From humble beginnings, Treasure Valley Coffee becomes one of the largest independent vending, OCS and micro market operations in Northwest

Idaho’s Treasure Valley region cuts a big swath, mostly through southern Idaho, from Boise to Vale, OR. It was first known as the Lower Snake River Valley before the valley’s chamber of commerce “rebranded” to Treasure Valley in 1959 to reflect the wealth of opportunities available in the area.

The region is also home to one of the nation’s largest independent convenience service operations, Treasure Valley Coffee Inc., which provides coffee roasting and service, full-line vending, micro markets, and bottled water processing and delivery.

Treasure Valley Coffee, located in Boise, was founded in 1984 by coffee devotee Tom Boyer. After 16 years with Portland-based Boyd’s Coffee, where he worked long hours and covered many miles as a salesman, Boyer decided to return to his hometown and start his own business.

TV Coffee, as it is often called, started in Boyer’s garage at his Boise home, which had oil heat and no air conditioning. Operating from this modest quarter, the OCS business grew rapidly, and eventually took on allied business segments, including coffee roasting. Flash-forward to 2018, TV Coffee was big enough to purchase Canteen’s Boise operation, significantly increasing its service footprint, and removing the biggest regional competitor. Today, the company owns several buildings with 156,000 square feet of office, warehouse and production space.

Thirty-four years after starting an OCS business from his garage, Boyer had built a diversified coffee, beverage and food services operation that always maintained high-quality standards. On Sept. 30, 2018, shortly after finalizing the Canteen Boise acquisition, Boyer died tragically in an aviation accident while piloting a Cessna T210M airplane. He was 73.

He left behind daughter Suzanne and son Greg; five grandchildren; and many extended family members and friends, as well as some 200 employees.

He also left a company ready to adapt, innovate and grow. He left his management team with the experience and confidence to handle the day-to-day operations, and the foresight to envision a bold future. Boyer’s legacy was proven right in 2019, when the company registered record revenue growth in all service categories, and more so when the pandemic ambushed the world economy in 2020, crippling many small businesses. TV Coffee, however, rallied to mitigate losses, grow its micro market business and prepare for future expansion.

THE DAILY GRIND

“Tom was very passionate about quality coffee and service and wanted to offer the best product that money can buy,” said Suzanne Boyer, who is now the company’s president. “He not only took pride giving a customer the best cup of coffee, but he would also want them to feel friendship. This is how he built TV Coffee.”

Suzanne said her father’s kind nature is the main reason that TV Coffee offers such a wide variety of coffee blends. When a customer would suggest a flavor profile they might like, it would not be uncommon for Boyer to create a coffee for that request. Today, TV Coffee sells nearly 100 coffee varieties, and its roasting operation processes 1.5 million pounds of coffee annually.

“Bringing joy to people through his coffee and never letting quality slip made him a winning salesman,” Suzanne recalled.

When Boyer started TV Coffee in the mid-1980s, a severe economic recession was just coming to an end; inflation had run rampant in the late 1970s and the prime interest rate soared to 21.5% in June 1982. The budding OCS entrepreneur managed to obtain an SBA loan and sold a residential property near the University of Oregon; he also poured his own savings into the new venture. After rolling into Boise, he bought a used van, had it painted at a prison shop, designed a logo and added the logo to the van.

During TV Coffee’s first year, he focused on outside sales and ran the coffee route, building up enough accounts to hire his first full-time route-person within a short period. With time to prospect and set up more OCS accounts, it didn’t take him long to build a second full-time route.

TV Coffee supplied its OCS clients with filter-pack coffee, its signature product, first supplied by Continental Coffee Co., and Newco’s RD3 pour-over brewers, which were just coming out at the time. The RD3 brewers, available with two or three burners, became known for their durability. TV Coffee offered them with Newtap stainless-steel decanters instead of glass.

Newco brewers were not Boyer’s first choice, but the Missouri company offered financing that was not available from other coffee equipment manufacturers at the time.

With filter packages, pre-measured ground coffee is sealed inside a pouch of filter paper. The advantage of this packaging type is that no filter is needed to brew coffee, so there are no rogue grounds leaving a mess at the end of the day.

Filter-pack coffee was a big selling point for TV Coffee. Boyer taught his salesmen, when on calls, to use a rag to wipe around the spray head fitting of an open brewer to show the prospective client how much oil and coffee grounds build up on the spray head.

However, coming up with a filter pack and brewer combination that produced quality coffee was not easy 30 years ago. Boyer worked closely with Newco Enterprises to fine-tune the KD brewer by suggesting enhancements to spray heads and brew baskets.

“Newco’s owner, Joe Webster, took an immediate liking to Tom, and the two became good friends as they worked out various brewer issues,” Suzanne recalled. “Newco built custom equipment for TV Coffee, adding features that Tom thought were best.”

Boyer took great pride in his coffee and the filter-pack process that he helped to perfect. So, when his filter-pack supplier was bought by a larger coffee company, his product lost consistency and quality. At this point, he realized he would have to produce his own coffee to maintain standards. In 1992, TV Coffee began constructing a building to house its roasting operation, which commenced the following year. He frequently visited a roaster in Kansas City to learn the craft.

With roasting and packaging in house, Boyer had control over quality, and opportunities to supply private label coffee to other OCS operators across the country, and to sell to retail customers. The company opened the Roasteré Gourmet Coffee store in front of the original roasting building. The coffee shop sells 14-oz. and 5-lb. bags of coffee to locals and online, along with portion packs compatible with Keurig K-Cup brewers, and coffee brewers, equipment and accessories. Daily free samples are available at airpot stations.

Roasting also spawned the expansion of Treasure Valley Coffee operations in neighboring states. These are independently owned convenience services providers that license the TV Coffee brand name and operate under the profile of the Boise original. Treasure Valley Coffee of Utah Inc. was the first licensee, opening in 1994 in Sandy. Two more followed, one in Washington and the other in Oregon.

Indeed, roasting brought about a windfall of success and surprising breaks. When TV Coffee began roasting, it was operating three OCS routes. Soon after, that capability ignited a 10-year period of OCS growth. The company was steadily amassing enough new locations to add one full-time route annually, between 1994 and 2005. Today, amid a nationwide slowdown of office services, the company still operates 16 OCS routes.

TIME TO HYDRATE

Seeing that many of his OCS customers were purchasing bottled water, Boyer began a pure-water bottling division in 1998. Marketed under the Rain Water Refreshed brand, the division bottles 5-gallon jugs and delivers them on 16 routes, mostly to businesses, and sometimes to residential customers.

Then in 2016, TV Coffee bought a spring water company about 95 miles east of Boise. Hagerman Spring Water sits atop one of the largest aquifers in the Northwest, Suzanne noted.

“It’s some of the of purest water around,” the TV Coffee president said. “With this acquisition we gained three water routes and some great people, but now we had two different bottled water types: water produced by reverse-osmosis filtering and natural spring water. It was a challenge. We had to get bottling plants to handle both types.”

Her father fought tooth and nail to keep vending out of the service mix. However, vending would become an inevitable consequence of TV Coffee’s OCS success, and the only way it could remain competitive against a considerable rival, a corporate-owned Canteen division, that was bundling both services.

“I recall Tom telling me, ‘We just lost such and such customer…I started them on our OCS 15 years ago! They got ‘em with vending. We must start a vending program,’” Suzanne said.

TV Coffee rolled out its full-line vending service with snacks, food and cold drinks to complement its OCS and bottled water programs in 2002. Thanks to its firmly established OCS footprint, the vending business grew swiftly. The operation was able to add merchandising to many existing coffee accounts and offer it to new accounts.

With several delivery channels selling numerous products, the company began to pay closer attention to management tools that would be necessary for continued improvement and growth. It adopted and deployed Streamware, whose suite includes DeliveryMax for OCS routes and VendMax for vending machines. It subsequently installed Lightspeed Automation’s pre-order picking system.

“The route and warehouse upgrades, particularly pre-kitting, were game-changers for the company. Such a great benefit to us,” Suzanne said. Lightspeed pre-kitting was installed at the Boise warehouse first, and then at TV Coffee’s Twin Falls and Blackfoot offices. The company now integrates inventory management across all offices and channels.

All of its vending machines accept $1s, $5s, $10s and $20s, and most process cashless payments. TV Coffee’s goal is to have all of its machines equipped with cashless readers in the very near future. Its philosophy is to accept any payment media a customer might be carrying. Since most ATMs dispense $20 bills, that’s what customers have most. Change is returned in dollar coins.

The technology upgrades helped TV Coffee to prepare for its acquisition of a major competitor. At first, Canteen Boise, whose vending and OCS bundles forced TV Coffee into adopting its long-resisted merchandising program, had its sights set on acquiring TV Coffee.

Boyer considered the pros and cons of being acquired and becoming a Canteen franchise, but thought it made more sense for TV Coffee to acquire Canteen. In April 2018, TV Coffee purchased the accounts and assets of the Canteen Boise operation. It is an uncommon undertaking for an independent vendor to buy a Canteen-owned operation; it’s almost always the other way around.

The acquisition of Canteen Boise followed the purchase of a smaller route, Eastern Idaho Vending, a year earlier. (TV Coffee became a part of the Canteen network in 2017 after buying EIV.) In terms of vending machines, both acquisitions left TV Coffee with almost 3,500 machines, when factoring in its own vender assets.

MICRO MARKETS

Around the same time TV Coffee began operating vending machines, the company recruited Kelly Brown, who now oversees micro markets. He replaced an OCS route salesman who was reassigned to the new vending division.

After serving almost a decade in the OCS group, Brown transferred to the vending division to help launch TV Coffee’s micro markets. As part of his due diligence, he visited the Seattle branch of Evergreen Vending, owned by operator Jim Brinton, founder of Avanti Markets. Brown shadowed Evergreen’s routemen and salesmen for several days to learn more about the shelf-checkout market. He immediately realized that micro markets could capture more sales than vending machines.

TV Coffee placed its first market in May 2012. Since then, Brown has strived to place markets over vending machines in many locations. Today, the company operates about 125 markets. And this business segment actually turned a profit and increased revenues last year throughout the pandemic.

“March 2020 was a tough time for us,” Brown said. “We got calls to pull out markets or products in them. Then in June we started witnessing another shift in which some clients, like call centers, saw that their employees were just as productive working at home as at the office, so they vacated those sites.”

For TV Coffee, the COVID-19 lockdown presented it with beneficial transition opportunity. The older market equipment that came back to its warehouse was refurbished and updated. New graphics were applied to market fixtures, millwork was replaced or refinished, header boards and cooler marquees were all updated. TV Coffee’s inhouse graphics is able to create and print labels, stickers and signboards in small and large formats.

“Early markets were primitive,” Brown observed. “Shelves screwed to walls. Coolers were placed next to shelves…turn on the kiosk, and we called it ‘good.’ So, we said, ‘let’s update this market and find a new home for it.’”

Suzanne Boyer added, “We took advantage of the pandemic slowdown by upgrading our people, as well as our equipment. We held interdepartmental cross-training sessions. We put an emphasis on upgrading our credit card readers, telemetry systems and radios. We went into the field, when we could, to change out vending equipment and micro markets…we rarely had time before to do all this.”

While some locations were shuttered, others in the manufacturing and food processing sectors needed larger markets to support expanding staffs and longer shifts. Moreover, employees at these locations had to stay put, during their shifts, for breakfast, lunch or dinner, and delivery orders were not permitted. As a result, micro markets were able to feed the closed campus.

“There’s a range of views out there,” Brown noted. “Some clients asked if we could carry more products and different lines not offered before [the pandemic] to encourage their employees to remain onsite. Then it was business as usual at other venues.”

Every TV Coffee micro market that came back in 2020 was either reinstalled at its original location or found a new home, Brown reported. Grand and re-grand openings were held. “We held a re-grand opening for this six-year-old market,” he said. “We used the occasion to introduce an updated market app and showcase the micro market concept to new employees.”

The re-grand opening is an effective promotion for driving signups for stored value cards and mobile apps. It draws attention to new products, too. The concept predates COVID-19, Brown clarified, but it’ll be especially effective now because many employees have not been to the office for as long as a year.

“We laid out a game plan on how we were going to reopen,” the TV Coffee general manager said. “Our strategy is to show the value of the market, reintroduce apps, spotlight new products and change out planograms … make it a clean slate. It’s more than turning on the kiosk and restocking shelves, baskets and coolers. And it’s essential to contact clients to ask them about their reopening policies. We also post signage around a market and digital ads on kiosk screens describing our sanitation and stocking procedures.”

OUTLOOK & OPPORTUNITIES

The COVID-19 pandemic weighed heavily on TV Coffee’s 2020 performance, hitting OCS hardest, with sales down about 28% to 35% in the category. The company’s local coffee customers saw their sales decline more than 30% last year, according to Suzanne Boyer. Thanks to strong sales at micro markets in the second half, TV Coffee was able to mitigate total losses; total income was down 21%, compared with a record 2019.

“We had some short roasting weeks during 2020,” Suzanne acknowledged. “We had to move people to different departments.” But TV Coffee’s workforce decreased less than 10%, compared with 2019’s staffing level.

The TV Coffee president is betting big on the company’s future. Last year it purchased a building located next door to its warehouse.

“The building came up for sale in 2019, and we needed the additional space then,” Suzanne said. While some advisers cautioned against the investment amid the uncertain financial times of 2020, the TV Coffee president remains an optimist. “Our new building will support future growth…and I’m not going to let a pandemic get in our way,” she said.

TV Coffee’s new president is now committed to leading it through the most difficult period in modern times. Not even her father could have imagined that a global viral pandemic would cause worldwide economic devastation. A “bring-it-on” outlook helps her deal with daily stressors, not the least of which is the supply chain crisis, now affecting all operators.

Fundamental to any company’s survival is a succession plan to ensure future leadership roles. As part of TV Coffee’s plan, Tom Boyer added Joel Myers, Suzanne’s son, to the company’s board of directors in 2017.

Myers, 31, officially joined the coffee and vending organization in June 2020 as supply chain manager, a particularly challenging role amid the supply chain disruptions resulting from the coronavirus. ■