Local Coffee Houses Brew Up Java Wars

Trendy coffee shop owners admit there’s always a risk in opening up a store, especially in a blue-collar city known for its “regular Joes.” But local entrepreneurs and java corporations alike have bet that Fort Smith will be the next hot spot for coffee junkies.

A friendly Arkansas River Valley competition is brewing among some of the bigger coffee shop names. Starbucks Coffee Co. will open in the fall, said Keith Stewart, the firm’s regional marketing manager.

Sweet Bay Coffee Co. owner Dave Adams said his company has been prepared for Starbucks’ arrival for a long time.

“We’ve studied the industry from our local point of view … We know what Starbucks does and we know how they operate,” Adams said. “I think we’re prepared for them to come into town.”

Adams, along with his wife and four others, purchased the company in 2001 from John and Dana Ogorzalek. The Ogorzaleks founded the company in 1992 in Muskogee, Okla., and moved it to Fort Smith in 1996.

Another franchise company already invaded Fort Smith. The Coffee Beanery has been in Cisterna Market on U.S. Highway 71 South since August 2003. Mike Group, who owns the rights to the Coffee Beanery in Fort Smith and Northwest Arkansas, said Starbucks’ arrival will only help his store get more new customers.

“Starbucks coffee is trendy,” Group said. “More and more people are drinking gourmet coffee.”

Group pointed out that unlike his store, Starbucks doesn’t offer breakfast, lunch or dinner.

Stewart agreed that Starbucks will raise coffee interest in the city. It has a wide-spread effect, in a good way, he said.

“The great thing about Starbucks is that our success doesn’t come at the failure of other coffee companies,” Stewart said.

Adams agreed that Starbucks will get more people interested and he’s ready for the change.

“[Starbucks] is going to do nothing but good things for the industry,” Adams said. “It will just create more and more coffee drinkers.”

Starbucks is being built in front of Logan’s Roadhouse at Rogers Avenue and Interstate 540. The 1,600-SF store will seat about 20-25 people and include a drive-through lane.

A drive-through seems to be a key element for coffee shops. Cornerstone Coffee owner Brenda Honey said the lack of a drive-through has hurt her success. People who want coffee, she said, are in a hurry.

Honey opened her store in Cornerstone in October 2004. She originally had two employees, but because business became tight she had to make some changes.

“I’ve had to let everyone go, and I’m running the business totally,” Honey said.

Honey said she hopes to pick up when school starts, and she’ll stick around until May to see how sales are doing. Otherwise, she might have to close up shop. Still, she said, “it was worth the gamble.”

Adams said his company has increased its revenue 30 percent since his anchor store reopened in March 2004, mainly because it increased its product line. A fire destroyed the store in February 2003. Adams took the chance to build bigger and better.

The 3,500-SF store nearly tripled the size of the original. It features a patio with sliding doors, a library and general seating. Adams also owns the Sweet Bay in Central Mall, which opened in 2001. However, he doesn’t own the Sweet Bay store in Fianna Hills. Adams said the owner of that store purchased the rights to use the company’s name and ingredients before Adams bought the corporation.

Adams said he hopes to put a store in Northwest Arkansas, but has yet to find the right location. He employs about 55 people in both Fort Smith stores.

Starbucks is a publicly traded company based in Seattle. It opened 514 new stores in the United States in 2004 and had a total net revenue of $5.3 million, according to its annual report.