Starbucks opens doors in Missoula

Jade Onatelli climbed out of a car with Washington plates in the parking lot of the new Starbucks coffee shop on North Reserve Street. She and her father were making a pit stop on the road from Auburn, Wash., to Billings.

By ROBERT STRUCKMAN of the Missoulian

http://missoulian.com/articles/2004/09/08/news/local/news06.txt

Jesse Onatelli said his daughter needed her "specialty coffee drink." He waved his hands in the air at the words, as exasperated fathers sometimes do.

The two went inside the new store, which is visible from Interstate 90. It is the international giant’s first company-owned store in Missoula. Until last August, Montana was one of the only states without a stand-alone store. The first opened in Helena and another followed, as well as a pair in Billings.

Starbucks coffee has been available at the Albertsons grocery store on Russell Street, and the Barnes & Noble bookstore on North Reserve. Those stores are licensed by Starbucks but run by the companies that house them.

The arrival of Starbucks in Montana has caused tremors in the coffee market, independent shop owners in Missoula and around the state say, but most are confident that healthy stores will survive. In Billings and Helena, no stores have closed their doors and blamed Starbucks.

"It’s not the box-store effect," said Paul Anderson, owner of Morning Light Coffee Roasters in Helena. Morning Light has two retail locations and also sells beans wholesale. Jordan Hoyt, owner of Todd’s Plantation in Billings, gave the same report.

The coffeehouses that have closed in Helena over the past year – including one of Anderson’s own – would have closed anyway, he said.

Anderson pointed to a number of factors. For one thing, drinks at Starbucks are within a few dimes, generally on the higher side, of most independent coffeehouses. Also he and others noticed a gateway effect. A brand name like Starbucks attracts attention from non-coffee drinkers who then join the coffee craze.

And then there is the Starbucks backlash.

Katie Harper, a University of Montana law student and coffee drinker seated Friday afternoon outside Catalyst Espresso on Higgins Avenue, called the coffee chain "gross."

"It’s that anti-mega corporation, anti-franchise thing," said Scott Laisy, owner of Butterfly Herbs in downtown Missoula. On the register at his coffee bar is a sticker that says, "Friends Don’t Let Friends Drink Starbucks."

Laisy has had a unique view of Starbucks’ growth. From about 1973 to 1986, Butterfly Herbs bought coffee beans from the company when it was an "interesting little roaster in Seattle." As the chain grew, he said, the quality deteriorated.

Laisy, who said Starbucks has become like the fast-food chain McDonald’s, feels the free-thinking Missoula crowd will avoid the newcomer and stay loyal to the locals.

"They’re not a threat to the small independent stores," Laisy said, but he added that the arrival of Starbucks is another sign of the homogenization of American life.

On the other hand, the competition from a mega-chain sometimes prompts a local store to change its business to become more competitive.

"Five years ago a rumor went around that Starbucks was coming, and I diversified the food menu," said Kelly Sax, who owns Catalyst. Last month the store, which serves soup and sandwiches and sells cakes and pastries, began to serve breakfast.

"I’m not worried," Sax said.

Neither is Carol Junkert, who with her husband, Glenn, owns Hunter Bay Coffee Roasters in Lolo.

"I’m not quaking," Junkert said. Coffee retailers she has talked with have told her that Starbucks will "raise coffee awareness" in Missoula and the surrounding area.

Anderson in Helena agreed. "It’s the ‘incoming-tide-floats-all-boats-higher,’ " he said.

"Everyone benefits when Starbucks comes in," Junkert said.

In Billings, Hoyt wasn’t ready to concede anything to Starbucks: "Is Starbucks responsible? I don’t know."

Still, Hoyt does like the coffee.

"I was in Starbucks last week. I had a cup of coffee, bought a regular espresso and a decaf espresso. They’ve got a good product," he said.

As for Mark Fitzgerald, the manager of the new Starbucks on Reserve, his goal isn’t to raise awareness for the competition. He’s in the business of starting Starbucks stores. He has opened six stores, including the five in Montana. He would like to advertise, he said, and tried to buy billboard space on I-90 but found them all taken.

Anyway, he said, the market is big enough for everybody.

"The coffee business is so huge. If a store serves good coffee, has a good location, it’ll be fine," he said.

The market is big enough that Fitzgerald has plans for two more stores in town. The first could open in as little as two months. No lease is signed, he said, so he can’t talk about a location, but he did indicate that a store on Higgins near the University of Montana would probably thrive.

More stores make life easier for corporate outposts like the ones in Montana. Scones and other items in the pastry rack are shipped in frozen, Fitzgerald said, and reheated in the store. And shipments of beans and other supplies come only once a week.

"You err on the side of too much rather than too little," Fitzgerald said. If one of the espresso machines goes down, he doesn’t have a partner store to help with a backup.

Then there are all the wrinkles of a new operation. A water pump burned out already, "factory defect," Fitzgerald said.

But one store near an off-ramp was all the Onatellis needed last Friday.

Inside, after Jade Onatelli made her order, she turned to her father: "Daddy, do you want an americano?"

"No. I just want to sleep," he said.

Behind the counter, one barista turned toward another and asked if he wanted to learn to make the younger Onatelli’s drink, a "doppio compano." That’s two shots of espresso over whipped cream.

Reporter Robert Struckman can be reached at 523-5262 or at [email protected].