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A customers wait for their coffee at Artigiano in Vancouver. (JOHN LEHMANN/JOHN LEHMAN/GLOBE AND MAIL)
A customers wait for their coffee at Artigiano in Vancouver. (JOHN LEHMANN/JOHN LEHMAN/GLOBE AND MAIL)

Competition

Coffee chain plans to beat the odds Add to ...

Espresso is a delicate art. It begins with the beans and ends in the hands of a barista, ideally working a manual grinder.

Even then, a grind too coarse can ruin the best beans, hot water flowing through the coffee too quickly in the machine. It's a fraction of a difference on a grinder and a recipe for an espresso that's too bitter, too weak. An espresso pulled well, born of great beans sought out on remote farms in the mountains of Guatemala, Costa Rica and Kenya, ground just right, the dark liquid in a small porcelain cup sings, a cascade of flavours.

"Espresso is fickle. It's a multivariable equation," said Kyle Straw, current Canadian barista champion and a store manager with Vancouver-based Caffè Artigiano Inc., a small chain of 14 cafés set to slowly expand to North America's largest cities: Toronto, Montreal, New York, Chicago, Los Angeles.

When Starbucks Corp. abandoned manual grinders a decade ago, sacrificing quality for speed, it planted the seed of a new wave of coffee sellers, from Stumptown Coffee Roasters in Portland and Chicago-based Intelligentsia Coffee & Tea Inc., to Vancouver's JJ Bean Coffee Roasters and Caffè Artigiano.

Now Artigiano -- Italian for artisan or craftsman -- is attempting a Starbucks-like ascent, not in sheer scale but in geographic scope. The same difficult equation exists: to maintain a delicate quality as the company gets larger and further flung. Like Starbucks before it, Artigiano has staked its expansion on developing quality workers at its existing cafés to open new stores and finding top-quality busy locations to draw in new customers one by one.

Annual sales of the privately held company are more than $10-million, up about 40 per cent as it has just gone through a burst of expansion.

"As you get bigger, the purists will say you'll never be as good as when you had one, two cafés. It's hard to convince them it's possible," said Willie Mounzer, CEO and co-owner of Artigiano. "We'll never be Starbucks. You just have to take it slow. If Artigiano can occupy this niche in Vancouver, it can do it anywhere."

Mr. Mounzer, 52, has helped do it before. In 1982, he started as a server at a new restaurant in Edmonton, Earls. The one-restaurant operation was chaotic in its first months and began to expand. Mr. Mounzer rose quickly and for years was a top executive, vice-president operations, as Earls expanded, never more than four stores in a year. The emphasis was always on quality, once hiring gourmet chef Michael Noble to oversee food development.

But Mr. Mounzer had always wanted his own show, the enterprising blood born of an entrepreneurial Lebanese family. His grandfather had moved to Canada in 1918, and he had grown up around strong Turkish blends in espresso cups. So when he walked in to one of the two Caffè Artigianos about seven years ago, he fell in love: "This is exactly what a cafe should be." He offered to buy Artigiano right away, but he was turned down several times.

Artigiano was born as the 1990s ended. Vince Piccolo had worked in Vancouver's fine dining business. He was starting a family and wanted a day job. He felt there was an absence of great coffee, so he opened Artigiano and several years later founded 49th Parallel Coffee Roasters. In 2006, when Artigiano had five cafés, he sold to Mr. Mounzer to focus on the roasting business, which supplies Artigiano and cafés around North America.

"At one point, Starbucks was the predator," Mr. Piccolo said. "They'd set up wherever there was an indie café. What's happening right now, indie cafés are opening near Starbucks and taking business. I don't know how Starbucks can compete."





It was Starbucks that taught North America the language and nuance of upscale coffee, started in Seattle in 1971, and launched on a continent-wide expansion in the late 1980s after chief executive officer Howard Schultz experienced the luxurious Italian tradition of espresso, convinced it would work in the United States and Canada.

It did -- and around the world. Starbucks is the world's biggest coffee chain with almost 17,000 stores, 1,051 of them in Canada.

Starbucks, however, lost its magic. Mr. Schultz, the company chairman, had stepped down as CEO in 2000 and returned to the post in 2008 to revive the company's spirit. One move is a new espresso machine, still automated but better than what is used in most of the locations.

A telling experiment is an attempted resurrection of Starbucks circa 1987 as the company imitates the upstart competitors it inspired. Last year, as part of what CEO Howard Schultz is calling "start-up mode, hand-to-hand combat," Starbucks opened 15th Avenue Coffee & Tea, and Roy Street Coffee & Tea, two faux independents in Seattle "inspired"-- and owned by -- Starbucks. Both stores use manual grinders-Mr. Schultz "always hated" the automatic machines, a Business Week story last summer said.

For Starbucks, it's a two-front war, as it also expands into instant coffee to deal with ambitious low-end coffee competitors such as McDonald's. "We were the leaders on specialty coffee and educated consumers on what truly good coffee should be," said Colin Moore, president of Starbucks Canada, in an answer to questions by e-mail. "We will continue to treat it as an art form to be nurtured and appreciated."

To Mr. Piccolo, it's can't be done well on a large scale, especially the good stuff.

"The coffee world has really evolved in the past five, 10 years, the science of extraction. A large corporation can't focus on that. Coffee's becoming more and more detailed. People will want to know where the coffee came from, how sustainable it is, how the farmer is treated, how much he was paid, the terroir of the farm."

(For beans it sells, 49th Parallel will list numerous details such as the farmer, the soil, the altitude of the farm, how the beans were processed. The emphasis on taste is extreme -- one Guatemalan coffee is said to have "engaging flavours of chocolate, anise, and orange with complex acidity, creamy texture and smooth butterscotch finish" -- and 49th Parallel's online slogan goes: "Black as the devil, hot as hell, pure as an angel, sweet as love.")

The balance between growth and quality is tiny, Mr. Piccolo said. "If you're opening 10 stores a year, it's impossible."

Mr. Mounzer doesn't plan to open more than four a year and this year guesses he'll open two, with the aim to do it in the U.S., where he has a regional manager in both Chicago and L.A. Growth is naturally circumscribed by talent, which is slowly trained at existing Artigianos, as was the strategy at Earls. A cashier becomes a barista who becomes a store manager who eventually might open a new store.

"It's the right people who take care of the brand," Mr. Mounzer said.

JJ Bean, an Artigiano competitor in Vancouver, just opened its eighth café in the city, each of the JJs different than the others. Owner John Neate, whose grandfather was a large wholesaler of coffee in Vancouver, roasts coffee for several hundred cafés, including in Ottawa and Montreal, but he is wary about expansion on the retail side.

"I'd love to build stores in other cities but the way we do things is quite unique and quite limiting," Mr. Neate said. "For us to go to Toronto, we'd have to compromise what we do. You can only have so many stores, I don't know how many, but I think after 20 it's hard to remember all the managers names and their families. We're pretty close to our maximum size around 10."

At Artigiano, Mr. Mounzer began by building a foundation from which to grow, things such as ensuring all store managers had their own office and computer and did their café's cash, whereas the smaller business under Mr. Piccolo did daily cash through head office. Artigiano has already more than doubled to 14 under Mr. Mounzer and it also experiments beyond obvious downtown locations, such as one in a strip mall in Westbank near Kelowna in the British Columbia interior, and in a Vancouver outlet of London Drugs.

Beyond B.C., there are two Artigianos in Calgary.

On questions of quality as Artigiano grows, Mr. Mounzer points to the fact an Artigiano barista has won every single one of the seven Canadian barista championships, and current champ Mr. Straw heads to the world competition in London in June.

Pulling an espresso needs to be exact, but the right training means Artigiano (which employs about 230 people) can build the team to get bigger and without losing what makes it better, Mr. Straw said.

"It's very replicable."

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