November 13, 2004

Coffee shop's arrival is grounds for St. Paul feud

Curt Brown, Star Tribune

Two coffee shops at one St. Paul intersection have whipped neighbors into a froth.

Picket signs, egg tossing and "corporate scum" graffiti welcomed Caribou Coffee when it opened one of its 100 Minnesota branches right across the street from Brewberry's. The cozy independent has been a mainstay on the corner of Fairview and Randolph avenues for a decade.

Now two months into the coffee clash, Brewberry's owner Jan Nelson -- slingshot in hand -- insists that business is "fabulous." She has extended her hours, spruced up her exterior and marveled as loyal customers rally to her defense.

Caribou honchos say the ardent chain resistance has calmed, business is better than expected and the market is big enough for David and Goliath.

Liz Murray hopes so. She lives in the politically active, middle-class area, where the Macalester-Groveland neighborhood meets Highland Park.

"I almost hate to give my name because I'm not at the neighborhood independent shop," said Murray.

"I'm used to Caribou, I know what I want and it's nice and convenient," she said, ordering a large Caribou cappuccino before hurrying back to paint a child's dresser. "I hope neither goes under and both survive and fill their own niches. And I'm not sure I consider Caribou the big guy, because it's still based in Minnesota."

True, Caribou was born in the Twin Cities a dozen years ago and recently moved its headquarters to Brooklyn Park. But the chain is now owned by an Atlanta venture capital company, which in turn is controlled by a bank in the Middle Eastern nation of Bahrain.

Nine of St. Paul's roughly 50 coffee shops, or nearly 20 percent, are now Caribous, according to city licensing officials.

' Lot of loyalty'

Nelson was wrapping up her first decade as the owner of the Brewberry's when the Blimpie's sandwich joint across Fairview closed. Her shop sits in an ideal location within walking distance of the College of St. Catherine and St. Paul Academy.

Brewberry's is more than a place to get a quick cup of java. There's a Brew Babies wall filled with snapshots of customers 18 months and younger. There are knitting nights, prose and poetry contests, fresh pastries, soups, sandwiches and yellow mums in glass vases.

"I was kind of hoping a cute flower shop would move in, so when I heard for sure it was Caribou, I was kind of disarmed, wondering what it would mean to my business," said Nelson, a former training consultant for Target Corp. "I went: 'Oh my gosh, wow, this is not something I would have expected.' "

After all, most of the nearly 300 Caribous across the country are in strip malls or connected to grocery stores or skyways. For the record, Caribou officials said the property owner came to them to see if they were interested in the Blimpie's parcel.

After studying the area's population density and commuter patterns, they said sure.

"The question was: Do we think there's a market for both to compete? And we concluded that there was," said Chris Toal, Caribou's marketing vice president and a Highland Park resident.

So up went the mega Caribou sign on the northeast corner. Nelson promptly looked at her shop and listened to her customers, including sympathetic architects and designers.

"They'd say: 'Jan, your building's exterior doesn't match the warm interior,' " she said. "It was very boring and if you weren't brought here by someone, you'd whiz right by. I wanted it to be a little jewel box."

She repainted the building light green, extended her hours and put up a snazzy new sign, telling anyone driving past that hers is a neighborhood coffee shop. And the neighbors, irked by yet another chain threatening their area's quaint residential feel, stood strong.

"Sometimes the competitive side of business goes too far," said City Council Member Pat Harris, whose ward includes the shops. "But the great thing is to see people rallying around a local St. Paul business."

Among those supporters is Rachel Flynn, a St. Kate's nursing student from Uptown in Minneapolis, who spends the gaps between classes at Brewberry's.

"I've really made it a point to come here since Caribou opened because it's important to support longtime neighborhood businesses," said Flynn, 26. "They give a city its character and meaning, and it made me mad when Caribou came in right across the street."

Over at the Caribou, painter Steve Jeska shrugged, praised Caribou's convenience and said: "Hey, it's not that huge. It's not Starbucks."

Allan Rossman, a 71-year-old consultant who lives in the neighborhood, said the shops couldn't be more different.

"Brewberry's is sane, with decent music that won't drive you crazy," he said. "It's nonoffensive and filled with creative, communicative and articulate people having meaningful, in-depth discussions.

"There's nothing wrong with Caribou if you want a fine, efficient cup of coffee, but it's the exact same shop as the one I visited in Tokyo," he said. "It's standardized."

Gary Hemphill, an analyst with the New York Beverage Marketing Corp., thinks both could survive.

"The advantage of the larger company tends to be price because they can buy higher quantities at lower prices and exert more marketing muscle," Hemphill said. "But the home-grown company has its own appeal if it has the wherewithal to withstand the challenge."

Members of the Mississippi Market food cooperative across the street from the coffee shops remember when the more corporate Whole Foods opened on nearby Grand Avenue. For a year, loyalty was strong, but the competition ultimately cut into their profits. If the big chain can whittle 15 percent of the little independent's profits over the long haul, said Hemphill, the consequences can be dire.

Neither Nelson nor Toal would disclose any specific sales numbers or percentages. Brewberry's owner says she's "energized, hopeful and grateful for all the customers showing a lot of loyalty."

Toal said the graffiti proclaiming "corporate scum and other expletives" weren't isolated to the new Caribou, but also hit Starbucks and other chain stores on Grand.

"We think that was a small, isolated group and not St. Paul-like behavior, so we've moved on," he said. "We think there's a tremendous upside."

After all, he said there are 17,000 coffee shops in the country, and specialty coffee sales have climbed 38 percent in the last three years.

"But, still, only one in 10 cups of coffee is consumed at a coffee shop," Toal said. "All the activity at the Fairview-Randolph corner is an indication that we can both co-exist successfully in a market big enough for both of us."

©Star-Tribune 2004

 

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