In search of the perfect brew
Rose-Marcoline offered national brand coffee to customers who requested it, but the majority of customers purchased the private label.
Following Cayer’s advice, Rose-Marcoline joined the National Coffee Service Association (NCSA). She attended NCSA conventions every two years, which she found informative.
By 1987, Rose-Marcoline had hired her brother and a sales rep to help service her 100 accounts. She moved to a warehouse in the downtown area.
A change in career path
At the time, the local beer distributor decided he wanted to get into the coffee business and offered to buy Rose-Marcoline’s company and two other independent OCS companies. The beer distributor, owned by the McCormick family, acquired Coffee Mill, Coffee Systems of Erie and Cafco Coffee Service to form McCormick Coffee.
Rose-Marcoline had never lost interest in running a coffee shop, so after selling Coffee Mill, she opened a coffee shop in a local hospital. In the meantime, she launched some unrelated businesses. She started a courier service for hospital laboratories and a health care provider directory that included facsimile numbers of health care providers. Both of these businesses met needs she learned about while working as an X-ray technician.
The hospital coffee shop was successful, and she opened a second coffee shop in another hospital.
McCormick Coffee, meanwhile, under its new owners, expanded into the convenience store coffee business, servicing 75 convenience stores. The convenience store chain became half of the company’s business.
McCormick Coffee sales had increased substantially by 2004, when the owners were planning for retirement and they approached Rose-Marcoline about buying the company.
Opportunity beckons
Rose-Macoline and a partner agreed to purchase McCormick Coffee. The company operated from a 12,000-square-foot building in downtown Erie owned by the McCormick family.
When she assumed control of the business, she found it needed a stronger focus on quality. The company had grown significantly, but it had poor inventory control, and it had not maintained Rose-Marcoline’s commitment to quality coffee. The McCormicks had largely replaced Rose-Marcoline’s high fraction pack, 100 percent Colombian coffee with lower fraction pack, national name brand coffee and their own private label blend.
“They really eroded what I had worked so hard to achieve,” Rose-Marcoline said. “There was no vision.”
She reviewed the sales records and eliminated about 300 of the nearly 1,000 accounts on the books, based on sales volume.
The former owners had introduced handhelds and a computer program written for the beer industry. Rose-Marcoline is switching to a customized software system that utilizes wi-fi enabled handhelds.
She consolidated three warehouses into one.
She replaced all of the employees with the exception of one.
But things got worse before they got better. Six years after buying the company, it lost the convenience store business, which cut sales in half.
The setback didn’t discourage her. In retrospect, this was a blessing in disguise. Rose-Marcoline opted not to try to recover the convenience store business with other convenience stores. “They (convenience store customers) are very demanding,” she said. “You run your whole company for those sales. I’d rather have manageable customers instead of them managing me.”
She also realized a lot of exciting new products had come on the OCS market.
Single-cup offers new growth
The biggest opportunity of all was single-cup coffee, which was almost non-existent in Erie in 2005. Rose-Marcoline signed on as a Keurig distributor after she began carrying Green Mountain Coffee Roasters fraction packs.
“They moved everybody from the ‘pot’ price to the ‘cup’ price,” Rose-Marcoline said of Green Mountain. “That was their success.”
The Keurigs helped win accounts and are now in 15 percent of the company’s OCS accounts.
