2014

On the Shoulders of Giants

On the Shoulders of Giants Monthly Column

Martin Diedrich- Revolutionizing the Coffeehouse Experience

Martin Diedrich was born into a family of coffee. For multiple generations, the Diedrich family has made numerous contributions to the coffee industry. Martin set the bar for coffeehouses everywhere. As the innovator of the coffeehouse atmosphere, he had a rollercoaster of a ride to get to where he is at today.

The Indiana Jones Days
Born in Canada with German family roots, Diedrich grew up in a multicultural environment. Even though his family has strong ties in the coffee industry, he had no interest at following in their footsteps. He attended the University of Arizona and University of Texas to pursue a degree in anthropology. Since growing up in Guatemala allowed him to work on his family’s small coffee farm, he knew that the work in coffee was hard. His father wanted him to continue the family’s coffee business, but Diedrich wanted to do what he wanted to do first.

“I guess you could say that I wanted to live like Indiana Jones for a few years,” Diedrich said laughing.

However, while on an archaeological dig in southern Mexico in 1983 he had an epiphany. His family was struggling and had little money to their name, and his two younger brothers were just getting the roaster business underway.

“I couldn’t enjoy what I was doing as an archaeologist when I knew my family was struggling,” he admitted.

The Start of Coffeehouse Culture
1982 was a year of complete social and economic breakdown in Guatemala. It threatened his family’s coffee land until the family let it go and moved to southern California. The family took the hand built roaster and roasted coffee for the surrounding community.

In 1984 the first prototype coffeehouse of Diedrich Coffee emerged. “This was a new experience in the U.S. Many people thought that a true cappuccino was an alcoholic beverage. The public had no concept of what a coffeehouse was,” Diedrich said.

At the beginning he employed about 70 people and was serving about 2,400 guests a day. By 1992 four shops had opened. It was at this time that Diedrich had a comfortable retirement set up for his parents.

“It became a way of life for me, and it has been for my family for four generations,” he said.

When Starbucks announced its plan to come to Orange County in 1992, Martin felt territorial and wanted to plant his flag in his hometown, so he found a private investor. 45 percent of the company was sold for $1 million. Three more shops opened.

DucDuong_roaster-cropA Turn for the Worst
While at that year’s company Christmas party, Diedrich looked around. “At that point I had opened seven coffeehouses and felt as if I didn’t know some of these people. I missed the good ol’ days.”

By 1993 and 1994 the private investor brought in bigwig CEO people to oversee everything. Diedrich was told that he had over-valued the company and owed the private investor $250,000. Diedrich gave the investor more shares of the company.

In 1996 Diedrich Coffee went public. The stock plummeted and went below a dollar on NASDAQ. At this point, things were not looking too good.

“From the day the company went public to the day I left eight years later, the company had eight different CEOs,” said Martin.

Once the company went public, Diedrich needed to sign an employment contract that was to be in three-year terms and would roll over. It rolled over until 2004.

“It was June 30th and one minute before 5:00PM when the CEO of the company walks into my office and tells me that the chairman of the board was not going to renew my employment contract,” he explained.

He drove home that night not knowing what to say to his wife, Karen. “This was all we knew. This company had my family’s name written all over it. It was the identity I became used to,” Diedrich said.

The Light at the End of the Tunnel
Diedrich finally told Karen what had happened, and after a three-hour discussion, Martin and Karen had plans to get Kean Coffee started.

A year and a half later, the first Kean Coffee opened in Newport Beach, California, named for Martin and Karen’s only son, Kean.

With Kean Coffee, Diedrich wanted to innovate coffee. In the last few years of his time at Diedrich Coffee, the CEOs only cared about money. It had 500 outlets, four brands, in nine different countries. This was not the way Diedrich had envisioned his coffeehouses.

“I was now able to paint a new fantasy on a blank canvas with Kean Coffee,” he said.

Even though he lost the company he started with his family name, he said that he gained the gift of experience and Kean Coffee would not have been possible.

With the two Kean Coffee locations, Diedrich is applying his craft to serve the community, just like his family has done for generations.

“I’m not just in the coffee business; I’m in the people business. I’m not in business to ‘sell coffee,’ I’m in business to sell an experience,” he explained.

The Kean Coffee coffeehouses are buzzing and alive with energy and great conversations. The purpose of these coffeehouses is to reconnect people, not just to sip on some great coffee.

Great Accomplishments
Martin Diedrich has also helped create some of the great accomplishments that the coffee industry has seen. He is a supporter of the Rainforest Alliance projects and helped start the Cup of Excellence program. In 2005, Martin also received the Lifetime Achievement Award from the SCAA.

While the Diedrich name is plastered all over the coffee industry, Martin has now made a name for himself all over again with Kean Coffee, and the legacy continues.

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