Memo: On Coffee and Enlightenment

When author David Perell published the brilliant short essay “Beer Mode, Coffee Mode“, I began to research the history of the dynamic between the two beverages. Perell’s work was a figurative look at the creative impulses around fun and focus, not the consumption of the products themselves. Once upon a time, caffeine overtook alcohol as the drink of choice. This is a memo on coffee’s first period of great European influence. The adoption of coffee culture and non-alcoholic beer consumption could mean something similar for today.

What happens when alcohol consumption falls and coffee consumption increases during periods of instability and new forms of community? If history would have it, we’re in for a period of lasting social, economic, and scientific innovation. There is a passage in Steven Johnson’s The Invention of Air that is relevant to this thought. The book is about the protégé of Benjamin Franklin, who had a notable thought on the European 17th century.

The impact of the introduction of coffee into Europe during the 17th century was particularly noticeable since the most common beverages of the time, even at breakfast, were weak ‘small beer’ and wine. Those who drank coffee instead of alcohol began the day alert and stimulated, rather than relaxed and mildly inebriated, and the quality and quantity of their work improved. Western Europe began to emerge from an alcoholic haze that had lasted for centuries.

The innovations that come of today’s Web3 era of the internet may influence decades of human existence. History doesn’t repeat but it rhymes, and two consumer trends may be to thank. We are consuming more coffee and we are drinking less alcohol. We are more social and mindful. We’ve seen this relationship between beverages once before, during The Age of Enlightenment. PhD philosopher and professor Stephen Hicks once wrote:

As a contributing factor, coffee (and tea) certainly gets credit on physiological grounds. Also contributing was the development of European coffee house culture, the coffee houses bringing businessmen, artists, and scientists together for drinking and socializing. The great Lloyd’s of London company, for instance, had its beginning in Edward Lloyd’s Coffee House in London, which dates from (possibly) 1685 or (more likely) 1688, the year of England’s Glorious Revolution and John Locke’s return from exile in Holland. [1]

We are sitting at the confluence of two rivers: mistrust in our institutions and the emphasis on mindfulness. That intersection is strikingly similar to the “long 18th century”, a period of remarkable change from 1685-1815.

The Enlightenment produced numerous books, essays, inventions, scientific discoveries, laws, wars and revolutions. The American and French Revolutions were directly inspired by Enlightenment ideals and respectively marked the peak of its influence and the beginning of its decline. [2]

Europe’s long century was of the most consequential to our contemporary economies and cultures. Then, it was the French Revolution of 1789, Adam Smith’s liberal economic theories between 1776 and 1789, the adoption of the printing press, new forms of travel, and the proliferation of member clubs, salons, and the European coffee house. There are similarities between the spirits of then and now. Both Europe then and America today faced massive cultural shifts against the backdrop of what we now politely call “consumer bifurcation”: the rich getting richer and the poor are sinking lower into poverty.

Web Smith on Twitter: “Coffee is an underrated bedrock of modern civilization. Without the European coffee house, there would have been no Age of Enlightenment. / Twitter”

Coffee is an underrated bedrock of modern civilization. Without the European coffee house, there would have been no Age of Enlightenment.

Many of today’s cultural shifts are emblematic of the upper echelon of society risking investments across a spectrum of assets. Consider the move from fiat currencies to crypto protocols, from named online users to the pseudonymous economy, from physical artwork to the non-fungible, from centralized narratives to decentralized storytelling, and from government galactic to civilian intergalactic. We are in the midst of another Age of Enlightenment thanks to a mass migration from physical to digital agglomeration.

Unlike 1685-1815, the European cafe is no longer the venue for the exchange of ideas.

Back then, the apex of the French monarchy crashed thanks to a bifurcation of wealth elevating an aristocratic class while the neglected suffered from impoverished conditions. Meanwhile, the European cafe became the resort for “those with wit,” removing mostly men from the patterns of drunkenness and debauchery. A generation of perpetual drunks shifted from alcoholism to the sobering and mind-altering benefits of caffeine. This trend away from one and towards the other influenced many great social, academic, and political advancements.

The European cafe encouraged information synthesis in ways that universities once exclusively held monopoly over. They promoted conversation, debate, and authorship. The shift from alcohol to coffee was the catalyst.

Today’s subtle cultural shift: beer down, coffee up

Coffee has never been more popular in the United States. There are a record high 15,000 Starbucks franchises in the United States. There are over 37,100 coffee houses in total, generating some $22 billion in 2020 retail value. By that same year, over 40% of US consumers had a single-cup coffee system in the house, up from close to 10% in 2012. .

In a period between February 2019 and February 2020, $1.25 billion in Starbucks frappuccinos were sold in the United States. According to Mordor Intelligence, the American coffee industry can expect a CAGR of 4.8% through 2025. Of that growth, nearly 70% of consumers prefer in-home coffee. They note another key insight:

A gradual shift has been observed from soft drinks to coffee drinks among consumers in the region in recent years.

Of those in-home coffee systems, Cometeer near the forefront. Former computer scientist Matt Roberts co-founded Cometeer in 2015 along with Doug Hoon and Karl Winkler, who each possess extensive backgrounds in engineering and product development. The brand went on to raise an initial $50 million and today, backed by a strong direct-to-consumer and subscription strategy, the brand is reported to be on track for high eight figures in annual revenue. In 2019, my alma mater Gear Patrol wrote about the brand: 

Not much is known about Cometeer Coffee Capsules, but what we do know is encouraging. Its site promises specialty-grade coffee frozen “in peak state” and ready to brew with or without K-cups (plus, it’s recyclable). The collection of high-profile roasters are already on board may be even more telling — co-signatures from craft coffee roasters like George Howell, Bird Rock, Equator and CounterCulture don’t come easy. [3]

Just a few years later and it is showing up in New Year’s Resolution product rundowns on Snaxshot by Andrea Hernandez. Herproduct site is of the foremost authorities on interesting, qualitative consumer developments. But equally as interesting is this figure on non-alcoholic beer import volume:

According to IWSR Drinks’ Market Analysis, a data and intelligence company that tracks worldwide alcohol trends, non-alcoholic drink products increased 22.6% in 2020 and is expected to grow over the next four years. IWSR anticipates a CAGR of 9.7% in this market through 2024. The trend towards decreasing alcohol consumption is emerging in predictable and unpredictable places. First the predictable by the IWSR:

Beer continued annual volume declines with a -2.8% loss in the US in 2020, as volume gains in imported beer weren’t enough to sustain losses in domestic beer volume. Nonetheless, imported beer grew market share in 2020. No- and low-alcohol beer proved a bright spot for the category, however, and the category is expected to continue to grow.

And the less predictable, a recent report by The Guardian notes an NA movement in high places:

The Virgin Mary, which started serving alcohol-free drinks in Dublin a couple of years ago, is expanding. [4]

And while Cometeer is making headlines in the in-home coffee market, Athletic Brewing has emerged as the DTC media darling for the non-alcoholic movement. A recent CNBC feature on founder and CEO Bill Shufelt was amplified by investor Darren Rovell, who aptly saw the DTC beer brand as a worthwhile investment before this trend was clear to many in the consumer investment industry.

Nearly four years ago, I chose to give up alcohol altogether. My reasoning was personal but the gist of it was that I wanted to maximize every day that I had left. Gone was the mental fog and some of the anxiety commonly found in entrepreneurs. Meetings were more productive, ideas were more potent, and I grew more confident in my ability to synthesize unrelated ideas. These attributes are the foundation for what made the Age of Enlightenment collectively great, it took unfulfilled drunkards and turned them into alert and witty thinkers. The best of those thinkers changed the world.

Consumer trends can be leading indicators. And while there is no guarantee that this trend away from alcohol and towards coffee will continue, there is precedent for what happens if it continues. And the early signs point to that outcome. We’ve experienced an extraordinary period of innovation over the past several years. The best and brightest are feverishly reading, writing, executing, and synthesizing the work of others just to keep pace with the many innovations across economics, health sciences, communication, and art. You can never call your own time one of enlightenment or reason. But something about today seems different than the years that preceded it. Maybe what we drink has a role in all of it.

By Web Smith | Edited by Hilary Milnes | Art by Alex Remy and Christina Williams 

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