Secrets To Winning The Coffee Game

In today’s business environment, a successful office coffee service provider needs more than a love of coffee. There are too many competitors, too much volatility in coffee prices, too great a shift in what is important to the OCS decision maker at a facility. It means OCS business owners must stay informed and current, which is the daily goal for Bill Levine, founder and president of American Coffee Services, based in Cleveland, OH.

“You can’t just show up. Otherwise, it’s a recipe for disaster,” he said. “Business people have to be informed.”

This mantra has helped him grow for the past 60 years changing his operation from a vending focus to fully OCS. It is why he has always tried to diversify and take advantage of new opportunities in addition to managing as many fluctuating costs in his business as possible. This allows him to balance offering affordable coffee options with exceptional service and invest in professional marketing that includes utilizing new trends and technologies that appeal to decision makers.

Vending beginnings 

Levine didn’t always have a coffee service business. He started out running Atlas Vending in 1958, which serviced vending machines in Ohio, as well as game rooms in various other states. That was when a friend with a small coffee distributing company asked him for a favor.

“He was going bankrupt and begged me to take the business and just put it in my warehouse,” said Levine. Because it was a friend and the business had a small group of dedicated customers, Levine ultimately said yes. Fast forward a few years and Levine got a surprise phone call from his accountant. “He said, you know that small coffee distributing business you run, but don’t put much attention into? It’s making more money for you than the rest of your segments,” recalled Levine. That was a turning point. Levine bought a much larger coffee distributing company and sold his vending and gaming businesses. That was nearly 30 years ago.

Managing volatility 

Through the years managing a successful business, Levine has developed a strategy of eliminating as much unpredictability as he can. With coffee, that means purchasing it green.

“That’s one of the ways we remain competitive,” said Levine. “There’s too many other extraneous costs that we don’t have control of — bank interest rates, increases in packaging costs, etc.” In his market, consumers are still price sensitive. He can be competitive on price, and still have control of his profit margins, by purchasing and then warehousing green coffee.

While Levine buys green coffee to manage volatility, green coffee prices can themselves be volatile. “Many things can happen that affect the price,” said Levine. “You need to know where there’s rust on plants. Weather patterns are important — an El Nino is a big deal.” He adds that even more can affect the price, such as money market and hedge fund traders. These groups affect the commodities market with speculation, shorting it, longing it and nano trading. 

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