How I Got My Start at Caribou Coffee
After Cookies, I Was Still Hungry
After selling Great American Cookies, I began looking into other food concepts for possible ideas. Coffee was on my mind.
Quickly, I discovered the huge gap between the largest player—Starbucks, and the closest challenger. In 2000 and 2001, I tried to buy a coffee company. When that proved unsuccessful, I decided to start my own company, which I planned to call “PerQs.” It was a play on words blending “perk” and “perquisite.” The store would offer great coffee, food, and something extra — Internet access before that was really common, as well as fax machines and copiers. A business center that also sold gourmet coffee. I toyed with creating memberships that would give customers a portable office—with food.
Introductions
I was still developing my business plan in 2002 when my friend Larry Stevens, head of mergers and acquisitions for PriceWaterhouseCoopers in Atlanta, introduced me to Charlie Ogburn, executive director of Crescent Capital Investments, Inc. Crescent owned a number of companies. One company, Cirrus Aircraft, was looking for someone to help with sales and marketing. He thought I might be a good fit as consultant, so we scheduled a lunch at Charlie Brown Airport in Atlanta.
Caribou Connections
Larry did not tell me much about what to expect at the meeting, so I started doing some research on Crescent Capital. I found that they owned an 80 percent stake in Caribou Coffee, headquartered in Minneapolis.
This is fortuitous. I had a personal connection to the company—there was a Caribou near my home. Atlanta was the company’s second market after Minneapolis, and I regularly frequented the store. Years before, I bought my own white ceramic Caribou mug. It was pretty chipped and worn, so I repaired it with Super Glue when the handle broke off. I still have it to this day.
The Beginnings
Caribou was the second largest non-franchised coffee-house chain in the nation, with 207 stores in nine states and the District of Columbia. John and Kim Puckett founded the company. John was a management consultant with Bain & Company, while Kim worked for General Mills. Regular customers at Coffee Connection in Boston, the Pucketts had dreams of opening their own coffee shop. They researched for more than a year, looking for ways to improve on the concept.
While sitting on the summit of Sable Mountain in Denali National Park during a backpacking trip to Alaska, they were talking about their new company. On the descent down the mountain, they saw a herd of wild caribou— which became the inspiration behind the name. The Pucketts moved to Minneapolis in the summer of 1992 and opened the first Caribou Coffee in Edina, a suburb, in December.
Caribou Concept
The Caribou concept was warm and welcoming, evoking a mountain lodge with fireplaces, exposed wooden beams, earth tones, and oversized leather sofas and chairs. Each store had a children’s corner that appealed to harried parents looking for a safe, quiet place to relax. Walking into a Caribou Coffee was like escaping to the mountains, and several coffee chains, including Starbucks, later adopted similar designs. From the moment Caribou opened in Minnesota, it became the coffee café of choice. When the Pucketts sold Caribou to Crescent in 2000, the company headquarters remained in Minneapolis.
So, I went to the meeting with Charlie prepared to talk about coffee. He came expecting to discuss Cirrus airplanes. We hit it off immediately, and once Charlie realized I wasn’t too interested in Cirrus, we turned our attention to Caribou.
