Above And Beyond

Sept. 20, 2019

Coffee Ambassador has provided San Diego County with premium office coffee service for 50 years. Like most OCS operators, their methods of offering coffee service have drastically changed, but what hasn’t changed is their steadfast commitment to truly listening to their clients’ needs. Run by powerhouse siblings Sean Curtis and Barbara Curtis Smalley, Coffee Ambassador keeps those clients happy by being both scalable and adaptable, and by providing superior training to their 35 employees.

“The way we’ve got this company set up, it’s like I’m the front stage and [Smalley] is the backstage, like a theatrical production,” Sean Curtis, CEO of Coffee Ambassador, explained. “I’m in charge of marketing and business development, or what the customer sees, feels, tastes and touches. And then Barb’s specialty is the detail-oriented stuff like computer systems, IT and human resources.”

Curtis and Smalley’s father had worked in the Los Angeles-based family business, the Wilbur Curtis Company, which manufactured commercial coffee brewing equipment. In 1969, he decided to take a chance and move to San Diego to launch Coffee Ambassador.

“In a way, you could say that we’re third-generation coffee people,” Curtis said. “My father was very entrepreneurial, to leave an established family business in Los Angeles and come to San Diego. To take that risk was something I always appreciated.”

Despite Sean’s admiration for his father’s risk-taking spirit, he didn’t initially plan to join the family business.

“I was actually pre-med at UCSD, but found out that wasn’t really my calling,” Curtis recalled, laughing. “I moved over to San Diego State in the business school and got a degree in marketing. The whole time I was working at Coffee Ambassador, so it was a great eye-opener for me because of the diversity of the companies we serviced. It was a great experience.” 

Barb Smalley also worked at the family business while attending school, and she ultimately decided that joining the company was the right choice for her.

“I was working at Coffee Ambassador during college, and even in high school, so I had to decide what I was going to do. Was I going to go outside the family?” Barb Smalley, president of Coffee Ambassador, explained. “I looked at other options, but we’re a pretty tight-knit family, so I decided to go with Coffee Ambassador because it was long-term sustainable. I majored in business, so it just made sense. And when you grow up in it, you find a love for it.”

A love for coffee service

Both Curtis and Smalley clearly have a love for office coffee service, and coffee itself. They have a deep knowledge and appreciation for the brands they work with, including regional roasters like Peet’s Coffee & Tea, Gaviña Gourmet Coffee, and internationally-known brands like Nespresso and Starbucks. Curtis noted that they’re also doing a lot of business with FLAVIA and Lavazza. Curtis and Smalley’s expertise and superior customer service has attracted many San Diego County businesses, including hospitals, banks, law firms, and particularly companies in the thriving biotech industry.

“We cover all of San Diego County, so that starts at the border of Mexico and runs all the way up to San Juan Capistrano,” Curtis said. “The footprint has always been the same, but I think our concentration of business has really changed, especially over the last five years. The area that we’re located in is between Del Mar and La Jolla, and it’s a really big biotech hub, with probably 600 biotech companies within five to six miles of us. It’s a great place to live, and it attracts a lot of scientists here.”

Despite the biotech boom, the territory was not exempt from economic downturn, especially during the Great Recession. To avoid losing accounts, Curtis and Smalley proactively approached clients and suggested costcutting measures until the economy improved.

“Everybody was cutting budgets,” Smalley explained. “So we went after our accounts — particularly our larger accounts who were doing single-cup brewers, which cost them twice as much per cup than traditional brew — and offered to swap everything out.”

Smalley said Coffee Ambassador’s route drivers, who were paid on commission, were initially disappointed with this approach, as they earned a higher gross profit by selling single-cup to their clients.

“I said to my drivers, ‘Don’t be penny wise and pound foolish,’” she continued. “The worst thing you can do is get booted out because you’re too expensive. If they don’t want to spend money on coffee, they’re going to send someone to Costco and do it themselves. I’d rather stay in there, keep the relationship going, and be a good vendor for them. We might earn 50 cents instead of a dollar, but when the economy turns around, maybe they’ll upgrade again.”

Being sensitive to client’s needs transcends what’s happening in the economy at any given time.

“It was a big challenge for us in 2008, but it’s a continual process,” she said. “I always find that in January, everyone is looking at their budgets, and that’s when they say, ‘We’re spending more than we think we should.’ So we say, ‘What’s a good solution for you, and what’s going to keep your employees happy?’ People’s needs change and budgets change, so you have to be scalable. You have to let your clients know that you’re willing to adjust, because it’s not about what Coffee Ambassador needs, it’s about what our clients need.” 

An extra special experience

In order to give prospective clients a special experience, Coffee Ambassador created the Coffee Showroom, a custom tasting room within their 10,000 square-foot headquarters. This allows them to invite prospective clients for a complimentary tasting in a comfortable, relaxed environment.

“We wanted to build a really cool café for our staff, and as Barb and I started working on the project, I realized that we’re in such an ideal area. What if we started bringing people in to do taste testing, just like they’d demo a product at the Apple Store?” Curtis recalled. “It ended up being a great way to get people into our facility in a very low-pressure way — we’re not high-pressure salespeople, we take a consultative approach — so they can try different coffees. We have a lot of variety, different coffees, the ice maker, the water filtration system — virtually our entire line is laid out in this showroom. We’ve got nice lighting and artwork, and we play music. We make it a fun experience.”

Curtis said that inviting prospects to the Showroom has taken their closing ratio up around 90 percent. He attributes this to their ability to showcase different types of coffee in a welcoming space where Coffee Ambassador’s friendly, informative staff can answer any questions that may arise. The Showroom has been so effective that Curtis and Smalley recently opened another tasting room in partnership with Nespresso.

“We’ve partnered with Nespresso, which is part of Nestle, and took one area of our building to showcase the Nespresso Professional, which was designed specifically for offices,” Curtis said. “We dedicated a space for Nespresso because we think it has so much potential in the long term. They wanted to form a true partnership; they were extremely accommodating, and they were great to work with.”

Microbreweries, millennials and customized service

Both Curtis and Smalley likened the popularity of their tasting rooms to the saturation of microbreweries in San Diego, and across the U.S.

“There’s kind of an interesting parallel taking place, as San Diego now has over 100 microbreweries,” he said. “Millennials are really into it, they’ll go to all the different tasting rooms. We wanted to take it a step further with the coffee experience in the office. We make it more fun — we invite you in to do a tasting, and if you think this might fit in an area of your break room or [office] kitchen, we have all the information you need right at your fingertips. I think having the tasting rooms helps ignite ideas and excitement over what they can do back at their own workplace.”

Curtis noted that millennials are also driving the trend to consume products from local businesses — specifically, local roasters — especially ones who align with their beliefs around environmental sustainability.

“We’re seeing that customers want to get local roasters into their offices, so we’re working with a couple of local roasters to bring their coffee to our customers,” he said.

Smalley noted that offering local products along with internationally recognized brands is important because people want variety in their beverage options. Even if an initial order with a local roaster is a small one, Smalley said that she can see the potential for growth.

"It’s nice to have variety; I think people like to experiment with different drinks,” she said. “Local brands are a big trend — there are a lot of microroasters around, just like there are a lot of microbreweries around. Instead of just sticking to the big guys, we’ll carry local roasters. Right now it may just be one bag a month, but it will probably take off in popularity, and we’ll see growth there. It’s important, because we’re also locally owned and operated — we pride ourselves on that — and we hope we can do business with local folks.”

Coffee Ambassador is part of the Royal Connection, a division of Birmingham, Alabama-based Royal Cup Coffee that sources independent OCS businesses to service national accounts where they don’t have branches.

“There’s a whole map of the Royal Connection, so they can compete with the national players, but then the client gets customized service,” Smalley explained. “It gives national companies the opportunity to get more of a focused, specialized service. It’s a great relationship for both of us. It was easy to take this concept into our portfolio and execute it.”

Offerings beyond coffee

Curtis said that while Coffee Ambassador is providing a lot of single-cup and bean-to-cup services to clients, they still do a significant amount of business in traditional, fresh-brewed coffee. Growing segments include water filtration and ice machines, which Curtis attributes to the rising popularity of cold brew and iced coffee.

“Making an ice coffee is pretty straightforward,” he explained. “You make a fresh cup of coffee and then you pour ice over the top, and then you can add creamer or flavored creamer, which we sell a ton of. We’ve expanded our options, and we carry a significant number of creamer flavors. We sell more French Vanilla than we do regular half-and-half.”

In addition to expansive coffee options, water filtration and ice machines, Coffee Ambassador also offers teas, sodas and snacks through pantry service. Smalley said that if a customer requests a particular product, she’ll find a way to provide it to them.

“With pantry items or extra items that they may need, if we don’t carry it, I’ll source it and find a way to get it,” she said. “Even if that means carrying two to three cases in the warehouse for that one customer, then we’ll do that. The new craze is that La Croix water. We had clients request it, so we started carrying it. Another client wanted a certain type of crackers, or water bottles with special caps on them, or a decaf tea that we can’t get through Vistar, so I found a way to buy directly from Bigelow. We don’t carry a lot of pantry items like a micro market would, but if they need something, we’ll give them what they want.”

Curtis said they analyze the cost-effectiveness of particular products to ensure they make sense for each account.

“We’re improving on the whole coffee experience, but the caveat for us as an OCS operator is the cost,” he said. “The big, dramatic change [in the industry] is the bean-to-cup demand. That would be like de jong DUKE, Avalon, these larger units in which you put the whole beans in, activate the machine to grind the beans, dose them and make a coffee or Caffé Americano. The units have a mixture of powdered milk so you can also make a cappuccino or a latte. These machines are considerably more expensive, so we have to make sure that we get what we call ‘the right fit’ clients, where there’s enough people and there’s enough demand to support the economics of the business model.”

Curtis said that his colleagues in Canada and U.S. cities such as Los Angeles, San Francisco and New York City initially sparked this trend, and it’s now migrated to other areas of the country. He noted that prospective clients often approach Coffee Ambassador after seeing a bean-to-cup setup in another client’s office, showing an increasing interest in high-quality coffee in the workplace.

Training, technology and trust

Curtis and Smalley oversee 35 employees at Coffee Ambassador, and training is very important to the company culture. Coffee Ambassador does general training based on the CX “customer experience” model, and they also hold product-specific trainings with their supplier partners as needed.

“We hear from a lot of our vendor partners that we really focus on training,’” Curtis said. “It’s important. The way I look at it, besides the coffee, our most valuable resource is our human resource. Yeah, we’re in the coffee business, but we’re also in the service business, and that means having happy people out in the field representing the company. Training also helps build confidence — you build excitement, you improve morale, and people feel engaged.”

Training is also important as technological advances continue to generate new equipment for making coffee and running business operations. Smalley said that Coffee Ambassador has been using Smart Service in conjunction with QuickBooks, and iFleet to communicate with service technicians, salespeople, and customer service representatives.

“We’ve outgrown QuickBooks, if you can believe that, so we are now embarking upon upgrading to NetSuite,” she explained. “It’s going to be a bear — I’ve been through three upgrades, and it’s not fun — but it’s better than crashing. You know how technology changes; in two or three years, it’s outdated. So you really need to keep up with it.”

Curtis said that he foresees more technological advances affecting the OCS segment, particularly with telemetry and touchscreens.

“Everything is getting more sophisticated — it’s like the computer industry — it’s amazing how things change,” he said. “For us, our key’s got to be keeping close to our customer’s needs. If something pops up in the marketplace that we haven’t seen, we need to address it quickly and see if it’s right for us.”

“It’s great that you can do stuff online, especially for marketing purposes or if you need to disseminate information,” he continued. “But at the end of the day, coffee is about the taste, the smell, the tactile experience.”

Both Curtis and Smalley enjoy working with their team, with the many different clients they’ve worked with over the past three decades, and with each other.

“I really like the variety of all the different things I get to do as CEO,” Curtis said. “I’m always putting on different hats, but at the end of the day it all comes back to driving that customer experience. I enjoy the people — our staff and our customers.”

“The nice thing about being with your family is that there’s a high amount of trust,” Smalley added. “One of our mantras is, do what you say you’re going to do. That’s really important. The key thing for us is the people. People are the bloodline of the company.”