Smith doesn't himself appear outside Starbucks to promote his buy-local alternative. "Too confrontational," he says. Still, he underscores the theme whenever he can. "It's Maine versus the national giant," he told the Portland Press Herald, the state's largest newspaper, early last year, when it became known that Starbucks would locate a store in Portland. The same argument sometimes figures in Smith's pitch to investors and prospective landlords.
Smith, ironically, isn't a Maine native and doesn't talk like one. He was born in Indianapolis and has lived in nine states and in Canada. He and his wife, Pauline Klek, graduated from Miami University in Oxford, Ohio, and about five years ago opted to live in Maine when they couldn't afford their first choice--Nantucket Island. (Klek moved to Nantucket in 1996 to work as a veterinarian, and Smith commutes there on weekends.) Early on, however, Smith did recognize the value of the word Maine in a brand name. After toying with the name Carpe Diem Coffee, he switched to Maine Roasters because, he says, "there's L.L. Bean and the image of a pine tree. Maine has a good image. It stands for high quality. There's good workmanship behind the product."
The quality of Smith's coffee arguably owes something to Maine, where his beans are roasted and some of them are brewed into coffee. Of course, none of the beans originate in Maine; they're all grown in faraway places like Costa Rica, Brazil, and Sumatra. And, it turns out, Maine Roasters' original business model isn't homegrown, either. Smith frankly acknowledges that it was largely cadged from Starbucks.
In early 1993, while entertaining the possibility of starting a specialty-coffee company, Smith devoted about three weeks' time to "hanging out" at Starbucks stores in Chicago. Nursing a cup of coffee for hours, he took note of the various stores' equipment and inventory, monitored training sessions for their employees, and tracked cash-register transactions in order to calculate the average purchase, writing all the information down on Starbucks napkins. One morning at 6, he parked a car opposite a Starbucks store in Lake Forest, Ill., and from that vantage point counted customers on a chrome-plated clicker. "After a few hours, the police came," Smith related, "and said there were some people who called, and they wanted to know what I was doing. I explained that I was counting customers, and it was a market-research project for myself." After the police left, Smith clicked away till 9 p.m.
Some of Smith's shrewd start-up tactics have stuck with him. When he posts employees outside a Starbucks store in Portland, he arms one with the chrome-plated clicker. As the employee hands out chocolates with one hand, he discreetly counts Starbucks customers with the other. From the number (the tally one early-morning hour was 67) Smith extrapolates the daily sales and profitability of a Starbucks store, according to formulas he has developed. The numbers will guide him in deciding where to open new Maine Roasters stores and how much he should invest in them to maximize profit.
Whether Smith's buy-local tactic is working is anybody's guess. On days when Maine Roasters employees take up their posts outside Starbucks, whole-bean coffee sales are 10 to 15 bags higher than normal at Smith's store a block and a half away, he says. And the company's Maine identity seems to attract news coverage, says Smith, who has been interviewed by TV reporters from Portland and Boston, and who's quoted occasionally in the Press Herald. All of which raises the Maine Roasters profile. "What can I tell you?" he says. "Sales are up."
And how do customers on the sidewalk react? On this morning in April, when DeMarco and his companion, Maine Roasters store manager Ryan Corliss, offer chocolates to the departing Starbucks customers and other passersby, most accept them. Several people show their approval by giving a thumbs-up. One well-groomed woman, Elizabeth Burns, a lawyer who works in a nearby office, objects vehemently. "I find it extremely impolite for you to stand outside a competing company and do this," she tells DeMarco. A few minutes later Ray Haversat, a manager at the Old Port Starbucks, remarks: "It's becoming a negative thing. Customers complain about the abuse they're getting when they try to get in the door."
The only way to reach Rand Smith late on a Friday afternoon is to call him on his cell phone. At about 2:30 p.m. he shoves off in his black 1998 Chevy Suburban. After a 200-mile ride from Portland to Hyannis, Mass., and a two-hour-and-15-minute ferry ride to Nantucket, he joins his wife for the weekend. (He reverses the journey on Sundays.) Not that the trip is all for fun; weekends are when he attends to the Maine Roasters on the island. Smith reckons that he works 70 to 80 hours a week and logs 5,000 miles a month in the Suburban, which has telephone messages stuffed into the steering wheel. It's a wearying life. "I tell my wife that by age 40, I want to be out," he says. "I mean that by then I either want Maine Roasters to be self-sustaining or I want to sell."
That makes his exit deadline October 5, 2004. To meet it Smith seems willing to bend further to the pragmatism that has defined his entrepreneurial career. His strategy of offering Maine coffee drinkers a local alternative, for example, goes only so far. In the back of his mind, Smith sees Starbucks as a potential buyer of Maine Roasters. At least, he says, "it's an option."
Joseph Rosenbloom is a senior editor at Inc.
