We call what will you experience now a Master Class. Your teachers are always men and women who have lived through what it is they speak about. Let's now visit a family that is rather new to the US, but brings a proud reputation and skill that we can all learn from.

(Voiceover) These men have it all. Their company, Cafe Pilon, is the premiere Cuban espresso coffee roaster in the world. Their company has happy customers.

Unidentified Man #1: Good coffee, Cuban.

Unidentified Man #2: It's Cuban coffee.

Unidentified Man #1: It's the best.

Unidentified Man #3: I love Cuban.

Unidentified Man #1: The best.

HATTIE: (Voiceover) They have happy, loyal employees.

JEAN-PAUL: Well, they treat me like brother and father and sister.

HATTIE: (Voiceover) And, most importantly, they have each other.

ANGEL SOUTO: (Voiceover) Of course, Alberto--he's likes to always come out with new ideas.

JOSE ENRIQUE SOUTO: (Voiceover) Angel, he watches the customers like a hawk. You take a customer away from Angel, he goes crazy.

ANGEL: (Voiceover) Jose Enrique is our oldest brother. You always look up to the oldest brother.

HATTIE: You do?

ANGEL: Yes.

HATTIE: So he hasn't let you down yet?

ANGEL: No, not yet. No. I don't think he ever will.

HATTIE: (Voiceover) Why so much success?

JOSE ENRIQUE: You got to want it. And then you have to go out and get it. It won't come to you, you have to go out there and get it. There it is, the best. Nothing but the best.

HATTIE: (Voiceover) In Miami's Little Havana, it seems everyone's drinking coffee, and much of it comes from Miami-based Rowland Roasters, which does business under the name of its most popular brand, Cafe Pilon. It generates $70 million in annual sales and has 175 employees. Owners Jose Enrique, Jose Alberto and Angel Souto are brothers who have coffee in their DNA.

ANGEL: (Voiceover) I drink every morning Cafe con Leche. It's milk with espresso.

JOSE ALBERTO SOUTO: OK. I have four a day. And it makes me work harder.

HATTIE: (Voiceover) Even though the Souto family has been in the roasting business since 1865, they had to start over with nothing when they came to Miami.

JOSE ENRIQUE: We came here in 1960, when Mr. Castro took over, and he took everything in Cuba and he made it all owned by the government. So it's a very, very difficult situation, and I ask myself the question sometimes. How would I react if here in the United States, somebody would come to me and all of a sudden say, `Hey, this is no longer yours. Now it belongs to the government.' Now it belongs to somebody else without you doing anything to deserve that. And it's really very hard to imagine going through that period.

2

HATTIE: So how did your dad get started?

JOSE ENRIQUE: Well, first of all, the only actual natural way of doing it was going door-to-door. We established a network of friends and family who would know all the people. And we used to knock on doors and say, `Hey, you know, we're so and so and we're in the coffee business here in the United States. And now we have Cuban coffee here. And we'll deliver it to you once a week. And if you have some friends or relatives, give us their address and we'll give you a free week of coffee.' And those guys would give you a list of people.

HATTIE: So you got the referrals?

JOSE ENRIQUE: Exactly. So the idea was, `Look, I'm going to give you the freshest possible coffee, because we're going to roast the coffee and we're going to bring it right into your door.' So that's how we started. We started that way. And then as my brothers grew, and we all started going through high school, and getting their driver's license, the first thing they did, they got a little VW, Volkswagen. And I always tell my dad--you know, I always said, `You've got to write a letter someday to the VW people and tell them that because of them, you were able to build up your business."

We used the little cars because they were inexpensive, they were very, you know, easy on the gas. So it was easy to use them for routes. And each one of us, three of us, had a Volkswagen as well as my dad. And we all went around and did our routes. And all the way through high school, and then through college, that's what we did. And then after I graduated from college, I said, `You know what? The coffee business is a rough business. I want to have a business where I need to have a secretary...'

HATTIE: Oh, you wanted an easy life.

JOSE ENRIQUE: `...and be an executive.' I wanted to go travel, and that's what I did. I did that for a number of years until I decided, "This is wonderful, but I want to go back to my roots. I want to go back to the family business." You know, there was an opportunity. Both of my other two brothers were just getting out of college so we felt this is the time to do it. The company wasn't making a lot of money. It was a very small company.

There really was no opportunity to make a lot of money. It was something that you would have to be kind of doing the same thing you were doing before. And because you felt you had an education, and you had sort of an American type of feeling on it, you wanted to go out in the world and kind of prove yourself. And then after we did that, we all decided, `You know, this is wonderful. We have proven ourselves out in the world of business. We want to go back to the company, and we want to build it.'

3

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.

4

HATTIE: (Voiceover) The brothers make it seem so simple. Buy the right beans, roast, blend and grind them to perfection, then package the coffee to ensure freshness. Nothing seemed simple to me. I saw dozens of details in each step.

JOSE ALBERTO: Well, first of all, this is Fernando Chavez.

FERNANDO CHAVEZ: Hi.

JOSE ALBERTO: He's a real coffee buyer. And this is room is so important because here's where the quality is maintained. He checks different types of coffee that we receive, samplers--you know, before we buy it. And then after, he checks it in as it comes in the warehouse.

(Voiceover) Promotion of coffee and roasting is an art. Same way as the wineries. They have a wine taster that takes all the different grapes. We do the same.

HATTIE: Well, so did you like that?

FERNANDO: Yeah, it's OK. It's OK for this time of year.

JOSE ALBERTO: Buying right, to me, means buying the right quality. Pricewise, of course, we always try to buy at the best price. But for me, if you say buying right, it means the quality and that's very important. That's the most important part of our business.

HATTIE: OK. And that's why Fernando is so critical.

JOSE ALBERTO: Fernando helps us tremendously in the sense of he's the one that maintains that the coffee that is coming in every day is the quality that we purchase.

FERNANDO: Well, we basically follow the fundamentals of the market, the supply and demand picture. We follow it all times. That's London, closed down about a half a cent.

5

JOSE ALBERTO: Then we have also the Actron, which is one that measures the roasting color.

HATTIE: When you started working for your father, what was the processing like then?

JOSE ALBERTO: Well, we're going back 25, 26 years ago. So, of course, the roasting machinery that we had was not as sophisticated as the one that we have nowadays. So actually the quality was not as easy to maintain. Now with the growth, and the new machinery that we have, of course, qualitywise, it makes it a little easier for us.

HATTIE: So how many finished pounds a day come off of this process?

JOSE ALBERTO: We are not running at full capacity, we're only working about a shift.

HATTIE: Wait a minute, you're not running at full capacity? You need your brothers to get out there and sell some more.

JOSE ALBERTO: Yes, that's what I tell them. Sure. But they always say that I spend all the money in machinery. That's what they say.

HATTIE: And so it is a push-pull thing, isn't it?

JOSE ALBERTO: Yes, it is. It's kind of a battle we have. They sell and I produce. I'm always trying to keep ahead of them so--of course, right now we're doing about one shift a day, about eight to 10 hours a day. And all we have to do is open up more hours and we can produce more. (Voiceover) Fifteen years ago, we were the first espresso roasting coffee company in the United States to have a brick pack, which is called a vacuumized coffee bag.

(Voiceover) We invested in equipment to have the best and freshest coffee available to the public. You see here that we have two roasters. And there's Jean-Paul. Jean-Paul has been with us for the last 21 years.

HATTIE: (Voiceover) Jean-Paul is the man in charge of these million-dollar roasters. It's so nice to meet you.

JEAN-PAUL: Thank you.

HATTIE: Can you tell us how you do what you do?

JEAN-PAUL: Yes.

HATTIE: OK. Let's have a look. You're going to do 800 pounds in each roaster at a time.

JEAN-PAUL: At a time. When they start in the morning, it's hot, very hot. But after 20, 25 minutes it's running, cools.

JOSE ALBERTO: Well, Jean-Paul, when we purchase--we acquire business about 21 years ago--he was a roaster of that business. And he had maybe about five or six years of experience when we took over and he's been with us ever since. He's a great employee and he's very loyal.

HATTIE: And how long does it take to process it?

JEAN-PAUL: The process takes maybe--sometimes 10 hours.

HATTIE: (Voiceover) Every small business strives for this.

JOSE ALBERTO: What we try to do is we try to run this business in a way that everybody knows their responsibility. And even though we have a plant manager and we have supervisors, everybody knows what they have to do, and that's the way we like to run our business.

HATTIE: So they feel important because they know what they're supposed to do, and they're left alone to do it.

JOSE ALBERTO: Exactly. We want to make sure that they are proud of what they do, and they know it's very important for the company whatever type of job they do.

6

HATTIE: (Voiceover) Cafe Pilon has two types of customers. Eighty percent of sales come from grocery stores. The other 20 percent comes from cafes, coffee shops, restaurants and even hospitals. These institutional customers serve up the brew one cup at a time and help drive grocery sales. We went into the Versailles bakery and we had cafe con Leche. So is that your customer?

ANGEL: (Voiceover) That's right. And Versailles is our number one customer. Basically what we do is a special blend for them.

HATTIE: So is this one of your customer-service techniques, that your big customers will come to you and say, `I don't want what you're doing for anybody. I want my own blend?'

ANGEL: That's right. They came to us about three years ago and they wanted to make up special blend for them and that's what we're doing right now. And they're very happy.

Unidentified Man #1: Because it's very energetic. You know, and it gives you a lift.

HATTIE: Oh. It gives you a--averted energy.

Unidentified Man #2: I got a piece of paper at home, the coffee's good for the sex, believe me. That's right.

Unidentified Man #2: I read it. I heard that. I read it in the Miami Herald. Unidentified Man #1: Yeah.

HATTIE: So you have coffee or you have Viagra?

Unidentified Woman: Coffee's cheaper.

Unidentified Man #3: The Souto nice people.

Unidentified Man #3: The family Souto very nice people.

Unidentified Man #1: And they started on the bottom.

HATTIE: Yes. We know that. We know that.

Unidentified Man #1: They are hard-working people.

HATTIE: And you keep them in business because you keep drinking five, six, seven cups a day.

Unidentified Man #2: I drink eight to 10 every day.

ANGEL: And also we do service on their machines, which is a very important part in the institutional end of it. (Voiceover) And when the machine breaks or it's malfunctioning, what they do is they call us at the office and we send a technician down there and we fix the machine.

HATTIE: (The Lightbulb in the Studio) Don't reinvent the wheel. Or, if it ain't broke, don't fix it. The Souto family was in the espresso roasting business in Cuba, but the biggest name in coffee in Cuba was Cafe Pilon. When the founder of Cafe Pilon was ready to retire, the Soutos offered to buy the business and created growth by combining the companies to maximize efficiencies. And they never thought of dropping the Cafe Pilon name to replace it with Souto. What this teaches, I believe, is business decisions should be made separate from our egos. The Soutos would rather increase profits than see their own name on the package. Decades later, they have again acquired another competitor that carries another name. This is the Souto family business that is proud to own all the best names in Cuban coffee.

There's much more throughtout this web site. You can see streaming video of this show and all the other programs, as well as transcripts and study guides.

8

(Voiceover) Now the third generation of Soutos put Cafe Pilon on the Internet. Anna and J.P. see the Web as an extension of the way their grandfather marketed his coffee originally.

ANNA: You know, he started out in the early '60s and he went door to door. He probably had about a couple hundred customers he would sell to door-to-door.

HATTIE: Right.

ANNA: My grandfather had his sons helping him out -- they were in college at the time. We think that the Internet in the next decade we could be serving 200 million people. You know, go to door-to-door, basically still the same concept but we're doing it through the computer.

J.P.: I think that every Internet user who buys my coffee once, they'll be back for more. Another cup.

HATTIE: What could you say or tell people that you learned from your father that you're now using in business to make this an even more successful company than maybe he even dreamed? What did you learn from your father?

JOSE ALBERTO: Well, I'm going to say that the most important thing is honesty. I mean, this type of business it's--your word is very important. And when I say that is--for example, whenever I'm buying coffee, I might be calling, you know, some of the importers on the phone and I might be watching the market on the screen and say, `Well, this is a good time to buy. Let's put an order to buy so many bags.' Your word is very important because it might take a few days, even sometimes weeks, before we actually get a contract on those coffees that we are buying. So the most important thing that I learned in this business is your word is critical.

HATTIE: Is everything.

JOSE ALBERTO: It's everything. And my father always told me that even if we do make a mistake when you buy, you bought it, that's it. Your word is so--I would say that's the most important thing.

JOSE ENRIQUE: My father, he's terrific. He's a man who, when he was in his 40s, came to a new country, did not speak the language yet he was able to go through a lot of work, a lot of hard work, didn't think about the past and he always had a very positive feeling about the future. The one thing that I feel is so important that I learned from him is his perseverance. I mean, I remember him in periods where things were tough -- you know, back in the late '60s -- middle '60s. The business was not growing. It didn't look like it was a very stable business. And as a matter of fact, some people might say this was a dying business because nobody knew what was going to happen in the next few years.

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HATTIE: You are so up, you're so energetic, you've been doing this for 30 years, how do you stay excited? How do you stay motivated?

JOSE ENRIQUE: Well, you know, now, we're involved in new acquisitions. We're looking for new products. We see a great opportunity to get our product to the Caribbean Hispanics, into the rest of the Hispanics, into the United States, and also into mainstream America. Because of what the things that Starbucks did, now we think that this opens up a lot of doors for us, because now people are looking at different coffees, different ways of making coffee, and we think that that is a great challenge. And this is what gets us motivated.

JOSE ALBERTO: (Voiceover) When we came over, my father had a dream that, you know, we could make it here, and he did it. And he had a dream of not only going door-to-door, but later on having his own plant, a small little plant, and started roasting. And that's how we did it. But he did it not only for his survival, he did it for, in a sense, to try to create a business and teach us that business so we could continue.

ANGEL: Our biggest dream -- someday Cuba will be free and we can go there and sell coffee. You know, that's where Pilon started and that's where, hopefully, someday we can go back and sell coffee there.

JOSE ENRIQUE: Again we look at the day when Cuba's going to be free again. And we hope that's not going to be too long from now, when Mr. Castro is out of there and people finally are free to choose what they want to do with their lives. And we see that as a great market possibility eventually in the future years. Again, I have to re-emphasize, once Castro's out of there, because we don't see eye to eye with his policies.

HATTIE: Do you still have hope?

JOSE ENRIQUE: Oh, we definitely have. You never lose hope. I think Cuba is going to go back to a free country again. I mean, after all, he's (Castro) the last guy in the world; he's like a dinosaur now. He used to be a young guy who was supposedly fighting the wrongs of the world. It turns out to be that he's one of the last wrongs of the world. So now we need for him to move, go somewhere else and let the young people in Cuba get a taste for democracy, get a taste for capitalism so they can start their own business. We know the Cuban as an entrepreneur, as a guy who works. And I don't care how long they have lived under the Communist system, they can't get used to it. And you see people coming into the United States, and after spending a few weeks here, a few months, they very quickly become acclimated. They learn that they need to work every day, that the longer they work, the better off they are. And that if they stick to something, eventually it pays off and it creates, you know, the American dream, you know. And this is what we see happening in Cuba. And when that happens, we want to be part of that. And we know our product is an intrinsic product of the island, and we hope that someday we'll be selling Pilon coffee in Cuba again, you know, as a free country.

HATTIE: (Voiceover) This freedom tower is to Cuban Americans what the Statue of Liberty is to so many of the rest of us. And this flame will burn until freedom rings in Cuba again.

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HATTIE: (Voiceover) Our executive producer, Bruce Camber, spent some time looking at how Cafe Pilon is using technology to expand its market. At Cafe Pilon, we saw what I thought looked like a sophisticated business. What can we learn from them about technology and connectivity?

BRUCE CAMBER: The very first thing we learned is that they put their money in the right place.

HATTIE: What do you mean?

BRUCE: They put their technology in the roasting. You walked into a facility and you see a million dollar roaster. Now that's their prime business, so they put their money in their roasting facility and they didn't really put much technology in too many other places.

HATTIE: So what do you think they need to do to get better, maximize their use of the Internet? They've got a Web site. What next?

BRUCE: They're on the right path. And the path that they're on is to take a look at how they consolidate all their e-mail into one central facility. So they're looking at network servers, and taking all their computers from all around their office and putting them on a central server, so everybody has "TheirName@cafepilon.com. That's not the case today. Plus they're very smart because they're also looking at security. They want a firewall in front of that network so they let the right people in and keep the wrong people out.

A little bonus

HATTIE: So how do I do this at home?

JOSE ALBERTO: This is very simple. All you do is you pour water in the bottom part of the machine and then the filter, of course, goes on top. And then you fill it up with Pilon espresso.

HATTIE: Of course.

JOSE ALBERTO: You just screw it on, put it on top of the stove top, and in five minutes, you're going to have a delicious coffee--espresso coffee.

HATTIE: And it comes out of here, right?

JOSE ALBERTO: It comes out of here. And in five minutes, you're going to have a delicious cup of coffee. Espresso coffee.

HATTIE: Low tech.

JOSE ALBERTO: Low-tech, easy.

HATTIE: Easy. Business start-ups are fueled by immigrants who start businesses. It's been said as a country we are constantly being reinvented, not just by the free flow of ideas, but by the free flow of people.

We thank the Souto family for bringing Cuban espresso coffee to America.

The Closing of the Show.