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SELLING THE BENEFITS OF OCS

Membership warehouse clubs were making their initial forays into OCS at the time. But Ferguson was able to counter the warehouse clubs’ lower prices by showing the customer how many times the product was being handled from the warehouse to the office. The employee had to pull the box from the retail or wholesale warehouse shelf, haul it to the counter, take it to the car, bring it to the office store room, then eventually move it to the break area.

Ferguson made the customer realize that all of this handling affected the product.

The business was much simpler back then. Products and equipment were mostly limited to pourover brewers and fractional packs. Ferguson and Endres reasoned they could go off on their own without too much difficulty. “I knew the sales end; he knew the service end,” Ferguson recalled.

They launched Southern Refreshment Services in 1991 in their garages. They bought used equipment from operators and restored it. They also bought a used van and repainted it. They went knocking on doors offering national brand fractional pack coffee and pourover brewers.

From the very beginning, Ferguson and Endres wore uniforms bearing their company logo.

PRIVATE LABEL BRINGS AN ADVANTAGE

In eight months, Ferguson and Endres signed an agreement with Excelso Coffee Co. to provide private label fractional packs. They remain committed to this day to
Excelso Coffee Co. for the support the roaster gave them in that crucial early period.

Growth was steady. After one year, they moved out of their garages into a rented warehouse.

Ferguson and Endres didn’t realize it right away, but they had picked a good time to be competing against national brands with high quality private label coffee. In the mid 1990s, some national roasters were offering customers lower pack weights which they claimed delivered the same quality coffee as heavier pack weights. Ferguson was able to successfully sell his private label against the lower pack weights. “That (the lower pack weight national brand) really helped us,” he recalled. “It (the private label) went over like hot cakes.”

In two years, they hired their first employee, Endres’ brother-in-law, Fred Sierra, to repair brewers and wash decanters. Sierra is now the general manager. Around this time, they also invested in their first OCS management software system.

EARLY INVESTMENT IN OCS SOFTWARE

They were just learning about computers. Not many small OCS companies invest in management software, but Ferguson and Endres recognized the need for good accounting software in a business that must keep track of equipment, orders and inventory.

In 2000, they hired their first dedicated sales person. This proved to be an important advantage as OCS products and equipment were evolving. Better quality products and equipment — such as airpots, single-cup brewers and specialty coffee — gave the company the chance to distinguish itself from the competition. Ferguson and Endres believe that it is necessary to have dedicated sales people to market these benefits.