Coffee competition percolating

CNY Business Journal (1996+), Sep 01, 2006 by Acton, Ryann

SYRACUSE - Coffee used to be an inexpensive diner staple. Now it's a big restaurant category of its own, that serves pricy lattes, cappuccinos, espressos, iced coffees, and other exotic, hard-to-pronounce combinations. And consumers are lapping it up.

In some areas, specialty coffee shops are on every corner, and Central New York is no exception. Coffee-shop expansion is percolating all across Central New York, including Syracuse, Dryden, Ithaca, Camillus, Baldwinsville, and McGraw.

Central New York is the ideal place for expansion because the specialty-coffee market is underdeveloped compared to other markets in the Northeast and across the country, says Jane Amico, Dunkin' Donuts' marketing manager for Albany and upstate New York. The current and future coffee-shop expansions will help Central New York's coffee market catch up. According to the National Coffee Association USA, about half of Americans age 18 or older drink a coffee beverage daily.

"It's a coffee phenomenon that's happening around the country ... Everyone is talking about coffee. It's part of the a.m. ritual," Amico explains.

This fall, locally owned Freedom of Espresso will add two new Syracuse locations-115 Solar St. in Franklin Square and 744 S. Crouse Ave. on the Syracuse University (SU) Hill. It currently has three stores - one each at 144 Walton St., 424 Pearl St., and 128 W. Genesee St.

Anna Dobbs, owner of Freedom of Espresso, says the two new sites were ideal because of location. She says she had set her sites on both locations in February when setting business goals. Dobbs owns Freedom of Espresso with John Dobbs, her ex-husband. She declines to disclose the business's revenue.

The Crouse Avenue location is near Crouse Hospital, making it ideal for attracting business from staff, patients, and visitors, she says. The Franklin Square location is among highoccupancy buildings with no coffee shops nearby, she says. Freedom of Espresso will lease both locations.

"[Franklin Square workers] don't really have anywhere to go," Dobbs explains.

Freedom of Espresso has about 20 employees companywide, but will hire 8 to 12 more workers with the new locations, Dobbs says.

Construction began in July to renovate the Franklin Square location, but has yet to begin on the University Hill location, because Dobbs just signed the lease Aug. 18, she says. Dobbs declines to disclose the renovation costs.

Joseph Enterprise is the contractor for both locations. Michael Geraghty of MG Architects is the architect for the 850-square-foot Crouse Avenue location and McKnight Architects is the architect for the 1,500-square-foot Franklin Square location.

Freedom of Espresso competes with chains like Starbucks and Dunkin' Donuts by focusing on quality coffee, Dobbs says.

"We roast our own coffee [every other day]. That's what we're all about," she says.

Selling wholesale coffee to local restaurants like L'Adour, Alto Cinco, and Pascale's Bake House, as well as coffee shops, and hair salons are a large part of its business, says Dobbs. Syracuse University is one of Freedom of Espresso's newest wholesale customers with an unnamed coffee shop opening at the E.S. Bird Library.

The shop will serve Freedom of Espresso coffee, Dobbs says.

Central New York is also going to soon see more chain coffee shops.

Dunkin' Donuts has 41 stores in Central New York, with plans to add 10 to 15 more over the next 18 months, says Mark Bardack, vice president of Ed Lewi Associates, a public-relations firm representing Dunkin' Donuts.

A new 3,000-square-foot Dunkin' Donuts location opened in Dryden in July.

Parish, Ithaca, Baldwinsville, Camillus, Bridgeport, Chittenango, and McGraw are next on the list for Dunkin' Donuts' aggressive expansion, says marketing manager Amico. The stores will open within the next six months, she adds. Each location will add about 30 to 40 jobs, says Bardack, the spokesman.

The growth is part of the Quincy, Massachusetts-based chain's mission to be where consumers live and work, Bardack says. Over the next 10 years, Dunkin' Donuts wants to triple the number of its locations by expanding into new markets, says John Gilbert, vice president of marketing.

Privately held Dunkin' Donuts declines to disclose its revenue. Jon L. Luther is Dunkin 'Donuts' CEO.

While coffee shops like Freedom of Espresso and Dunkin' Donuts are expanding, Starbucks has no current plans to open more stores here, says Amy Berklich, a Starbucks spokesperson. Since entering the Syracuse market in 2000, Starbucks has opened five locations in Onondaga County two in Syracuse, one in Clay, one in DeWitt, and one in Fayetteville.

Not all Central New York specialty-coffee shops have prospered. Less than a year after opening, husband-and-wife owners Michael and Susan Petrosillo closed La Tazza Coffee House's doors. The 2,200-square-foot location at 727 S. Crouse Ave. on the SU Hill opened in November 2005. The couple billed it as an alternative to Starbucks.