ESPRESSO BONKERS

Charles Pretzlik investigates

the high-street coffee-bar explosion

WE all laughed when Steve Martin ordered a 'half-double-decaffeinated-half- caf with a twist of lemon' in LA Story. How smug and superior we felt. Now, only a few years later, we're all at it. Well-tailored City gents and stiletto-heeled shop assis- tants are calling for a 'short skinny wet latte with wings' and a 'double chocolate decadence muffin'. It's hip. It's yo-bro New York. It's the New Economy in all its glory. You don't have to have a personal trainer or a mobile telephone to drink the New Coffee, but such fashion accessories undoubtedly add to your credibility as you queue, or rather stand in line, to be served.

Chains like Starbucks, Costa and Coffee Republic are colonising the high street. There are now as many as 300 dotted around the country, most of them in Lon- don. Last year they achieved a turnover of more than £30m. Mintel, the market researchers, predict that within four years there will be as many as 1,000. So far these places have done no more than whet the appetites of the aspiring Wall Street types, but in America they have provoked coffee rage. In Portland, Oregon, a vandal has gained popularity in some quarters by hurling a brick through the window of his neighbourhood Starbucks.

Why are the urban trend-setters and their acolytes in the suburbs hooked on the New Coffee? It's not exactly a dignified habit. You often drink it from cartons that have small openings in their lids, like no-spill baby beakers. One theory is that, for men at least, it is just an excuse to drink warm milk. The New Coffee reminds them of their mothers. It is not cheap, of course, which might appeal to conspicuous consumers. 911e cup — remember, each one contains Just coffee, milk and water — costs about £1.50• The cost of coffee and milk make up Only a tiny fraction of the total bill. About 45p covers the cost of raw materials — 33p of that is the coffee and the milk; the rest is things like paper cups, plastic lids and chocolate sprinkle. About 42p covers staff costs and 38p goes towards other things like rent and rates. That leaves a profit, once all bills are paid, of about 25p per cup. Privately, some owners admit that most of their patrons can't tell the difference between one milky brown cup and anoth- er. In fact, Starbucks itself doesn't find it easy to spot the difference. In one of its leaflets it defines a cappuccino as espresso, steamed milk and foamed milk. The same leaflet describes a caffe latte as. . . er, espresso, steamed milk and foamed milk. No wonder the New York rabbi and comedian Jackie Mason was driven to complain recently in the Independent on Sunday that 'anywhere else you pay 25 cents for a milky coffee, and you get a cup the size of a Buick which the waitress will fill up for you all day. Go to Starbucks and it's not white coffee, it's latte, and it's $7.50. And there's no chairs in these joints, just a few high stools stuck in the window. In the States, every Starbucks you look at, I guarantee there'll be 12 tall gentiles sit- ting in the window and one short Jew try- ing to climb a stool. And, if that's not bad enough, when he's finished he has to climb off the stool and tidy up after himself.'

In England, there are chairs for the cus- tomers, but the 'self-clear' ethic applies equally here. They wouldn't have put up with it in more robust times. Long before Americans discovered the pleasures of drinking coffee in public, London coffee- houses were the centre of social, political and literary influence. By the middle of the 18th century there were 500 of them in the capital. Some, like Tom King's in Covent Garden, were fronts for brothels. The Cocoa Tree specialised in politics. All were dens of gossip. James Boswell used coffee- houses to recuperate between bouts of whoring. Samuel Johnson drank tea in cof- fee-houses. One cup cost id — about 20p in today's money. The liquid in the cup was in those less pretentious times simply called coffee. You could have it black or white. Drinking it was not a lifestyle choice: Frasier, the utterly affected fictional radio psychiatrist, would have been laughed out of those joints. These days coffee-shops are not places for laughter; even the irony of the coffee-drinkers is earnest. Drinks with skimmed milk are called `no harm' or `no fun', which is about right: a mug of skimmed milk and decaffeinated coffee is as exciting as liquid tofu.

It's not just the coffee-drinkers who talk daft. Howard Schultz, who runs Starbucks, speaks warmly of the 'Third Place', a loca- tion we need in our lives somewhere between work and home. So what's wrong with a pub or bar (`where everybody knows your name,' as they say in Cheers, a sitcom that, happily, predates the coffee craze)? The answer is that some people, women especially, find them too smelly, smoky and dark. And threatening. Then there is the diet thing. Girthists make the prim point that coffee is less fattening than beer.

So you can stay slim and feel unthreat- ened in a coffee-shop. But not necessarily unmolested. Coffee-shops are good pick-up joints, at least for the sort of people who use dating agencies. There is huge scope, they say, for turning eye contact into con- versation by pretending you're not sure whether the freshly delivered cup of white froth on the counter is for you or for her. Fighting over the choccie or cinnamon sprinkle is another 'chat opportunity'. The really bold can even try getting froth on the end of their nose, just as Dr Evil does in the latest Austin Powers movie. We are in the land of the saddies.

One could be forgiven for assuming that, having got so many of us hooked, the cof- fee-shop companies are coining it. In fact many are still loss-making in the UK because of the enormous cost of setting up a chain of shops. Luke Johnson, entrepreneur and chairman of the Belgo restaurant group, says, 'At the moment, most of them are operating as a mass char- ity for the coffee-drinking public.' He believes that in some parts of London the market is already saturated and the main players are now locked in a battle for mar- ket share. The market will eventually con- solidate into two chain players, Starbucks and Costa [owned by Whitbread, the pubs and brewing group].'

The competition is scalding hot. On top of Starbucks, Costa and Coffee Republic, other brands muscling in include Madis- ons, Aroma and Caffe Nero. Nestle has launched a number of Cafe Nescafe out- lets; Scottish & Newcastle, the brewing and pubs group, is testing the market with seven Espres outlets; and Sainsbury's opened a coffee-shop in Clapham, south London, last year. Already the larger com- panies are buying out their rivals. Star- bucks last year paid £55m for Seattle Coffee Company, equivalent to about £1m a shop. Coffee Republic has bought sites from several rivals and, earlier this year, McDonald's paid ilOm for Aroma. The McLatte cannot be far off.

To squeeze more sales out of the same shop-space, many have tried selling new products. Some have tried food, with vary- ing degrees of success, and Starbucks are masters at flogging mugs and fresh coffee. Coffee Republic has come up with the Baby Cap, a cappuccino for kids with flavoured syrup but no coffee. Madisons is gearing up to make organic coffee with organic milk: the big thing for next year, if you can wait that long.

As usual, it is California that has the last word in gimmickry. There, some coffee- shops have lawyers on hand, sell second- hand clothes and books, hold pottery classes or have launderettes attached.

The new coffee-shop owners are clearly on to something, but fashions change much faster these days. As Microsoft is finding out, the pioneer soon joins the establishment and ceases to be as cool. Popular consumer brands need careful nurturing if they are not to be worn out. Does anyone still wear Pierre Cardin?

The trend may yet prove to be a short- lived squall in a coffee cup. In New York tea-shops are the latest thing. The oppor- tunities for entrepreneurs in this country are immense — perhaps we can expect Oriental-themed outlets with geisha girls performing tea ceremonies (definitely not for rushed City folk), or, for radical chic, a teashop called Benn's, named in honour of that socialist champion and tea-quaffer. Whatever, expect to be paying £2.50 for a humble infusion in a cardboard container soon.

The author writes for the Financial Times.

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