HARRIS TEETER BREWING UP CARIBOU COFFEE LINK

ROSEANNE HARPER

ALPHARETTA, Ga. -- Harris Teeter is heading its fresh foods aisle in a new store here with a Caribou Coffee Co. coffee bar.

This is the chain's first linkup with Minneapolis-based Caribou Coffee Co. The relationship will be carried into future stores in the Atlanta market, said officials at Harris Teeter's corporate offices in Charlotte, N.C.

The Caribou coffee bar, in the right, front corner of the 51,000-square-foot Harris Teeter unit here, anchors the fresh-foods aisle, and is adjacent to the prepared-foods department. Six tables with chairs are provided.

"We're very happy with our relationship with Caribou and it [the coffee bar] has been well received by our customers," said Ruth Kinzey, spokeswoman for the 136-unit chain.

The supermarket, which opened here just a few miles north of downtown Atlanta in February, is Harris Teeter's fourth in the Atlanta area. In its other three units in the market, Harris Teeter operates its own coffee bars.

Kinzey said the chain won't replace the existing Harris Teeter-run coffee bars in the Atlanta market. "But we do plan to add Caribou at new stores there. We have another store slated to open there during the summer," she said.

This is the second brand-name coffee company Harris Teeter has teamed with to run a coffee bar. In North Carolina, the chain has replaced five of its own coffee bars with ones run by Seattle-based Starbucks.

Asked why not Starbucks in Atlanta, Kinzey said it was not an option because Starbucks had a previous arrangement with a competitor in the Atlanta market.

She said the coffee bar's look complements the look of Harris Teeter stores in Atlanta. "We like the decor Caribou has. Our management is pleased with the way it blends with our store," she said. She also pointed out that Harris Teeter uses different store decor packages in different markets.

According to Collin Barr, vice president of store development for Caribou, the Caribou "look," above all, attempts to create a warm feeling.

"Our concept is that of an American coffee house, not a European espresso bar," Barr said. "It's a pine look -- a lot of knotty. We're decorated more like an Alaskan lodge."

He added that the company has a definite goal, to become the "place to be" in the neighborhood.

"We want to be the gathering place, and we think our coffee can be the catalyst that brings people together. People are moving away from tobacco and alcohol, and we see ourselves replacing the neighborhood pub," Barr explained.

He also said Caribou has the goal of becoming a destination that brings people back several times a day.

"We want to be the place you run into in the morning to get coffee and a muffin, then come back to at lunchtime to read the newspaper, and again maybe to meet a friend after work for coffee," he said.

Caribou's stores are all corporate-run, not franchised, and are all staffed with its own employees. The company's arrangement with Harris Teeter is a lease agreement for the space.

Harris Teeter installed its first coffee bar, a company-run operation, in 1993 in a store in Charlotte, N.C., and currently has coffee bars in 23 stores.

Regarding the decision whether to use a branded coffee operator as a partner or run coffee bars in-house, Kinzey said, "We see different options as being appropriate in different markets."

For instance, Caribou already has an established presence in the Atlanta metro area, with 15 freestanding locations there. It entered the Atlanta market two-and-a-half years ago.

The coffee company currently has a total of 74 stores in eight market areas, and operates 11 of them inside supermarkets. It expects to launch operations inside 10 to 15 additional supermarkets by the end of this calendar year, Barr told SN.

In addition to its relationship with Harris Teeter, Caribou currently has lease arrangements with Byerly's, Edina, Minn., and more recently began doing business with Heinen's, Warrensville Heights, Ohio.