TWO FOR THE ROAD - COFFE HOUSE IN BUSINESS JOURNAL

Coffee shop competition brewing in downtown Phoenix

Premium content from Phoenix Business Journal - by Jan Buchholz

Date: Friday, April 15, 2011, 3:00am MST

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Jim Poulin/The Business Journal

Damian Serafine, owner of City Central Coffee in downtown Phoenix, says he isn't worried about the proliferation of coffee shops popping up in the area.

Damian Serafine isn't at all worried that he's opened City Central Coffee half a block south of a Starbucks at Central Avenue and Adams Street in downtown Phoenix. He signed a five-year lease for 1,200 square feet in the 1 North Central Avenue building.

"I don't mind it at all," Serafine said of his close proximity to Starbucks. "In Seattle and Portland there's a coffee shop on every corner. Besides, I know my coffee is so much better," he said.

This week, Spoonz, a coffee shop and cafe opened half a block west of the same Starbucks. Owner Denise Bismore also isn't concerned about competition in the area.

"People who like Starbucks will always like Starbucks, but people who want a really great cup of coffee will come here," she said.

Meanwhile, rumors abound that Starbucks will open yet another store in CityScape — about a block from its Central and Adams site. RED Development, developer of the mixed-use high-rise, won't comment. Neither will Starbucks, which gave the Phoenix Business Journal the following statement:

"We are always looking for great locations to better meet the needs of our customers and reach others who may not have the opportunity to visit Starbucks stores. Choosing a site for a new Starbucks location is a key element in providing customers with the Starbucks experience and we carefully consider many factors when opening a new store. We have no announcements regarding potential new locations in Phoenix."

Another Starbucks would make for an even more crowded caffeinated scene. Already the Seattle-based giant operates locations in the nearby Phoenix Convention Center and Phoenix City Hall. Serafine, a subcontractor to Aramark, also operates coffee concessions at the Convention Center, Symphony Hall and the Orpheum Theater.

And still there's more. Cartel Coffee Lab, a boutique roaster that started in a Tempe strip mall, has been operating for about 15 months at 1 N. First St. That, too, is about a block from the Adams Street Starbucks and City Central Coffee. There's also Jacquee's Espresso in the Two Renaissance building, a few steps across the street from Spoonz.

Though both Serafine and Bismore offer a variety of espresso drinks and other beverages, they believe their locally roasted, fair trade blends will bring customers back for more.

"It's a huge difference when you roast locally in small batches," Serafine said.

Though he is reluctant to criticize Starbucks, he said its mass production can't compare with small batch roasting, which he has done at Echo Espresso in west Phoenix. Serafine named his exclusive blend after his daughter Sophia. It's a secret combination of beans from India, Brazil, southern Mexico, Sumatra and Ethiopia.

Chompie's Bakery provides City Central Coffee with baked goods. Spoonz also offers homemade baked goods, salads and sandwiches.

Bismore said getting Spoonz up and running in the 101 North building was an exercise in perseverance. She's owned other restaurants before closing Silver Spoon in the San Carlos Hotel at Monroe Street and Central Avenue. She had planned to open Spoonz in November 2010, but city code requirements and the holidays ­— she's also a caterer — delayed the opening by about six months.

"I'd never done a complete build out before, and it seemed like the city was more scrutinizing," Bismore said.

She's not complaining now, however. Open just a few days, traffic has been good.

"We haven't done any advertising and it seems to be doing its thing," Bismore said.

Connect with Jan Buchholz at jbuchholz@bizjournals.com or on Twitter at jreneebuchholz.com.

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