New Industry Turns Problem into Profits

THE COFFEE BREAK

THE office coffee break, as firmly entrenched in U.S. life as pie a la mode, is a costly and disrupting mid-morning nightmare to many a company from Norwalk, Conn, to Norwalk, Calif. Some employers have simply thrown up their hands--and ducked out of the way of the stampede. But others have set their minds to licking the problem of lost man-hours. In the process they have not only taken the bitterness out of the coffee break, but have helped to spoon up a profitable new business: coffee catering, to bring the coffee in to employees. Says a Kaiser Aluminum executive in Oakland, Calif.: "Our department alone is saving $110 a month on coffeetime. I drink the coffee at my desk while I open the mail, save half an hour--and enjoy it more."

Prime examples of the new coffee caterers are Boston's William McConnell and Berton Steir, who wanted to get into a new business that would be depression-proof. In 1950 they bought one automatic coffee machine and started to serve coffee in a downtown Boston office. Since then, McConnell and Steir have built a $2,000,000-a-year business, own a fleet of trucks, 300 coin-operated coffee dispensers, 30 banks of food-vending machines, and a catering service that sells coffee by the jug to more than 100 offices and industrial plants.

The best-known coffee-break business in the U.S.--and probably the biggest--is operated by Schrafft's East Coast restaurant chain. In 1950 Schrafft's was called in by the Mutual Life Insurance Co. of New York to do something about the daily chaos caused by 1,700 kaffeeklatsching employees on 13 floors, all trying to go up or down the elevators at the same time. Schrafft's sent a battalion of waitresses with specially equipped carts rolling from desk to desk, cut coffeetime truancy so effectively that 500 other employers were soon clamoring for the service. Schrafft's now grosses some $4,200,000 a year from coffee-break service, employs 500 waitresses to deliver 20 million cups of coffee and 13 million pastries a year to offices in Manhattan, Philadelphia, Boston and Newark.

Big or small, coffee caterers can usually convince employers that a coffee break on the job can be actually a break for the boss. "Coffee breaks make money for the employer by increasing efficiency," advertises Chicago's Standard Coffee Service. In Los Angeles Al and Jerry Lapin, young (26 and 28) owners of Coffee Time, Inc., ask businessmen: "What is your employees' time worth?" If 25 workers each take an extra 15 minutes a day to go out for coffee, argue the Lapins, they may cost their employer more than $100 a week v. Coffee Time's $21.20 weekly charge for serving coffee on the job. Radio Corp. of America, one Coffee Time customer, is so pleased with the service that it has banned outside coffee excursions, dispenses 45 gallons of coffee a day at cost to employees. In exchange for the manpower savings, about half the companies pick up the tab for employees' coffee. Many others pay half the cost, turn employees' contributions over to recreation funds.

Coffee-vending machines have also had a spectacular postwar boom, particularly in big offices and plants where workers take staggered coffee breaks. Though many workers still object to the taste of coin-machine brews, a Dallas company recently started selling a $2,000 machine that stores fresh coffee at 185DEG in heated Thermos jugs. The dispenser is so successful that Mobile Kitchens, Inc. installed 62 in Washington, D.C. last year, and is putting in new machines at the rate of one a day.

The hottest company in the automatic coffee business is Rudd-Melikian, Inc., a Pennsylvania firm founded by two wartime Air Force buddies in 1946. After experimenting with an old soft-drink machine, Captain Lloyd K. Rudd and Sergeant K. Cyrus Melikian developed an automatic dispenser that uses a quick-frozen concentrate called Kwik-Kafe. The partners grossed $14 million in 1955, have 700 employees and 250 licensed distributors servicing companies throughout the U.S. and Canada; e.g., Eastman Kodak Co. has 100 machines which sell 280,000 cups a month to workers in its Rochester plant.

Even if the coffee is free, some employees prefer to go out for coffee, just to get out of the office. "I know I duck out twice a day," says a sympathetic boss in Dallas, "and I don't even drink coffee." Nevertheless, most companies who have polled their workers report that employees would rather have coffee in the office than fight jammed elevators and drugstores once or twice a day. Many executives even boast of serving better coffee than the cafe across the street. Says Vergil Finnell. a San Francisco coffee caterer: "A lot of companies now offer good, easy coffee as an inducement to the people they want to hire. It's become kind of a fringe benefit."

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