The Coffee Bean & Tea Leaf is ready to join the big leagues.
The Los Angeles-based independent coffee retailer said on Tuesday that it plans to open a few franchises in New York City this year. Eventually it will expand that number to 100.
We “are looking to aggressively grow through the rest of the United States over the next few years,” said CEO John Fuller. “This is just step one in that commitment to it.”
In New York, Fuller said, Starbucks is the main competition.
Fuller argued that the Coffee Bean could gain from “Starbucks fatigue.”
People sick of seeing a Starbucks at every corner might want a change, he said. “That helps benefit us as well as other brands,” said Fuller.
Nicole Miller Regan, an analyst who covers restaurants for Piper Jaffray, said “everybody wants to try something new.”
The Coffee Bean prides itself on serving high-quality coffee in a cozy atmosphere. “A lot of third wave coffee roasts the way that we do,” said JJ Smith, vice president of franchise operations and business development. Third wave, or specialty coffee sellers, include the likes of Blue Bottle Coffee and Intelligentsia.
Fuller said that Starbucks “fatigue” could help bring business partners to the table, as well.
“We’re not as corporate,” Fuller said. “We’re the ones who get to decide,” he said of himself and Smith. The small team means developers, landlords and franchisees have to deal with less red tape than they might with a larger corporation. And Starbucks is “always out making political statements … sometimes it can be inflammatory.”
And with “tea” in the name, the independent retailer says it can take advantage of customers’ preferences for healthier, lower-calorie drinks. “Tea is a real big platform for us,” said Fuller.
Currently, the coffee chain has just 311 stores in the United States, mostly in Southern California. Over the next five to ten years, Fuller said he hopes to bring that number up to about 1,000. That would still put Coffee Bean far behind Starbucks, which has about 15,000 stores in the United States.
This is the Coffee Bean’s second foray into New York City. It first entered the market in 2011, and had around 13 stores in the city by 2016. The company closed the stores that year, and is now moving forward with a different franchisee.
Even if the Coffee Bean does manage to lure some customers away from Starbucks, it’s unlikely to make a dent in Starbucks’ business.
Starbucks is “the victim of their own success,” said Regan. “Their density is a problem.”