U.S. Coffee has been in business for more than 40 years. It’s one of the last independent office coffee service providers in the Tristate area and has seen the industry change from a focus on coffee frac pack weights to single cup. Then again, much hasn’t changed for this 100-employee OCS provider, which still focuses on identifying customer needs and providing the best service.
Second generation owners Doug Shindler, president, and Richard Trapani, vice president, have taken the company their fathers built and added the equipment and software needed to keep the operation current and competitive. They consider their greatest attribute the ability to quickly respond to evolving consumer demands and test the latest technology, including using the Internet to move into business to consumer sales.
Two heads are better than one
The history of U.S. Coffee has always involved partnership. The business was created by Shindler’s father, Lowell Shindler, and his partner’s father, Steve Trapani. Both had small, 100 account OCS operations and after meeting at a local industry event, felt they could do better together. In 1972 they merged to become Bunn Coffee Service Inc.
Lowell ran the front of the house – operations. Steve ran the back - purchasing. They both focused on the future, meeting customer requests as the industry grew bigger and they could no longer know each customer personally.
From fathers to sons
Shindler started working for the business in 1995 as a sales representative. He had gone to school to be an attorney and after a few years, realized it wasn’t a career he wanted to pursue. Instead, he felt drawn to OCS. “Being in business is just more fun and exciting,” he said. “It’s in my DNA.” Shindler learned the business and was named president in the early 2000s.
Trapani had worked summers at the company for years doing everything from stocking the warehouse to sales. When he graduated with a public relations major in 2001, jobs were scarce. He always knew he’d come back to the family business someday, so he joined U.S. Coffee in the clerical department. The next year, he launched into sales to really learn the operation. He became vice president in 2006.
Name changes to U.S. Coffee
The name was changed to U.S. Coffee in the mid-90s for two reasons. The first was to end confusion that the operation might have a relationship with BUNN-O-Matic. The second was to choose a name that could be nationwide – since this had always been a goal of the founders.
In 2012, both Lowell and Steve passed away, but Shindler and Trapani remember their mantras, which included the belief that OCS was becoming a high volume, low margin business. Shindler considers this even truer today. “It’s tough to be a small company in this environment,” said Shindler. “Equipment is expensive. Margins are shrinking … Our company is large enough to hire good people and invest in the current technology.”
Trapani agrees the business has changed. “Our fathers used to walk around with a demo machine in a box – no expanded items,” he said about Lowell and Steve. Now, U.S. Coffee has more than 2,000 SKUs in the warehouse, plus an additional 40,000 office supply items that are not stocked. “We carry anything that doesn’t have to be refrigerated,” he added.
Requests spike for single cup
Single-cup, or what Trapani calls “one cup” has been a large trend for U.S. Coffee in recent years. “It’s changed the OCS landscape,” he explained. More companies are asking about single-cup because they believe it can make a better cup of coffee and will make employees happy. However, for Trapani and Shindler, the widespread availability of kcups make single-cup less profitable than it could be. “Everyone carries them – retail and the Internet – and since we don’t operate on a route system it’s impossible to police customers,” said Shindler about where locations are buying kcups.
U.S. Coffee also uses other cartridge style brewers, as well as bean to cup brewers, in order to offer single-cup options to locations. The company is also reinvestigating pod brewers as a better tasting and eco-friendly alternative. Currently, single cup is about 60 percent of the company’s coffee sales.
While the increase in tea drinking among U.S. consumers continues to be reported, U.S. Coffee hasn’t seen a jump in its tea sales. “It hasn’t taken off like coffee has – not in OCS,” said Trapani.
U.S. Coffee is also aggressively selling office supplies to customers, especially in defense against these types of companies adding coffee service. “We even hired an office supply sales specialist,” said Shindler.
U.S Coffee currently offers 40,000 office supply items in its catalog, something Shindler wants to add to the company Website. The biggest hurdle is getting preferred products to show up before other products in a search, Shindler explains. If a customer is searching for hot cups, Shindler wants the company’s OCS vendor cups to show up ahead of the office supply vendor hot cups, which cost him more. “It’s a matter of prioritizing the correct vendor,” he added.
Internet offers B2C
Despite the challenges, the partners believe the Internet will be the OCS battlefield of the future. “It’s becoming less and less a [physical] territory business,” said Shindler.
“It’s certainly a different business than coffee service.” Trapani agrees. “If you’re not on the Internet…you’re falling behind.”
Since U.S. Coffee has no prescheduled routes, locations must submit their orders via phone, fax, or more recently, the Internet. Trapani has seen more and more location managers using the Internet, especially among the millennials, who rarely call to talk to a customer service representative.
Having several robust Websites allows the operation to not only reach its OCS customers, but also sell directly to the consumer.
U.S. Coffee commits a lot of marketing dollars to the Websites’ SEO (search engine optimization) and Google AdWords. The company is also active on Facebook, Twitter and Pinterest. Once you start selling on the Internet you are no longer an OCS operator. You are an Internet retailer and that’s a totally different game,” added Shindler. It requires different skills and a large monetary investment. “Creating a Website is the easiest and cheapest part.”
Meeting customer requests
U.S. Coffee has three vending routes, separate from its OCS business. The vending business was added because of OCS customer requests. However, despite being a relatively small part of their service, they have invested in a lot of vending technology. The operation uses handhelds, prekitting, credit card readers and the partners just added vending management software to better analyze product sales and track cash accountability.
While Shindler and Trapani recognize the value in micro markets, they don’t consider them a good fit for their area. Trapani explains that being in a metropolitan market with high rise office buildings, most customers would have to get in an elevator to visit the market, and at that point, they would take the elevator down to the street and visit a convenience store. However, when the right opportunity comes along they are excited to try that too.
Sustainability just catching on
While customers have long been interested in green initiatives and sustainability, it’s only been recently Trapani and Shindler find customers are willing to spend money on these items. Therefore, the company now offers a large list of recycled and compostable products. “I wanted to come up with a good product line, so the customers could be as green as they wanted to be,” Trapani said. He finds customers start the process of going green by removing cups altogether and asking employees to use mugs. Then they ask for recycled paper goods in the breakrooms, etc.
Whether it’s for environmentally-friendly items or a particular type of tea, customer requests are something U.S. Coffee takes very seriously. “We will try to meet any request,” said Trapani. And often, he and Shindler will use the request to consider an additional service they could provide. That is how the company added vending, office supplies and water service. “We try to never say no,” Trapani added.
As their competitors were bought, U.S. Coffee continued to maintain a customer-orientated and flexible service structure. This, and the operation’s size, have allowed U.S. Coffee to take advantage of the newest technology innovations, and also test new products and services. “We still take risks,” Shindler declared proudly. He and his partner are well positioned for the future of coffee service.
