Detroit Veteran Upgrades Marketing To Compete In A More demanding OCS Market

Some veterans of the office refreshment industry say the best of times are behind them. The OCS market is saturated, and the cost of product, equipment and wages are at an all time high.

Others say these are good times to be in the business, since the specialty coffee industry has injected it with new life and the newer brewers can deliver a genuine coffee house experience.

Veterans Bob Smith and Don Souden, who operate Pontiac Coffee Break Inc. in suburban Detroit, see merit in both of these positions. Having built the business from the ground up more than 30 years ago, they are realistic about today’s challenges, yet recognize the opportunities.

A new approach is needed

They believe that the future is promising, thanks to the quality of the state--of--the--art product and equipment. However, in order to take advantage of these tools, the OCS industry needs to improve its image to match its competing channels, such as c--stores and specialty stores. To do this, they believe they need to invest in better marketing programs.

“The OCS industry doesn’t get a lot of respect because we haven’t demanded it,” said Smith, who founded the company in 1974. Given the challenges the industry faces today, such as higher operating costs, increased competition from other retail channels and a stagnant customer base, Smith and Souden have pulled out all the stops and are investing heavily in marketing.

They recently invested $15,000 in a professionally produced, four--minute audio--visual presentation on a CD ROM that demonstrates the benefits of OCS, complete with customer testimonials. The company is presently conducting a bulk mailing of this presentation to prospective customers.

New focus on marketing

The CD ROM is one aspect of a new marketing plan. The company also offers monthly product promotions which customers can find on its website. It also offers custom logoed coffee dispensers and gives away free condiments. All of these activities are part of an ongoing plan to create a higher level of customer appreciation for OCS.

The enthusiasm can be felt throughout the company’s Waterford, Mich. headquarters. Employees greet visitors with smiles. Drivers, known as route managers, and service techs wear neatly pressed uniforms. The walls are decorated with coffee memorabilia and displays of both historic and new products and equipment, such as coffee pods and pod brewers. Most visitors would never know the building is over 30 years old, as it has been remodeled and is always in immaculate condition.

Humble beginnings

Today’s challenges are simply the latest chapter in a story that began when Smith returned from his duty as a fighter jet pilot in Vietnam. OCS was still a new concept at the time, and it seemed like a promising opportunity. He rented some space in his brother’s printing company and began knocking on doors with pourover brewers and national name brand, fractional pack coffees.The cost of product and equipment was so low at the time that Smith took locations with as few as four employees.

In six years, he built the business to about $250,000 in annual sales. In 1981, he met Souden, then a 27--year--old school teacher who was looking for a more lucrative career opportunity. Smith was working long hours and knew he couldn’t grow the company much more on his own. He offered Souden to buy into the company.

Both agreed that a partnership made more sense than an employer/employee relationship. This way, Souden had a stake in the success of the company, but would not be inclined to go off on his own and become a competitor. Souden remortgaged his house to buy into the business as a partner.

“I thought it was a unique business,” Souden said. He reasoned the business had a good future since coffee is a necessity in the workplace. He was impressed with what Smith had accomplished single handedly up till that point. “I liked that he had the initiative to go out and start this company,” Souden said.