Bean Wars

The L.A. Times business section takes a look at the local coffee shop battle, in particular the face off for No. 2 between The Coffee Bean, Peet's and others. Most of the story focuses on The Coffee Bean and its major growth in recent years (even though the piece fails to mention the company's recent expansion into Hawaii!)

Yet the dominance of Starbucks and its 11,000 stores doesn't stop others from making money. The entire coffee house and kiosk industry is growing at 20% annually, Miller said. Americans spend about $10 billion annually at coffee outlets, according to the Specialty Coffee Assn. of America.

"There's a new person drinking a cup of coffee outside their home every day, and there's also someone going from one cup to two," Miller said.

That's what Coffee Bean Chief Executive Sunny Sassoon counts on for growth in the family-owned business, which he says is profitable and will hit $200 million in sales this year. Sassoon wants to grow the business at a 30% annual rate over the next decade.

"The potential is huge," he said, especially in California.

In Starbucks' hometown of Seattle, there's 1 coffeehouse for every 2,500 residents, Sassoon said. In California, the ratio is 1 to every 28,000 residents.

Coffee Bean owns, licenses or franchises 160 locations in the state and plans to jump past the 200 mark this year. Most of the growth will be in Southern California.

The chain recently signed a deal to license as many as 40 mini-cafes in Ralphs Grocery Co. stores over the next three years, including 11 this year. Coffee Bean will supply the coffee, tea and baked goods for the cafes, which will be staffed by Ralphs.

"We plan to open 11 this year," Ralphs spokesman Terry O'Neil said. "Customers like to be able to get a coffee or tea while they are in our stores."

As we recently wrote, the Coffee Bean finally opened its first location in Glendale (on Glendale Ave.) -- and we're still dying for ice blendeds in my work neighborhood, the Miracle Mile (which has actually been, believe it or not, without a Starbucks either -- but one is set to open in a few weeks). C'mon, Coffee Bean, get cracking!