Gourmet coffee pops up in unexpected places

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A good cup of coffee can bring customers into a business — and keep them around at least for as long as it takes to drink it, said Richard Wyckoff, who oversees refreshment services for Aramark Corp., a top food service provider.

A booming part of Aramark's business is at car dealerships, which are requesting Starbucks self-service machines that can grind and brew a fresh cup of coffee for potential car buyers in less than a minute.

The idea is to keep customers happy — and browsing.

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"If you look at trends in the coffee business and the growth of gourmet coffee, primarily due to the Starbucks chain, the consumer is much more aware and appreciates much more the value of a good cup of coffee," Wyckoff said.

The National Coffee Association's 2004 National Coffee Drinking Trends report found that of consumers who said they had purchased coffee in the past week, 11 percent said they bought it at a convenience store, 18 percent at work and 7 percent at a mass merchandiser. The purchase information is a new addition to the annual report.

Consumers who start drinking espresso at the ballpark may eventually upgrade to a regular Starbucks fix, said Sharon Zackfia, an industry analyst with William Blair & Co. she said.

"The emergence of a more refined coffee culture probably helps Starbucks in the longer term," Zackfia said. "They still have the premium brand."

Starbucks reported revenue of $5.29 billion for fiscal 2004, up from $1.68 billion in 1999. That total includes a growing line of non-coffee beverages, food and other merchandise as well as revenues from a rapidly growing number of non-U.S. outlets.

Paul Frischer, who owns the Music Recyclery chain, says he likes Starbucks as much as the next person, but there's also room for independent brews. Frischer's roots are in the coffee business; he started with a Chicago cafe but soon found the CDs he was selling offered a better return.

That was almost 15 years ago, before coffee roasting technology got less expensive and Starbucks raised the expectations of coffee drinkers, Frischer said. Now his Fire Fresh blend attracts customers who might not otherwise come into the store and gives those who do another reason to stick around and buy.

Coffee also can give some cachet to businesses that might otherwise be seen as blah, said Marion Illies, who opened the EZ New Web Laundromat & Cafe a few months ago in Culver City, Calif. Customers there can sip frappuccinos, sit on designer furniture and surf the Web while their clothes are cleaned and fluffed.

"Laundromats used to be the centers of communities ... and it totally changed, they became nasty," Illies said. "I thought, why not change laundromats into what they used to be by adding a coffee shop?"

Weston, the cafe life professor, wonders how long the ubiquitous coffee trend can last. There are some places, like bookstores and libraries, where fancy coffee is logical and others, like gas stations, where it is not, he said.

"We're now at the height of the fad, so everyplace is going to try it, and most of them will wash out," Weston said.

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