Hillcrest is about to lose another coffee house gem, this time to the king of designer coffee, Starbucks. Diedrich Coffee on University Avenue will be replaced by the larger corporate chain by the end of the year.

Hillcrest’s Diedrich Coffee is not the only casualty of the recent sellout. A total of 40 corporate-owned Diedrich Coffee stores were sold to Starbucks in early September, for approximately $13.5 million.

The reasoning behind the sale? Diedrich Coffee, Inc. believes its strength resides in importing specialty coffees and growing its wholesale market, which has grown more than 46 percent in the past 12 months. Third-party sales for the quarter ending June 28 represented 78 percent of all coffee sold by the company. Apparently, corporate-owned stores sales were minimal compared to their wholesale distribution.

“Diedrich Coffee has a long and storied tradition of selecting and roasting the finest coffees in the world,” said Steve Coffey, chief executive officer of Diedrich Coffee. “With the trends shifting toward specialty coffee in restaurants, offices and specialty stores, Diedrich Coffee has experienced significant growth in our wholesale business. We are well positioned to be a strong competitor with the potential for greater growth and profitability in the future.”

Less than a month after losing The Living Room coffee house, Hillcrest is void another quaint coffee establishment. Diedrich Coffee may be a corporate enterprise, but what sets it apart is its friendly atmosphere and hometown, community feel, say local residents.

“It’s a meeting place of friendships,” said Philip Kaufman, San Diego resident and regular patron at Diedrich Coffee. “There’s a closeness we share here. We want to enjoy our cup of tea, enjoy our friendships and enjoy where we go to spend our time.”

“The atmosphere, people and tea are great,” said Julie Molteni, who comes to Diedrich Coffee frequently. “Diedrich has the independent vibe but has the ability and size to accommodate a variety of interests and people. It’s a corporate-indie hybrid.”

“We’ve truly built a community here over the past few years,” said another patron. “We come here not only for the awesome espresso and great service but to see our friends. The staff are our friends, as are the friends we have made at this very place. I met my girlfriend here, and we continue to come a few times a week. I can’t stand to see it become something else – far from what we have called a second home.”

Robyn Bennett, local Starbucks marketing manager, confirmed Starbucks’ agreement with Diedrich, Inc.

“Starbucks is committed to the community of neighbors and merchants that have supported the Diedrich Coffee location in Hillcrest,” Bennett said. “When it reopens as a Starbucks Coffee store, customers will find Starbucks’ great coffee, friendly faces and a relaxing and comfortable gathering place. We look forward to continuing our relationship with the Hillcrest community and getting to know new customers at this store.”

Most of the Diedrich Coffee staff was shocked by the corporate announcement. The agreement with Starbucks allows the company to provide its employees with the smoothest transition possible. All non-management store employees in good standing at the stores being sold will be offered positions with Starbucks, and store managers and assistant managers will be provided the opportunity to interview for positions.

“Starbucks has agreed to hire all Diedrich Coffee employees,” said Maya Pogoda of Sitrick and Company, a public relations firm hired by Diedrich, Inc.

The current employees, however, are unsure if they will remain, Kaufman said. “When we found out, the mood immediately changed,” he said. “Some have worked for Starbucks before and refuse to go back. You know they are hurting, too.”

“The employees here are really the heart of the place,” Molteni said. “They greet you upon arrival and make you feel like family.”

Diedrich Coffee management strives to provide a supportive working environment for its employees, Kaufman said. Many are in college and juggling hectic schedules.

“They work around their schedules and are really flexible with making it work,” he said.

Local patrons are unsure of their own future. “I was really upset that my coffee place was closing,” said Molteni. “I’m not sure where I’ll go after they change hands at the end of the year. I guess I’ll have to find a new place that’s not one of the millions of Starbucks in Hillcrest.”

“It’s a Grind is a great place to hang out – good vibes,” Kaufman said. “It’s about finding a place in Hillcrest and having no fear of the area. At Diedrich, you get a comfortable, welcoming feeling, void of criticism. You can’t get that just anywhere. It’s rare.”

“We’ve lost The Living Room already, and now this. I don’t know where I can go,” said another Diedrich Coffee frequenter. “You can’t just recreate a feeling or emotion like that.”

Diedrich Coffee will remain open for the next few months, with a slow transition into Starbucks. Customers will still be able to purchase their products online at www.diedrich.com.