SOMETHING'S BREWING LEADERS OF PRIVATELY HELD 240-STORE CHAIN SAY THEY TRULY SEARCH WORLD FOR BEST COFFEE, TEA.

Byline: Brent Hopkins Staff Writer

Melvin Elias sits in the corner of The Coffee Bean & Tea Leaf store - hand wrapped around a cafe mocha, people-watching, considering the taste of his brew, listening in on the chatter.

As chief operating officer of the 240-store chain, he eschews sending lieutenants to check up on his stores. Instead, he frequently drops in unannounced to see what works and what doesn't.

``I get out to three or four stores per weekend,'' he said, kicking back in a store near the company's La Cienega Boulevard headquarters. ``It's essential to stay in touch, so I go as a customer and listen to what the customers are saying.''

Celebrating its 40th anniversary in August, the chain manages an impressive $110 million in annual sales, yet handily pulls off the trick of seeming like a small, intimate operation. It's still relatively small compared with rival Starbucks Corp., which plans to open 1,200 new stores this year alone. The Coffee Bean, by comparison, will open a mere 15 by year's end.

``You don't think of Coffee Bean as a corporation because it's homey,'' said Amy Sweet, a Studio City writer enjoying her morning cup outside a Ventura Boulevard location. ``You walk into Starbucks, and they're all the same. Here, it's just like going into my living room.''

Founded by Mona and Herbert Hyman in 1963, the chain grew modestly from its one location in Brentwood. Singaporean entrepreneur Victor Sassoon entered the picture in 1996, when he purchased the rights to the Asian franchise market. The partnership grew quickly, with Sassoon opening 29 stores within two years, nearly doubling the chain's locations. Before the end of 1998, Sassoon, his brother Sunny and partner Severin Wunderman purchased the Coffee Bean outright.

Though it is a corporation, International Coffee & Tea LLC retains the hallmarks of an independent. Day-to-day decisions are left to store managers. And rather than a huge department to handle tea procurement, David DeCandia sits in a small room in a Camarillo distribution facility where he is surrounded by maps of India used in his search for the tea sold in stores. He still mixes the Chai by hand, and if a customer has a question about his 30 varieties of teas, he can be called directly from the stores.

``I get things like, 'Hey, my wife's pregnant. Is this tea going to be OK for her?' I can usually put their minds at ease.''

DeCandia hired on five years ago as a warehouse manager, but he developed curiosity about the free samples of tea floating around the offices. Tea was far less prominent when he began, coming from wholesalers without much scrutiny as to quality or origin.

He'd always been a Lipton man, but he grew intrigued with the exotic scents emanating from the pouches that found their way onto his desk. He began reading up on the drink's history, attending lectures and amassing samples.

The story is similar for his office mate Jay Isais, director of green coffee. With 20 years in the business, Isais figures he's roasted 10 million pounds of coffee in his life - and the amount is growing at 60,000 pounds per week in Camarillo.

``Now, it's a cliche to say you scour the world to look for the best coffees, but not everyone's doing that,'' he said. ``We're always looking. We get coffee from 14 countries, but we're buying from a pool of less than 1 percent of the coffee in the world. If there's something good coming from Costa Rica, I know about it. I know who's growing it, who's buying it and what they're paying for it.''

That expertise, and the attention paid to turning those beans into drinks has paid off handsomely for the chain that claims to have innovated both the ice-blended and chai latte drinks, now ubiquitous at their competitors' stores, large and small.

For some, their favorite beverage becomes something of an addiction.

``I've had two coffees a day, every day, for the last six years, without fail,'' said Rusty Sant, a Sherman Oaks optician who frequents the shop at the corner of Coldwater Canyon and Ventura boulevards and is weaning himself off a $300-plus-per-month habit of 24-ounce black vanilla brew. ``I don't even have to order. They just make it when I come in.''

Though most Coffee Bean fans are quick to heap insults on the Seattle behemoth's brews, the far-larger Starbucks clearly is ahead with the general public. In its most recent quarter, Starbucks reported revenues of $1 billion, nearly 10 times what the Coffee Bean sells in an entire year, with a $68.4 million profit. In contrast, the privately held Coffee Bean earned just $9 million last year.

``They have different definitions of success,'' said Sarah Allen, an editor of Fresh Cup, a monthly trade magazine following the specialty coffee business. ``They'll never have the huge profit margins that Starbucks has. They do it because they love it, and they're passionate about the business.''

Elias isn't opposed to growing the chain. He says taking it public is not an immediate option, but one that could be explored down the road. He wants more locations, and the public seems receptive. His office logged 9,000 requests for domestic franchises last year, in spite of the fact that the company does not grant them, and its mail-order business snares customers from across the country. Yet, he's content with growth at a slow pace.

``We're a community coffeehouse; that's what we are.'' He smiled. ``We don't want to be cookie-cutter, because it's not about how big we can get. It's about how good we can get.''

Brent Hopkins, [phone]

brent.hopkins(at)dailynews.com

CAPTION(S):

4 photos

Photo:

(1 -- color) no caption (tea leaves in a hand)

(2 -- color) no caption (coffee beans in two hands)

(3) Tea buyer David DeCandia samples one of the varieties at The Coffee Bean & Tea Leaf's Camarillo distribution facility.

Andy Holtzman/Staff Photographer

(4 -- color) Melvin Elias, chief operating officer of The Coffee Bean & Tea Leaf, sips a cafe mocha in one of the chain's 240 stores. He personally makes the rounds to hear what customers are saying about the specialty coffee and tea retailer and roaster.

David Sprague/Staff Photographer