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Gourmet coffee in the hills of Idaho.

In 1986 Jerome Eberharter quit a comfortable 8-to-5 job as a marketing analyst with a Boise bank, mortgaged everything he owned and started Idaho's first and only coffee roasting company. That year he roasted, blended, and sold about 480 pounds of gourmet coffee a month for 8-10 Boise-area restaurants and specialty shops. But Eberharter knew it was just a beginning.

"I used to take a walk around the building at night when no one was here and envision what it would be like with more people, more roasters, telephones, and computers," revealed Eberharter. "I knew as long as I had great coffee, good people, and access to money, we could do it."

Today, Eberharter's vision is reality. His White Cloud Mountain Coffee Company is wildly successful. Eberharter and 30 employees produce and market 35,000 to 40,000 pounds of gourmet coffee a month in 132 flavors and about 40 blends. A wholly-owned coffee cafe subsidiary with its own label called Moxie Java, the company now has 10 outlets in the Intermountain West with seven more license agreements pending in Washington state, Idaho, and Arizona.

Sales have gone from $27,000 in 1986 to $2.1 million last year between the White Cloud and Moxie Java affiliates, and company officials are projecting 40% more growth in 1993. There are plans to have 200 Moxi Java stores, kiosks, and carts operating by the next decade and a $1 million stock offering made last September sold out in February.

Since he formed his coffee company in 1986, Eberharter has moved into larger quarters three different times and hired 30 employees - not counting another 80 who run the Moxie Java outlets under licensing agreements. Eberharter now has 375 wholesale clients, including the giant Albertson's supermarket chain.

"Most people at the bank thought I was crazy," he says about his leaving. "Bankers are used to 8-5 jobs. But I decided I rather make less money my way than more their way. I love calculated risks."

Eberharter's White Cloud label coffee is sold primarily in grocery stores, specialty shops, and restaurants in the Rocky Mountain states, but he has clients as far away as Alaska, Germany, and Japan. He hopes to have a real presence in the international market one day. I'll be totally happy when I'm sipping Moxie Java coffee in Rome," he says. Among his most popular coffees are his French Roast, Colombia Supremo, Cowboy, Guatemala, and Sumatra blends. Another big seller is his Sun Valley blend, which he labels as "rich, but not arrogant."

To some, the words "successful Idaho coffee roaster" might sound like a contradiction of terms, but Eberharter has found success in his home state and elsewhere by noticing a vacuum, then filling it. More than anyone else, he is responsible for turning a state of beer and soda drinkers into one that also appreciates gourmet coffee.

And at his two Scottsdale, Arizona, Moxie Javas, he has introduced warm-weather residents to his labels by selling slushy, Italian fruit drinks called granitas. Once they're hooked on the fruit drinks, customers are then often introduced to ice latte coffee drinks.

"We try to be flexible so we can deal with the customer and climate base," says Bob LaChance, a White Cloud development and sales representative. Whether it's Scottsdale, Arizona, or Whitefish, Montana, we want to be customer-driven."

But perhaps White Cloud's most promising venture is one with a Denver-based company called Carts of Colorado. Under the terms of a recently-signed agreement, Moxie Java kiosks and carts will hook up with PepsiCo companies such as Kentucky Fried Chicken, Pizza Hut, and Taco Bell in "clusters" at non-traditional sites such as grocery stores and malls.

"Grocery stores are the new collection point for today," says Eberharter. "But there is very little growth in the grocery industry so when they can get 20 kiosks paying $500 to $1,000 a month in rent, it adds millions in revenue as well as increasing traffic flow in their stores. I think in a few years you'll see food courts, banks, dry cleaning and other businesses inside most major grocery stores."

The concept is already being tested in Scottsdale where Moxie Javas are located alongside several big-name food outlets inside two Smitty's grocery stores. "It's called 'power-branding' and it works," Eberharter explains.

The stock offering made in September was under a special SEC program known as a Small Corporation Offering Registration, or SCOR. The program allows small and mid-sized companies to raise up to $1 million a year through stock options and allows two company officers to sell stock directly to the public, without a broker serving as a middleman.

Drew Wahlin, White Cloud president, says the money will be used to fund investments in infrastructure that will allow Moxie Java to expand into new markets. Will more stock be offered? "We'll have to wait and see if we need more capital, but it's a possibility," he claims.

Eberharter says he acquired his taste for gourmet coffee during his college days in Seattle where he frequented coffeehouses and espresso bars. The Bainbridge Island, Washington, native moved to Boise in 1983 when his wife Gail, a medical student, went there to complete her family practice residency.

"My first instinct when we moved here was to open an espresso bar in Boise," he says today. "I'm glad I didn't. It would have been way ahead of its time. The city had only one espresso machine then, it was broken half the time and not a lot of people missed it."

He soon got a job in the marketing department at a Boise bank, but spent evenings and weekends pursuing his first love by buying and selling roasted gourmet coffee out of his garage.

"I bought large volumes, broke them up and sold them to local restaurants that were looking for better coffees," he recalls. "I'd come home from work and there would be 400 to 500 pounds of coffee on the doorstep. The UPS guy once told me he'd spend 20 or 30 minutes just unloading coffee at my place."

Eberharter, who wanted to run his own business ever since he was a kid, decided the time was right in 1986. He got a loan, left his job with the bank, bought a roaster and began roasting and selling his own coffees in a 900-foot bay near his home. He also packaged and delivered the coffee, kept the books, and pushed a broom.

For 15 months Eberharter worked without a salary as he tried to get the company off the ground. Today, he pays himself a modest salary and pumps most of the profits back into the company.

The Idaho coffee maker says his success is due partly to his decision to shun traditional Robusta coffee beans and use only top-grade Arabica beans which he buys from San Francisco, New York, and New Orleans coffee brokers, or directly from growers on trips around the world.

He also says he can thank a 30-year decline in the quality of coffee found in most supermarkets. "Most coffee in America is sold stale," he claims." And major industrial coffee makers use a large percentage of Robusta coffee to keep costs down. It tastes terrible but it's cheap."

As a result, Eberharter isn't all that surprised about his success. "I was convinced people would pay more to drink better coffee. Now, older people tell me 'this is the way coffee used to taste."'

Through his White Cloud and Moxie labels, Eberharter says he is ready to reclaim a younger generation of coffee drinkers. Pointing to statistics that shows Americans, on a per capita basis, drink less than half as much coffee today as they did in 1962, Eberharter claims the industry lost a whole generation of coffee drinkers through poor marketing.

Although his business is thriving, Eberharter says he's not tempted to cut back on his 70-hour work weeks. "My business is really play - it's not a job, but a passion.

"But I'm also concerned about the company's future. Some people pursue growth for the sake of growth and then burn out. I want us to grow at a manageable pace, reward our employees and stockholders, and I want us to have fun along the way. Most of us spend as much time here as we do with our families so it has to be fun."
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Title Annotation:White Cloud Mountain Coffee Co.
Author:Koller, Greg
Publication:Tea & Coffee Trade Journal
Date:Apr 1, 1993
Previous Article:In search of the 21st Century brewer.
Next Article:The espresso lesson.

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