From coffee cart to community cornerstone

What started as a coffee kiosk in front of a local grocery store has blossomed into a business at the heart of Federal Way.

Poverty Bay Coffee Company, now under the ownership of Federal Way nonprofit FUSION, has been a staple in Federal Way for decades.

Dan Olmstead, founder and president of Poverty Bay Coffee Company, had earned an accounting degree and drove a cement truck while working at his father’s honky tonk, “going nowhere fast.” In 1986, Olmstead moved from Nebraska to Seattle when he got a job at America West Airlines.

Three years later and looking to escape the rat race of the airline industry, he and a partner started a small coffee kiosk business in Federal Way called Especially Espresso. Their coffee cart was a sidewalk vendor in front of various Safeway grocery store locations in the city.

Olmstead, now 62, and partner Sara Stracke, now vice president of Poverty Bay Coffee Company, both met their significant others while working at the coffee stand.

Olmstead’s wife, Alice, worked as a seamstress at Fit-Rite Alterations in Federal Way. She and a friend would stop by the kiosk for their beverages almost daily.

“We used to call them the finicky sisters because both of them, boy, you had to make their lattes just so. And both of them would tell you how to make it every time they came,” he said. Alice and Dan started dating in the spring and married in October 1997.

After a few location jumps and plenty of business, the coffee duo decided they wanted to do more. So, in 1997 with the help of about 20 friends who helped raised $100,000, Olmstead and Stracke started a small batch micro-roasters business known as Poverty Bay Coffee Company.

“I tell people I am the unintentional entrepreneur,” he said with a laugh. “I was always more of a hippie than a driven person. Everything that we’ve built has been one brick upon the other.”

Roasting cold brew before it was considered cool by mainstream standards, the company now offers more than 40 types of coffee roasts. The company itself is named after the nearby Poverty Bay, which lines the northwestern corner of Federal Way near Redondo.

The business partners caught some ribbing over the year about naming their company a word that means lacking, but Olstead believes “every business sets out from poverty bay hoping to reach the bay of riches, but most of us don’t.”

As Safeway stores began to sell Starbucks coffee, Olmstead was looking to find another place to plant Poverty Bay Coffee.

“I had always wanted to have a cute little coffee shop that has great food,” Olmstead said.

Poverty Bay Cafe, located at 1108 S. 322nd Place behind Safeway, now sits in what was previously an insurance information processing storage site full of filing cabinets. Since the cafe officially opened in 2002, the cozy spot has become a place for friendships, meetings, community connections and, of course, great coffee.

Dan and Alice Olmstead own an Auburn-based coffee roasting company that has grown gradually year by year, and their products are sold in local stores, Costco Business centers, and local coffee shops such as Asensio Coffee in Twin Lakes.

Their biggest seller is Skookumchuck River French Roast, which they sell more of than all of the other products combined. Almost every one of their roasts are named after Northwest water landmarks, like the Snow Lake Dark Roast, Hylebos Creek Medium Dark Blend, Point Defiance Decaf and more.

The second-best seller is Ralph’s Light Roast, named after Olmstead’s blonde Kane Terrier Pug mix sidekick who passed away about six years ago. Ralph went with Olmstead everywhere, winning the adoration of nearly every customer and eventually becoming the company’s mascot, Olmstead said.

In addition to the roastery company and located at the same Auburn site, the Olmsteads also own Cascade Valley Blends, a wholesale smoothie supply company offering 10 different fruits focused on healthy blends.

“So many smoothie mixes on the store’s shelves, they should be called Slurpees because when you look at the ingredients, the first ingredient is sugar or high fructose corn syrup,” he said. The Olmsteads have found synergy between their two companies, reaching the same core clients.

These days, Olmstead is working 35 hours a week instead of his usual 60, and considers himself semi-retired. He plans to continue engaging with his customers via social media and the company’s website, even planning a blog series visiting and sharing information about the Washington sites his roasts are named after. When safe to do so, he also looks forward to taking a 30-day road trip to visit his daughters and grandkids in San Diego.

Separating from his business venture of 30 years is not an easy chapter, but Olmstead says the people he has met along the way are what made Poverty Bay Coffee his passion.

“I made a lot of friends over the years, and got a lot of support from a lot of people, and I’m grateful for that,” he said, thanking the community. “You open your doors and you take all comers, but it takes a lot of clients to make a business work.”

He saw people meet friends for a cup of coffee in the lumpy-seated booths along the cafe’s east wall, and saw families meet for weekend breakfasts. He watched his employees grow up, work to put themselves through college, and for three employees, meet their significant others while working the coffee counter.

“Having a place that the community chooses, one person at a time, and having it be a place where they tell you all the time how comfortable it is and how much they love being there, it makes you work a bit harder and it makes the work worthwhile.”