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Last Update: Sunday December 17, 2017

Key Idea: Acquire The Competition

The Souto family has acquired their competitors twice. This strategy has made them the largest Cuban coffee roasters in the US.

Key Question:

A: They Souto brothers were able to buy their competitors because they have in place technology, million dollar roasters and leadership to roast, package, deliver and serve the customers they won with the buy-outs. Just getting more customers will not guarantee that you will see long-term growth. If you are not able to do the work and make customers happy, they will find another source.

Think about it

Do you want to grow?  What steps do you need to take to position yourself to buy a competitor?  Do you have excess capacity now?  What company out there might be in trouble that you could take over or buy?

Clip from: Cafe Pilon, Rowland Coffee & the Souto family

Meet the three Souto brothers; lovers of freedom.

Miami: In this episode, we open with pictures from 1961 just before Castro forced his ways into the homes and business of this family. And though he took over everything, he could not take over their spirit. This family left behind all their worldly possessions but came to the USA with their greatest possessions -- their integrity, their love of family and friends, their creativity, their love of Cuban espresso coffee, and the knowledge needed to rebuild their family business from scratch.

Meet the Souto family, owners of Rowland Coffee Roasters in Miami.  They started with a coffee delivery business, bought Rowland, then Cafe Pilon, then Cafe Bustelo,  Medaglia D'Oro Espresso, Java Cabana and more.

Go to all the key ideas and video of this episode...

In memory of José Angel ''Pepe'' Souto, the Patriarch of the family who died at the age of 91 on November 18, 2007.

Cafe Bustelo Inc.

Rowland Coffee Roasters, Inc. Javacabana.com, BusteloCool.com

5605 NW 82nd Ave
Miami, FL 33166-4000

Visit our web site: http://cafebustelo.com

Toll Free: 800-990-9039

Business Classification:
Beverages: Coffee

Year Founded: 1962

Acquire The Competition

HATTIE: (Voiceover) There's a twist to this story. This company didn't begin with the brand Cafe Pilon.

JOSE ENRIQUE: What happened is this. In Cuba, way back in the later part of the 19th century and early part of the 20th century, coffee was sold as coffee. You know, there was no brand name.

HATTIE: It was just coffee.

JOSE ENRIQUE: It was just coffee. And then you would develop your customers based on the relationship you had with the customers. And they'll buy from you not because you had a certain brand, because people used to go into stores and just ask for coffee. As the years went by and the brand name became more important, this is when Cafe Pilon in Cuba became a very large name and a very important name. The gentleman who did that, his name was Manuel Jesus Bascuas. When we came over to the United States, so did Manuel Bascuas, and he started his roasting plant. So we became his customers.

JOSE ENRIQUE: Eventually, he saw an opportunity to sell the business to my father, and my father saw an opportunity there to buy the business, buy the brand and try to develop the brand and make it bigger.

HATTIE: Well, let's talk about your father's wisdom. He gave up his name. He, obviously, didn't have the ego attachment.

JOSE ENRIQUE: No. Not at all. Because what happened was Pilon was such a strong name with all of the Cubans from all over the island, while our brand was basically important in certain areas of the island. Pilon was like a national brand.

HATTIE: So he gave up his own name to buy the brand that was bigger.

JOSE ENRIQUE: Exactly. Exactly. And that's how we started growing.

HATTIE: How did your father get enough cash to buy Cafe Pilon?

JOSE ENRIQUE: Well, you're talking about a very small business. You're talking about a business that was in the thousands of dollars. So it wasn't a lot of money. So my father was able to get financing from a banker.

HATTIE: A bank loan?

JOSE ENRIQUE: A very close friend of his who was the president of a bank here. And he was known for helping Cubans -- refugees -- who were starting businesses here.

HATTIE: And the banker knew the Pilon name and he knew your father's character.

JOSE ENRIQUE: Exactly.

HATTIE: ...and he figured, `This is going to work.'

JOSE ENRIQUE: Exactly.

HATTIE:  OK, so you switched from knocking on doors and you guys in your Volkswagens delivering to individual homes.  The Cafe Pilon thing brought you retail accounts.

JOSE ENRIQUE:  Right.  Now we're going into the retail stores.  We were having to buy trucks, having to hire people, having to establish routes and cover the areas in Miami.

We were talking about that before. This is where some  of the experience we got in other businesses before going back to the family business helped us tremendously.  Both of my two brothers worked with American companies, Campbell Soup one of them and Pillsbury, the other one.  So they were able to get a lot of the marketing and merchandising ideas and things that were being used in the store.

Me on the other side I was working for a department store as a buyer in an executive position.  So I was able to develop the advertising end of it.  You know the promoting, the getting people to the store to buy products.  So we put our two cents together and this is what came of that.

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