Boyd Coffee Company Business Information, Profile, and History

History of Boyd Coffee Company

Boyd Coffee Company is a leading distributor of coffee, brewing equipment, and dry mixes for food service users. The company uses a direct sales force of 200 sales representative in 25 states. Headquartered in Portland, Oregon, their territory extends as far east as Chicago and St. Louis. Since the 1960s, Boyd's has gone from delivering three varieties of coffee to distributing more than 2000 coffee and food items, such as dry mixes for beverages and sauces. Coffee and brewing equipment account for about two-thirds of sales. Co-CEO's Dick and David Boyd and their father Percival "Rudy" Boyd are the company's sole shareholders. In the late 1980s, the firm reintroduced retail and ran two of its own Portland area stores. Altogether, the company's coffee output was the equivalent to an estimated 800 million cups a year.

Portland Origins

Percival Dewey "P.D." Boyd was born in New Zealand in 1879. The son of a Presbyterian missionary from Scotland, P.D. immigrated to the United States at the age of three. He worked at grocery and sales jobs until about 1900, when he started the Boyd Importing Tea Company in downtown Portland.

P.D. made door-to-door deliveries of tea and coffee with a horse and red wagon he had bought for five dollars. Trucks replaced horses around 1910; in another ten years, Boyd had stopped delivering to homes. Among other measures P.D. Boyd initiated to keep his company in business was the practice of loaning brewing equipment to food service customers.

Rudy Boyd took over his father's business after World War II. In December 1946, the company became known as Boyd Coffee Company. A few years later, a frost wiped out Brazil's coffee crop and nearly took Boyd Coffee with it.

Boyd introduced vacuum-packed coffee in cans in 1955. About this time, the company began manufacturing automatic coffee brewers for restaurants. The company also introduced paper coffee filters to restaurant users. A home version, the Flav-R-Flo Brewer, was rolled out a few years later. Boyd Coffee was also ahead of its time in hiring practices. Its long time coffee buyer, Veda Younger, was one of the first females in her line of work.

While Rudy Boyd never finished high school, his sons David and Dick went to the University of Oregon. Like their father, they both grew up working for the family business. David began stripping tape from cartons at age 12. Dick began at age 16, counting coffee can lids. In 1975, David took over as CEO of Boyd Coffee upon Rudy Boyd's retirement. Rudy maintained a presence as chairman.

In the late 1980s, Boyd opened five of its own Red Wagon retail stores. It also opened espresso cafés in Portland and Seattle.

Going Gourmet in the 1990s

Gourmet products would be the fastest-growing segment of the coffee market in the 1990s. In 1990, Boyd, which claimed to be the country's largest purveyor of gourmet coffee, had more than 50 gourmet varieties. Its coffee carts were supplying colleges, supermarkets, department stores, and hotels.

With annual sales of $100 million and 400 employees, Boyd Coffee was profitable and growing in the early 1990s. Its plant was enlarging by 60 percent and going to double shifts. However, in November 1991, Boyd's board replaced David with Richard for undisclosed reasons, reported Fortune FSB in a 2002 article on sustaining family businesses. The brothers eventually began sharing the position of president/CEO equally after bringing in a business/family therapist. The Oregonian reported that Dick Boyd also brought in Los Angeles-based Flamhlotz Management Systems Consulting Corp. to facilitate some strategic planning.

In 1991, Boyd sued the coffee businesses of Denver's Boyer family over trademark infringement. Boyd claimed the Boyer name was similar enough to confuse consumers. The next year, Boyd acquired another Denver-based business, Ambassador Office Coffee Service.

Boyd expanded its sales and service operations to Minnesota, Wisconsin, and the upper peninsula of Michigan in 1993. The company was part of the Dine-More consortium of regional roasters servicing national food service accounts such as ServiceMaster.

By the mid-1990s, Boyd was packaging 75 different types of coffee. The company had installed electronically controlled roasters and was increasing production to 19,000 tons of beans a year. Boyd was rolling out espresso entertainment centers and coffee carts under the Italia D'Oro brand. The firm also imported espresso equipment. Company executives credited Starbucks with boosting awareness and sales in this segment.

Boyd began selling organically grown coffee around 1990; it was certified organic by Quality Assurance International (QIA) in 1997. The certification process, which documents the processing as well as the growing of the coffee, took three years. Boyd claimed to be the only national distributor of certified organic coffee.

Boyd was the main supplier for Tuscany Premium Coffees, a small upscale chain that had eschewed its Seattle origins to focus on markets new to gourmet coffee, such as Cleveland, Pittsburgh, Philadelphia, Dallas, Houston, and Denver. Tuscany Inc. went bankrupt in April 1997 after a failed IPO.

Boyd was also heavily involved in the food service business, an outgrowth of its coffee packaging. It prepared packaged dry mixes for soups, sauces, beverages, and desserts, and other products. To foster ties with the food service community, Boyd prepared an educational program for Johnson and Wales University, a leading culinary institute. The company also sponsored a culinary competition for high school students in Washington State.

By the late 1990s, Boyd products were being distributed in Japan, Korea, and Taiwan. Boyd participated in a joint roasting venture in the Philippines. In early 2001, Boyd began a partnership with Vitality Foodservice Canada, Ltd., the largest Canadian food service beverage manufacturer and distributor.

2001 Expansion

By 2000, the expansion of Boyd's Sandy Boulevard plant had dragged on for several years. The company had scouted areas elsewhere in the country, including Utah (an odd choice, since traditional Mormon wisdom frowned upon coffee and other hot beverages). However, Boyd ultimately decided to stay in Portland. A new plan called for adding 132,000 square feet to the facility, doubling its size. Boyd aimed to have all its operations under one roof, and the space would house a new warehouse distribution facility. The company had been leasing 55,000 square feet of warehouse space near the airport. Boyd finally broke ground on the $8 million expansion in March 2001.

Oregon Business magazine named Boyd Coffee number 49 of Oregon's top 100 companies to work for in 2001. Dick and David Boyd attributed the company's success to integrity, respect for employees, and contribution to the local community. More good media coverage came from the Food Network. The cable network's "Unwrapped" series took a five-minute look behind the scenes at Boyd Coffee in one of its episodes.

Principal Subsidiaries: Boyd Coffee Co. (Philippines), Inc. (50%).

Principal Divisions: Boyd International Foods; Red Wagon Stores; Techni-Brew International; Today Food Products.

Principal Competitors: Farmer Brothers Co.; Superior Coffee.

Chronology

• Key Dates:
• 1900: P.D. Boyd begins coffee and tea deliveries in Portland.
• 1946: Rudy Boyd takes over his father's business.
• 1972: Boyd's relocates to a new factory and headquarters complex.
• 1975: David Boyd succeeds father Rudy as head of Boyd Coffee.
• 1991: Dick Boyd replaces brother at top spot.
• 2001: Boyd's breaks ground on plant expansion.