A Battle Brews In Beantown

WHEN EVEN McDONALD'S GETS SERIOUS about coffee, you know the millennium has arrived. In Boston, Mcdonald's has just launched ads promising to freshly grind and brew a "premium gourmet" blend. Verily, as McDonald's says, "it's grounds for rejoicing."

The ad is just one stir in a hot new front for the coffee wars. Beantown (nicknamed, of course, for a different bean) is pretty hip when it comes to java. It's home base to the 22-store chain Coffee Connection, which dominates local outlets of other national companies such as Gloria Jean's and Canada's Timothy's. But this week Starbucks, the Seattle-based coffee-bar company that has rolled out more than 270 stores since 1971, UPS the ante by announcing the April opening of its first Boston store. And coming soon: a newly hip Chock Full O' Nuts, which plans a rollout in the Northeast of 200 stores, cafes and kiosks.

For the coffnoscenti, this is all good news. Boston "is going to be a coffee paradise," says Corby Kummer, who is writing a book on coffee. But for merchants, it means competition in a market they once had to themselves. Coffee Connection founder George Howell "feels threatened," says Erna Knutsen, a San Francisco supplier. "It's his turf It's certainly a far cry from 1974, when Howell arrived from San Francisco and couldn't find a cup to write home about. Or from 1987, when Howard Schultz bought out Starbucks and set out to turn America into "Latteland."

In fact, Starbucks's arrival in Boston could actually help companies such as Howell's. When Starbucks entered San Francisco two years ago, it fueled demand for local roasters such as Peet's. The specialty market is growing: a trade group predicts it will capture half of the $8 billion coffee market by 1999, up from $1.5 billion in 1989. What will actually suffer most will be the supermarket brands. Once converted, specialty-coffee drinkers rarely go back to Folgers.

A Battle Brews In Beantown | News