Coffeepreneurs: The story behind Water Avenue Coffee

The Portland coffee scene has changed dramatically over the last three years, as several top-notch cafés and roasters have opened their doors. The (mostly) friendly competition between cafés has pushed everyone’s quality standards higher, propelling Portland to the top spot in the country for being able to find great coffee. One of the best of these new coffee companies is Water Avenue Coffee. Located in Portland’s Inner Southeast Industrial District, the shop sells excellent coffees in a setting that welcomes you to the neighborhood.

When you walk into Water Avenue, it is clear a great deal of thought went into designing the café. The shop is spacious, with a hefty wooden bar made of reclaimed Oregon fir wrapping around the shop from front to back. Painted gray walls give the café a mellow, understated ambience. Sturdy cement floors remind you of the building’s industrial past. Behind the coffee bar, the roaster cranks out batches of meticulously roasted coffee, whirring and crackling as it transforms pale green beans into lustrous brown gems.

A wealth of coffee experience behind the bar

Water Avenue has only been open since 2010, but the owners’ coffee experience goes back much further. Bruce Milletto is a Specialty Coffee Association “Coffee Luminary,” well known for a lifetime of work shaping the specialty coffee industry. He founded Bellissimo Coffee Advisors in 1991 and partnered with his son Matt to open the American Barista and Coffee School (ABCS) in 2003.

Matt Milletto, Bruce’s son, grew up around the coffee industry and has worked in coffee steadily for the last twelve years. Since 2003, he has been teaching and training at ABCS, where he serves as vice president. Matt also founded Barista Exchange, a networking site for the coffee industry that has more than 13,000 members.

Brandon Smyth, Water Avenue’s third owner, has been working in coffee for more than a decade and a half. A former roaster for Stumptown, Smyth is the coffee buyer and the head roaster for Water Avenue. He also teaches a roasting class at ABCS.

Matt and Brandon were kind enough to sit down with me to share the story behind the company.

Brandon Smyth, Matt Milletto and Bruce Milletto, the co-owners of Water Avenue Coffee

From Corvallis to Portland

Water Avenue’s origins can be traced back to Corvallis, Oregon, in the late 1990s. At the time, Milletto was studying photography at Oregon State University, something of a rarity at the land-grant university.

“I was one of maybe five people going there to study photography,” he said.

While Milletto was in school, he worked at a coffee shop close to campus called Interzone.

About the same time, Smyth quit his job in high tech to work at Interzone. Switching to coffee was a big change, but the coffee industry was something that had interested him for years.

“There weren’t a lot of jobs in Corvallis when I was growing up,” he said. “Especially when you’re younger, being a barista is the cool job to have. That’s what drew me to it. I was lucky to get a job at the café.”

Matt and Brandon became fast friends, and they enjoyed working at Interzone.

“The owner was a super cool guy. We had a lot of freedom,” recalled Milletto. “We were doing really fun stuff, like pourovers and working with a lever espresso machine.”

Milletto left Interzone to spend his last year of school in Macerata, Italy, a small college town in the province of Le Marche. In Macerata, he studied art and photography, but coffee was never far from his mind. When he came back to the US, Milletto managed a coffee bar in Eugene, and a couple years later, he moved to Portland to teach and train full time at ABCS.

Smyth also took a detour before coming to Portland. He left Corvallis to move to the Bay Area, where he worked at the Royal Coffee Importers Annex. Working at the importer’s café gave him his first exposure to the diverse profiles of regional coffee varietals. It was a great learning experience, but Brandon missed the Pacific Northwest.

“I soon realized that I had left the greatest state in the Union. Portland was always the city I wanted to live in,” he said.

When he came back to Portland, Smyth worked at Stumptown Coffee. It was there he found his calling.

“When I met the roasters and saw the machines, I knew that’s what I wanted to do,” he said. “Working there is quite a learning experience – there’s lots to do, lots of roasting going on. They have hundreds of coffees from all over the world. It’s a great place to learn.”

Lacking any previous roasting experience, Smyth began his time at Stumptown filling bags with coffee and driving the delivery vans, eventually working his way up into a roaster position. “I've never learned more working anywhere else or met better people,” he said.

The magic moment

In 2009, Bruce, Matt and Brandon were hanging out over beers, talking coffee and looking at vintage roasters online, when they got an idea. Why not go ahead and order one? Given their collective coffee knowledge and experience, they knew they could put something unique together. Seizing the spark of inspiration, they ordered a French-built 1974 Samiac roasting machine from a company in Switzerland, and set about designing a new coffee company.

While they were waiting for the roaster to arrive, which “took a lot longer” than they anticipated, Water Avenue set up shop in Smyth’s garage to take care of the wholesale accounts they had already signed up.

“I had a small roaster in my garage” Smyth said. “I spent many, many hours in there roasting a couple pounds at a time.”

When the new café opened in June 2010, they fired up their “new” roaster and began experimenting with coffees on a larger scale.

The cafe interior. Photo courtesy Jinsu Lee

Roasting and blending

To bring the best out of the green coffees he purchases, Smyth roasts the beans slowly at low temperatures, a method that is often called “Scandinavian style.” Slow-roasting the beans creates more complex sugars, giving the beans a better flavor profile.  Although it might take a little more time, the difference in the coffee quality is distinct.

“One of the reasons Starbucks’ coffee tastes burned or bitter is because they roast it so quickly,” he said. “The fast roasting process does not let the longer-chain sugars form. We roast it at lower temperatures, making the coffee taste better. I guess you could say I’m a Scandinavian at heart.”

While some of the coffee roasters in Portland have mostly done away with espresso blends, Water Avenue continues to offer its El Toro espresso blend year-round, along with a rotating single-origin espresso.

“The advantage to having a blend is that you can offer it all year and it will follow the same flavor profile,” explained Milletto. “If you were to just offer single-origins all the time, your coffees would be constantly changing. Wholesale accounts don’t like that. If someone is used to getting a milk drink, they’re like, wow! They’re fun to taste but it’s hard to be consistent, and that’s a big part of [the coffee business].”

Quality starts at the source

Like many third wave roasters, Water Avenue is trying to shorten the supply chain between coffee farmers and the customer, through direct-trade relationships.

“There are a couple major ways to go about sourcing,” said Smyth. “The first is to work with importers here in the United States who bring coffee in from all over, and let them work with farmers. The other way is to directly buy your coffee off the farm, which is absolutely the best way to do it for everybody. We can get higher quality coffee. We get exactly what we want. When I was in El Salvador, for example, I got to process the coffee that we’re getting in two weeks.”

Direct trade saves money too. “It’s cost effective when you do [direct trade] because your coffee prices come down,” said Smyth. “The farmers get a good price from us and we don’t have to pay an importer, which is usually about a buck-fifty a pound. What you can do is give 75 cents more per pound to the farmer.”

In addition to being able to pay growers more, Smyth says that working with them has other benefits.

“In the short time I’ve known one of the farmers I work with, we’ve developed a really strong relationship where we communicate almost every day,” he said. “We’re planning for next year’s crop, trying to figure out what varietal and what kind of process would be the best.”

Portland’s reputation as a coffee capital has helped Water Avenue build the relationships with the farmers. “A lot of farmers are looking at Portland in particular as a litmus test for the rest of the US,” said Smyth. “They want to know what we want specifically, because they know we’re on the cutting edge. So if they’re able to produce what we want, they’re going to be able to sell well. It’s a cool situation to be in.”      

Smyth is excited about some of the new things happening with the growers. “All the farmers are doing really cool experiments with varietals, trying to grow different things,” he said. “The Mokka we have is an Indonesian coffee and it’s being grown in Colombia. It’s really clean and clear. The Panama Esmeralda that’s so famous is the same idea.”

Portland’s unique coffee scene

In addition to being pleased by how things have gone with Water Avenue, Milletto and Smyth also spoke very highly of Portland’s unique coffee culture.

“I travel quite a bit to different cities, and it’s often on business, so I’m touring a lot of coffee bars,” Milletto said. “I think Portland is genuinely passionate about quality. We definitely have led a path for quality on espresso drinks and micro-roasters.

Smyth gave credit to his past employer for helping develop Portland’s coffee culture. “In Portland,” he said, “you have a more educated community, and a lot of that has to do with Stumptown. They did a great job of explaining how that works. Our challenges to convey that aren’t as big as if we were in a different city, like if we were in the Midwest or on the East Coast.”

Milletto said that one of the keys to building a great coffee culture is to be sure to provide an experience that resonates with the local population.

“I don’t want to say that people are trying to emulate or copy us, but I’ve been to other cities where it looks like people have tried to start a coffee bar based on an experience they have in Portland, and it’s tough to do.  I think in every city, you need to know your city before anything. What works here in Portland works for a lot of us, but if you’re in Nashville or Atlanta, you really need to be genuine in your offerings and educate your customers.”

Smyth agreed. “Education takes a long time,” he said. “People have to come in and you talk to them. Little by little they come to understand what coffee is all about. I have a friend who just started a roastery in Miami who came from here. He said it is really hard for him to get people interested in small-batch coffee roasting. But here in Portland it’s little different, people are more curious about where their products come from.”

Milletto predicted the specialty coffee scene would continue to spread, as roasters, cafés and baristas educate customers about quality coffee.

“We have a past client in Boston called the Thinking Cup, and the owner is an ABC graduate,” Milletto said. “In cities like Boston, you get one or two great shops and now people not only have an example to follow, but the customer base is becoming more interested in switching from a Dunkin’ Donuts to a specialty coffee retailer.”

Milletto does not worry about having too much competition within the industry, at least not yet. “I’ve been to NYC and LA to see what’s going on there,” said Milletto, “and there’s a lot of really great shops opening with people doing great things. These bigger cities are not even close to the saturation point of too many coffee shops. It’s exciting to see.”

What the future for Water Avenue looks like

While there may be a lot of untapped growth potential outside Portland, neither Smyth nor Milletto are in a hurry to provide the coffee for that growth. Water Avenue does not sell much coffee outside Portland, for several reasons.

“The big hurdle we have is shipping,” Smyth said. “Our coffee is based on being fresh. It’s hard to mail.”

Supporting the company’s wholesale accounts is also an important consideration. “We really try to offer a high level of support and training, making sure everyone is brewing our coffee at its best,” said Milletto. “We have a lot of people requesting our coffee, but as a main roaster for a coffee shop, I don’t think it makes sense to ship coffee more than one day. I think going with a local option is often best.”

That said, they aren’t opposed to sending some of their coffee long distance, at least once in a while.

“Guest spots at coffee bars in New York – we love that kind of stuff,” said Milletto.

Pursuing sustainable growth for the business

The owners are taking a long-term view of success for Water Avenue. “A big focus of ours is our employees,” said Milletto. “Growing their coffee skills and education, and professionally as well. We have some employees that help out in the school [ABCS]. We encourage them to compete. I don’t think we created Water Avenue to immediately be a profit center. It’s something that is rewarding and sustainable for us too.”

Milletto and Smyth want their employees to get the experience of traveling to origin. “We’re trying to implement a program where we send as many employees to origin as possible,” Milletto said. “Two top employees are going to go each year, based on performance. Bruce, Brandon and I go to origin as much as we can, but we’re realistic too. We need to do what’s best for the business. Hopefully someday we can take more trips.”

As the business continues to grow, Smyth looks forward to bringing new coffees to Portland.

“We’ll have some pretty wild experimental coffee and some really straightforward delicious coffee,” he said. “Things are changing really quickly, and the coffee is going to get better and better, especially in Latin America. I’d really like for us to be the ones to showcase that.”

With a passion for making great coffee and a commitment to growing their business slowly but steadily, Brandon Smyth and Matt Milletto are building a Portland coffee company that should be around for a long time.

“It’s the culmination for all of our passions for coffee and our expertise of being coffee professionals,” Milletto said. “It’s allowed us to really do something from our hearts. We want to be known as a unique and genuine micro-roaster that started in Portland, in the heart of the most competitive market, that people appreciate for the right reasons.”