SEATTLE FIRMS SHOW JAPANESE HOW TO ESPRESSO THEMSELVES

By Eric Torbenson P-I Reporter

Tuesday, August 11, 1992

Section: Business, Page: B4

They may scoff at American cars, but the Japanese apparently can't get enough of Seattle-style latte served from a cart.

After a year and a half of planning, two Seattle companies - Burgess Enterprises and Strictly Seattle Ltd. - this summer introduced espresso carts to the world's third-largest coffee market.

Burgess supplied the top-of-the-line carts and espresso machines, while Strictly Seattle cultivated the business relationships required to sell anything in the sensitive Japanese market.

The result? The first cart in Tokyo sold 3,500 cups of espresso on its first day. The busiest Seattle cart fills about 1,000 cups on a great day.

Those sales resulted from heavy promotion, but the cart is still doing ``better than even the busiest carts here in Seattle," said Ron DeMiglio, president of Strictly Seattle.

``There is fantastic potential there," said Andrew Caple, Strictly Seattle's chief executive, who sipped a latte in the Burgess Enterprise offices in south Seattle.

Espresso is extremely popular in Japan, but buying it from a cart on the way to work is new, DeMiglio said.

``Japanese people pay for the right to sit down because space is so limited," DeMiglio said. ``Getting up and walking down the street with a drink was a whole new concept."

Strictly Seattle's analysis of the Japanese market developed Espresso Americano, which combines Italian and American themes with a product the Japanese already love, Caple said. The companies originally wanted to use Seattle in the title, but decided many customers wouldn't identify coffee with Seattle.

Strictly Seattle contracted with Millstone Coffee Inc. of Everett to supply beans to the Espresso Americano franchises.

The tough part was finding entrepreneurs committed to setting up a cart. Few Japanese entrepreneurs want to invest in something that they aren't sure will work, DeMiglio said. To reassure the potential investors, Burgess offered extensive employee training and support services, said company president Bob Burgess.

The careful detail servers give to each drink and the personal attention they give customers make the carts attractive in Japan's fully automated culture, Burgess said. ``It's a very preparation-oriented society."

Caple said the next two carts will open in Tokyo's Ginza area, a busy section of the city. Eventually, carts could open up on city streets around Japan and from there spread around Asia. But Burgess and Strictly Seattle plan to move slowly.

``Japanese business is based entirely on relationships," said DeMiglio, who has spent four and a half years marketing products in Japan. ``We're not going to spread ourselves too thin."

Burgess has received inquiries about the cart and espresso machines from Australia, Israel, Korea and from hundreds of locations around the United States.

In addition to Millstone, other local coffee roasters are either contemplating or reaching agreements to export to Asian markets. Sue Hatch, marketing director for Seattle's Best Coffee, said the company will soon ship coffee to a Vietnamese market.

``They brew their coffee in single servings, using about three times as much coffee as we would use, and then they use a sweetened condensed milk," Hatch said. ``We're sending them a darker roast."

Starbucks Coffee Co. has no immediate plans to ship overseas, but ``it will be a great market in the future," said Laura Moix, media representative.

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