Putting Stock in Beans : Trends: High-quality coffee is in demand, and micro-roasting outlets are proliferating. They emphasize freshness and premium blends.

As customers stroll in to buy their morning coffee at Caffe Latte in the mid-Wilshire district, they are surrounded by images of Third World coffee plantations and European cafe society.

Burlap sacks of raw, pale-green beans are piled by the door. A few steps from the cash register, coffee roaster James Marcotte dumps some beans into the funnel of a gleaming, steaming European-style roaster.

Marcotte is micro-roasting, the practice of roasting small quantities of coffee beans for maximum freshness--and the hottest trend in the coffee-drinking world.

This is the way coffee should be done, say micro-roasters, who believe that the flavor of coffee beans dramatically declines--as much as 60%--within two weeks after roasting.

“(Consumers) think that fresh ground is fresh coffee,” said Orange County micro-roaster Martin Diedrich. “That’s like saying the shelf life of bread begins when you slice it.”

Apparently coffee lovers have been waking up to the difference. Coffeehouses that specialize in micro-roasted brew have become one of the decade’s hottest niche businesses.

Although coffee drinking has been on the decline for more than 30 years throughout the United States, the market for specialty, or gourmet coffees, has taken off, particularly on the Westside. Since the late 1970s, such sales have grown from a near 0% share of the national market to nearly a third.

By 2000, forecasters expect half of the estimated 125 million American coffee drinkers will be drinking specialty coffees--decaf, flavored and gourmet, said David Dallis, president of the Specialty Coffee Assn. of America. The number of micro-roasters is expected to nearly quadruple in the 1990s, to about 1,400.

“It’s the industry of the ‘90s,” said Diedrich, whose family manufactures coffee roasting machines. Sales have gone from a trickle to a flood in 10 years.

“To me, it’s kind of like a Gold Rush,” he said.

Consumers say the micro-roasted coffees taste better, are relatively affordable--between $8.50 to $12 a pound--and drinking them at coffeehouses offers a “bar experience” without the alcohol, Dallis said.

Storefronts with on-site roasters valued between $12,000 and $25,000 have sprung up throughout the Westside--there are several in mid-Wilshire, Beverly Hills, Santa Monica and Marina del Rey--as well as in the west San Fernando Valley and Orange County.

The proliferation has been both welcomed and scorned by veteran roasters.

“There are a lot of pretenders and impostors in the business,” said Diedrich, who has been roasting for about a decade. “You have to know coffee. This is a tough business. You’re making your money a (cup) at a time.”

When Alan Chemtob opened the Coffee Emporium in Marina del Rey in 1979, he was one of the only roaster-retailers in the city. In the past three years, as several competitors opened on the Westside, he has begun to worry about the quality of the coffee and the motives of those who have jumped into the business.

“There’s a lot of romance that goes with coffee,” Chemtob said. “A lot of places don’t have that anymore.”

Micro-roasters take pride in their craft. They precisely label the origins of their coffee beans, right down to the names of the estates on which they were grown. To refine their art, they practice “cupping,” an elaborate method of testing the brew akin to wine tasting.

Roasting is a subtle craft, where seconds make the difference between a moderate “city” roast and a dark espresso.

“In a world of so much anguish and pain, these are really inexpensive pleasures,” said Diane Pomerance, a documentary filmmaker and micro-roaster devotee who was buying a couple of bags at the Coffee Roaster in Sherman Oaks.

Marcotte, who co-owns City Bean Coffee in Westwood Village, says the expansion of Starbucks Coffee, the Seattle-based chain, educated customers and primed the market for micro-roasters: Many customers who didn’t know much more about coffee than Juan Valdez and Sanka a few years ago can today tell the difference between a coffee from Ethiopia and one from Guatemala.

After Starbucks, many coffee patrons move on to the tiny shops of the micro-roasters, said Richard M. Healy of the Coffee Roaster. Healy, a former corporate banker, opened his shop eight years ago. In those days, he was a pioneer--the city inspectors didn’t know what to make of his Diedrich roaster.

For the first two years, virtually no one but a few Europeans came. Then, after a regional magazine did an article on Healy’s business, sales took off. Today, his clientele runs the gamut--from plumbers and bus drivers to movie stars.

Back at Caffe Latte, Marcotte watches the beans spinning in the roaster turn from green to beige to deep brown through a tiny circular window. Marcotte roasts the beans twice a week, pound after pound for up to five hours each day. It can be tedious work.

“It’s kind of like doing the laundry,” he said.

At the first crackling sound, Marcotte pulls a slender trowel out of the drum and inspects a few of the beans. He waits another couple of minutes, and then, at the second crackling sound, releases the finished roast in a fragrant, steaming waterfall.

Like other micro-roasters, Marcotte gladly shares expert tidbits about a coffee’s origins. A Kenyan grind, for example, might have picked up its tangy flavor from the lemon trees ringing the coffee estate. A Costa Rican grind might come from an estate that pays its workers well, provides health care and helps to preserve rain forest wildlife.

Occasionally, such discussions can be laid on a bit thick. Diedrich recalls the competitor who told a customer that he charged $5 more for his Jamaican Blue Mountain roast because it grew “higher on the mountain” than Diedrich’s.

With micro-roasting increasing in popularity, can home roasters be far behind?

It’s too soon to tell. But Marcotte says that City Bean is getting more requests for raw coffee beans, especially since one customer relayed a tip about their availability to his friends on the computerized Internet.

But, judging from the recent lunchtime crowd at Caffe Latte, the finer points of roasting still remain way above the taste buds of most coffee drinkers.

Keith Baxter sipped a cup while reading a newspaper. He had no idea what country, much less which estate, it came from. Nor did he care. He drank the coffee because, he explained in his best Maxwell House voice:

“I was just taking a sip of it and I thought, ‘Wow, that’s great! That’s what it’s supposed to taste like!’ ”