Coffee Holding Co Inc (NASDAQ: JVA)

Coffee Holding Co., Inc. was incorporated on October 9 1995 under the name Transpacific International Group Corp and after a merger in April 1998 adopted its current name. The company is an integrated wholesale coffee roaster and dealer headquartered in Staten Island New York with additional roasting facilities in La Junta Colorado and Port Chester New York. Through its wholly owned subsidiaries Sonofresco LLC and Second Empire LLC the company offers tabletop coffee roasting equipment and expanded roasting capacity. Core business activities involve importing raw green coffee beans from global sources and selling them to roasters and coffee shop operators. The company also roasts blends and packages coffee under private label specifications for retailers and under its own eight proprietary and licensed brand names for supermarkets wholesalers and independent stores. Its operations emphasize freshness quality and timely delivery within seventy two hours of roasting.

Revenue is derived chiefly from three product groups wholesale green coffee private label coffee and branded coffee. Wholesale green coffee sales consist of unroasted beans sold to large medium and small roasters and coffee shop operators across the United States Canada and various international markets. Private label revenue comes from coffee roasted blended and packaged to meet retailer specifications and sold under the store’s own brand. Branded coffee revenue is generated from the eight owned and licensed brands including Cafe Caribe Don Manuel S&W Cafe Supremo Via Roma Premier Roasters Harmony Bay and Café Femenino which are sold to supermarkets wholesalers and individual retail outlets. Additional income streams include the sale of tabletop coffee roasting equipment and related grinders through Sonofresco and modest contributions from tea sales. The company also pursues growth by expanding its wholesale green coffee customer base and by introducing new licensed brands or specialty blends across multiple price points. Pricing strategy positions some products at competitive and value levels while others are offered at premium levels based on bean origin and processing method.

Coffee Holding Co., Inc. holds a distinctive position in the coffee industry due to its broad diversification across product categories and price tiers. The company believes its profitability is less sensitive to commodity price swings and economic cycles because it participates in retail branded coffee mainstream retail private label coffee specialty retail coffees wholesale specialty green and gourmet whole bean coffees single cup coffee pods food service instant coffees tea and tabletop coffee roasting equipment. Its long history nearly fifty years in the business provides deep expertise in roasting blending and market analysis which it leverages to offer value added services such as coffee blending training and market identification to gourmet roaster customers. As a charter member of the Specialty Coffee Association of America the company is recognized as one of the largest distributors of Swiss Water Processed Decaffeinated and Dattera specialty Brazil coffees in the United States. The branded coffee portfolio benefits from eight proprietary name brands and an exclusive licensing agreement with Del Monte Corporation for the S&W trademark which has been present in the market for over eighty years. Management leadership includes Andrew Gordon who has served as president chief executive officer chief financial officer and treasurer for forty four years and David Gordon who has served as executive vice president operations for forty six years both of whom are original members of the Specialty Coffee Association of America. Competitive pressures come from numerous regional green coffee dealers in the wholesale segment and from larger national players in the private label and branded segments such as Massimo Zanetti Beverage Company Kraft Foods owner of Maxwell House and J. M. Smucker Co. owner of Folgers and Café Bustelo. Coffee Holding Co., Inc. seeks to compete by emphasizing consistent quality reliable on time delivery and responsive customer service rather than relying solely on price.

The company serves a wide array of customers that includes specialty gourmet roasters and coffee shop operators who purchase unroasted beans for their own roasting activities. Supermarkets and wholesalers acquire private label and branded coffee for resale under their own store labels or the company's brand labels. Foodservice operators such as restaurants cafes and institutions obtain both private label and branded coffee for brewing and service. Independent retail stores convenience outlets and specialty shops also stock the company's branded coffee products. While the filing does not disclose specific major retailer names it indicates that Coffee Holding Co., Inc. sells to some of the largest retail and wholesale customers in the United States as well as to customers in Canada and several international markets. The company’s customer relationships are supported by a direct sales force independent food and beverage brokers and participation in trade shows and industry publications.