A SPECIAL BLEND.

• Author: Williams-Tracy, Laura

The new CEO is not a family member, but Roy Davis makes sure ultimate power in S&D Coffee is all relative.

The aroma wafts down Concord Parkway, rousing the olfactory nerves of all who venture outdoors. On a nearby golf course, players inhale coffee fumes on the back nine after sucking back the sweet smell of tobacco from the Philip Morris plant on the front nine. Here, on a no-nonsense commercial strip, amid car dealerships and discount stores, S&D Coffee Co. roasts and packs the beans that perk some of the nation's trendiest, and some of its most pedestrian, blends.

Dean & Deluca gets some of its coffee here. So does Bojangles. The recent acquisition of the nation's oldest coffee roaster made it McDonald's top supplier: 60% of the java served under the golden arches in the United States, and all of the tea, comes from S&D.

This is what J. Roy Davis Jr. built. He took the sleepy business he inherited from his dad, whose bread and butter had been selling coffee to mom-and-pop grocery stores, and turned it into the nation's third-largest supplier to the food-service industry. He started out with nine employees. Now he has 700 in 33 states, customers nationwide and suppliers -- the growers and brokers who sell him his raw material -- worldwide. He did all this by filling a niche when the dominant national brands, Maxwell House and Chase & Sanborn, abandoned restaurants to focus on supermarket sales in the '60s. Expanding his sales force and, later, his production capacity, he discovered momentum was as addictive as that first cup in the morning. "Growth," he says, "began to turn me on."

It still does. He anticipates revenues will reach $145 million this year, up from $100 million in 1999. Much of the growth came from the acquisition of 204-year-old Victor Coffee Co. of Boston, which supplied 4,000 McDonald's restaurants. Davis thinks S&D can double its size in 10 years. (It still trails Torrance, Calif.-based Farmer Brothers Co. and Chicago-based Sara Lee Corp.'s much-bigger Superior Coffee subsidiary.) But he's 66 -- in excellent health, he'll let you know -- and wants to travel more. He'll keep coming to work to spoon out some cream and sugar (and maybe a lump or two), but he's decided it's time to let somebody else stir the cup.

But who, exactly, and how? For most family-owned businesses, this isn't a problem: They don't last this long. Just 10% survive into the third generation. The Ferguson family had owned Victor Coffee since the early 20th century. S&D got it because nobody in the family wanted to run it. But Davis has two sons who've spent a decade in the business. Both have MBAs -- Alan from Carolina, Rhyne from Wake Forest -- and have run S&D divisions -- Alan, vice president/juices and liquid coffee concentrates; Rhyne, vice president/specialty coffees. Both have been on the board of directors...