Coffee Bean & Tea Leaf, one of many Davids in the battle against Goliath Starbucks Coffee Co. for java supremacy, is set to brew up more business.

The largest and oldest chain of coffee stores in Southern California is undertaking an $11 million expansion in California and Arizona, opening as many as 30 new locations by the end of the year.

The Los Angeles-based company has earned the reputation as a quiet but healthy competitor to Starbucks. After almost 40 years in business, the chain has grown to 139 stores, with operations in Singapore, Malaysia, Taiwan and Israel.

"What has made us successful is the understanding that the product is really the foundation to any successful company," said Melvin Elias, the company's vice president of operations. "The secret to remaining successful is to provide the best service, product and environment."

The Coffee Bean & Tea Leaf, a unit of International Coffee & Tea LLC, roasts coffee daily at its facility in Camarillo in order to deliver a fresh product to its customers, he said. The company, founded in 1963, also imports and flavors its own teas and makes its own chocolate and vanilla flavoring.

The company recently moved into Phoenix, Ariz., with two stores and San Francisco, where it opened an outlet in Pacific Heights.

"We want to take advantage of markets that have been undeserved by our brand," Elias said. "These markets include consumers with roots in Los Angeles who are familiar with the company's name and reputation."

The chain operates 68 specialty stores along the West Coast. At an estimated cost of $350,000 per new store, the company is expected to spend about $11.2 million this year to expand to 100 U.S. outlets.

"We are not here to be the largest chain of coffee stores at the expense of our product," he said. "We feel the market is large enough for all of our competitors."

Despite its size, the chain has enjoyed consistent increases in revenue. Coffee Bean & Tea Leaf generated $60 million in worldwide sales in 1999 and, while the 2000 results haven't been tabulated yet, officials of the privately held company expects revenues to come in just under $100 million.

Even though that represents a 40 percent growth in revenues, the company's size still pales in comparison with that of its main competitor. Globally, Starbucks is still on top with more than 2,100 locations.


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