Bottoms up

The coffee business has been percolating throughout the country with java giant Starbucks leading the way. From October through Dec. 29, 2002, Starbucks reported net revenues of $1 billion worldwide, an increase of 25 percent from the previous year, according to Jim Spillane, director of development. The company, which debuted in Seattle in 1971, has more than 6,000 locations worldwide, including more than 3,500 company-owned stores in North America.

It has a stronghold in the Las Vegas Valley coffeehouse scene as well. Since entering the local market in 1995, Starbucks has set up 40 company-owned stores in addition to 30 licensed branches located in grocery stores and casinos.

"Las Vegas has been a strong market for us," Spillane said. "We've opened two stores to date in this fiscal year (which runs from October 2002 to September 2003), two more are under construction, and we are expected to open a few more company-owned stores this year, too. There are also plans to open six to eight licensed locations this year," Spillane said, adding company sales in Las Vegas are comparable to similar-sized markets in the southwestern United States including Fresno, San Diego, Orange County and Arizona.

"We have been expanding at the same rate in about all of these markets."

Witnessing the growth firsthand is Sara Graham, 26, manager of the company-owned store at 10260 W. Charleston Blvd. She has worked at 10 valley locations since joining the company five years ago.

"I came to Starbucks as a second job, as something fun to do in the evening. I liked it so much that I quit my day job in real estate, and I've been with the company ever since," Graham said.

"I've seen enormous growth in the volume of customers during the past few years, and I think that's because we offer many different types of drinks that appeal to a lot of different people. Naturally, our drip coffee has been popular. Other popular drinks have been toffee nut lattes, mochas, caramel macchiatos. Espressos and teas are always ordered, and frappaccinos are popular, especially when it's hot outside."

The self-proclaimed "barista extraordinaire" said that the store's ambiance and sense of familiarity also attract customers.

"Everything that you see in my store can be seen at other stores throughout the country. It is very consistent. All of the stores serve the same drinks, we play exactly the same CDs. Coming to a Starbucks, no matter where it is located, is a familiar experience," she said. "When people come in they always receive a smile and a friendly hello with their cup of coffee. We want them to leave feeling good."

The company's diverse customer base has contributed to its success, as well, according to Graham.

"We have amazingly diverse types of customers. Because we are located at a busy intersection, a lot of commuters come through our drive-through, and we get a lot of cyclists and hikers heading out to Red Rock (National Conservation Area). Mothers with children, senior citizens, businessmen, high school students -- they can all be seen here throughout the day," she said. "A lot of our customers are repeat with some coming in every day or even two or three times a day."

Spillane believes that his company's careful selection of store locations has also contributed to its success.

"There's a lot of things that go into deciding where to build a store. We look for a particular type of traffic, a targeted intersection that we have been following for years," Spillane said. "The residential base is important. The traffic flows, the accessibility, the parking, the other retailers that would be good co-tenants to us -- there are a lot of things that go into it."

Such components will continue to be analyzed in the coming years because the company will continue to focus on growth, according to Spillane. He said it has set the goal of having 10,000 company-owned retail stores in North America, and 20,000 to 25,000 total outlets worldwide by 2008.

"We have very experienced and passionate people that are working to make this happen. We feel that we are very well-connected in the markets and the communities, and we feel that we are where the customer wants us to be," Spillane said. "We are a growth-oriented company, and because we are a publicly traded company, we need the growth and that fuels our expansion."

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