FAIR TRADE CONTINUES TO GROW
Fair Trade products continue to gain customers, he said. Royal Cup Coffee is a Rainforest Alliance partner and Chapman said the demand for these products has not been hurt by the economic downturn.
Two years ago, the company established “The Royal Connection,” a partnership with several other regional OCS operators on a national accounts program that has been successful. This was modeled on a concept the company previously established in the foodservice side of the business. Chapman said they have succeeded in winning a number of national accounts.
Among the operator partners are: Coffee Ambassador Inc., San Diego, Calif.; Boston Bean Coffee Co., Woburn, Mass.; Coffee Distributing Corp., New Hyde Park, N.Y.; Coffee Unlimited, Chicago, Ill.; Alta Coffee Co., Newport Beach, Calif.; Associated Services, San Leandro, Calif.; Your Choice Coffee, Philadelphia, Pa.; Ronnoco/Mid-America Coffee, St. Louis, Mo.; and Consumer’s Choice Coffee, Louisville, Ky.
ECONOMY PRESENTS NEW CHALLENGES
The recent decline in consumer confidence has caused more customers to review their expenses, but Chapman claimed that it is not dramatically affecting sales. He said most customers are choosing to reduce allied product purchases. “Things have to be pretty serious to give up that Flavia machine,” he said.
He said that same-store sales have declined on account of layoffs in customer locations. To make up for this, the company has initiated a three-part marketing plan to be executed at the district level:
1) Reduce expenses by 10 percent below budget.
2) Make 10 additional key customer contacts per week.
3) Each selling resource makes 10 additional prospecting calls per week.
The company has the advantage of a strong training program.
Chapman said the company also has the benefit of being privately owned. Hence, employees know the company will continue to develop the people needed to support its growth.
While the economy has made the OCS business more challenging in the past year, the consumer’s appreciation for specialty coffee has created an opportunity for companies in a position to deliver a memorable experience.
Profile: Royal Cup Coffee Co.
Majority Owners: The Smith family
Headquarters Location: Birmingham, Ala.
OCS Branch Operations: Atlanta, Ga., Charlotte, N.C., Nashville, Tenn., Memphis, Tenn., Washington, D.C., Tampa, Fla., St. Petersburg, Fla., Orlando, Fla., Dallas, Texas, Houston, Texas, Denver, Colo.
Number of Full-time OCS Employees: 25
Estimated 2008 OCS Sales: $50 million