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Nowadays, Most Americans Know a Little About a Latte : Trends: It started in the Pacific Northwest. Today boutique roasters are thriving nationwide.

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From Reuters

Americans are thirsty for a really good cup of coffee.

Across the country, more and more people are sipping gourmet coffees brewed from specialty beans from boutique roasters--and paying a hefty premium for it, industry experts say.

“This has opened doors for companies like mine . . . to satisfy consumers who want to have a good cup of coffee,” said Phil Johnson, president of Millstone Coffee Inc., a privately owned roaster in Everett, Wash.

Unlike Seattle-based Starbucks Corp., which has gourmet cafes around the country, many small roasters sell beans but not java by the cup.

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Those that do sell coffee by the cup, such as Heritage Coffee Co., a roaster and retailer in Juno, Alaska, tend to be regional businesses.

In the Pacific Northwest, about half of all the coffee sold is of gourmet grade, but consumers in other parts of the country tend to buy their coffee in cans packed under the well-known brands and sold in supermarkets.

As the gourmet coffee craze gets perking, experts say specialty beans will be available everywhere, from convenience stores to grocery stores, some of which will even provide do-it-yourself roasters.

Given the expected growth, the gourmet coffee industry will not be spared taking a lump or two.

“There will be a considerable amount of consolidation in the industry,” said Grady Saunders, president of the Specialty Coffee Assn. of America and president of Heritage Coffee. “Companies will merge and companies will be bought,” he told an industry discussion group this week.

If local roasters’ share of the $5-billion U.S. coffee market reaches a critical mass so that the major brands start to feel the pinch, the big companies are likely to respond aggressively with new products and may even lower prices, experts said.

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“I think the winners, from the company standpoint, in the (gourmet) category will be those who stick with the quality they started with and are not overly tainted by any pricing factors that come into the market,” Johnson said.

But if more consumers develop a taste for naturally decaffeinated hazelnut-flavored coffee from hand-picked Arabica beans, will there be enough to go around?

Mike Nugent, a senior vice president at Dean Witter who specializes in gourmet coffee, said roasters will have to integrate vertically--invest in coffee plantations and mills--to ensure steady supplies.

If demand for gourmet coffee continues to rise, experts say, the beneficiaries will be the producers, who recently have seen prices drop dramatically.

“You have producers who have in the past few years been in a very difficult situation,” said Tom Kilty, executive vice president of M.P. Mountanos Inc., a coffee broker. “Now they’re seeing a market in the U.S. and other countries where consumers are wanting and appreciating a better-quality cup of coffee.”

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