Mich.-based businesses remain viable as national chains shutter in tough economy

Jennifer Youssef / The Detroit News

There may be fewer Starbucks in Michigan these days, but locally owned coffee chains are slinging more espressos and cappuccinos than ever.

East Lansing-based Biggby Coffee reported its best year in 2009, with revenue topping $40 million, even as food and beverage retailers across the state reeled from a 4 percent drop in sales. Biggby recently opened new stores in Birmingham and Ann Arbor and has eight more in development.

Although a Coffee Beanery franchise closed in Southfield two years ago, the Flushing-based company opened 12 stores last year, including one in Miami and three at Detroit Metropolitan Airport, and more are in the works.

And Ann Arbor-based Bearclaw Coffee Co. has 12 new stores in development and recently opened a mobile unit in Radcliff, Ky.

The growth comes as national chains such as Starbucks are retracting in Michigan and nationwide. Starbucks closed 18 stores in the Great Lakes State last year. Caribou Coffee shuttered three stores in the state the year before.

While the recession has hurt some national chains, the coffee market overall has exploded, said Ric Rhinehart, executive director of the Specialty Coffee Association of America. The U.S. retail coffee market generates $32 billion a year and is poised for growth as the economy improves, he said.

Michigan's years-long recession has helped local chains, experts say.

Locally based businesses have learned how to remain viable in a tough economy, and they better understand their customer base and can adapt to their needs. They've also benefited from the growing buy-local campaigns, with more residents patronizing locally owned businesses.

The ability of these companies to be successful in a bad economy speaks volumes about their businessacumen, said Andy Deloney, a spokesman for the Michigan Restaurant Association.

"They've been running lean and mean for years," Deloney said. "They know what it's like to be in the trenches."

And their success bodes well for other coffee entrepreneurs.

Detroiter Dona Davis opened her first coffee shop, Pointe Java, in Eastpointe last month and hopes to be as prosperous as her Michigan counterparts.

"It gives me hope to keep moving on," said Davis, who managed coffee shops for 12 years before venturing on her own. "It makes me think that if they can do it, so can I. It's just a matter of time."

jyoussef@detnews.com (313)222-2300

Original article: http://www.detnews.com/article/20100513/BIZ/5130368/1001/Local-coffee-chains-find-home-brewed-success#ixzz0noZYuilC