ON THE COVER North Coast Journal Weekly

Stranger in Paradise: Starbucks comes to town

story & photos by ARNO HOLSCHUH

IT'S 5:30 A.M. EUREKA IS dark, quiet and for the most part still asleep. A clear white moon looks down on a little building with a giant Holstein cow painted on the side on the northern edge of town where I am staring in sleepy disbelief at Mike Moran and Michelle Piñón. The reason for my incredulity?

[photo of Udder Place]These two people are not just conscious, they're actually alert.

"Yeah, I wake up early and start twitching along pretty good," Moran says as he literally jumps around his coffee shop, the Udder Place, while preparing for the day's operation. "I'm kind of just zinging all the time."

It's a good thing, because his customers start arriving well before the official 6 a.m. opening time. Investment broker Von Hawley Butterfield [in photo at left] strolls in the door and starts an easy chatter with Moran. Butterfield doesn't even need to order his double latté -- it's being made as soon as Moran spots Butterfield's car pulling up. Moran prides himself on being able to remember what kind of coffee drink a person prefers, be it red eye (coffee with a shot of espresso) or a macchiato (espresso with foam).

That Butterfield and Moran act more like two good friends than a retailer-customer is indicative of the relationship many in Humboldt County have with their daily coffee and the people who make it: a close and personal one. With more than 75 places to buy gourmet coffee and five coffee roasters, Humboldt County has become a coffee paradise.

[photo of chess players]Humboldters like good coffee, and judging from the success of our coffee economy, they're willing to pay for it. Current coffee shops report business is good, and new ones are opening all the time.

But there's one new coffee joint in town that some would rather just stay away -- Starbucks. The international corporation, based in Seattle, opened its first Humboldt County location in early October at the corner of Myrtle and West avenues.

Is Moran worried about the corporate interloper?

"Nah. It's a drag, sure, but I don't think it's going to dip into my business. We have our little niche."

The Humboldt coffee economy is a collection of those little niches, a spectrum of different atmospheres and methods in which to ingest caffeine. There's the hip young crowd enjoying music and mochas at Arcata's Muddy Waters, the table of young men loudly drinking black coffee, smoking cigarettes and playing chess outside the Humboldt Bay Coffee Co. in Eureka's Old Town, students and office workers reading and chatting over steaming mugs at Sacred Grounds across the street from Arcata's City Hall, and the dim calm of an early afternoon at Café 321, tucked into an alleyway off 3rd Street.

That's where you'll find Fred Jewett [in photo below left]. He said he chooses to drink his coffee (organic Costa Rican) at 321 because he can sit in peace. "I'm taking a break from the other responsibilities I have during the day," he said, doodling on a sheet of paper.

Would Jewett ever buy his coffee from Starbucks?

"I considered going to a Starbucks once," he said, squinting as if recalling a distant memory. "It was in San Francisco. But I hardly had any money and the prices were really high."

It was more than just financial necessity that caused him not to frequent Starbucks, however. Jewett said he "didn't feel comfortable there."

"The atmosphere I sensed was: We at Starbucks hope your lives are so busy that you leave soon." Jewett said he treasures 321 because the management lets him sit for as long as he likes.

That management is Steve Palmer. It's a little misleading to call him the management. He's also most of the labor force, putting in between 12 and 16 hours a day.

"I am 321 Coffee," he said. "I made it and it's my baby."

It's a labor of love. Before coming to Humboldt County, Palmer had what he called "a money job," selling auto parts to repair shops in Los Angeles. But the money wasn't satisfying, Palmer said. Fortunately, he came to Humboldt County in 1993 and found his calling in coffee.

"I really didn't get into good coffee until I got up here to Humboldt. Once I got up here, I worked a part-time job in a café, and that was really nice." Three years ago, he started 321.

Palmer echoed the Udder Place's Moran when he talked about Starbucks. He said his customers wouldn't go there, but he still wasn't thrilled to have the store in town.

"When Starbucks or other corporate stores make money, that money leaves the area," he said.

It is the most pervasive argument against Starbucks: As part of a corporation with headquarters outside Humboldt County, the store's financial task is to collect money and send it back home.

Locally owned stores, according to this argument, keep the money in the community. If coffee shop owners become quite wealthy, for example, they may be likely to deposit their money in a local bank or credit union where it would be available for other small nonchain businesses to borrow. They may build a new home and furnish it by patronizing local merchants -- or they just might hire more local workers and not work so many hours themselves. That's why Palmer would rather that you caffeinate at his local competitors than with the chain store.

"People don't have to come to get coffee with me. Just don't go to Starbucks."

That friendly attitude toward the competition -- at least the local competition -- is a hallmark of Humboldt's coffee industry. Several of the roasters and retailers interviewed for this report spoke warmly of their rivals, even those located just down the street. There's even a loosely organized trade group: the Humboldt Coffee Guild.

[photo of John Hall]"It's an opportunity for the people selling coffee to network," said John Hall, owner of the Humboldt Bay Coffee Co. and organizer of many guild events. [In photo at right]

"You can gain coffee knowledge, share information, share resources and methods," Hall said. When coffee shops try to help each other with issues like training, product knowledge and where to get good prices on milk, they all benefit.

"There are a lot of lessons that have been learned by one coffee retailer that could be imparted to another," he said.

But isn't he just helping the competition?

"I don't view the other retailers as my competitors," he said. Hall roasts and serves coffees that he has personally selected from among thousands of potential sources in coffee-growing regions of the world. Humboldt Bay Coffee, Hall said, carries a distinctive stamp because of the selection process.

"And as a roaster, it's in my interest to see retailers that sell my coffee do well -- and they do better if they talk to each other. I think there's business enough for everyone."

That magnanimous attitude even extends to Starbucks.

"I can't see anything but gain from offering [Starbucks] a welcoming hand," he said. "Being an enemy of Starbucks -- I don't see that."

On the contrary, Hall said that Starbucks helped create the current national appetite for gourmet coffee, ultimately helping his business.

"My industry owes a huge debt to Starbucks. They may have an inferior product and a homogenous culture, but they have brought millions of consumers to specialty coffee."

Which is not to say that he feels elated to have the big boys in town. Hall said that he also felt "threatened" by Starbucks.

"They have awesome marketing power. They have financial resources a local retailer doesn't have. And they have egress into major grocery chains. There isn't a local roaster in Humboldt County that can get their coffee into Safeway. If Starbucks goes to Safeway, they just waltz right onto the shelves. It's a big difference."

And Hall also believes that buying at Starbucks causes harm in a broader sense.

"If people choose to shop at a business that sends its profits out of the community, I think it hurts our community. Businesses like Starbucks, Home Depot or Safeway offer benefits to our community, but they hurt it as well."

Hall is well qualified to talk about how coffee roasters can export their product and have profits return home -- he does it himself. The majority of the coffee roasted at his facility, located in a building just across the alley from the coffee shop, is sold at retail outlets like grocery stores. Some is sold as far away as New York.

Hall's isn't the only outfit roasting coffee in the county and selling it elsewhere. Muddy Waters already distributes its coffee from Alaska to Ohio and is in the final stages of preparing a "Deep Blues Blend," officially endorsed by the estate of its namesake blues musician, for national distribution. Gold Rush Coffee Co., which roasts in Petrolia and has stores in Eureka, sells its beans across the country through a healthy mail-order business.

Gold Rush cofounder Karen Paff said that she hoped Starbucks would be a challenge her company could rise to.

"That is the best face to put on it. When there's a challenge, you hope it brings out your best. It will certainly clarify your weaknesses!"

Paff said her business -- which began with roasting beans in a cast-iron skillet over a campfire -- has been dealing with challenges for 20 years. "We're into our second generation as coffee roasters and I think we have a future."

It's easier to have that attitude when you're an established business of two decades. What about if your coffee operation is just four years old and you got booted from your prime location to make room for the building in which Starbucks was to be housed?

That happened to Jitter Bean Coffee Co., a drive-through "coffee shack" located in the parking lot of Long's Drug Store at the corner of West and Myrtle in Eureka. When Starbucks wanted in, Jitter Bean's lease wasn't renewed and the company had to move.

"[Starbucks' arrival] took a locally owned business and pushed it elsewhere," said Brian Emenaker. He and about 20 other coffee customers spent the morning of Oct. 4 protesting outside the new Starbucks location and giving out free politically correct coffee.

"The whole idea behind Starbucks is that they are a predatory company," Emenaker said. "They come into a community and prey on a market for good coffee that has already been established by a local business. Every dollar that is spent at Starbucks is funneled to a board of directors somewhere."

But that's not all that's being protested at Starbucks. Other protesters were carrying signs decrying the use of genetically modified crops or milk that was produced using bovine growth hormone.

Which is odd, as it isn't clear that Starbucks uses either. It is impossible to test for growth hormone in milk, so the only way that Starbucks or any other business that uses milk can certify a dairy is hormone-free is by using organic milk -- which is available on request at Starbucks.

And genetically modified coffee?

[photo of protester]"It hasn't even been approved for commercial use yet," admitted protester Martha Devine [in photo at right]. Asked if she thought it was strange to protest something that wasn't even an issue yet, Devine replied that she and fellow protesters were "trying to nip it in the bud."

It is symptomatic of the response many communities have had when Starbucks moves in: Those who are concerned with social justice or environmental health use protests against Starbucks as a vehicle for their other concerns -- in this case, the use of genetics to increase agricultural output.

In some ways, Starbucks makes a particularly strange target for such protests. The company has played contrary to the trend of many businesses over the last 10 years by taking more responsibility for its employees' well being. Starbucks offers part-time employees excellent benefits, including health, dental and a pension plan.

So why protest Starbucks?

"For the same reason we protest at McDonald's instead of Burger Time [which recently closed and sold its property to Jack in the Box]," Devine said. "They're multinational corporations that establish themselves to the detriment of our local community." And Starbucks doesn't deserve any respect for the way it treats its employees "if they are shutting down local coffee shops," Devine said.

[photo of Jitterbean]"No, I think that's not a good tradeoff."

But the Jitter Bean Coffee Co. hasn't been shut down. The drive-through store has moved to Fifth and T streets; its location in front of the Broadway Cinema stayed put. Moving the Myrtle store to Highway 101 has been good for business, said Rick Roberts, who owns the company. [In photo below left]

"I don't think [the protesters] understood what was going on," he said. "Starbucks didn't push us out. There was going to be development on that site, Starbucks or not, and the development pushed us out. And that's not evil, it's just progress."

"I don't feel guilty about drinking Starbucks," said Valerie Flemming. Sitting with a friend outside the Starbucks on a Thursday afternoon, she said the store's familiarity made her feel comfortable.

"Where I used to live, in Pismo Beach, we had a Starbucks a minute and a half away from our house," she said. The fact that all Starbucks look the same isn't discouraging to Flemming -- it's the biggest reason she comes here.[photo of ladies at Starbucks]

"It makes me feel at home," she said.

And while she acknowledged that Starbucks was "corporate coffee," Flemming said it made no sense to pick on Starbucks. "Look, everything is corporate. Your car is corporate, your clothes are corporate, even your pen is corporate."

But she was willing to admit one thing: She had recently tried out a local coffee shop and found its brew to be "the bomb."

"It was really good. Very caffeinated."




Employees at the local Starbucks store declined to comment for this report, saying all press inquiries had to go through a San Francisco public relations firm. That PR firm required all questions be submitted in written format.

When District Manager Brian Gillespie was reached via cell phone -- just before press time he said while Starbucks "has to pay shareholders for their support," a lot of the money taken in by the store stays in the area. Salaries and benefits are part of that, but Starbucks also buys milk from Humboldt Creamery.

Gillespie said that as yet there are no plans for additional Starbucks in Humboldt County, but that could change.

"Eureka is very growth-friendly," he said.


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