scant on details at the time, he has since explained the source of this claim - Panos himself, in his pitch to buy a controlling stake in Carmichael's company.

Carmichael spoke to IBTimes today about how the news will affect Stumptown's perception.

I think the fact that they weren't forthcoming is going to be an issue, he said. We [boutique roasters] have a relationship with our customers. In any relationship, when you lie about something so material, it's going to affect the relationship.

Although he has been at the center of the story (which Eater is now calling Stumptowngate) from the start, Carmichael denies any interest in causing trouble for Stumptown, or Sorenson. Duane has done some great things, he said. I didn't intend to create such hubbub.

Carmichael says that he had been in touch with Sorenson, sending him a text message to let Sorenson know that he intended to speak to the media about the alleged buyout. The idea was to give my opinion. The bottom line of what I said was very simple. I want to scare them [corporate investors] away from buying us...I want them to stop calling and stop tempting men and women who own companies.

Carmichael also offered Sorenson some advice. I said, 'Just don't lie, dude'...And then the first thing he did was lie. Carmichael described Friday's New York Times story in which both Sorenson and Panos deny a sale as extremely troubling.

That said, Carmichael agrees with Panos's statement in the same story that getting money to help grow a business is not evil. I think that handing over your company to people who may not share your ethics and the ethics with which you built your organization is not evil, either, he said. It's just not appropriate.

I'm proud of the specialty coffee industry, he went on. I'm proud of what we are able to accomplish together. And what would compromise that is if we were to become too valuable to outside investors who will slowly tear our teeth out.

So what should be Sorenson's next step?

He is going to really have to reach out to his people and put this straight.