First Colony Coffee & Tea Company

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First Colony Coffee & Tea Company

204–218 West 22nd Street
Norfolk, Virginia 23517
U.S.A.
Telephone: (757) 622-2224
Toll Free: (800) 446-8555
Fax: (757) 623-1833
Web site: http://www.firstcolonycoffee.com

Private Company
Incorporated: 1902
Employees: 80
Sales: $50 million (2005 est.)
NAIC: 311920 Coffee and Tea Manufacturing

First Colony Coffee & Tea Company, one of the first coffee manufacturers to distinguish itself in the specialty coffee market, sells a collection of single-origin coffees and blends, flavored and decaffeinated coffees, third-party certified-organic coffees, fair-trade coffees, and estate coffees. The company also markets First Colony and Bencheley specialty and flavored teas. Its products are sold at supermarkets, club stores, mass merchandisers, department stores, and specialty stores.

A REGIONAL COFFEE ROASTER: 1902–1950S

In 1902, the year in which the first International Coffee Conference took place at the New York Coffee Exchange, James G. Gill founded the James G. Gill Company, a coffee-roasting and tea company, in Norfolk, Virginia. Gill, a Scotsman by birth, and an established purveyor of imported European coffees and teas in Virginia, purchased a two-bag coffee roaster and began supplying stores in the greater Norfolk area with freshly roasted coffee. His mission was to bring quality coffees and teas to his clientele and to nurture a culture of long-term business relationships with retailers.

The Gill Co. grew steadily throughout the decades of the teens and the twenties to become known as a respected regional roaster in parts of North Carolina and Virginia. During this period in American history, packaging and transportation limitations led to the development of local and regional coffee roasters, who supplied their coffees and teas regularly to individual grocers. Best known and most successful for its Red Bag coffee—a blend of coffee and chicory—the Gill Co. became the largest regional roaster in the Virginia area and the nation's third largest importer of chicory. Despite its success, however, the company remained relatively small in scope when compared to other roasters nationally.

In the 1940s, ownership of the company remained in the family, but passed to J. Gill Brockenbrough, Sr., whose great aunt was a Gill. During World War II, the Gill Co. supplied the ships at the Norfolk naval base with coffee in bulk, which kept its roasters working 24 hours a day. By this time, the company was selling regionally to supermarkets as well as to small grocers, and employed company salesmen, assigned to travel regular routes in trucks loaded with freshly roasted bags of coffee to keep the company's customers stocked in its products. The company packed its coffee in wax-lined brown paper bags that it folded over and sealed by hand, as well as in bulk burlap bags of 30 and 50 pounds. This arrangement continued into the 1960s and 1970s, by which time the Gill Co. had 20 to 30 regional salespeople.

After World War II, however, there was a drop in coffee consumption in the United States. Major coffee brands, some of which were by that time selling nationally, placed less emphasis on coffee quality and flavor and more emphasis on convenience and price. Ease of transportation and the vacuum-sealed can meant that coffee did not have to be freshly roasted. Soda pop and instant coffee also came into popularity. "The younger generation wanted convenience," Charlie Cortellini, who became the company's president and chief executive officer in 2003, explained in a Tea & Coffee article. He added, "Popping a soda can spurred on a generation and quite frankly the coffee just wasn't good anymore. It literally killed a generation of coffee drinkers."

J. Gill Brockenbrough, Sr., had two sons, J. Gill, Jr., and Thomas (Tom), both of whom went to work for the Gill Co. in the early 1950s. Tom played a role in the company finances, but Gill, Jr., as vice president of the company, developed a keen interest in specialty coffees. He began importing a variety of beans from far-flung places, such as Africa and Indonesia, and roasting exotic coffee blends for himself and his friends. He eventually started test marketing his coffees—which included Arabian Mocha from Yemen; and Mocha Java, Colombia Supremo, Fancy Bourbon Santos, and Kilimanjaro from Tanzania—and developed a brochure with six or seven different coffees that the Gill Co. sold through a specialty division, which it called First Colony, beginning in the 1960s.

BUILDING A NATIONAL PRESENCE: 1960S–1980S

Also in the 1960s, the company started looking at the higher end of the coffee market and found that selling to department stores, in addition to grocers, created another outlet for the Gill Co.'s coffees. The first Washington, D.C., department store to sell the Gill and First Colony coffees was Woodward and Lothrop. Macy's and Bloomingdale's in New York City also started to carry Gill coffees in their food department, as did Marshall Field's in the Midwest, Meier & Frank in Portland, Oregon, and, eventually, most major department stores in the United States. In addition, during the final years of the 1960s, as the specialty foods movement got underway, lots of smaller stores started selling Gill coffees, and the company began to sell a lot more of its coffees in the larger 50-pound bags. The company also sold its coffees locally to restaurants and to such institutions as hospitals.

The specialty coffee industry experienced a growth spurt in the 1970s, and company revenues reached about $30 million during the first half of the decade. J. Gill Brockenbrough, Sr., sold the First Colony Coffee & Tea division to his sons in 1978. J. Gill, Jr., was interested in expanding First Colony, and the brothers saw an opportunity to increase the company's sales in the new cohort of coffee drinkers. They also added a line of specialty teas in tins, which they named "Susan's Teas" after a friend who created the company's first orange- and cinnamon-flavored tea blend.

The Brockenbroughs' hired a sales manager, Bob Meskin, who instituted a system of independent brokers. The brokers were selected on the basis of their sales connections as well as their commitment to providing outstanding customer service. On commission, these brokers sold First Colony coffees and teas to department, gourmet, and specialty stores. Also at this time, the company experimented with establishing coffeehouses, but this proved unsuccessful.

Department store sales remained strong through the mid-1980s with sales to Macy's reaching well over a million pounds in a year. Then, in the mid-1990s, First Colony's sales to the large stores started to dwindle, and the company turned to the emerging coffeehouses as a new market. These new customers, because they emphasized freshly brewed coffee, did not want to buy the company's 50-pound bags of coffee. So First Colony switched to selling five-pound bags, which it shipped six to a case, and then two-pound and one-pound bags.

COMPANY PERSPECTIVES

We have cultivated a new kind of coffee company, and we take pride in offering you our finest selection of beans while knowing that we are simultaneously improving the quality of life for coffee growers and their families.

The broker system had been a great success for First Colony. It suited the company's emphasis on building personal relationships with customers. At its heyday in the 1980s, the brokers reached about 50 in number. Then department stores began to cut back on their food departments, and First Colony turned back to supermarkets in the mid-1990s to fill the slack. Supermarkets usually work with distributors for their food items instead of brokers, so First Colony cut back on its brokers.

The Brockenbrough brothers also had a falling out in the 1990s and sold their interests in the company in 1995 to a group composed of individual investors and investment groups, which included a coffee-growing concern in Colombia. Tom Brockenbrough reinvested some of his interest in order to stay involved in the company and remained its chief financial officer.

Part of the new ownership was composed of 96,000 coffee-growing farmers who made up the Federación Nacional de Cafeteros de Colombia—Comité Departamental de Cafeteros de Antioquia. This partnership made First Colony the only vertically integrated coffee company in the United States and made it a forerunner in the fair-trade movement, which sets labor and pricing standards for the coffee industry. It also ensured an environmentally responsible agenda for the company.

First Colony has funded projects within the collective's growing regions, such as the construction of an aqueduct and the renovation of schools and hospitals. "It's an education for the consumer with so many labels and buttons out there. First Colony is the only coffee company that truly represents the foundation of the coffee industry," noted Cortellini. The cooperative eventually came to be the largest shareholder in the company.

INNOVATION IN A HIGHLY COMPETITIVE MARKET: 2003–06

Following the change in management, First Colony's production dipped somewhat from its mid-1990s peak of 25,000 pounds of coffee per day. However, from 2003 to 2006, according to Cortellini, the company again experienced a growth in sales of about 15 percent, bringing it back to near-peak levels. The increase was due in part to an exclusive licensing agreement with some famous brands, such as Jack Daniels, Ghiardelli, Southern Comfort, Frangelico, and Tia Maria. The company began selling Ghiardelli chocolate-flavored coffee in 1995 and followed with Jack Daniels products in 1997. In 2005, it introduced its Discoveries line of coffees in one-and-a-half-pound bags.

KEY DATES

1902:: James G. Gill founds the James G. Gill Company.
1940s:: J. Gill Brockenbrough, Sr., becomes head of the company.
1978:: The brothers Thomas and J. Gill Brockenbrough, Jr., purchase the First Colony Coffee & Tea division of the Gill Company from J. Gill Brockenbrough, Sr.
1995:: The brothers sell the company to a group of investors, which includes the Federación Nacional de Cafeteros de Colombia—Comité Departamental de Cafeteros de Antioquia; Charlie Cortellini becomes chief operating officer.
2002:: The company marks its 100th anniversary.

By 2006, First Colony products were available in 50 states and over the Internet. They sold in local stores, restaurants, and specialty shops as well as in supermarkets and high-end department stores, and chains, such as Marshall Field's, Macy's, Lowes Food Stores, Costco wholesale clubs, Linens 'n Things, Bed Bath & Beyond, and Target. The company was still relatively small but growing, still continuing to build lasting relationships as a way of doing business, and still roasting all of its coffees on two roasters that it had purchased in the 1960s.

Carrie Rothburd

PRINCIPAL COMPETITORS

Green Mountain Coffee, Inc.; JBR Gourmet Foods Inc.; Starbucks Corporation; Equal Exchange, Inc.; Global Exchange; Millstone Coffee Company; Thanksgiving Coffee Company.