October 30, 2003
Where the End Justifies the Beans
Businessman Allen Gochnour is a regular at the Coffee Bean and Tea Leaf on La Cienega Boulevard, and like many of the people who wait in the line that often stretches out the door, he's not just there to grab a cup of java and run. Instead, the transplanted Pittsburgher hangs out to kibitz with the people behind the counter, who affectionately call him "customer of the year," answer the trivia question of the day and sip his Ultimate Ice Blended -- a blended frozen slush of sweet milky coffee, before he continues with his day.
"This is what the world was intended for," said Gochnour, as he licks the whipped cream off his drink. "Kosher food, kosher coffee, a great place to sit down -- Pittsburgh doesn't have anything like this."
In fact, few cities do. In the battle of the bean, where chain stores like Starbucks and Peets compete to serve the strongest espressos and the frothiest cappuccinos to the hoards of caffeine addicts, Coffee Bean has distinguished itself -- for the Jewish community at least -- by its commitment to kashrut. Every drink, muffin, salad or sandwich is kosher.
Now, Coffee Bean is taking its relationship with the Jewish community one step further. In keeping with the company's credo of opening community-friendly stores, the newest Coffee Bean store, in the heart of the Fairfax district, will be closed on Shabbat and will serve chalav yisrael milk (milk that has been supervised by a Jew) and pastries, to appeal to the ultra-Orthodox segment of the community.
Herbert Hyman opened the first Coffee Bean and Tea Leaf in Brentwood in 1963, which sold -- coffee beans and tea leaves. Later on, as customers became more interested in the products, Hyman set up a beverage-sampling bar, and later on started serving a full line of beverages.
Hyman started opening more stores, and in the 1980s there were about eight Coffee Bean stores in Los Angeles. But it wasn't until one Coffee Bean employee threw some coffee and ice into a blender in the mid 1980s that the store really started to become popular.
"That drink was responsible for the worldwide frappe craze," said Melvin Elias, Coffee Bean's COO. "That is when the growth machine started. The Ice Blendeds became very popular and it made the [store] units profitable. It was an innovative drink, and it took a long time for an established player like Starbucks to realize that we were onto something."
By the late 1990s, there were 60 Coffee Bean stores, and Hyman sold the business to Debbie and Sonny Sassoon -- Los Angeles-based Orthodox Jews. The Sassoons decided to invest in the brand on a more macro scale to set it up for more accelerated expansion. Now there are 240 Coffee Bean and Tea Leaf stores in California, Arizona, Nevada and in 10 different Asian and Middle Eastern countries. About a year after buying the business, the Sassoons also decided to make the products kosher.
Many in the community speculate that the Sassoons went kosher because they didn't want to be responsible for Jews going into the stores and eating non-kosher products, although the Sassoons would only say it's good for business.
"The market for kosher is growing tremendously," said Debbie Sassoon, who researches and develops the new drinks for the company. "Less than 50 percent of consumers for kosher products are Orthodox Jews. It's because the kosher stamp means more supervision -- a good housekeeping seal of approval, and [people think] that kosher is cleaner and purer. Also being that Los Angeles is the second-largest Jewish community in America, we thought that there would be a benefit to having kosher certification for our products."
However, experts disagree that selling kosher products has wider business benefits.
"I don't think non-Jews think that kosher means healthier. I don't think anyone really has a clue what it means," said Hal Sieling of Hal Sieling and Associates, a marketing company for the restaurant business. "There are obviously people who really care about kosher -- but they are not gentiles."
Sieling thinks that the coffee craze has yet to reach its peak -- he estimates that designer coffee drinking will continue to be popular until about 2010, and that Starbucks, a business with $4 billion in revenues and 7,000 stores (250 in Los Angeles), will carry on dominating the coffee store market, providing Coffee Bean with the staunchest competition.
"Starbucks is the biggest player by a long shot," Sieling said. "Nobody else is close."
Coffee Bean currently makes more than $100 million in sales, and while they are expanding into new neighborhoods, they say they are not interested in giving Starbucks a run for their money nationally.
"We have no plans to be No. 2; no plans to expand to the East Coast, although it might be a possibility since we have hundreds of customers that want us to do that," Elias said. "We focus mostly on the Southern California core market, and will continue to do so. We are born and brewed in California -- that is our home."
The Beverly and Alta Vista Coffee Bean and Tea Leaf will have its grand opening on Nov. 2, from 11 a.m.-2 p.m., at 7235 Beverly Blvd.
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