The deal is expected to be finalized next week
Revelator Coffee Company is taking the next step in its fast-paced growth strategy by making a major acquisition in Atlanta. The Birmingham, Alabama-based company is acquiring Octane Coffee, president Josh Owen tells Eater Atlanta. The deal should close sometime next week.
Terms of the sale were not disclosed, but Diane and Tony Riffel, the wife-and-husband team behind Octane, will have some stake in Revelator’s success going forward. The Riffels will serve as advisors for an as-of-yet-undetermined amount of time as the two companies transition into one. In the short term, the Octane brand will remain in existence. Owen expects Octane cafes to rebrand under the Revelator name and serve Revelator products “in the next year, year and a half.” Director of coffee operations Sarah Kluth, who previously spent nine years with Chicago-based Intelligentsia Coffee & Tea, sources beans from farms around the world and oversees roasting at a facility in Birmingham.
Revelator, backed by Berkeley, California, venture capital firm Roble Partners, made its debut with a Birmingham cafe in October 2014. In the two-and-a-half-years since, it has opened a roastery in the Magic City and expanded across the Southeast with nine more locations in Birmingham, New Orleans, Atlanta, Nashville, Chattanooga, and Charleston. The first Atlanta cafe opened in Westside in August 2015. That was followed by outposts in Midtown and inside West Elm at Ponce City Market.
The first Octane cafe opened in 2003 in Westside. At the time, the neighborhood had not yet become a hot bed for restaurants and development. “We were super early for that part of town and kind of wanted to see what happened, and it kind of evolved beyond our expectations,” Tony Riffel says. Octane has expanded with locations in Grant Park, Buckhead, Midtown, and beyond Atlanta with two Birmingham locations.
The acquisition effectively doubles Revelator in size. The company has “80 to 90” employees on its payroll, according to Owen, and it will fold in another 75 upon closing. Most Octane employees will have the option to keep their jobs, but there will be some cuts due to redundancies. Revelator will operate 17 cafes (15 across the Southeast and two more in Massachusetts after recently acquiring Boston-based Wired Puppy Specialty Coffee & Tea). With increased buying power, it will make a greater push into wholesale. Revelator beans are available at five Whole Foods stores in the Southeast right now, and Owen says that number will jump to 40 later this spring. The company wants to do more business with hotels, restaurants, and smaller cafes.
Revelator will take the acquisition as an opportunity to fold Octane’s beer, wine, and cocktails to its business model. A centralized kitchen will launch as a way to improve the food service at the cafes (although Little Tart Bakeshop, a separate business with a separate lease, will continue to operate out of the Grant Park space it currently shares with Octane). As the company grows, Revelator intends to become a destination for more customers beyond the caffeine-obsessed.
“To be successful, particularly in the South, I think we have to be a hospitality company first and a coffee company second,” Owen says. “This is about providing an experience to our customers, and that experience comes in a lot of forms.”
After opening their newest cafe in Midtown last August, the Riffels did not have immediate plans for further growth, and they were not looking to sell their company. They weren’t immediately sold on Owen’s pitch to buy Octane, but upon reflection, saw it as an opportunity to ensure something they created would continue to grow. After pouring so much energy into the business for more than a decade, the couple will take some time off to recharge. While there are no firm plans for the future, they’re staying in Atlanta, and they don’t intend to stay idle for long.
“Our minds are constantly moving through ideas, so we'll take a small break probably,” Diane Riffel says. “But I think we'll both be excited to see what else we can try and do.”