September 8, 2011, 12:36 PMBy OLIVER STRAND
Doug Zell, the founder of Intelligentsia Coffee and Tea, announced that he will share his duties as chief executive with the philanthropist and former real estate developer Robert Buono. Mr. Zell and Mr. Buono will both have the title of Co-C.E.O. in a professional association that Mr. Buono characterizes as a “partnership.”
But both said that Mr. Buono was not investing in Intelligentsia, only contributing his management experience to help the company move forward with stalled expansion plans.
Mr. Zell and Mr. Buono met when they were undergraduates at the University of Wisconsin, where they were members of the same fraternity.
The announcement comes at the end of what has been a relatively quiet year for a company that is considered to be in the top tier of independent coffee roasters. Between 2007 and 2010, the Chicago-based company opened three high-profile coffee shops and a roaster in Los Angeles, established a presence in New York with a coffee lab and training center in SoHo and acquired Ecco Caffè, a highly-regarded roaster based in Santa Rosa, Calif. In June of last year, Michael Phillips, then with Intelligentsia, won the World Barista Championship in London, the first American ever to take the top spot. (Mr. Phillips has since left to start Handsome Coffee Roasters in Los Angeles.)
But then Intelligentsia’s growth slowed dramatically. After announcing plans to move Ecco Caffé to San Francisco and open a roaster and coffee shop, construction has yet to begin on what the San Francisco Chronicle described as a 5000-square foot space in Protero Hill leased in 2010.
The stalled project raised questions about the financial health of Intelligentsia. Those concerns were thrown into sharp relief when the news broke in June that Stumptown Coffee Roasters, by some measures Intelligentsia’s closest competitor, took on an investment from a private equity firm with deep pockets and immediately announced that it will open roasters in Chicago, San Francisco and Los Angeles. Stumptown already has roasters and coffee shops in New York, Portland and Seattle.
According to Mr. Buono, the first phase of the Ecco Caffé build-out will begin soon. It’s a part of what Mr. Buono calls “responsible growth” – even though Mr. Buono’s real estate company was responsible for $700 million in development, he said his relationship with Intelligentsia is that of an administrator, not an investor. “We don’t want growth to sacrifice that quality,” said Mr. Buono.
“We’re bringing on management expertise so that we can grow and still remain independent,” said Mr. Zell.