Minneapolis' Spyhouse chain sold to Missouri specialty coffee collective

Spyhouse Coffee Roasters and its six store locations have been sold to FairWave, a newly formed collective of independent specialty coffee brands headquartered in Kansas City, Mo.

The Minneapolis-based roaster will remain in the Twin Cities, where it also sells coffee at grocery stores, restaurants, bakeries and other cafes.

"We're looking forward to being able to accelerate growth in our market with additional cafes and retail opportunities," Spyhouse President Kevin Wencel said in an interview.

The first Spyhouse cafe opened on Nicollet Avenue in Minneapolis' Whittier neighborhood in 2000. The company now has four other Minneapolis cafes in Uptown, Northeast, the North Loop and the Emery Hotel, which has a licensing agreement. It has one location in St. Paul on Snelling Avenue. Spyhouse also operates a roasting facility in northeast Minneapolis.

The sale comes after a unionizing effort by workers last fall in which Spyhouse management offered to sell its five company-owned cafes to employees. The union drive failed, and Wencel said a deal with employees never gained traction.

The negotiation with employees was "not a catalyst to sell the company," Wencel said, saying an effort to find a buyer for Spyhouse has been underway for the past nine months.

Terms of the deal with FairWave were not disclosed, but owner and founder Christian Johnson sold his entire stake, Wencel said.

Wencel joined Spyhouse in August 2019 and will remain with the chain to focus on operational strategy and business growth.

FairWave, formed in 2020, focuses on acquiring smaller local specialty coffee companies to give them more access to capital and products so they can grow and remain in their home communities. Spyhouse is the third coffee company in its portfolio, which includes two other Kansas City brands.

Becoming part of the larger FairWave collective will broaden Spyhouse's access to sustainable coffees, create economies of scale and improve marketing and technology, the companies said.

"What's not part of the vision is to take local brands and nationalize them," Wenzel said.

"We want to remain a powerful local brand, stay community-focused with a transparent supply chain with sustainable practices," he said. "All of that goes to create a great coffee experience in and outside of the cafes."