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In the valley below Sugarloaf, Carrabassett Coffee grows

BY Jennifer Van Allen

1/12/2015
Photo / Peter Van Allen
Photo / Peter Van Allen
Tom Hildreth, co-founder of Carrabassett Coffee, in front of the new, 7,000-square-foot facility on Route 27 in Kingfield. Carrabassett Coffee has annual sales of $2 million and has both retail and wholesale business.

Carrabassett Coffee may not be the biggest company in the Carrabassett Valley, but with 125 wholesale and 2,000 mail-order customers from all over the country, it may be one of the most well-known.

In early January, the 16-year-old company became a whole lot more visible, as it opened a new fire-engine red headquarters along Route 27, between Farmington and Sugarloaf, just a mile from its former home. The new 7,000 square foot facility, which is more than five times larger than the old one, will allow Carrabassett to double the amount of coffee it roasts, add two employees to its 19-person staff and position the $2 million business to endure for the long term.

“We'll be able to bring good coffee to the masses,” says co-founder Tom Hildreth.

What's more, he hopes the new home base will send a clear message to anyone passing by: here in this outdoor-sports mecca, you can have a way of life that you love — and find a way to make a living.

“Perhaps a light bulb will go off and they'll think, 'Maybe I can try to figure out how to make a living here, too,” says Hildreth.

Carrabassett's expansion comes as other major employers in the area are experiencing growth spurts of their own. In the past year, Barclaycard in Wilton, Jarden Plastic Solutions in East Wilton and Maine Wood Concepts in New Vineyard have all made public plans for new investments and job growth.

“Existing businesses that are expanding are driving economic growth in the region,” says Alison Hagerstrom, executive director of the Greater Franklin Development Corp.

To be sure, the Carrabassett Valley shares the struggles common to many areas in Maine — high costs of electricity and fuel and a nascent broadband infrastructure. But she hopes this business growth, along with newer corporate recruits like the Poland Spring Bottling Plant, which brought 40 new jobs to the area in 2008, offer proof of what the Carrabassett Valley has to offer.

In many ways Carrabassett Coffee's origin story is as iconically Maine as the coffee has become. After graduating from Harvard in 1970, Hildreth, a native of Marblehead, Mass., moved to the area, taught skiing at Sugarloaf, worked in various positions in the corporate office and eventually became director of marketing there. Along the way he worked with Steve Skaling, a chef who had opened Java Joe's coffee shops in Sugarloaf and Augusta. Hildreth invested in the shops, then the two decided to roast coffee together full time.

At the time, in the mid-1980s, the market for specialty coffee was just starting to percolate nationwide, as consumers thirsted for alternatives to mass-market brands. Seemingly overnight, coffee drinkers could easily find French roast brews at the same place they bought their gas. “Suddenly people were paying $1 for coffee, not a quarter,” says Hildreth.

Hildreth and Skaling rented an old garage, and taught themselves how to roast coffee on an old popcorn popper. On the eve of Jan. 1, 1997, the pair roasted — or, actually, over-roasted — their first batch. The smell and the smoke were so bad that a friend driving nearby thought his car was on fire. (“We didn't time it right,” Hildreth recalls.)

That first year, they roasted 15,000 pounds of coffee and generated $39,000 in sales, making deliveries in a Dodge Neon. It was rough at first. Prices for green coffee beans spiked. Much of their product went out the door as free samples meant to woo customers. To make extra cash, Hildreth guided whitewater rafting trips. To save money, he slept above the store. “That first year was grim,” he says.

But one relationship at a time, the company grew — and not always on a straight upward trajectory. The Java Joe's in Augusta closed. In 2007, they closed a shop in Bethel after a seven-year run. There are now two Java Joe's locations — one in Farmington and another near Sugarloaf.

One key to Carrabassett's success, Hildreth says, has been building a clientele beyond Maine's borders. About 90% of the business comes from wholesale customers and about 10% of wholesale business comes from out of state.

“That's the reason we can survive here,” says Hildreth, 66, who bought out Skaling's share of the business in 2009. “There's just no way we could survive on the local economy.”

A distribution agreement with Sysco allows Carrabassett to service sizable customers like Idexx and Sunday River that would be impossible for Hildreth and his small staff to service on their own.

About 10% of the company's sales are mail ordered directly to 2,000 consumers around the country — as far as Alaska — many of whom discovered the coffee while on vacation in Maine. Its five-pound bag, which Carrabassett offers for a rate that amounts to less than $10 per pound, including the cost of shipping, has been popular with mail-order customers.

Carabassett's growth happens as the appetite for specialty coffee has never been more intense. The retail value of the U.S coffee market is estimated at $46 billion. More than half of that market — in both volume and dollars sold — is made up of specialty coffee, according to the Specialty Coffee Association.

“As people become more interested in local, sustainable and delicious food, they naturally become interested in things like specialty coffee,” says Heather Ward, research analyst with the Santa Ana, Calif.-based trade group.“[Specialty coffee] is often a local business, is markedly more delicious and places an emphasis on sustainability and fair practices.”

So it's no wonder that other Maine-based roasting faciliities are also growing. Wicked Joe's, which has been in Maine since 2003, moved to a 25,000-square-foot facility in Topsham in December. Coffee By Design, founded in 1994, moved its roastery into 45,000 square feet on Portland's Diamond Street in March 2014. The wave of newer coffee roasters includes Matt's Wood Roasted Organic Coffee in Pownal, Crooked Porch Coffee in Bar Harbor and Tandem Coffee Roasters in Portland.

“Maine is becoming known for outstanding specialty food.” says Mary Allen Lindemann, co-owner of Coffee by Design. “The microbreweries and distilleries have really put Maine on the map and it makes sense that coffee is a part of that.”

Though there are more players competing for shelf space, “what we all do will raise awareness that we have great coffee in Maine,” says Lindemann. “And that helps all of us.”

Hildreth says that the influx of new roasters have caused a “bit of a dent” in sales. But he adds: “Coffee is a huge industry. By getting just a tiny slice of that market, you can make a good go of it.”

He stresses that the business hinges on strong long-term relationships — like the one he's had with customers like Chip Gray, owner of Freeport's Harraseeket Inn. Gray has been taken by Hildreth's diligence and tenacity, from same-day trouble-shooting to the six different attempts he made to come up with a Harraseeket Blend for the historic inn.

“He's an absolute rock, and a wicked-nice guy,” says Gray, who hosts about 40,000 guests a year. “He's always here making sure that everything is just so. He's like a whirling dervish. I've never seen anything like it.”