Community Coffee Co. L.L.C.

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Community Coffee Co. L.L.C.

3332 Partridge Lane, Building A
Baton Rouge, Louisiana 70809
U.S.A.
Telephone: (225) 368-3900
Fax: (225) 295-4510
Web site: http://www.communitycoffee.com

Private Company
Incorporated: 1956
Employees: 1,000
Sales: $100 million (2001 est.)
NAIC: 311920 Coffee and Tea Manufacturing

Community Coffee Co. L.L.C. is the largest family-owned coffee brand in the United States. The company was founded in Baton Rouge, Louisiana, in 1919 by Henry Norman Saurage, whose grandson, Henry Norman Saurage III, remained chairman of the board of directors in 2002. Community was the first company in North America to develop vacuum-sealed bag packaging and is now the owner of a patent on vacuum-sealed whole bean dispensers for retail outlets. Unofficially regarded as the “state coffee” of Louisiana, Community sells its signature “red bag” coffee in grocery stores across the Gulf South, through mail- and Internet-ordering, and through its subsidiary CC’s Gourmet Coffee Houses in Louisiana and Texas.

Laying the Foundation for Success: 1919-76

Community Coffee began with Henry Norman “Cap” Saurage in 1919 when Saurage opened the Full Weight Grocery in Baton Rouge and began selling his own unique blend of coffee. Saurage bought a variety of freshly roasted beans from New Orleans, mixed them according to his own tastes, ground and packaged the coffee by hand, and delivered it to his local customers by horse-drawn wagon. By 1924, demand for the coffee was so great that Saurage could hardly fill all of his orders. He closed the grocery store and converted the barn in his own back yard into a coffee mill and packaging plant in order to devote himself to the coffee business full time. Saurage named his product “Community” in recognition of his devoted local customers. As the reputation of Community Coffee grew, Saurage began delivering his coffee to stores and restaurants.

Cap Saurage was famously meticulous about the quality of his product, and his son, H. Norman Saurage, Jr., was no different. In 1941, shortly after assuming the helm of the company, H. Norman bought a Jabez Burns “Jubilee” Roaster, and Community began roasting its beans in-house. By controlling this crucial phase of coffee production, he argued, the company would be able to guarantee an even greater level of quality and freshness. In 1946, production expanded further when the family built its first modern coffee roasting and packaging plant in downtown Baton Rouge. During these years, the company also began filling orders by mail upon request.

In the 1960s, Community began importing its own beans directly from Brazil. At the time, this was highly unusual for a company of Community’s size; most companies purchased their beans from brokers. The move was indicative of Community’s dedication to maximizing quality control and further streamlining all phases of production. In the early 1970s, Community built a new and improved plant on the other side of the Mississippi River, in Port Allen. At the new location, Community could receive shipments of green coffee beans straight off the cargo ships that came into the port of Baton Rouge.

Innovation and Growth: 1970s-80s

Cap’s grandson Henry Norman Saurage III assumed the role of president and CEO in 1977. Norman had grown up in the coffee business. During his teens, he had worked as a coffee urn repairman in the warehouse of the mail order department and also filled in as a salesman in the summer. Norman spent much of his early career in the sales department, where he developed his knowledge of the industry as well as his coffee palate. Eventually, he earned his way to management level, where he served as vice-president overseeing operations, marketing, and sales.

When Saurage III succeeded his father in July 1977, the coffee industry was in the throes of a worldwide crisis. A freeze in Brazil had ruined the bulk of that country’s coffee crops. At this time, Brazil’s crops accounted for about 35 percent of the world’s supply of green coffee beans, so when the freeze devastated world supply, the price of coffee soared. True to his grandfather’s founding values, H. Norman Saurage III led Community’s management team to design a new pricing strategy that would lessen the impact of the coffee shortage on retailers and individual customers, demonstrating the company’s ongoing commitment to the community it served. Through Community’s efforts to offer extremely competitive prices and avoid taking advantage of its customers during the coffee shortage, the company benefited greatly: it attracted new customers, gaining greater market share and brand recognition, while redoubling the loyalty of existing customers.

During this time, Saurage III was also instrumental in pushing forward the development and marketing of new, vacuum-sealed coffee bags—the first of their kind in North America. The vacuum bags made it possible to offer customers the convenient packaging that they were accustomed to, along with a level of freshness that had previously only been available from vacuum-sealed steel cans. Further, vacuum bags were a much more cost-effective form of packaging than cans, and Community was able to pass the savings along to its customers once again.

At a time when H. Norman Saurage III was focused on revamping and reinvigorating the company’s brand growth strategy, the vacuum-sealed bags were a critical innovation, enabling Community to extend its business to previously unreachable regions. Before the vacuum bag, Community could not—or would not—sell its coffee outside Louisiana or the lower Mississippi Gulf Coast, because the lower-tech packaging of that time was not sufficient to maintain optimum freshness and flavor (qualities upon which Community had built its name) over the extended shipping distance. The vacuum technology enabled Community to introduce its product to Texas and all of the Gulf states. The result was an exponential increase in sales. Later, Community would go on to patent a special, vacuum-sealed whole bean gourmet coffee dispenser called the Fresh-O-Lator, which would prove an enormous boon to grocery store sales.

With the vacuum technology in place, Community was also well poised to expand its mail-order business. In 1981, the company launched its first proactive effort to increase sales through mail order. Community developed and distributed its first extensive mail-order catalog, which included gourmet coffee, gourmet food, and kitchen equipment.

Saurage III’s tenure as president and CEO ended in 1983, when his father resumed the position. In 1986, Charles E. Lee, Community’s treasurer, was named president until he was succeeded by L. Patrick Pettijohn. Lee and Pettijohn were the first top executives at Community who were not members of the Saurage family.

Investing in Louisiana: 1988-99

From its first years, Community Coffee was committed to participating in and giving back to the community in which it operated. Through financial commitments, product donations, and employee volunteer work, Community contributed to civic improvement, particularly in the area of education. To this end, Community Coffee launched a program in 1988 called Community Cash for Schools, which involved community participation (and encouraged sales of the company’s coffee) and resulted in monetary donations, used for equipment and supplies, to participating schools. By 2001, the 13th year of the program, Community had contributed more than $2 million and attracted the participation of 750 schools throughout the South.

By 1995, Community Coffee was selling strongly at supermarkets in six southern states, and the well-known brand was poised once again for market expansion. In September of that year, Community formed a subsidiary called Community Coffee Shop, Inc., and announced plans to start opening local coffee houses under the name CC’s Gourmet Coffee House, beginning with its first location on Magazine Street in New Orleans. Community had made an appearance on the coffee house scene in the early 1980s when it opened six coupon redemption sites in Louisiana under the name Community Coffee Place. At these outlets, customers could redeem coupons for coffee and tea, as well as gourmet kitchen items. Community also used these sites to sell and serve coffee, but the venture was discontinued in 1981 due to waning consumer interest.

With the launch of CC’s, Community’s first wholly retail endeavor, the company staked its territory in the final frontier of distribution. This was seen as a necessary move in order to keep the company at the forefront of all avenues of industry competition. Billed as community gathering spots, CC’s took pains to cater to the full spectrum of coffee drinkers—from the inquiring coffee gourmet to the regular guy seeking a plain old cup of “joe.” New employees were required to undergo a week-long training program that focused on developing their palate and vocabulary for the world’s many varieties of coffee.

By 1997, Community was planning a major expansion of the chain—from four locations to 12 in a year’s time. The stated strategy was to continue to expand into areas where the Community brand already enjoyed a grocery store presence and an established base of loyal customers. At this time, the most prevalent coffeehouse chain in the region was PJ’s Coffee and Tea, founded in 1978, with 20 stores and 16 franchises from New Orleans to Mississippi and Florida.

In the following years, Community forged ties with the local arts community as a way of further distinguishing its cafes and its identity as a true Louisiana brand. In 1998, CC’s began a collaboration with New Orleans’ Contemporary Arts Center (CAC) whereby CC’s cafes would host professionally curated exhibitions of works by local artists and crafters. By supporting the arts, Community had found a way once again to promote its own business while providing a public service.

In 1999, Community Coffee became the exclusive corporate underwriter of a New Orleans-produced, nationally syndicated radio show called American Routes. Distributed by Public Radio International, American Routes was then being broadcast weekly on 80 stations around the United States.

Company Perspectives:

Our vision is to be the best coffee company in American while sharing our passion for quality with you!

Community Coffee experienced astronomical growth in the 1990s. The decade had spawned a new national awareness about the quality and varieties of coffee available. Sales of instant coffee had plummeted and Americans were now willing to pay more for gourmet grinds. Coffeehouses offering premium gourmet coffee and specialty drinks had sprung up everywhere, responding to and nurturing the craze. According to the Specialty Coffee Association of America and the National Coffee Association, these coffeehouses, CC’s among them, netted $3.9 billion in sales in 1999. Over the decade, Community’s staff roster had grown from around 200 employees to more than 1000, and CC’s Coffeehouses had spread through Louisiana and into Texas, numbering 30 locations and still growing by 2000.

New Ideas for the 21st Century

In 2001, Randall “Randy” Russ, then acting as vice-president of operations, was elected Community’s new president and CEO. Russ’s stated vision was to make Community Coffee the best coffee company in the nation—not necessarily the biggest, but the best. The challenge for Russ in fostering Community’s ongoing growth and success would be to hold the company true to the values and identity of its 82-year-old heritage while continuing to innovate and keep pace with the changing times.

Community Coffee continued to grow and modernize its operations as it entered the twenty-first century. In 2000, the company launched a Web site with an online store. Community also sought to extend its presence beyond the seven states it already occupied and began marketing itself to the rest of the nation (especially Louisiana expatriates) alongside other distinctive Louisiana offerings such as Tabasco sauce or Zatarain’s food products.

At the public service end of the business, Community maintained its support of Louisiana and the other Gulf Coast states through programs like Cash for Schools. In 2001, the company also spearheaded a Relationship Coffee Program with the Colombian Coffee Federation in Toledo-Labteca, one of the poorest regions of that country. This program guaranteed coffee farmers a premium, fixed price for their coffee in exchange for continued top-quality crops. In addition to the pricing guarantee, Community pledged to deposit money into an endowment that would be used to build a new secondary school in the region. Randy Russ cited collaborations like this as essential to the future of the specialty coffee industry. Indeed, as consumer awareness of the politics surrounding coffee production continued to grow (as evidenced by the fair trade coffee movement), it seemed as though Community Coffee’s strong values and capacity to innovate would put it ahead of the competition.

Principal Subsidiaries

Community Coffee Shop, Inc.

Principal Competitors

The Procter & Gamble Co.; Starbucks Corporation; New World Restaurant Group Inc.; Tully’s Coffee Corporation.

Key Dates:

1919:: Henry Norman “Cap” Saurage begins selling his own blend of coffee to customers at his Baton Rouge country store, the Full Weight Grocery.
1924:: Saurage closes the company store and converts his barn into a coffee mill to devote himself to selling coffee full time.
1941:: Henry Norman Saurage, Jr. brings the roasting process in-house.
1946:: The Saurage family builds a modern roasting plant overlooking the Mississippi River.
1957:: Community begins importing beans directly from Brazil.
1970:: Community builds a new plant across the Mississippi River in Port Allen, implementing advanced European packaging techniques.
1977:: Henry Norman Saurage III becomes president and begins development of the first vacuum-sealed bags in North America.
1988:: Community Coffee launches its Cash for Schools program.
1995:: Community Coffee opens the first CC’s Gourmet Coffee House on Magazine Street in New Orleans.
2000:: Community Coffee launches its Web site and begins selling coffee online.
2001:: Randall “Randy” Russ succeeds H. Norman Saurage III as president and CEO.