OCS Success: More Than Coffee In The Carolinas

Sept. 9, 2015

More than just coffee. That’s the creed that Capitol Coffee Systems, an office coffee service provider located in North and South Carolina, was built upon. In just three decades the operation has grown from two to 50 employees, one to six operating locations and 300 to 3,000 SKUs. It has lived up to its motto by embracing trends such as technology investments and offering its locations the best possible customer service. Capitol Coffee Systems has grown its customer base to more than 4,000 and has no plans of slowing down.

Humble beginnings

Capitol Coffee began in 1979 when Buddy Brunson and John Scott decided they wanted to work for themselves. They had been working in sales for a coffee roaster, but saw an opportunity in office coffee. Brunson and Scott began their operation out of a barn, using it as their warehouse and two Volkswagen Beetles for delivery vehicles. But it didn’t say that way for long. They quickly outgrew the barn and VW Beetles and moved into a warehouse with delivery vans.

Today the company is a second-generation business that has grown organically with six locations in Raleigh, Wilmington, Charlotte, Columbia, Beaufort and Charleston. Capitol Coffee Systems still operates on its early commitment to offer a great selection and even better customer service. In order to stay successful with customers, the company has made investments and expanded services.

Watch trends, embrace change

Although the company began in coffee, its owners quickly realized the need to offer more than just a cup of joe. The companies’ founders knew they needed to be a one-stop shop for their locations; a comprehensive breakroom solution. They began offering more SKUs of non-coffee products such as breakroom snacks, paper products, water systems, hand sanitizers, cleaning supplies and more. As the consumer changed, so too did the company’s offerings and that is still true today.

“Capitol has always embraced trends, new equipment and new technologies,” said Scott. “From the early days of embracing automatic pot systems over pour overs, to today's trend towards bean-to-cup systems.” Currently the company continues to grow and stay relevant by partnering with local roasters and offering alternative beverages. “Do not be afraid of new trends,” said Scott. “Yes there are still great accounts out there that use a 3-burner glass pot system. But there are also some really, really great accounts out there that want a pricey bean-to-cup machine. The equipment cost up front can be scary, but the return can be huge.”

Technology counts

Technology is another change Capitol Coffee Systems hasn’t ignored. Early on, the company went away from working accounts "off the truck" to a pre order system. “That allows us to carry a wide variety of products and manage inventory better,” said Scott. It built a Website and allowed customers to do online ordering, which continues to be a large part of its business. It also moved to a cloud-based business management system in 2011, which helped the company eliminate the need for on-premise servers and helped grow the company’s share of revenue from its B2B ecommerce site from 5 percent to more than 30 percent. “Every business action is in real time and updated immediately,” said Scott. “We are able to work from anywhere via our mobile devices.”

The company’s technology adaptation has given them some recognition. In 2014 Capitol Coffee Systems was recognized with a Market Mover Award from Modern Distribution Management (MDM), a provider of wholesale distribution news, expert analysis and market research. The company looks forward to continued growth, but recognizes that growth won’t come without some challenges.

Challenges encourage innovation

One of the biggest challenges the company faces is the amount of competition it has, especially from companies not traditionally in OCS, such as large office products companies. “We have to rely on our greatest strength, customer service, to remain relevant,” said Scott. Another challenge is the rising cost of doing business. “Product costs, equipment costs and employee costs are major factors,” he said. Capitol Coffee Systems isn’t worried about its success, however. The company’s ability to embrace change and trends, as well as continue its focus on customer service, will make it a strong OCS force for generations to come.