Local coffee shops compete with Taylor Place Starbucks for student business

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(Alexandra Scoville/DD)

Coffee is a big business in downtown Phoenix, especially with students at ASU’s Downtown campus. But how are local coffee shops stacking up against the Taylor Place Starbucks? (Alexandra Scoville/DD)

By Taylor Seely, Samantha Stull and Joey Hardy

Downtown Phoenix is home to a number of coffee shops, but with a Starbucks conveniently located in ASU’s Taylor Place residence hall, how do local coffee shops survive?

According to data provided by Melody Mitchell, manager of the Taylor Place Starbucks, the location’s yearly revenue is estimated to be $660,000, not exclusive to ASU students. During its busiest six months, the Starbucks location’s monthly revenue is estimated at $80,000.

Its monthly revenue fluctuates depending on the season. There is a two-month period during winter break where the estimated monthly revenue decreases to $50,000. When ASU is out of session for the summer, monthly revenue falls as low as $20,000.

Any business that wants to become involved in the Sun Devil Dining program must be located on an ASU campus, said Ronald Briggs via email. Briggs is the assistant dean of students and also works for Educational Outreach and Student Services. A business can then become compatible with the Maroon and Gold Dollars program (commonly known as M&G), money that is available for students as part of their meal plans.

Local business owners agree that being close to campus is essential to attracting students.

“It’s all about convenience. (Starbucks) is right in Taylor Place,” said Jonathan Carroll, owner of Songbird Coffee and Tea House.

Stephanie Vasquez, owner of Fair Trade Cafe, said it can be difficult to bring in students who aren’t from downtown Phoenix.

“When you have students that aren’t comfortable to explore, (Starbucks) will be their first choice,” Vasquez said.

Outreach to students

While the Taylor Place Starbucks can place pressure on small businesses, Vasquez said coffee shops such as Fair Trade have to thank Starbucks for making coffee cool for students to drink.

Each local coffee shop aims to offer something unique to customers. John Sagasta, owner of Jobot Coffee and Dining, said he keeps in mind how to draw in a student clientele.

“I think what we offer on the street is a little bit different than a lot of other areas in town,” Sagasta said. “I feel like so many people have heard of Fifth Street; there’s a lot going on (here).”

To give students what they want out of a coffee shop, Sagasta works to create a fun atmosphere for students. Jobot stays open 24 hours on the weekends to stand out against the other coffee shops and hangouts.

In order to find friendly and hardworking baristas that will better serve customers, Sagasta said, he tries to keep a competitive pay wage.

“I definitely want to be competitive in that area because I feel like that’s how you get a better staff: You pay them better,” Sagasta said. “They’re more loyal, try a little harder and they’re going to learn the techniques more because they’re going to feel like, ‘I don’t want someone to come take my job if they’re better at it than I am.’”

Jobot also offers punch-card rewards and is interested in starting a $2 taco Tuesday, with shells made out of crepes.

At Songbird, it’s all about the quality of what they offer, Carroll said.

“It’s how we do our coffee. It’s by the cup, and it’s basically a two-and-a-half minute process,” he said. “You go to Starbucks and order a coffee, and it’s out of an air pot. Is it really that fresh?”

Another feature at Songbird is the loyalty program, Tab. With Tab, customers come in to a coffee shop and load money onto an account. Customers can put $20 on their account and not have to pay out of pocket until that fund runs out. Another benefit of Tab is 10 percent off each purchase.

Johnny Eddins, owner of One Coffee Company, uses his self-described “let’s get downtown happening” attitude to attract students to his shop. After recently moving into the building, Eddins wants to change the previous business model by focusing on giving the customers more of what they want.

“Yesterday Phoenix Law students said, ‘We want Rice Krispies treats,’” Eddins said. “So today I’m going to get the stuff for Rice Krispies treats, and we’ll have Rice Krispies treats next week.”

Eddins also offers a student discount and marks down his day-old pastries.

“We do anything to help the students out,” Eddins said.

Fair Trade prides itself on its organic and eco-friendly views. Owner Vasquez said the coffee shop brings in students by putting a twist on traditional coffee: All of their products are fair-trade-certified. The shop also offers several organic options.

With big business, it’s just about selling coffee, but for Fair Trade it is much more than just pushing out coffee, Vasquez said. However, Starbucks Corp. has offered fair-trade coffee since 2000.

Local support

Competition among coffee shops can be fierce, but the owners of Jobot and Songbird agree that the general consensus among their customers is to support local coffee shops rather than corporate chains.

“I think it’s cool to know customers are fluctuating from different coffeehouse to different coffeehouse and supporting small businesses at the same time, instead of going to a giant, like Starbucks,” Carroll said.

Sagasta said buying local seems to be a trend, adding that’s not necessarily a bad thing.

“Everyone talks about green and everybody talks about local,” Sagasta said. “It’s in for sure, which is awesome. It’s really good for that to be in.”

Vasquez emphasized the importance of customers supporting local companies, as their money is supporting families and individuals in the community as opposed to corporations. For small businesses, there is often concern of not reaching desired revenue and possibly facing closure.

ASU Downtown involvement

Infographic by Jayson Chesler

During the school year, Jobot’s bottom line increases by about 15 to 20 percent, Sagasta said. However, without taking part in the Maroon and Gold Dollars program or having the convenience of being located in Taylor Place, Jobot and other local coffee shops do not receive the same annual revenue as the Starbucks does.

“When (ASU) put Taylor Place in, there was so much commercial space underneath that they rented to big spot chains. The big idea that ASU was coming down here, that everyone got so excited about, was because there was going to be all these students that could help (small businesses) out,” Sagasta said. “Now we’re thinking, ‘Oh what are they trying to do? Just keep them in one building all the time? You’re not going to let these guys spread out and see what’s out there?’”

Sagasta’s concern lies with the fact that Starbucks’ position as the primary coffee vendor on campus leaves no space for local coffee shops.

The university works to integrate the students with the local community, ASU’s Briggs said.

“Throughout the academic year, students are encouraged to take advantage of the resources and services here in the city,” Briggs said. “During Fall Welcome week, our staff coordinates a program — TaylorFest — where students have the opportunity to interact with local businesses and community resources.  We also engage throughout the year with First Fridays, Food Truck Fiesta and Civic Space events.”

In the end, Vasquez said it’s not about coffee or big versus small business but how customers can make a difference.

“It’s about a lot more than coffee,” Vasquez said. “It’s about the betterment of community and ourselves and choices we make as consumers.”

Contact the reporters at taylor.seely@asu.edu, snstull@asu.edu, jmhardy5@asu.edu