They may not know that the city is home to such giants of the magazine publishing world as Fresh Cup, Barista Magazine and Roast. Or that one of the premier institutes of higher latte learning, The American Barista & Coffee School, operates out of an old brick warehouse on the Willamette River's east bank.

There, surrounded by hulking espresso machines that purred and hissed like cats during a class earlier this week, Bruce Milletto pronounced: "Portland has become the epicenter of coffee in the U.S."

Such a grandiose proclamation might sound boosterish. But Milletto, the coffee school's president, sees small roasters setting up shop in Portland and students traveling from around the globe to attend courses for home coffee brewers, coffeehouse owners, novice baristas and those aiming to compete in such events as this weekend's big barista smackdown.

Concurrent with the championship, the school this week offered two workshops, one in sensory skills for coffee pros and one in the heady details of latte art.

Nine students tied black aprons around their waists and gathered 'round as instructors Jared Mockli and Matt Milletto, Bruce's son, explained the fine points of crafting lattes so lovely they could show in any First Thursday art walk.

Matt Milletto, the school's training director, is bearded, vested and moves around his classroom with all the confidence of an Ivy League professor or a Renaissance man, weaving chemistry with physics and economics with aesthetics. Each of them matters, as any barista worth her nutmeg knows.

He explained that in order to pour a perfect latte, the coffee must be top-notch, like Stumptown's Hair Bender blend, and used, ideally, within two to eight days after roasting. Grind only enough for the beverage you're making, he advised. Level the grounds in the portafilter basket with a smooth sweep of the hand, tamp it down and introduce it to a glistening, Italian-made espresso machine. When they've said buon giorno, extract a smooth stream of crema, or rusty espresso, into a pre-heated ceramic cup.

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Got latte? A battle is brewing as fast food chains target coffee concoction

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The number of people trying lattes probably is growing now that lattes are more widely offered, said Matt Milletto, vice president of Bellissimo Coffee InfoGroup, a specialty coffee consultant based in Portland, Ore.

Even though lattes are becoming more mainstream and espresso drinks are popular, it's hard to find comparative data to show whether there has been an increase in sales or orders of lattes in particular. Still, items in the specialty coffee category, which includes lattes, were ordered 10 percent more often in 2008 than in 2007, according to NPD Group, a market research company.

The specialty coffee market is growing while overall coffee consumption is not, said Harry Balzer, vice president of NPD Group.

But coffee industry insiders are concerned about the quality as specialty coffee becomes more automated and mass produced.

At the same time fast food-type companies compete with Starbucks, independent retailers are focusing on "high-quality, high-standard beverages," Milletto said.

There's a difference in quality among fast-food chain restaurants and independent coffee houses, he said.

"A good latte starts with excellent espresso blend, good quality milk and, most importantly, a well-trained barista," said Milletto, also director of the American Barista & Coffee School in Portland.

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Owners of small coffee shops take plunge during recession

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Profits are important, however, as some shops have learned the hard way, said Matt Milletto, vice president of the Portland consulting firm Bellissimo Coffee InfoGroup and director of training at American Barista & Coffee School.

"Before you think about open-mic nights and the muffins you'll bake in the back and how your friends will come in, you need to understand that none of that will be possible if you're not making a profit," Milletto said.

A coffeehouse typically costs $150,000 to $500,000 to start, he said. In a successful shop, profits are 10 to 18 percent of sales, and the biggest expenses are labor and the cost of coffee, milk and other goods.

Location, location, capital

The biggest mistakes stem from undercapitalized shops and bad locations, Milletto said. "People will open their doors with their last dime and forget so many of the expenses ... that it's hard to make a good first impression."

Lately, Milletto sees fewer shops opening than usual because banks and investors have pulled back on funding. "There seems to have been a freeze on first-time business owners," he said.

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