Coffee Wars
At 6:20 on a recent weekday morning, Keith Sturm and Ron Strauch stopped for coffee. For Sturm, it would be a mix of cappuccino and Fusion Energy Coffee, which is infused with herbal extracts said to kick-start the day. For Strauch, it would be pure energy coffee.
So they were at Starbucks? Or maybe another upscale coffee boutique offering double-tall half-fat caramel whip part-soy mocha lattes?
No, they were at 7-Eleven, at 151 N. Gibson Road in Henderson.
Welcome to the coffee wars, when 7-Eleven and McDonald’s are serving designer coffees, Starbucks is offering $3.95 coffee-and-breakfast pairings — even instant coffee, at Targets in some markets — and everybody in between is wondering how it will all shake out.
For Sturm and Strauch, the price at 7-Eleven is only part of the appeal. Both work in the nearby industrial area. Sturm said he stops in at least three times a week; for Strauch, it’s daily.
"It’s great, fresh coffee without the high, high price," Sturm said. The store charges $1.29 for 12 ounces, $1.39 for 16 ounces, $1.49 for 20 ounces and $1.59 for 24 ounces. Refills of any size are 99 cents.
"It’s fresh," agreed Strauch. "It tastes just as good as Starbucks."
While they talked, a store employee repeatedly wiped the large stainless-steel counter in the coffee-service area, keeping it gleaming.
"Everything’s clean and consistent," Sturm said. "And I like the ability to mix any and all."
Indeed, the offerings at that 7-Eleven include a machine dispensing French vanilla cappuccino, vanilla cupcake cappuccino, hot chocolate and candy-cane cocoa in addition to pots of hazelnut, Colombian, the newly introduced Brazilian Bold, French vanilla and energy coffees. There also are three flavors of syrup, to be mixed at will without additional charge.
"People control the experience," said Stephanie Hoppe, senior director of marketing for the company.
"You don’t have to stand in line for a barista to take your order," noted company spokeswoman Margaret Chabris.
None of which is to say that Starbucks doesn’t have its loyal fans. Bob Cooney of San Clemente, Calif., made a stop at the Starbucks in the baggage area of McCarran International Airport last week. (This week, Cafe Americano at a local Starbucks was $1.95 to $2.50.)
"I like a strong cup of coffee," Cooney said. "I’ve found it’s consistent, and I like the flavor."
But Jimmy Sandford, a local resident who was at the airport to pick up an incoming passenger, said what he likes most about Starbucks is its convenience.
"I’m a frequent coffee drinker; this just happens to be Starbucks," Sandford said. "I usually just get a coffee," and he said he’ll sometimes stop, for example, at Dunkin’ Donuts — "something with a drive-through. Somewhere quick."
But while some argue that Starbucks’ massive footprint tends to wipe out any coffee stores in its path, Cooney noted it isn’t always the case.
"I’m a fan of the brand," he said. "I think they’ve done a good job of bringing coffee back to a state of prominence in this country." In that way, he said, Starbucks paved the way for independent coffee shops by creating a demand for them.
Charles Houtman would agree. "Everybody started thinking about coffee and how it’s roasted" because of Starbucks, said Houtman, the owner of Boulder Bean at 16291/2 Nevada Highway in Boulder City. Houtman said when his shop opened nearly 10 years ago it was the only one in town. Then a Jitters opened nearby, to be replaced by Starbucks about five years later. Houtman said the nearby presence of a Starbucks didn’t hurt him much, but that the state of the economy has. After an even 2007 and a slightly down 2008, "this year, we’re just kind of seeing how it’s going," he said.
So how does a coffee shop compete in this economy? For Houtman, it’s a personal touch, knowing many of his customers. For Michael Bellis, owner of two of the three Java Detours in the valley (the other is corporate-owned), it’s being small enough to be flexible.
"If a customer has a certain drink at a competitor, we’ll try to go out of our way to go and get that flavor syrup," Bellis said. "On any given day, we could have upwards of about 30 different syrups."
They also introduce drinks on a monthly basis. And all of Java Detour’s drinks — including its signature Oreo Latte and Black and White Latte — are available hot, iced or frozen.
Bellis said the effect of the economy he has noticed is that instead of coming in less often, customers are getting smaller drinks.
On up the scale, at least in terms of size, is The Coffee Bean & Tea Leaf, which has 15 outlets in Southern Nevada.
"We can’t outdo Starbucks on volume," conceded Phil Patent, president and chief operating officer of Las Vegas Coffee Investors, which owns the local franchises. "We can outdo Starbucks on quality of product and delivery of product. Starbucks, because they have gotten so large and they’ve gone with automated machines, it becomes more difficult for them to personalize the drink." (Starbucks, which has faced business challenges of its own, declined repeated requests for comment.) "If a customer wanted to have a cappuccino with extra foam, we’d be able to do that in the same amount of time."
Steve Ballard, senior operations consultant in Las Vegas for the McDonald’s Corp., said McDonald’s entered the fray several years ago with its bold Premium Roast Coffee and more recently with McCafe espresso-based coffees, which are priced at an average of $2.29 to $2.99 in Las Vegas. The company, Ballard said, is "basically trying to get into that marketplace and having a premium product at a value price and trying to create another business segment at McDonald’s."
While it’s anybody’s guess if the encroachments into each others’ traditional territory will be successful, Patent is sure of one way the growth of coffee stores has changed American society.
"I can say that with our mobile society nowadays, that coffee shops have become the individual’s home office," he said, noting that The Coffee Bean & Tea Leaf offers free WiFi. "People would come in, make business appointments and meet people there."
Contact reporter Heidi Knapp Rinella at hrinella@reviewjournal.com or 702-383-0474.
