Office Coffee Service Operator of the Year

Peter Tullio Jr. and his partners knew where the refreshment services industry was headed when they formed Gourmet Coffee Service Inc. in Van Nuys, Calif. in 1994.

Specialty coffee was a coming trend, and Tullio, the 2005 Automatic Merchandiser OCS Operator of the Year, decided it was time to step into the OCS arena. The company has grown consistently over the years, and is now one of the leading OCS operations in Southern California.

Tullio's father, the late Peter Tullio Sr., had moved to Southern California in 1978 to take it easy after many years with Interstate United. Peter Jr. was working as an attorney in Chicago when his father convinced him to join him in a small music and games/cigarette vending operation he had purchased, World Wide Vending. Less than a year after Pete Jr. relocated to Southern California, his father passed away. Pete's brother, Bob, soon joined the partnership, making the switch from the TV news business to vending.

Like his brother, Bob was intrigued by the lure of Southern California after years of harsh Midwest winters. Their mom, Alexandria Tullio, was on board as well, working the phones and wearing many hats. Larry Deagon, a vice president from World Wide Vending, also joined the partnership.

Operation changes its emphasis

The vending operation grew steadily over the years, expanding into full-line vending, but not coffee service. Eric O'Green joined as a partner and today oversees the company's vending business.

When the state outlawed cigarette machines in the early '90s, it was obvious that survival would require a corporate redirection by World Wide Vending. Full-line vending was highly competitive in Southern California, which was undergoing some tough economic times.

Specialty coffee gave new life to OCS

Coffee service, buoyed by the popularity of Starbucks, was clearly on the rise. Bob Tullio approached his friend, Jon Fishman, sales manager of Foodcraft Coffee, a Los Angeles-based OCS company, and invited him to invest in an opportunity that would be known as Gourmet Coffee Service. "With Jon, we landed the number one sales talent in the OCS industry," said Pete. "Jon's experience, the fact that we created a successful line of private label coffees, our routing expertise and the association with vending all helped us get off the ground running better than a company just starting out," Tullio observed. "We were able to project an image that we had been around for quite some time." Today, Gourmet Coffee Service carries Starbucks, Peet's Coffee & Tea, Gaviña and Torrefazione Italia, in addition to a number of their own private label selections.

While the company continues to run a few full-line vending routes, the vending and OCS operations have always been separate. In some cases, there are both vending and OCS deliveries going to the same location, but in separate trucks. "We keep our vending and coffee separate," Tullio said, "but our concept of offering total program management, from coffee service to vending, to water and first aid, has been a huge success."

Product and equipment suppliers lend key support

Tullio is proud of the fact that the company has been able to grow to nine OCS routes and about two and a half vending routes without acquiring another operating company. He credits two key suppliers for much of their success. "Newco has been there every step of the way with ongoing support, and that's why we use Newco brewers exclusively," said Tullio. "We were also fortunate enough to become associated with Gaviña, the most consistent and customer service oriented roaster we could have ever chosen for our private label line."

The only single-cup system the company offers is the Starbucks Interactive Brewer, one of the most expensive single-cup systems available. Because of its cost, not a lot of OCS operators use it. The company has about 24 of these units on location, and they are successful in the right locations.

The company also uses glass pots, thermal pots and integrated airpot systems. "We're amenable to all types of needs," Tullio explained. "Fortunately, Southern California is a diverse economy. All of our eggs have never been in any one basket," he added.

Unlike many of its large OCS counterparts on the East Coast and Midwest, Gourmet has not expanded into the more traditional single-cup systems.

Like most of his counterparts, Tullio has kept a close eye on the emerging pod systems. But at the present time, he doesn't think any system has been able to provide a consistent level of quality.

Gourmet tea offers new growth

The company has also found success with gourmet teas. Tullio has noticed major success with Starbucks' Tazo tea. "Green tea has exploded," he said. "It's a product everybody is demanding. The tea business is extremely strong." Gourmet Coffee Service has also been successful marketing cold beverages in glassfront beverage coolers provided by beverage bottlers, whom Tullio called "a key strategic partner."

Water filtration has been another strong growth area. Water quality varies by locale, but Tullio noted that many accounts are willing to replace bottled water coolers with Everpure water filtration systems.

While Gourmet Coffee Service has been able to attract talented employees at all levels, a big reason for the company's success is the fact that the owners work well together. The key is having partners who are dedicated. "Bob and Jon have built and are driving a powerful marketing machine, Larry Deagon is a skillful operations manager, and Eric O'Green keeps a close eye on the vending," Tullio said. Meanwhile, Tullio's son, Paul, manages the Orange County branch while Deagon's son, Lance, is the vending route manager. "We're still a family-oriented business, and that's the attitude we strive to project," Tullio said.