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Coffee high: Local entrepreneur works to bring back Thomas Coffee -- and city's coffee district

This article first appeared in the St. Louis Beacon, Aug. 12, 2010 - The morning's last batch of coffee beans was out of the roaster and still cooling, as Bob Betz, the president and CEO of Thomas Coffee, guided visitors through his refurbished plant at 922 South Boyle Ave.

Betz and his partners cut the ribbon in April on a new beginning for an old St. Louis brand, known for the little Scottish terrier on the bright blue can. They bought the plant for $1.2 million and spent 14 months putting their new business in order.

Thomas Coffee now has a new logo and color scheme -- crisp white and red -- though they kept little "Scotti." The time-worn brick plant has been spruced up and freshly painted, the vintage roasters, grinders and packaging equipment retooled and 11 full-time employees are on the job.

The business is still very much a work in progress, Betz said, apologizing for the lack of air-conditioning in most of the work areas of the building, including his office up front. But the toasty air was an oh-so-pleasant blend of freshly roasted beans -- Colombian, Costa Rican, Sumatran -- and Betz embraced his role as tour guide with gusto.

"I really just love coffee,'' he said, as he explained the roasting process at Thomas. "I drink probably more coffee than almost anybody you know.''

Betz loves all of the Thomas brews, which he drinks all day long. Black, please, with no cream or sugar to bury the flavor.

He points out a freight elevator he calls the oldest in the city and distinguishing logos on the stacks of beans in their burlap bags -- and why cans are better for storing coffee than today's trendy bags, but they've fallen out of favor because "that's your parents' coffee."

Betz, 55, is both a coffee-lover and salesman -- a scrappy, no-nonsense businessman who left his career in the technology industry and doesn't mince words, whether he's boasting about his premium coffee beans or describing what it took to build a deal with skeptical customers. He's also a civic booster who's as sold on rebuilding St. Louis as he is on rebuilding an old brand of coffee, despite an economic environment that's as stale as yesterday's brew.

He bought Thomas Coffee because it made sense, he said.

"It was really simple: It was in the city of St. Louis. I love coffee. And it was a brand that was beaten up, and I could afford it because it was beaten up. And so we thought, 'Hey, if we put the time in, we could rebuild this thing.' Who knows what this could grow to because the coffee industry is a big, big industry. Coffee is the second largest trading commodity in the world today, behind oil. And I love it,'' Betz said.

The company has made inroads: St. Louisans will find Thomas Coffee in both cans and trendy bags at Schnucks, Dierbergs, Shop N Save and Straub's stores, next to other hometown brands, such as Kaldi's and Ronnoco. Thomas Coffee is on the menu at a growing number of neighborhood restaurants, and the company recently announced that Pepsi MidAmerica had selected Thomas Coffee as the primary coffee vendor in its five-state distribution area that encompasses southern Illinois, southeastern Missouri, Tennessee, Kentucky and Arkansas.

But it's been an uphill battle and a lot of work, Betz said.

"I probably couldn't have picked a worse economy, but who knew that it was going to be this bad? No one in my opinion,'' he said.

The recurring theme of the new Thomas Coffee was summed up as Betz explained how he negotiated an exclusive one-year contract with the developer of a unique process to make antioxidant-rich coffee by using the whole coffee fruit.

"I told them, 'I'm going to be big one day.' "

Not huge. But big.

One for the city

{Betz says that he and his St. Louis partners -- Kohl Handlan, Dennis Gerling and Ramona Ustian -- are in this for the long haul. The deal to buy Thomas was financed through their personal investments and a $100,000 line of credit from Enterprise Bank and Trust. Betz refers to Handlan, who works in product development, as his hands-on gourmet.

The company has targeted revenue at $3.5 million this year, and Betz says his goal is eventually to triple that. If all goes as planned, he hopes to hire an additional 30 or so employees over the next three years. He wants to become the premier gourmet coffee company in St. Louis.

But Betz acknowledges that, as is the case with many such ventures, reality hasn't always meshed with the original business plan.

"Everything was messed up; the equipment was broken down. We spent a fortune getting this back in operating condition,'' he said.

On the other hand, refurbishing the 1950s-era equipment made sense because the manufacturers he consulted with stressed its durability.

"I asked, 'Should I get rid of it and buy some new?' And they said, 'You'll be dead in the grave and that machinery will still be humming along,' '' Betz said.

Betz said the company is making progress.

"Are we making tons of dough today? No. Every dollar is being reinvested -- every dollar, plus some. But we're to the point where we're not losing money, which is something great because as simple as that may sound we spent a lot of money fixing the place up, something that other people wouldn't have done. But I really think it's going to pay dividends in the long run,'' he said.

One of those dividends will be that a city business has been made vibrant again, said Betz, who lives in Wildwood but grew up in University City. He said he is committed to helping to rebuild St. Louis, even though he has always worked in the county and rarely visited the city, except for entertainment and sporting events.

"A lot of St. Louisans are like that,'' he said. "When I was a kid, we had 23 major corporations based in the city; we have five today. If the city dies, the county is just a slow death behind it.''

St. Louis has major problems but has made some progress despite what Betz refers to as "a tough, tough environment." He said it is important for the city to grow because young residents -- including his own six children -- must be able to find good jobs, or they will leave town.

"I don't want to see my kids have to move to get a career. The city has to come back,'' he said. "Chicago does a great job of taking St. Louis talent -- and they're not too far away from home. I love Chicago. It's a great city, but why are we losing it all?''

Looking back while moving forward

Betz would like to see a resurgence of the city's "coffee district,'' which also includes two nearby local roasters: Ronnoco and Kaldi's.

The Thomas Coffee building has been used as a roasting facility since 1905, when the Rose's brand was established, Betz said. While most residents know that St. Louis was once "first" in beer and shoes, they probably don't realize that at the turn of the 20th century the city was also a center for coffee roasting.

"It's part of our past that everybody's forgotten,'' he said.

By purchasing the Thomas brand, Betz was able to keep it in St. Louis. Some out-of-town coffee producers that bid on the business seemed less interested in keeping the plant running than in accessing the brand's space on local supermarket shelves, he said.

Since the purchase, Betz said he has been working to improve the quality of the brand, which all starts with the coffee beans. Instead of purchasing through wholesalers, he has been working to build direct relationships with coffee bean producers. He and Ustian have met with local farmers in Costa Rica and Colombia to ensure that their beans are hand-weeded and pesticide-free.

"We decided that we'd go back to the farms and do it the old-fashioned way,'' Betz said.

As part of its commitment to sustainability, Thomas Coffee recycles pallets and burlap bags. The chaff that separates from the beans during roasting goes to a fertilizer company. He credits his son, a sophomore in college, for that focus.

"He'll tell me that it's our generation that's ruined this world,'' Betz said, adding, "I think every generation blames their parents."

But the company's real key to success, Betz acknowledges, is in convincing consumers to try the reborn Thomas Coffee -- something that quickly became apparent during early focus groups.

"When you asked people, 'Have you ever heard of Thomas Coffee?' The first thing out of their mouth was, 'I remember that company.' Which means they had forgotten it,'' he said. "And then they would say, 'Aren't you the ones with the dog?''