The Rogue Valley's caffeinated culture has long been perked by its ubiquitous array of coffee kiosks, shops and drive-thrus.
From corporate coffee king Starbuck's to the avant-garde Dutch Bros., laid-back Good Bean locations and one-off Limestone Coffee Co., there's a coffee drink for every palate.
With so much competition, it can be hard to stand out. By one recent measure, however, the Human Bean Drive Thru has carved out a growing space in the coffee universe.
Entrepreneur magazine ranked Human Bean Drive Thru at No. 157 in its 38th annual Top 500 franchiser list, and it ranked No. 2 in the specialty coffee world behind Dunkin' Donuts.
"We are definitely near saturation here," said Dan Hawkins, who founded the company along with his wife, Rhonda, along with Tom and Tami Casey, in 1998.
"We just did a study down in Reno," Hawkins said. "In a five-mile radius there were about six specialty coffee retailers. In a five-mile radius here, there are about 45. So just opportunity in areas outside the Pacific Northwest, especially here in Southern Oregon because two of the major drive-thru players originated here, you just don't see what you see here outside this market — anywhere."
The Human Bean's first drive-thru espresso stand was in Ashland. The company has grown to 68 corporate and franchised locations in 10 states, with sales of about $45 million. At last count, Human Bean grinds through 400,000 pounds of coffee and espresso annually.
Human Bean is not alone in national recognition for its coffee business: Grants Pass-based Dutch Bros. is the nation’s largest privately held drive-thru coffee company, with 260 locations in seven states and more than 5,000 employees. Dutch Bros. is not on the Entrepreneur magazine list because its franchising is limited to its employees.
Human Bean started with a couple of stores in Ashland and Medford in 1998. Today there are 68 stores, stretching all the way to North Carolina, and by year's end Hawkins anticipates 85 locations. The company began franchising in 2003. Today, the going initial franchisee investment runs between $174,000 and $669,000.
"Everywhere we've opened has been really successful," Hawkins said. "Especially back East and the Midwest, you're looking at Starbucks and Dunkin' and that's it. Some people like that taste, some people don't. To us, we create the fastest experience possible."
Franchise queries slowed during the recession as lending tightened, but the rebound has been significant. Rather than look for hot spots, Human Bean leaves that to franchisees.
"We've been a major trajectory," Hawkins said. "We're on course to open another 10 this year, and our goal by the end of next year is 100 locations."
Sacramento, Odessa, Texas, and Canton, Ohio are on the docket, along with new locations in Colorado, and Idaho. Instead of single-location expansion, the company is now signing area development agreements with franchisees.
"We've sold a nine-store market in the Phoenix area, with the first one going into Mesa," Hawkins said. "Right now we have got someone very interested in Dallas, Texas. There isn't anything off limits, it's really by franchise interest. It's critical, when franchisor, teaming up with the right partner is critical."
Coffee, like wine, is often a matter of taste.
Sourced from Africa, Latin America or Asia, it can be light, medium or dark roasted; poured or dripped; hot or iced; loaded up with sweeteners, topped with whipped cream, or served black.
Region and season don't really matter.
"It's the same with Starbucks, everything hot turns cold with ice," he said. "The specialty coffee industry isn't really temperature sensitive. It's really delivery, the facility and making sure the experience is the right experience. Everybody has their individual taste, some people prefer Starbucks, and some people prefer Human Bean."
There are 10 people in the Medford front office handling administration, equipment support, vendor support, and marketing. Overall, the company has 160 employees. Human Bean procures green coffee beans from a variety of regions. At present it's helping farmers in Colombia develop their own wells.
"If there is a bean from Tanzania that isn't great this year," he said, "we'll substitute with a bean from Colombia or Papua New Guinea."
— Reach reporter Greg Stiles at 541-776-4463 or firstname.lastname@example.org. Follow him on Twitter at www.twitter.com/GregMTBusiness, on Facebook at www.facebook.com/greg.stiles.31.