Friday, November 11, 2005
Changes brewing in coffee scene
Here comes Starbucks, but local coffee house owners, many already planning expansions, say competition has its perks.
While Starbucks prepares for its grand opening in Roanoke next Friday, its independently owned competitors in the Roanoke Valley have expansion plans of their own.
The Seattle-based giant -- whose third-quarter profits climbed 29 percent to $126 million -- chose a retail center at a corner of the Wal-Mart parking lot on Valley View Boulevard as its debut site.
On the other side of town the caffeine level is rising.
Java the Hutt, which operates three drive-through operations in the valley, plans to open its first coffee shop diagonally across the street from the Grandin Theatre in December. Upscale wines, crepes and live entertainment could complement the array of coffees and teas.
Mill Mountain Coffee & Tea, which has four stores in the Roanoke Valley and one in Blacksburg, said it plans to open several new stores in Virginia, with possibly one in the valley.
Its expansion plans were going to happen regardless of Starbucks' expansion into the Roanoke market, said Hunter Johnson, vice president of operations for Mill Mountain.
"We're going to continue to be Virginia's premiere, independently owned coffee company, as we have been for the last 15 years," Johnson said.
Brian Coumont, owner of Joltz, a drive-through kiosk on Orange Avenue, said he plans to have three locations within five years. Coumont used to hang out at Starbucks when he lived in Seattle, and he was taken aback when he got to Roanoke and his customers thought a cappuccino was something that came out of a machine at Sheetz.
Starbucks can only help with the education process in specialty coffees, Coumont said.
Starbucks, as part of its corporate strategy, has been continuing to open in smaller markets, including Roanoke, and in off-the-highway locations because the more metropolitan areas are saturated, said Linda Bannister, an analyst with Edward Jones in St. Louis.
When Starbucks opens a store today, its success comes faster than it did, say, some five years ago, because its brand name is highly regarded and highly known, Bannister said.
Also, rents and wages tend to be lower in smaller markets, said Dan Geiman, an analyst with McAdams Wright Ragen in Seattle, where a Starbucks can be found on every other block.
The company is also broadening its appeal to the less affluent by offering a wider choice of coffees and teas.
With a presence in 35 countries, Starbucks said its long-term goal of 15,000 retail locations in the U.S., and at least 15,000 internationally, is achievable.
Starbucks has about 4,800 company-owned stores in the U.S. Of those, 148 are in Virginia.
The trendy coffee chain is quickly becoming chic among high schoolers.
Not to mention the suits who like to gather at the coffee shop for business and social meetings.
"It's that third place that management talks about between work and home," said Geiman.
Then again, there's a romantic ambience and cozy atmosphere that separates the local independents from the somewhat sterile environments of the chains, said some java lovers.
"The independents are more genuine; they have a certain presence," said Jess McCluney, a Roanoke College student and former employee of Mill Mountain in Salem.
Cameron Vest, a frequent customer of Starbucks in Seattle, said, "Mill Mountain, bar none, has the better coffee."
If Mill Mountain wants to compete with Starbucks, then it has to open at 6 a.m., an hour earlier than it does today, Vest said.
Each Mill Mountain store adapts to its community, offering its own unique, personal flavor, said Vest.
"Everyone's kind of like family."
A bone of contention with Bob Buckley, owner of Java the Hutt, is Starbucks' image that it is the standard by which others are judged.
Yet, Buckley acknowledged that competition forces the independents to sharpen their focus, rethink and redefine the core demographics.
"Competition gives me a chance to prove my product is good," Buckley said. "We [Java the Hutt] have the flavored lattes and blended drinks; mostly everything a shop does, but without the couches and live music."




