Petaluma-based Acre Coffee opens pizza shop in Sebastopol

The coffee business in the United States is basically a bunch of Davids going against a few Goliaths.

For smaller coffee producers to compete in the $90 billion annual sector, they have to find their niche against behemoths Starbucks, Peet’s and others ubiquitous with tremendous buying power and vast numbers of locations. That includes the small community of independent shops in Sonoma County.

Since its founding in 2011, Acre Coffee of Petaluma has found its sweet spot in providing a high-quality coffee along with a burgeoning food menu, featuring everything from a crispy potato hash to a brioche waffle. It now has six shops in Sonoma County and more than 100 employees.

With the notable exception of an ill-fated attempt by Taylor Lane Organic Coffee of Sebastopol, independent coffee shops here have mainly steered clear of the vast food menu Acre has established.

So for its next growth opportunity, the coffee purveyor has turned to pizza. You read that right: pizza.

“Why not pizza? Who doesn’t like a slice of pizza?” said Eddie Ceballos, director of operations for Acre Coffee. “It’s just not all about coffee. There has been an evolution of a food program that has evolved dramatically.”

The new Acre Pizza in The Barlow shopping district in Sebastopol opened on Feb. 1 to large crowds, said Steve Decosse, who owns Acre along with his wife and business partner, Sharon Fitzgerald, and Britt Galler of Truckee.

On Monday morning, customers were trickling in before 11 a.m. to try a New York-style pie that’s distinctive with a crisp crust and minimally topped with cheese and vegetables. One specialty pizza features baby broccoli, mozzarella and feta cheeses, lemon zest and forest mushrooms.

Decosse acknowledged the pizza business may strike some as a bizarre side project for a coffee shop operator, but he maintains it’s more a matter of survival for his java business that generates about $6 million in annual revenue.

“How can we vertically integrate something? To get to the level of cash flow high enough through lunch. And maybe even we stay open in a couple of stores to 8 p.m. at night,” he said.

“That’s the only way you can survive. You can’t do the model anymore where you offer four coffee drinks and a little cookie. It doesn’t work,” Decosse said.

The pizza gambit comes after Taylor Lane Coffee of Sebastopol attempted its own expansion with new food products under a former partner. That endeavor ended up floundering, and Taylor Lane was forced to close three locations and cut jobs. It has now concentrated on the wholesale market.

“The retail game is a lot of work,” said Phil Anacker, co-owner of Flying Goat Coffee, which has two locations in Healdsburg and one in Santa Rosa. “It’s not for the faint of heart.”

Anacker has focused Flying Goat on negotiating directly with his suppliers, so they can earn a living wage and ensuring he can keep a supply of high-quality coffee beans - even if he has to pay two to three times as much as Starbucks. He also sees an opportunity in Sonoma County and plans to open two more coffee shops.

The pizza bug for Decosse started with him as a 14-year-old living in the Ozarks and working at a pizza parlor, where he became a manager at 16. In 1990, he opened The Slow Club, a San Francisco farm-to-table restaurant. He also developed a Bay Area school lunch program with organic ingredients.

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