CO2… It’s What We Do

“I had to make a choice,” recalls Carbonic Systems, Inc. President Bob Finnie, describing his entry into the gases and welding industry. Like so many, he started out painting cylinders at his father’s business, Grand Rapids Welding Supply in Grand Rapids, Michigan. “I could either work for 4 dollars an hour, or 25 cents a cylinder. But I had to tell them ahead of time and couldn’t change my mind.” Finnie chose the piece work and usually doubled the hourly rate.

This choice was just one of many made by Finnie, each one based on gathering information, looking at options, and working hard, very hard.

The story starts in Grand Rapids.

‘Learn This’

After college, Finnie sold insurance and then copiers. The co-owner of Grand Rapids Welding Supply, Bob Fonger, was so impressed with Finnie’s selling skills after purchasing one of his copiers that he offered him a job in sales. Finnie started as a pioneer salesman, pursuing new markets and introducing new products. The first project he was put in charge of was specialty gases. Admittedly not knowing much about specialty gases, he attended a number of schools, learned all he could, and found new customers. Next it was helium. “They wanted to increase helium sales, but didn’t tell me how.” From his research, Finnie found out that balloon bouquets were on the verge of taking off, so he put together packages for local stores. Helium sales increased by 50 percent the first year, 80 percent the next. Then: “Plasma cutting equipment is new, and we want you to sell it,” said his boss. So Finnie learned all he could and did so well that the manufacturer tried to hire him away.

In 1987, Finnie was asked to do market research into the beverage CO2 business. Grand Rapids Welding Supply was selling CO2 for use as a shielding gas, but had no experience with the beverage business. Finnie’s research pointed to the need for a new concept, bulk CO2, and he closely watched how the competition was servicing a national fast food chain. Within two weeks, Finnie sold two bulk systems, and he knew the beverage business was his for the taking. He went to his boss and explained the challenge of going to a restaurant with the name “Grand Rapids Welding Supply.” “They either refer me to the maintenance guy or tell me their restaurant does not need welding supplies.” The name of the CO2 division became Carbonic Systems, div of Grand Rapids Welding Supply, and its slogan “We put the FIZZ in your POP” quickly caught on with customers.

The CSI fleet includes seven CO2 delivery trucks, both two-ton and six-ton. The six-ton trucks are DOT-approved.

By 1992, Carbonic Systems, Inc. had over 300 bulk CO2 accounts. Their main competitor did not have the financial resources to lease tanks, the method preferred by most restaurants. As a result, CSI was gaining accounts left and right until the competitor sold its CO2 assets to Grand Rapids Welding Supply. “That really put us into the beverage business,” Finnie says.

When Grand Rapids Welding Supply was acquired in 1995 by a distributor who did not want the CO2 division, Finnie and his wife Cheryl purchased it.

A Serious Business

Grand Rapids, voted “Beer City USA” in 2012 and 2013 and the “#1 Beer Destination” in 2014 by readers of USA Today, is home to over a dozen craft breweries. Forty-one breweries, cideries and distilleries dot the surrounding area. There are guided brewery tours, hundreds of hobbyists brewing beer in their homes, restaurants and pubs too numerous to mention, and an annual “Celebrate Beer” festival featuring over 1,000 different craft beers—held outside in February! In 2014, Grand Rapids was named one of the “Top 10 Best Vacation Cities for Beer Lovers.” In other words, there is a lot of CO2 being delivered in this town. Working out of a 5,000 sq. ft. location in Grand Rapids, Bob Finnie, his wife Cheryl, and 9 employees can justifiably be called the folks who keep the taps flowing in this beer-crazed city.

Finding Solutions

Bob and Cheryl Finnie, co-owners of Carbonated Systems, Inc.

The sale of CO2 to restaurants, bars, taverns, convenience stores and breweries make up CSI’s largest market, as well as to micro-breweries and home brewers. In addition to CO2, CSI provides helium, beer gas, oxygen and nitrogen, along with nitrogen generators for wine and beer dispensing. Also on tap are blenders, regulators and flow meters, tubing and fittings, pH control for swimming pools, fire department restaurant signage and dry ice. Bulk CO2 systems are available for post-mix beverage systems and mixed gas systems for beer and wine dispense. CSI is certified by Guinness Stout for a 75/25 mixture of nitrogen and carbon dioxide. If a restaurant needs a 60/40 mix for lagers and ales, a blender is installed. There is growing interest in CO2 monitors and alarms. While new restaurants are required by law to install them, Finnie expects that the regulation eventually will be enforced in existing restaurants.

Like many independents, CSI distinguishes itself on service. With fountain pop often being the highest margin, a restaurant does not want to see a machine go out of service for lack of CO2. Says Finnie, “Some companies believe they’re providing good service to a customer who runs out of CO2 as long as they show up in the next two or three days. We don’t think so. Our only time constraint is loading the truck and travel time. If the customer is an hour away and calls on the weekend, we can be there in two hours. Customers appreciate that.”

CSI’s problem-solving approach is what customers notice. “Every restaurant is a little bit different from the others,” explains Finnie. “We look for an opportunity to see what they’re doing and understand how they are operating so we can help them make their dispensing process better, saving them money or making them more efficient.”

In most instances, bulk CO2 is the problem solver. “As luck would have it, cylinders always tend to empty during the lunch or dinner hours, the busiest times in a restaurant. It takes an average of 15 minutes from the time the pop goes flat to the time it gets back up and carbonated. That’s 15 minutes when the restaurant has no sales on its highest margin product, at a time when employees are busy serving customers. Bulk CO2 eliminates this challenge, as well as the loss of product left in the cylinder that must be vented off. With bulk, the customer gets a better product and a better yield, especially with consistent pressure.” With CSI’s help, customers understand the benefits of a bulk CO2 solution. Currently, 60 percent of CSI’s CO2 customers are using bulk tanks.

Tanks like this one at a fast food restaurant are filled during the day so the driver can enter the building to make sure there are no leaks and it is operating properly.

Looking out for customers and providing proactive solutions is what CSI does best. Finnie, a board member of the International Beverage Dispensing Equipment Association and chairman of its Safety Committee, is very serious about safety. Unlike a lot of suppliers, every time CSI fills a tank, the delivery driver checks for leaks. “Many companies leave the valve open on the bulk tank so it can be filled from outside the building at a time convenient to the supplier, often in the middle of the night. The delivery driver never has to enter the building. We don’t believe that’s safe. They’re pumping a hazardous material into a building and they’re not watching where it’s going.” CSI delivery drivers fill tanks during the day, opening the valve and entering the building to make sure the tank is operating properly and there are no leaks downstream.

Drivers are outfitted with portable CO2 monitors and alarms. “We’re all about safety. I don’t want them put in a dangerous situation if there is a problem with CO2 at a site.” Finnie believes that when it comes to safety, you can’t spend enough money. “We have to make sure that not only our employees are safe, so are our customers.”

Restaurants can be challenging environments with high turnover, different languages, and a lot of young people, many of whom spend their time in a hot kitchen. CSI drivers are trained in providing skilled customer service. “Customers require a lot of handholding,” Finnie says. “When trying to troubleshoot by phone, something as simple as asking where a “gauge” is located can be a challenge if the customer only knows it as a “dial” or is in the middle of dealing with a crowded lunch service.

Ross Finnie (right) joined CSI in January 2015 after working as a commercial credit analyst on his father’s insistence he get experience elsewhere. He is learning the beverage gas business from the ground up, recently earning his CDL license.

Employees also learn how to work smarter, not harder, a practice that is paying off for the company, particularly when it comes to truck drivers. CSI guarantees 40 hours of pay for drivers, even if they work less hours. Explains Finnie, “If a driver is out working efficiently and returns early, he goes home if there is no work for him to do. So if he works 35 hours that week, he still gets paid for 40.” This does two things: “It keeps overtime to a minimum; and if a driver can work smarter and more efficiently, he doesn’t get punished for coming back early.”

Independent Strategies

CSI operates within a 100-mile geographic radius out of Grand Rapids. While nationally owned chains often want to deal with one vendor, typically a national supplier, CSI focuses on local franchise owners who prefer to deal with a locally owned and operated supplier. CSI has established an alliance with another independent distributor located outside of its 100-mile footprint. When a local customer expands by opening another store or restaurant outside of CSI’s footprint, CSI sells the equipment; the allied partner fills the tank and provides the service. And vice versa. “In the beverage business, one of the advantages that large national companies have is that they are everywhere. Our alliance enables two smaller independent distributors to work together by selling the equipment and providing the local service.”

With such out-of-the-box thinking, Bob Finnie continues to research products and new applications. “Every once in a while, I say, ‘Wow! I’ve never heard that before.’” And then he figures out a way to bring customers products and services that will make them more efficient and more profitable. “Our goal is not to be the biggest,” he says. “It’s to be the best.”

Gases and Welding Distributors Association