“The Comfort Foods acquisition was initially viewed by us as a long-term strategic need for our company,” says Andrew Gordon, Coffee Holding Co. president and CEO. “After closing our Brooklyn, New York facility in 2009 and moving all production to our larger facility in Colorado, we knew we would eventually need to have production capabilities on the East Coast in order to remain competitive for the business opportunities which could not be serviced efficiently from a logistical and profitability standpoint from the West Coast.”

Gordon points to declining Harmony Bay sales and reduced profitability of Comfort Foods.

“This is due to the fact that major supermarket chains have reduced shelf space that was once allocated to regional brands in order to accommodate the few remaining national brands and the advertising dollars supporting them,” Gordon says. “But we still relied on the facility for the production of products for our new private-label customers, as well as our increased sales levels of both Café Caribe and Café Supremo Espressos.”

Coffee Holding Co. also recently acquired Empire Coffee Company through Second Empire. The company will move its East Coast production into the Second Empire facility in Port Chester, New York. 

Coffee Holding Co. expects transferring all private brand, Harmony Bay, Café Supremo and Café Caribe production to the Second Empire facility will realize additional annualized net savings on overhead of approximately $700,000 through the closure of the Massachusetts facility.

“This transfer of production location will improve efficiencies by providing us with both manufacturing and logistical cost savings,” Gordon says. “We believe that these operational improvements should have a positive effect on profitability.”