Single-cup Wins Big in Tampa, Fla.

Community Refreshments, a Tampa, Fla. operation, was able to double coffee sales in a challenging market by understanding the unique benefits of the different single-cup systems and relating to customers on a personal basis.

New York City OCS veteran James Frank and his wife Marni founded Café Liberty Coffee, the OCS division of Community Refreshments, after starting and selling two successful OCS and office supply companies in New York State. They have no plans to sell Community Refreshments, however. Instead, the Franks are grooming their two daughters to take over the business one day. The company services 300-plus customers and is one of the largest Keurig distributors in Florida.

The Franks sold the vending division of Community Refreshments in February 2009 to focus on coffee and have seen their coffee business grow due to dedicated sales staff and customers asking for OCS bids in response to the economy. The Franks strive to provide not only coffee and ancillary products, but a personal relationship with customers and whatever additional services are needed.

FROM COFFEE SHOP TO COFFEE SERVICE

“I was driving through town at one in the morning and an idea hit me — this place needs a coffee shop,” recalled James Frank. In 1985, he borrowed money from family and got a small bank loan to finance a 1950s style coffee/ice cream shop in Westchester, N.Y. The 1950s style malt shop was popular at the time and the business succeeded. He was 20 years old with no college background.

MOVING ON TO COFFEE SALES

Frank sold the shop in 1990 when he decided sales had plateaued. His wife was selling office supplies in New York City and she knew Abel’s Coffee Service Inc., Hyde Park, N.Y., was looking for a salesperson. Frank took the opportunity to realize his long-time dream of working in Manhattan.

Although Frank had never sold OCS, he liked the owner and quickly excelled in the job. In his first week, he sold USA Today, a location with over 1,000 employees.

“I had zero sales experience, but I believe in relating to the customer,” said Frank. He doesn’t sell products; he sells himself. “We had a relationship,” said Frank, who kept in touch with the location manager of that first big customer even after he left New York. “Relationships are a part of the business, and the passion,” he said.
After two years working at Abel’s, Frank had some of his own ideas on how an OCS business could be even better. He was interested in a more high quality coffee service, including better quality coffee and classier uniforms.

Frank also believed it was possible to sell both OCS and office supplies together.

COMBINING OCS AND OFFICE PRODUCTS

“We decided we really needed to do it ourselves,” said Frank. The couple started ABC Office Essentials in 1992. It was one of the first combination OCS and office supply businesses. Early members of the National Coffee Service Association program, which became known as TOPS (Total Office Products Systems), the Franks grew the office supply side so much they began dealing directly with the office product supplier instead of using the TOPS program.

“We had two people who were from the respective industries — that helped us do well,” said Frank. His wife knew the office products market, and he knew coffee service. They worked well together and were quite successful.

After four years growing ABC Office Essentials, Frank and his wife were approached with an offer to sell.

“Because of our age, we weren’t afraid to work and (rebuild) another company,” said Frank. ABC Office Essentials was sold to Airline Stationary in New York City, which was featured on the first year of “The Apprentice” TV show. There was no non-compete agreement, so the Franks moved across town and started Corporate Accents in 1997.

In 2001, when the terrorists struck the World Trade Center, a number of Franks’ customers were affected.

“As a salesperson I have lots of visual memories of being in their offices and looking out. (The attacks) affected people in different ways, but I wanted to remember it the way it was,” said Frank. He and his wife decided to leave New York, so they sold the company.

RELOCATING TO FLORIDA

Having always liked Florida, the Franks decided to settle in Tampa and founded a third OCS company, Café Liberty Coffee, a name they used in New York for their private label coffee. “We had lots of marketing material, so we stuck with that,” he said.

Frank quickly learned the clientele in his new home was different. “When we first came to Florida, we brought our pack weight profiles with us, the ones we used in New York, thinking tastes would be the same,” explained Frank. His 2.5-ounce pack coffee overwhelmed some customers.

The education was a two-way process, however. Frank taught Tampa customers that “free” creamer and sugar was reflected in the higher coffee prices they were being charged. He also taught them to expect more immediate product delivery.

The Franks decided not to carry office supplies in Florida, instead focusing on coffee and a new business for them — vending.

TEMPORARY EXPANSION INTO VENDING

One of the first large accounts they landed in Tampa asked them to handle their vending banks. Frank agreed, although he’d never done vending before. “You always say ‘yes’ and then figure out how to do it,” he said.

They ran the vending division, VendWorks, for about four years before the economy slowed down. Looking at the return on investment for vending versus OCS, they decided vending was a distraction.

Frank wanted to sell the vending business to someone who would give the same level of customer service to his locations as he did, but he didn’t want to lose OCS accounts to the vending operators either. Eventually, the right buyer came along.

“I sold the vending side in February of this year and we’ve doubled our coffee sales,” said Frank. He wonders how much more coffee he’d be selling if he’d never gone into vending.

Currently, Café Liberty partners with several vending companies which do not provide their own OCS. Frank passes along any vending leads that come in via phone. He has no plans to go back into vending.

SINGLE CUP DRIVES GROWTH

Frank always had an interest in single-cup brewers, starting with Unibrews, one of the first Filterfresh competitors. He saw the success Filterfresh was having and felt the trend would continue.

“I model successful people,” said Frank. Currently, he places a lot of Keurig machines as well as Colibri and Brio equipment.

“Each individual account has their specific needs,” said Frank. If they want the freedom to choose a wide variety of coffees, Frank suggests a Keurig machine. However, some accounts need coin mechanisms, and that’s when he places the Colibri or Brio. These machines act like hot beverage venders.

Frank is not sold on pod brewers. “There are so many delivery systems out there that are better,” he said.

One system he’s investigating is the new Starbucks Interactive Cup brewer that accepts credit cards, which Frank sees being more important in future. He believes a lot of offices will consider charging for coffee to control costs.

Already, he has a location asking about ways to prevent people from pocketing K-cups for use at home. He is suggesting the new Green Mountain branded K-cup dispensing machine. The K-cups will be on free vend, but the location hopes the machine will eliminate the pilfering.

SUPPLIERS HELP MEET ECONOMIC CHALLENGES

“A lot of our growth, besides being due to our personalities and due diligence, is because of (suppliers) helping us,” said Frank. Folgers and Keurig gave permission to use their logos on Café Liberty uniforms. Frank is also asking suppliers for samples as a way to promote their products.

“You have to have a great relationship with your (suppliers),” said Frank. Keurig has stepped up and given him point-of-sale literature and other tools, which have helped him become one of the biggest Keurig distributors in Florida.

He recently signed on with Green Mountain Coffee Roasters, and has switched customers by using free samples.

“They (the manufacturers) are really helping us with what we’re trying to achieve,” said Frank.

REGIONAL COFFEE CHAIN BRINGS NEW OPPORTUNITIES

The Franks recently added a regional coffee brand, Community Coffee Co., a roaster, retailer and OCS operator based in Baton Rouge, La., after that company contacted Café Liberty about carrying their line. “We tried a number of different coffees. They have a strong presence in the South,” said Frank.

Community Coffee flew the Franks to Louisiana to see their roasting plant. Frank was impressed and felt the quality control was excellent. “I figured carrying an exclusive coffee no else does would give us a competitive edge,” he said.

Café Liberty carries Community Coffee fractional packs. Community Coffee is gaining momentum in the Florida market with a distributor in Orlando and a shop in Tallahassee.

Frank is also planning to offer his New York private label.

EXTRA SERVICE A MUST

“When things get tough, you need to think outside the box to reinvigorate your industry,” said Frank. Luckily for him, some of the out of the box ideas in Florida were old school in New York. For account retention, he will slip cookie packages into cases of coffee to make customers feel special.

Because price has become more of an issue with customers, Frank has begun offering generic alternatives. When someone calls for a specific sweetener, the sales person informs them there is a cheaper, generic-type sweetener also available. Frank doesn’t want to force the change on the location manager, but gives them a choice. Many managers like the idea because it means they are saving their company money.

As a way to help his warehouse personnel and route drivers understand that not all coffee is the same, he holds internal tastings. He has drivers taste different “medium” strength coffees, for example. Educated drivers are less likely to substitute an unrequested coffee when servicing a location.

CONSTANT FOCUS ON CUSTOMER SERVICE

Being from a competitive market, Frank has a “never say no” approach to customers. He believes this is the “service” part of his office coffee service title. Companies that deliver just coffee, creamer and sugar are, in Frank’s opinion, just distributors. Service means delivering whatever the location needs, from a bottle of window cleaner to towels for a health club.

Frank attributes his success to always putting the customer first. He knows where they go on vacation and what their pets’ names are. “We treat our customers as we would want to be treated as customers,” he said. He feels that sort of dedication really travels by word of mouth. He projects, due to the volume of calls he’s receiving, that his coffee sales will again double in the next couple years.