Metro Coffee Wars:

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Locals Not Scared of Java Giants

By Anne Gonzales

Chris Jackson had some sleepless nights in the months before he opened his Elk Grove coffeehouse last fall, and with good reason. His shop was being built across the street from a shiny new Starbucks.  
     But in the year since those bouts of insomnia Jackson is proud to say his It’s A Grind franchise has seen “phenomenal sales growth,” averaging 25 percent increases per month. His second store, opened at Elk Grove Boulevard and Bruceville Road a few months later, has been “even busier than the first,” despite another Starbucks store opening about a mile away. Jackson, who admits to being surprised at some of the Seattle chain’s marketing strategies, says Starbucks placed fliers with invitations for a free cup of coffee on the windshields of vehicles in his parking lot.
     “I found that ruthless,” Jackson recalls. “But I guess it’s a compliment because they must consider me a competitor.” Jackson also keeps in mind that if it weren’t for Starbucks, he probably wouldn’t be in business, as the company created the concept and the mass-market appeal for specialty coffees.  
     “A lot of people want an alternative,” says the young father and Elk Grove resident. “They appreciate a locally owned business. We’re their neighbors. Every day, we attract converts.”  
     Java City, a coffee roaster and shop founded in Sacramento in 1985, has always relied on a mix of retail coffeehouses and wholesale sectors to attract customers and enhance growth, says Nicolas Tucker, vice president of marketing. The homegrown company started with one location at 18th Street and Capitol Avenue. Today, it not only owns and operates 13 coffee cafes in California, but sells its hand-roasted beans, ground coffee and beverages to offices, casinos, hotels, restaurants, bakeries, convenience stores and colleges.
     Java City has seen double-digit growth annually in the last 10 to 15 years, says Tucker, who adds he doesn’t believe that the coffee market is saturated, in Sacramento or nationwide.
     “There are definitely more specialty coffeehouses, but they still serve a small segment of the overall coffee drinking population," Tucker points out. “Specialty coffees are a tiny movement when you compare them to Yuban and Hills Bros., much like microbreweries were for beer.”  
Continued...

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