Brewing success sans big name

Ed Arvidson has a wealth of knowledge about what he considers black gold – a commodity that he says is the second-most traded in the world behind oil, that is the most widely consumed after water and that is boosting a growing number of small, independent businesses in Central Oregon.

Coffee is Arvidson’s commodity of choice, and the consultant for the specialty-coffee industry helps coffee entrepreneurs compete with popular name brands like Starbucks and Tully’s. Independents in the coffee industry are not High Desert newcomers – many local coffee entrepreneurs have been here for decades, helping others start their own businesses.

Arvidson says Central Oregon is nearing a saturation point in the coffee business but still has some room for growth.

That said, he thinks most new coffee businesses will fail after a few years because they can’t figure out how to make it. Smaller operations must innovate in order to survive, he said, which means securing a prime location, pulling a great shot of espresso, marketing, and creating a comfortable, welcoming atmosphere.

”To my amazement, we keep seeing new shops open up,” Arvidson said. ”And as the area starts to become saturated, those doing the poorest job will be the victims.”

DiLusso Bakery Cafe has been pouring coffee in Central Oregon for more than 10 years and in 2003 merged with Royal Blend, which had been in Bend since the late 1980s. That history, coupled with innovation, has helped DiLusso remain successful, says owner Bob Golden.

DiLusso is expanding its organics line and recently bought Be-Bop Biscotti, which makes more than 3,600 biscotti biscuits per day and distributes them to 400 customers nationwide in more than 40 states, Golden said.

”We are always trying to find out what the community is looking for in a store,” Golden said.

”There are a lot of people who are transplants that moved here from big cities and they want things that big cities stand for (like coffee shops on every block).”

Arvidson said it’s hard to track the number of coffee bars in the country, but the Specialty Coffee Association of America estimates the United States has 26,000 and will have 30,000 by 2010.

Gary Mitzel, an account executive for Boyd Coffee Co. in Bend, says he’s counted at least 60 drive-through espresso kiosks in Central Oregon. Mitzel, who has been in the coffee industry for decades and also works as a coffee-business consultant, says roughly 40 of those are failing financially.

”Those (coffee stores) that are owner-operated tend to be more successful in Bend,” he said. ”Bend has a business environment where the entrepreneur is supported – people will go out of their way to support you.”

John Robella has owned Bend coffee kiosk Jitters Coffee Co. on Southeast Third Street since April. So far, he says, business has been steady and is picking up during the holidays. He said there’s plenty of coffee business to go around.

One of the most recent additions to Bend’s independent coffee scene is Backporch Coffee Roasters, which opened roughly a month ago.

Backporch is owned by David and Majell Beach. They’re new to owning their own business, but they have worked with Central Oregon coffee shops and roasters for years.

David Beach, who roasts his specialty coffee at the Northwest Newport Avenue store, focuses on freshness of his products. The shop serves no blends, changes its drip coffee every hour and no coffee drink uses beans roasted more than two weeks ago. Additionally, all the coffee is made using a French press – with grounds hand-filtered in a large glass container – and espresso drinks are made using a manual espresso machine.

”Being fresh is our biggest thing,” Beach said.

Bellatazza President Stewart Fritchman has been roasting coffee in Central Oregon since the early 1990s, when he started at Sunriver Coffee Co. That business’s wholesale operation exploded in 2002, he said, prompting him to open Bellatazza in Bend in 2003.

Now, Sunriver Resort has signed a license agreement for its own Bellatazza, which was set to open Thanksgiving Day, Fritchman said.

With more than 10 years of experience, Fritchman offers his own recipe for success as an independent in the coffee business.

”You have to be deeply passionate about not just the product and business, but the people you work with and serve,” he said. ”You need to have a brilliant location and you have to be prepared to make the financial commitment.”

National brands like Starbucks put millions of dollars into marketing and cultivating franchises, he said, adding that independents need around $100,000 for the building, equipment and marketing to compete effectively at that level.

Bend’s Strictly Organic Coffee Co. recently moved into a new, larger location on Southwest Bond Street. The roaster and coffee bar sits amid the high-end residential development, Mill Quarter, which is under construction and likely to bring additional coffee drinkers.

Rhonda Ealy owns the business with her husband, Richard Steffensen, who worked at Sunriver Coffee in the early 1990s. Ealy says her business is unique because of its certified organic and certified Fair Trade coffee. Fair Trade coffee is purchased directly from farmers to help them financially by eliminating the middleman.

”Lots of people drink coffee and people are getting more sophisticated about coffee drinks,” she said. ”Palates are getting better, which is better for us in the gourmet market.”

Convincing the public

Starbucks is a fierce competitor because the brand is so pervasive that consumers trust it, Mitzel said.

The challenge for the little guys, he said, is to convince coffee drinkers that they should take a risk and try a new coffee place.

”Espresso drinkers are extraordinarily loyal,” he said. ”Most independents have no advertising and do business in little locales, asking consumers to risk $3 to $4 on a drink.”

Bend resident Arthur Comolli took a chance with Backporch Coffee Roasters when it opened last month. Now, he goes there as often as he can.

”I had one cup and I was hooked,” Comolli said recently as he sat in the shop with a New York Times.

Comolli says Backporch has all the makings of a successful coffee shop: comfortable atmosphere, talented baristas who know a lot about coffee, Internet access and room for people to sit and linger. If they had a New York Times newspaper stand, it would be even better, he said.

Backporch owner Beach says he hopes to turn more Central Oregonians into ”coffee snobs” – people who appreciate and recognize a drink’s complex flavors.

”We’re going to do coffee tastings hopefully within the next couple weeks,” Beach said. ”It’s the most simple way to educate the consumer – put it in front of them in raw form.”

It will be like a wine tasting, he said, with people slurping and spitting out the different samples.

Central Oregon is known for craft breweries and its appreciation for wine, so Beach sees no reason why residents won’t embrace coffee the same way.