Morning Treat Coffee Company

Someone reviewing places I worked would believe that I couldn't hold a job. And it would be a reasonable conclusion. My working career has been in turnaround management. That's where distressed companies are rehabilitated through the direction of a court appointed manager, or one appointed by a board of directors. I have been appointed in both types. Of all the companies I was involved with, Morning Treat Coffee Company was a favorite. And here is its story. Royal American Corporation was a corporation of which I was President that purchased companies with problems, rehabilitated them, all for the purpose on making a fair return on its investment. Royal American purchased control of several banks, three life insurance companies, a resort, insurance agencies, retail furniture stores, delivery service, small loan companies, to name a few. However, Morning Treat Coffee Company had a historical twist to it. My father-in-law, Stanley L. Heine, was involved is the coffee trade in Louisiana and Mississippi for the greater part of his working years, serving two companies, first, Community Coffee Company Baton Rouge, Louisiana and then Morning Treat Coffee Company, New Roads, Louisiana. The President and Manager of Morning Treat Coffee Company at that time was James Leiux, and Mr. Lieux hosted a nice party for Shirley and me when we were about to get married. When I began to court my future wife, Shirley Heine, I listened eagerly to Mr. Heine's coffee stories. He was a fantastic salesman, called a "drummer" in his day. So much so, that I am proud to say that I published his sales thoughts in a book edited by a much acclaimed columnist, Smiley Anders called Sell, Sell, Sell. It's still in print at this time (2015). Mr. Heine would have been a long-term employee at Community Coffee Company had it not been for a bitter experience with its founder, Norman Saurage. Community Coffee wanted to expand into Mississippi and presented Mr. Heine the opportunity to open up the territory and would pay him a generous commission on sales. Now remember, Mr. Heine was one heck of a salesman meaning that the earned commissions ended up being more than Mr. Saurage expected to pay, and unfortunately didn't pay in total. It all ended in a bad confrontation, and Mr.Heine quit, or maybe was shown the door. When the book, Sell, Sell, Sell was ready to be published, both Mr. Heine and Mr. Saurage were dead. Because the sales motivating stories in the book spanned both the Community Coffee and Morning Treat times of Mr. Heine's employment, it would be nice if the present Community Coffee would post a few nice words as a preface to the book. I made an appointment to present my idea to the Saurage grandson then operating the company and he refused. Sad, sad experience. Mr. James Leiux was a board member of the American Bank and Trust Company of Baton Rouge, Louisiana. Mr. Lieux's father started Morning Treat Coffee Company and over many years the family grew in number. The coffee operations moved to Baton Rouge from New Roads, a town about 25 miles from Baton Rouge. The move and expansion to a really fine new coffee roasting plant required careful management of finances, but the family, now 23 heirs. were not happy that dividends were reduced and sometime eliminated. Over time, Morning Treat got into financial trouble with its bank, American Bank and Trust. This was about 1969. At the time Royal American Corporation's board of directors had effective control of American Bank and Trust so and good solution was found that Royal American would buy Morning Treat by rescuing it from its financial problem with the bank. Further, the bank required that Mr. Lieux resign from Morning Treat and that I be appointed its new President. Mr. Heine was at that time semi-retired and working managing a small family swim club near his home. Yes, my almost first move was to hire Mr. Heine as Vice President of Sales. The company needed him and his sales effort was noticed immediately. The retail and restaurant business loved him. On my side, with the financial support of Royal American Corporation, now the parent company of Morning Treat Coffee Company, we were able to purchase new trucks, upgrade the coffee roasting machinery, computerize our accounting and sales area, plus start a new marketing approach. In the past both Community and Morning Treat had coupons on the coffee retail bags which could be exchanged for gifts. Morning Treat introduced the use of those coupons to attend afternoon movies at a local movie theater. We filled the theaters. Then we got the Morning Treat coupons accepted at a major trading stamp redemption center thereby increasing the value of Morning Treat coupons.   On day, Mr. Heine brought me an article about a coupon in England experimenting with packaging coffee in tea bags. The packaging was slightly successful but had no shelf life. It shortcoming caught my interest. This was the problem. Tea is an inert substance, while coffee contains oil. When roasted coffee is contained by paper, the coffee oil wicks into the paper after a short time and destroys the filtering process of the paper. My further research found Earl Hiscock, a scientist in Cape Cod, Massachusetts that was attempting to develop a synthetic filter paper that would not allow coffee oils to wick into the "paper." He was working with the Crane paper Company that supplies our government with paper to print money. Earl was a recognized scientist having worked on the Manhattan Project (Atomic Bomb) so a large company like the Crane Paper Company would work with him on a gamble for something new. Also, the company that manufactured tea bag machines was also interested in the project. The company was Pneumatic Scale Company, a very old company directed by Kendall Doble, the chief executive officer. I wrote Mr. Hiscock and after a few exchanges he invited me to visit with him at his home. And while their I could meet a Crane company representative, plus Mr. Hiscock would take me to meet Mr. Doble whose factory was in the area. Shirley and I were avid RVers and had an RV, being summer, we loaded up the kids, and with our RV went to Cape Cod to meet on the coffee singles experiment. We parked the RV on a home site of one of the Pneumatic Scale Company's managers. It was a great visit and we all hit it off well with each other. My pitch to them was this: If Pneumatic Scale would send a tea bag packaging machine to our Morning Treat plant, and Crane Paper Company furnish us with paper samples, I would dedicate time, effort, and money, to solve the production problems. And we did. Although the Crane paper after time experimenting did well, and the new packaging machine ran well in producing bags, the shelf life was a big problem. I had set up a laboratory at the plank and purchased testing equipment, including a setup that measured oxygen levels very accurately. Also, I tasked James Williams, one of our plant managers to head up the coffee single bag project. Mr. williams did all the testing. One great inhibitors of coffee staleness is nitrogen gas. If the nitrogen replaced the oxygen in the bag, that would increase the shelf life. And it had to be done at high speeds to have a competitive price point. Day after day, the replacement idea just was not happening. The I had another idea. My idea was to encase the entire machine in a huge container, fill it with nitrogen gas and see if the oxygen level was really there. So, Mr. Williams built the container and we filled it with nitrogen gas and ran a short run of bags. Bingo! No preceptible oxygen levels in the bags. Without going into more theoretical detail, we were able to encase one area of the packaging machine to inject the nitrogen and do it at 450 coffee single packets per minute. That process became U. S. Patent No. 4,078,356 issued March 14, 1978. Because of his service to the project, I added Mr. Williams as a 25% co-inventor.   Packages were designed along with other marketing material and the product was launched. For what it is worth, our industry stated that Morning Treat Coffee Company was the first coffee company to produce a coffee single at a high rate of production speed making the product economically viable with a nine month shelf life. By that time I was exhausted, literally exhausted. Royal American had revenue from sources and dedicated it to the coffee project. To do that, I still had to manage other aspects of Royal American sucessfully or the coffee project would falter. There came a point where I had to stop. So I asked my board if I could sell the company and concentrate of developing real estate which I was good at. My board said yes and I sold we sold it to a NFL star that we felt could continue to move Morning Treat forward. It didn't work! Within 18 months, it seems, Morning Treat went bankrupt. The owner, his brother, and their attorney had engaged in activity that landed them in criminal court. (I will add facts here soon). And here is where their dirty works hurt Royal American and me in our pockets. Morning Treat Coffee, like any major business has a good volume of Accounts Receivable which they borrow against to cycle more business during the month. In the sale to the new owner, one stiplulation was that the accounts receivable line could not be moved from the bank normally used and the bank was aware of this clause. That was done so if Royal American had to sue the new owner for non-payment of some of their purchase obligations, the coffee company could continue easily back under Royal American. Accounts receivable liquidity is one of the important parts of the financial operation of a business. When bankruptcy was declared by the new owners, prior to that act, the new owners had moved the accounts receivable line to a local Savings and Loan Association. And before legal action could be taken by us, the bank went into liquidation with the FDIC. It was broke. I don't know how I can so easily write these words. Painful. Would you believe shortly thereafter the Savings and Loan Association also went into liquidation. It was broke. And then the new owner took bankruptcy. In some fairnes, banks and savings & loan companies were failing acros America. The final injustice was this. Royal American had a mortgage on the plant. When final settlement of the FDIC actions on all parties involved in the failed Morning Treat by the new owners, the FDIC position was that the plant was part of the estate and Royal American and Sam Gallo were left out of the remaining assets which all went to the FDIC. Because of my invention the sale of Morning Treat contained a note by the owner to me of a considerable amount. Worthless! The morale of this bankruptcy is that if "Uncle Sam" is in the deal, they get everything! You get nothing. As I write this, in a few months I will be 86 years old. Now these many years later, Morning Treat is still a happy part of my life because I achieved something for which I am proud. And the tail of this story is this. The trade mark Morning Treat is now owned by one of my sons who obtained it when no-one was looking.