In the Shadow of Starbucks

Those comforts include designing warm environments with leather sofas, Northwest architecture (exposed wood beams, rock facades, etc.) and fireplaces. Local and sustainable building materials and a Pacific Northwest color palette are also features. Each store has its own unique twists that tie to the local population.

"I heard Howard Schultz say that they had lost their cozy, warm environment," Herman notes. What Schultz was trying to re-create, says Herman, is an experience Woods already has. Indeed, if you walk into the original Starbucks at Pike Place in Seattle or its new "non-Starbucks" 15th Avenue location on Capitol Hill, it will give you a good sense of  The Woods experience. "They [Starbucks] have standardized what we do and how we do it and are trying to capitalize on it," Herman says.

Herman's employees saw Starbucks officials scouting out The Woods stores, so he offered to sit down and meet with a Starbucks regional manager last spring. They talked store construction and working "green," Herman says. Starbucks' new stores reflect those ideas, which include the use of reclaimed lumber, building the bakery the same size as that in The Woods and the use of recycled materials and products to earn LEED points. Starbucks representatives declined to comment for this story.

While Starbucks may be trying to capitalize on The Woods, Herman says he is benefiting from Starbucks' recent troubles. He acquired his Birch Bay outlet, The Woods' second top-grossing outlet, after Starbucks backed out of the location before it was completed. Herman says he jumped at the chance to take over the prime coffeehouse-ready location. "That building was built to the specifications of Starbucks and we made architectural changes to meet our standards," he explains.           

As Herman thinks expansion, he knows that there is often no carryover from community to community. He honed his brand with the first two spots in Lynden and was forced to re-establish himself in Bellingham with multiple sites. Herman thinks he can replicate the same identity moving south. "We believe it takes multiple locations to establish a brand," he says. "One store next to a freeway doesn't speak to who we are."

Herman is in discussions to bring The Woods to both Skagit and Snohomish counties-with multiple locations in order to create a sense of community-but has already landed on store 10. His latest endeavor, in Nairobi, Kenya, is slated to open by the end of January.
While the choice of going overseas so early may seem odd, he came upon the idea when he met a group of women from Whatcom County who had established a school in Kenya to teach locals how to create sustainable businesses. The new Woods will not only be a popular draw for those thirsty to buy a cup of Western culture, but it will also be a hands-on teaching tool for the students, as the outlet will use only local coffee beans. Herman says he is motivated to help the school succeed, and proceeds from the Kenyan blend of coffee in his nine Whatcom County locations are donated to the school.           

It's just the latest step Herman is taking both to grow his business and to establish himself as an alternative to the ubiquitous Starbucks. And with Starbucks watching, The Woods is replicating its own brand over and over again-a brand focused on community, no matter where that community lies.

Related: "The Third Wave"

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