The Daily Grind In an industry of high-visibility brand names, they don't have one. So how does this family's coffee company stay in business?

Take one post-grad challenging the theory of Father KnowsBest paired with a sister who can sell anything to anyone.Throw that familial fire into a ring with the champs of not onlythe instant coffee domain but the grocery world, and what do youget? A ferocious battle from underdogs full of determination. Theymight not win the match--in fact, they accept that's nearlyimpossible. But they know how to survive. And until they'reactually pinned, defeat will not be in their vocabulary.

Meet the team members of Ryan Coffee Co., the San Leandro,California, maker of Victorian House Concentrated Coffee: Greg RyanJr., 36, president and CEO; sister Heather Ryan-Dubé, 35, headof sales and marketing; and their father Greg Ryan Sr., 64, head ofinstitutional sales and licensing. Sounds ultra-professional foryour average family-owned business--but then again, typicalfamily-owned ventures tend to steer clear of markets dominated byKraft Foods Inc., Procter & Gamble and Nestlé, the largestfood company in the world.

A new variation on the age-old mom-and-pop story: In this one,the MBA-awarded son sees potential in the stagnant idea Mom and Popare sitting on and has to convince them there's a better way.Who knew concentrated coffee could cause such controversy?

The idea had been around since the late 1930s, and even largecompanies like Coca-Cola had unsuccessfully attempted to marketfrozen concentrate at the retail level in the 1970s. All Greg Sr.and his wife were trying to do when they invented their own liquidconcentrated coffee for personal use was eliminate coffee-makerconflict ignited by "regular or decaf?" and get rid ofcoffee grounds and filter waste. But after friends began ravingabout the Ryans' homemade brew, they decided to sell it tolocal restaurants and hired a sales and plant manager to run theoperation from their Northern California ranch.

Fresh out of Southern Methodist University in Dallas and hot onthe interview trail, Greg Jr. returned home in 1989 to help run thecoffee business. But with a product that perished almost as quicklyas it hit the shelves, Greg Jr. didn't see much of a future forRyan Coffee Co. He expressed his concern to Greg Sr., usuallygetting a response along the lines of "Oh, don't worryabout it--just sell it." Frustrated, he stopped working forthe company and decided to get a new job. "I said, `Listen, Ithink you and Mom are going to lose a lot of money becausethere's no product here,' " Greg Jr. recalls.About six weeks after he severed business ties with his parents,they announced the inevitable shut-down of the company--the productwas still spoiling, and they couldn't figure out how to fix theproblem.

Re-enter Greg Jr., who agreed to six months of salary-freeexperimentation to try to unravel the mysterious spoiling of theconcentrated coffee. But this time, there was an amendment to thedeal. "I made my parents admit and write down that the coffeecompany was dead in its present form," says Greg Jr."[And I also made them agree] that if I got lucky and figuredout how to make the product shelf-stable, I would get to controlthe company." Not too proud to realize their son's way wasthe only way, they agreed.

Staking Their Claim

After nearly six months of failed trials, Greg Jr.'sfinal-hour solution to save Victorian House Concentrated Coffeecame in the form of a biotech firm recommended by a family friend.The company's "off-the-wall" test using one of itsbio-applications would ensure the bottled product stayed out of therefrigerated section of grocery stores, where Kraft GeneralFoods' version had died a quick death, and instead sit atopshelves containing popular freeze-dried instant coffees. For that,the $500 testing fee was a small price to pay.

Patenting the perfectly sterile,additive- and preservative-freeliquid concentrate, however, proved to be an exhaustive effort. Butwithout patent protection, any member of the $1 billion U.S.instant coffee industry could make nonrefrigerated concentratedcoffee its game.

The Patent Era lasted from 1990 to 1996 and cost the familynearly $40,000. The first four years, says Greg Jr., were notunlike "beating your head against a wall." But Greg Jr.,occasionally tagged a pig-headed know-it-all by family members,reminded himself, "Just because the government says nodoesn't mean they're right." After a second and thirdtry, the Patent Office finally understood the novelty of theirproduct and approved their patent. Greg Jr.'s fearlessness,whether in asking the most obvious business questions or taking theinitiative to switch patent attorneys early on, helped provenaysayers wrong. Ryan Coffee Co. would change an industry thathadn't evolved in 25 years by means even industry giants hadfailed to discover.

Today, Victorian House is reinvigorating the shelves of morethan 800 retailers in California and Western Nevada. "It'slike Sesame Street--one of these things does not belong,"jokes Greg Jr. about the product's place among Starbucks'whole-bean coffees and other traditional instant coffeeproducts.

Long gone are the days when so-called experts tried to persuadethe inexperienced family business proprietors they'd never beable to sell anyone on the product. Early on, a marketing experteven went so far as to proclaim Ryan Coffee's chances ofraising money (which it did via private-placement financing in thespring of 1998) as being slim to none. "I was so depressed asI drove back to the office," recalls Greg Jr. of his meetingwith the marketing expert. "But I knew deep in my heart thiswas a great product and a great idea."

Stand And Deliver

Despite being the little guy, Ryan Coffee has managed to emergeunscathed from a challenging industry initiation: Overlycompetitive representatives, stunned by Victorian House'sprime, eye-level shelf space, have attempted everything from movingthe company's product into a store's backroom to stealingshelf space. The family employed a food broker who accomplishednothing, and handsomely paid a marketing whiz who failed to land abig account in over 10 months. "We now have a rule that no oneis allowed to sell our product without us sitting at thetable," says Greg Jr. "We're nervous of anyone whotalks a great game--especially when we know we can get it done[ourselves]."

And by working in unison, they have. Thanks to Heather'spreviously untapped marketing genius and her dedicated demoappearances from 1990 to 1996, Victorian House is fast on its wayto becoming a household name.

On occasion, the brand's growing popularity caught the Ryansoff guard--like when the Marina Safe-way (the grocery chain'sflagship store in San Francisco) account led to a NorthernCalifornia systemwide account in 1994. Heather says it was RyanCoffee's defining moment. Greg Jr. remembers the stress."After leaving the meeting where they told us they wanted to[take the product systemwide] in one to two months, Heather and Ilooked at each other, walked out and were like, `Oh my God, wecan't make that much.' "

They worked around the clock--even slept in their makeshiftplant. Then Heather would get up at 4:30 a.m., jump in her JeepCherokee, and join the ranks of the huge Budweiser and Coke trucksdistributing to their routes. Financial matters weren't anyeasier. Sales were good, but payments never came soon enough,making it nearly impossible to pay the bills. Says Greg Jr.,"We came very close to running out of cash."

But the Ryan Coffee Co. motto is "Yes, we can." Tenyears after starting, they're sporting 16 employees andprojected sales of $3.4 million this year. A larger conglomeratemay acquire and market the heck out of Victorian House someday. Buta new facet of the business comprising 30 percent of thecompany's total revenue--using the concentrate as an ingredientin other foods (Dreyers uses it in its Dreameries Cup O' Joeflavor)--would keep the Ryan Coffee name alive. In all cases, thekey to future success is flexibility--a small-businessspecialty.

And don't forget old-fashioned endurance. "My familywas in the ranching business, and we worked a lot of not-so-funjobs, so we felt prepared to work hard," says Heather."Even so, it's been more work than we ever guessed."It's good to know hard work can still amount to greatthings.

Contact Source

Ryan Coffee Co., (800) 452-8311, http://www.ryancoffee.com.