A Humble Beginning—Sam and Minna Unite 49 and Texas governments. Uncle David was also a co-founder of Corpus Christi National Bank (now Bank of America). His co-founder was Captain Richard King, the founder of the King Ranch. Captain King donated a plot of land in David’s honor to establish the Hebrew Rest Cemetery. As the Corpus Christi community grew, so did the Weils’ various enterprises. As they profited, their wealth was invested into purchasing land in the area. During this period of time, the Weil clan had 11 children. As Charles and Sarah grew elderly, they began to put their finances in order, appraising the family’s entire holdings of business and personal items so as to equally distribute them to the children. As was the custom at the time, the male descendants received the businesses, and when it came to the land (farms and ranches) to keep working these businesses, some were sub-divided to ensure equality. The female children were expected to get married and raise their children, so they received cash, stocks, bonds, and jewelry, also all in equal values. Over time, the Weil daughters spent the cash, sold the jewelry, and converted many possessions to currency in order to support their families. The men worked the businesses and grew them. They did not sell any of the lands, and some decades later oil was discovered on some of their farms and ranches. Because of this, their wealth continued to grow. All of the Weil men converted from Judaism to be Episcopalian in order Weil Brothers grocery store Interior view of Weil Brothers grocery store located at Lawrence and North Mesquite Streets in Corpus Christi, Texas. Three men stand in the center of this sparsely furnished store. The man in the center wears a long white apron. Metal bins against the wall contain fresh produce, and wooden shelves on the side walls display canned goods. This store was owned by Alex, Moise, and Joe L. Weil. It contained three distinct sections: exotic goods; self-service; and a ship supply chandlery, which supplied ships in port with food and services such as welding, translating, and the hiring of men. The section pictured sold Borden canned milk, fresh vegetables, H and H Coffee, and canned goods. A meat counter is visible in the background. Source: Harry Ransom Center, The University of Texas at Austin.
50 Susser Holdings to fit in with the Corpus Christi business community. However, most of the women remained Jewish. Even so, this did not create problems or rifts within the families. To highlight the closeness of the Weil family, numerous family reunions have been held over the decades, and the current generations still have family reunions every five years on Easter weekend, the last of which had approximately 300 attendees. Minna Schwarz, born in 1917, became an orphan at the age of 14 and was raised by her mother’s sister, Fannie Weil Alexander. Minna graduated from Corpus Christi High School. She then left to attend Southern Seminary in Virginia, a finishing school, referring to it as “Southern Cemetery!” After this, she attended the University of Texas in Austin. Upon her return to Corpus Christi, Minna met Sam Susser at the dance hosted by the Jewish Men’s Club, and they immediately felt a connection. After courting for six months, they both knew that they had found the one, and he proposed. She told her Aunt Fannie Weil and other family members of her engagement, but these relatives did not have the reaction she had hoped for; they forbid the union because they were a proud aristocratic German Jewish clan and did not want a penniless Jew from Russia to marry into the family. Not to be deterred, Sam and Minna eloped, hopped on a train to Houston, and found a rabbi to marry them on July 22, 1938. After they returned to Corpus Christi, the Weil clan still refused to talk with Sam for over two years, until he proved himself a capable businessman and a great husband. When Minna was orphaned, she inherited two service stations, one at Port Avenue and one at Comanche Street. Shortly after they were married, Sam took over operation of these service stations and began a wholesale fuel business, selling fuel to local companies. This was where the business he started truly began. What Sam accomplished over the next few years would lay the foundation for generations to come. Downtown Corpus Christi, 1943
A Humble Beginning—Sam and Minna Unite 51 Minna and Sam Susser It’s been a long, incredible trip from those early days to where we are now. And we continue to look to a bright future. —Sam J. Susser
52 Susser Holdings Success is not final; failure is not fatal: It is the courage to continue that counts. WINSTON CHURCHILL
Starting the Family Enterprises—Sam Susser, Sr. 53 Starting the Family Enterprises— Sam Susser, Sr. It is better to fail in originality than to succeed in imitation. —Herman Melville The world is moving so fast these days that the man who says it can’t be done is generally interrupted by someone doing it. —Elbert Hubbard Culture eats strategy for breakfast. —Anonymous I n any company’s culture, the values embraced and lived out by the leadership and founders are the ones most likely to be seen throughout the organization’s workforce and services. This is especially true of multi-generational, family-owned companies such as Susser Holdings. But these values gain strength when they are passed down from one generation to the next, particularly when they are a part of that company’s identity from the very beginning. Such was the case with Sam Susser and his many enterprises. The work ethic, creativity, and entrepreneurial drive that Sam demonstrated were ingrained into the company’s DNA from the very start, and the values that he cherished—dedication, honesty, integrity, innovation, and sheer stick-to-it-iveness—are still highly prized within Susser today.
54 Susser Holdings The Two Service Stations That Started It All Minna had inherited two gasoline service stations in Corpus Christi from the Schwarz side of the family. When she and Sam were married, Minna was in control of these gas stations, but she and Sam agreed that moving forward Sam would assume operational control. Sam did not like the retail business, which was too confining, so he hired a manager to run each station. Sam utilized an entrepreneurial streak that drove him to push this new business to be something more, something greater than what it was. Sam purchased a used tank truck, allowing him to go to a refinery and purchase gasoline at a better price to deliver to his two stations. He began selling his gasoline to other independent service station operators, as well as calling on companies in the area that owned fleets of cars and trucks to sell them fuel.1 Some wanted a pump and tank at their facility, and Sam installed this equipment and provided the gasoline. The business proved successful, and Sam grew an independent distributorship. In his first year, Sam sold 360,000 gallons of gasoline. It was a great time to be selling fuel in Corpus Christi. Due to the oil boom and bustling port, the city’s population doubled between 1931 and 1941. In addition, the new $25 million Naval Air Station would energize the economy, employing more than 9,000 workers in 1941. All of this meant more fuel needs, and Sam made shrewd business decisions to capitalize on the opportunity. Sam and Minna’s first child, Sam Julius Susser, was born in 1939, just a couple 1 Elizabeth C. Martinez, “Susser Follows Family Tradition by Building Circle K’s Success,” The Business Times, July 21, 2005.
Starting the Family Enterprises—Sam Susser, Sr. 55 of months after Germany had invaded Poland, precipitating World War II. A handful of years later, three other children (Harriet, Jerry and Susan) were born to them. The United States entered the war in December 1941 after the Japanese attack on Pearl Harbor. As the war continued, it became increasingly difficult to hire service station employees because of the draft and also more difficult to obtain gas. The stations eventually had to curtail service hours until after the war ended. By 1943, when he was called up to serve in World War II, Sam had three locations. He leased his stations to Sinclair and reported to San Antonio to join the Navy. They turned him down, though, because he had young children. Unable to join the Navy, he returned home to Corpus Christi. With his filling stations leased out, Sam had to look around for another line of work. He ended up doing a variety of things to support his family and make a living. One field of work he entered was contracting, doing dirt work and railroad repair jobs for Missouri Pacific Railroad. He also began to develop the Port Ayers residential subdivision. In fact, over the years he put his hand to a broad mix of business endeavors. Other Ventures Sam showed an early proclivity for believing in new ideas. This entrepreneurial streak was evident shortly after Sam first assumed control of the stations that started it all, when he got into a conversation one day with Solon Slosson, a football player from Corpus Christi High School who had stopped by. Slosson told Sam about a design he had come up with for portable bleacher seats. It seems that while Slosson was sitting on the bench one Friday night, he looked around the stands and began to notice all the uncomfortable people sitting there. Sam was very interested in the concept, and he sent Slosson Sam Susser
56 Susser Holdings home to retrieve the prototype he had built. Susser was so impressed when he saw it that he provided the financial backing needed to get a patent. Slosson began to turn out dozens of the things, which were sold in area hardware stores. Equipped with backs and cushions, they were adaptable to any size bleacher. They were a great success, and Sam got an early taste for trying new things. A few years later, in 1945, Sam become aware of a warehouse for sale on the ship channel directly on the Corpus Christi harbor. He decided to sign a 50-year lease on this 110,000-square-foot building and begin Corpus Christi Warehouse and Storage. This was a distribution warehouse designed for ships and railcars to unload their goods for Corpus Christi customers that shipped large quantities of goods—items like flour, large rolls of paper for newspaper, and cases of canned goods. Sam would store the goods briefly and then deliver them to customers from orders received. His sons, Sam J. and Jerry, started working at the warehouse in their early teenage years, moving heavy items like 100-pound sacks of flour. It was tiring, taxing work. One year Sam hired some university football players to help; they started off strong in the morning, but by noon they were spent. Twenty years later Sam constructed a second and third facility with a design that allowed for easy access for trucks to drive into the facility for deliveries. His main office was in the original building, and the three warehouses covered 20 acres. Sam also owned a new advertising medium that projected advertisements onto a screen. For example, he owned a property where he used the façade of the building to project images onto it for advertising purposes. He also owned various cartage and real estate investments. Whatever he did, he looked for innovative ways to distinguish himself or his offerings. He kept trying new ideas, feeding his creativity
Starting the Family Enterprises—Sam Susser, Sr. 57 and entrepreneurial strengths. As well, over time, Sam invested in commercial property and medical buildings, and he bought 20 acres on the edge of town at the corner of Gollihar and Ayers Street, where he developed housing and sold lots. He named the streets after his friends and family. Along the business street, he reserved areas for commercial development, where he built and rented to casual dining franchisees. By 1954, when Sam Julius was 15 years old, the two gas stations that started it all had closed. At this point, the gasoline wholesale distribution business and warehouse distribution were the family’s main businesses. Sam also became a distributor for Grand Prize Beer (Milwaukee) for a year. He gave up on this venture because his salesman, who would visit local bars to provide free samples to patrons, realized that the workers he was sharing it with would not accept this free beer. Sam figured that if you can’t even give it away, it must not be very good. One of Sam’s friends in Corpus Christi was named Joe Craine, a man who was of Irish descent and a devoted Catholic. Joe was in the furniture business, and together they invested in various real estate opportunities. They were very passionate about these potential ventures and would ride around the city sometimes until 3 a.m. to scout out potential investments. At one point, Sam Susser and Joe Craine owned 80 percent of the medical office space in Corpus Christi. One of their key strategies was a plan to build a medical facility next to the major hospitals in Corpus Christi. Joe and Sam would continue expanding their real estate property business over many years and developed an extremely close friendship that lasted until “Uncle Joe’s” death. For 30 years, they took a ride together every night after dinner to visit and inspect their real estate portfolio. Whenever one of the warehouse doors was left open, there was hell to pay for Siete Oil Corporation, Well No. 3, 1962
58 Susser Holdings Sam J. and Jerry! “Uncle Joe” gave Sam J. and Pat all of the furniture for their first home, and the next generation of Craines and Sussers also became friends and partners. In 1960, Sam and Joe also participated with five of Corpus Christi’s oil men to drill an oil well under the Guadalupe River, near Victoria, Texas, with a slant well into the riverbed. The seven men named their company Siete Oil Corporation—“Siete” meaning “Seven” in Spanish, after the seven investors. True to its name, the company discovered seven productive zones that were completed for oil and gas production. Sam’s son Sam J. was in college at the time and has memories of taking his girlfriend Pat Maltzman to this well site outside of Victoria, Texas to witness the completion of the well. In 1962, Sam and Joe bought the four-story Medical Arts Building at 1001 Louisiana. The building was almost equidistant between Spohn Hospital, Memorial Hospital, and Driscoll Children’s Hospital, with a main boulevard leading to each. It was one of many properties they had purchased over the past years as they built up a strong portfolio of investments. Sam began Coastal Bend Properties and in 1965 constructed a circular, five-story doctors’ building in the 1400 block of Third Street across from Spohn Hospital. The entrance would be about 200 feet from the doctors’ entrance to the hospital. Medical Plaza was one of the most up-to-date doctors’ buildings in the Southwest with 49,000 square feet and 35 to 40 suites. In addition to his business endeavors, Sam was a community leader in other capacities. He served as president of the Temple League and was co-chair of the United Jewish Appeal in 1947. He was first vice president of Temple Beth El in 1948, and also a member of the B’nai B’rith Knights of Pythias, a Lion, and a Jaycee. He served as program chair for the Jaycees in 1948. As Sam was working diligently as a business owner and entrepreneur, he was also raising a family. His first son, Sam Julius Susser, was born October 26, 1939 in Corpus Christi. Several years later, Sam J.’s younger siblings were born closer together, around the last years of World War II: Harriet Ann was born January 4, 1944; Jerry Louis was born February 21, 1945; and Susan was born March 16, Medical Arts Building
Starting the Family Enterprises—Sam Susser, Sr. 59 In the 1960s, Sam’s two sons, Sam Jr. and Jerry, would join Susser Petroleum, a business that would become the largest fuel distributor in the state of Texas. Sam, Sr. 1946. All were born in Corpus Christi, Nueces County, Texas where the family lived at 526 S. Tancahua, one of the 11 houses built for the Weil family, just a few blocks from the edge of the bay. Sam Julius and Jerry grew up working in their father’s early businesses. They did whatever was needed, even hauling 100-pound sacks of flour off rail cars while in high school. They would join Susser Petroleum in the 1960s, a business that would become the largest fuel distributor in Texas. They had big shoes to fill, but they would prove that they could leave deep footprints of their own. Sam and Jerry also learned the perils of politics from one of their father’s missteps.
60 Susser Holdings Without justice being freely, fully, and impartially administered, neither our persons, nor our rights, nor our property, can be protected. JOSEPH STORY, SUPREME COURT JUSTICE
The Perils of Corpus Christi Politics 61 The Perils of Corpus Christi Politics By ensuring that no one in government has too much power, the Constitution helps protect ordinary Americans every day against abuse of power by those in authority. —John Roberts, Supreme Court Justice Sometimes the best intentions and purest motives can be misconstrued and misinterpreted when you do business with people who do not hold as high a standard regarding what is right and wrong. Sam Susser found himself in just such a predicament in the early 1950s when he became involved in some business deals that involved oil and gas exploration in the Corpus Christi area. The legal troubles that resulted put him under a cloud that lasted for over a year, causing unneeded stress for him and his family. In January 1950, A.W. Gregg of Houston was awarded a lease on 240 acres of city-owned land near the Mathis Dam at Lake Corpus Christi after city officials weighed 11 bids. The lease was granted January 24, 1950. After Gregg was awarded the lease, legal documents showed that, beginning in May 1952, Sam Susser would draw $100,000 in royalties as an agent for Gregg and that Harry A. Grebe of Houston would draw $80,000 in royalties as a trustee for undisclosed interests. That would be the first of four oil and gas leases that A.W. Gregg was granted by the City of Corpus Christi. But over a year later, in mid-April 1952, questions began to arise regarding the first lease of the city-owned property. According to a fresh analysis done at that time, two other bids appeared to be better offers. City Manager W.B. Collier and Mayor Leslie Wasserman pointed out that it was a new venture for the city, with taxpayers’ money at stake, and that Gregg’s bid was accepted because it contained the fewest elements of gambling.
62 Susser Holdings A.W. Gregg held a press conference in Corpus Christi on April 16, 1952 to answer questions regarding the deal.2 Sam Susser also spoke with reporters that morning, revealing that George E. Woods, Sr. of Houston, Grebe’s father-in-law, was the beneficiary of the $80,000 oil payment that was assigned to Grebe as part of the deal.3 Lawsuit Filed Later that same afternoon, three Corpus Christi businessmen—Frank W. Nelson, realtor; Ed Russell, machine shop owner; and J.M. Benkendorfer, bottling company owner—filed suit in the 79th District Court in Alice, Texas to void the City of Corpus Christi’s oil lease to A.W. Gregg. Included as defendants in the suit were Mayor Leslie Wasserman; members of the City Council; City Manager W.B. Collier; the City National Bank of Houston; Southern Minerals Corporation of Corpus Christi; Sam Susser, Harry A. Grebe and A.W. Gregg. The petition, filed by the Corpus Christi law firm of Warren, McDonald and Groce, argued that the lease should be canceled because the City Council failed to comply with Texas civil statutes. Grand Jury Convened On April 21, Mayor Wasserman recommended that a grand jury investigation be launched to “clear the atmosphere, get at the truth and place the blame, if any, where it should be.”4 A Nueces County grand jury was subsequently convened to look into the matter. They began studying the matter. On May 13, 2 “Gregg to Explain Oil Lease Deal Here,” Corpus Christi Caller-Times, April 14, 1952. 3 “Susser Explains Grebe Trusteeship,” Corpus Christi Caller-Times, April 17, 1952. 4 “Grand Jurors Worked Hard Since February,” Corpus Christi Caller-Times, June 4, 1952.
The Perils of Corpus Christi Politics 63 Sam Susser appeared before the jury.5 Midway through the investigation, the district judge authorized the hiring of a special assistant district attorney, Hal Rachal, to work with the grand jury. He came to Corpus Christi three days a week, and in the final three weeks of the investigation, the grand jury also met with him for a couple of hours on Thursday mornings.6 Six weeks into the investigation, Sam Susser was again called into the jury room.7 The Indictments Finally, after seven weeks of investigation, the Nueces County grand jury returned indictments against Mayor Leslie Wasserman, A.W. Gregg and Sam Susser. The indictments against Gregg charged that he, on January 4, 1850, bribed Mayor Leslie Wasserman by endorsing a $20,000 promissory note for the mayor to influence his decision regarding certain oil and gas leases and that he paid $10,000 to E.G. Lyon to satisfy a debt owned by Mayor Wasserman. The grand jury charged that Sam Susser, on January 4, 1950, offered a bribe to Mayor Wasserman by promising to help him with certain debts and obligations he owed. The charges indicated this was done to influence the mayor in awarding the oil and gas leases on the city-owned land to A.W. Gregg. A four-count indictment was returned by the grand jury against Mayor Wasserman for accepting various bribes. Under Texas law, both the mayor and Gregg could face a two to 10-year prison term. Sam Susser, could, if convicted, serve two to five years. 5 “Grand Jurors Call Lowman, Susser, Collier, “ Corpus Christi Caller-Times, May 13, 1952. 6 “Grand Jurors Worked Hard Since February,” Corpus Christi Caller-Times, June 4, 1952. 7 “Cott, Koepsel, Susser Goes Before Grand Jury,” Corpus Christi Caller-Times, May 26, 1952.
64 Susser Holdings Susser Trial Transferred, then Postponed On October 27, 1952, Judge Frank G. McDonald ordered that the trial of Sam Susser be transferred to the 54th District Court in Waco after denying a defense motion to quash the indictment against Susser.8 Although Susser’s trial in Waco was originally set to begin May 11, 1953, Susser’s attorney, B.D. Tarlton, instead requested a postponement. A new trial date was set for June 8. Trial Finally Opens Finally, over a year later, the trial for Sam Susser began on June 8, 1953. Sam Susser was the first of the three indicted in the matter of the oil/gas leases to come to trial. District Judge A.J. Bryan of Hillsboro presided. When court convened, Susser’s attorney B.D. Tarlton again made a motion to quash Susser’s indictment on the grounds that it did not charge him with a specific offense that broke the penal laws of the state. Tarlton argued in his presentation that Susser’s indictment was due to the over-enthusiasm of the imported investigator, Rachal. Susser sat motionless during Tarlton’s argument; a pile of cigarette butts around his chair was the only indicator of his nervousness. After Tarlton’s presentation, Judge Bryan agreed and quashed the indictment, announcing that he was granting the motion. Susser hurriedly shook Tarlton’s hand and rushed from the courtroom to call his wife in Corpus Christi. After his call, he had only this comment, “I’m glad it’s over.”9 8 “Trial of Sam Susser Transferred to Waco,” Corpus Christi Caller-Times, October 28, 1952. 9 Travis Moorman, “Waco Judge Kills Susser Bribe Charge,” Corpus Christi Caller-Times, June 8, 1953.
The Perils of Corpus Christi Politics 65 Corpus Christi Chamber of Commerce map of regional oil and gas fields, August 1937.
66 Susser Holdings There is no royal road; you’ve got to work a good deal harder than most people want to work. CHARLES WILSON, CEO, GENERAL MOTORS
Susser Success Continues—Sam J. Susser 67 Susser Success Continues— Sam J. Susser Before you become a leader, success is all about growing yourself. After you become a leader, success is about growing others. —Jack Welch, CEO, General Electric You don’t learn to walk by following rules. You learn by doing, and by falling over. —Richard Branson, Founder, Virgin Group The two sons of Sam Susser, Sam J. and Jerry, had a built-in mentor in the form of their father, and it’s easy to see how much they stood to learn from him. His masterful entrepreneurial skills and multiple successful endeavors all provided fertile ground for a positive learning environment. They could learn through osmosis, watching their father’s skills and larger-than-life personality firsthand. And yet there was more than just tutoring at work here; his sons displayed a natural talent for business and proved themselves to be successful entrepreneurs on their own merits. Sam J. and Jerry helped their father in many ways, learning the ropes, and then started their own businesses. With inspiration and ability, they ventured far and wide and produced profitable results. Like their father, Sam J. and Jerry Susser were forces to be reckoned with. They learned skills, put them into practice, and wisely leveraged the financial backing of their father. Like him, they were successful at both seizing and creating opportunities. Sam J. and Jerry were opportunistic, creative, and skilled entrepreneurs. Success was part of their DNA.
68 Susser Holdings Lessons along the Way You are never learning if you’re the one doing the talking. —Sam J. Susser As the boys grew, they had plenty of chances to observe their father in action and to learn from the situations that he bore witness to. Some worked out smoothly, while others did not, but in every case there were lessons to be learned for someone with open eyes and ears. Sam and Jerry both received valuable lessons from riding around with their father practically every day. They listened intently. Whether it was breakfast with his friends, joining him on sales calls, or sitting in negotiations, they were there, listening and learning. Their father’s words of advice rang true, and became a Susser philosophy: There’s a reason God gave you two ears and only one mouth. You never learn anything when you are talking, only by listening. —Sam J. Susser It was fertile ground for learning business—from a great mentor. In 1955, when Sam J. was about sixteen years old, an aluminum packaging machinery salesman had an opportunity for Sam, Sr. to further utilize his warehousing space. This salesman inquired if Sam would be interested in installing a machine that would take a 1,000-pound roll of aluminum foil and re-package it for consumers, competing against Reynold Aluminum. Joe Craine and Sam bought the equipment and started Lone Star Aluminum. This venture operated for six years profitably, selling packaged aluminum foil through food brokers to grocery stores around the state. They eventually sold it as an operating business to the Rosenberg family in Dallas who offered a healthy price to acquire this company because they wanted to become more vertically integrated in their grocery distribution business. Then in 1961, Joe Craine, being involved in the furniture business, found a
Susser Success Continues—Sam J. Susser 69 custom furniture manufacturing shop in Tupelo, Mississippi; he thought Sam, Sr. and he could purchase this company and expand their sales nationwide. The company was a very successful business with a unique business model: made-toorder furniture, shipped to customers within a week. They foresaw significant expansion opportunities. Joe and Sam Sr. spent a lot of time analyzing this venture, while young Sam J. listened to these discussions. Finally, the decision was made to move forward. But this deal’s wings would be clipped before it even left the ground. Sitting in Joe Craine’s home one night, Joe and Sam, Sr. turned to their wives, saying, “We plan to buy this company and will have to move to Tupelo.” Minna said, “I was afraid of that. Well, I’m not going unless Myrtle goes with me,” referring to the woman who helped around their house. Then Joe’s wife Ann said, “I’m not going either unless our help goes too.” After sixty seconds of silence, Joe said, “Sam, this deal is over.” Sam was not so sure and asked, “Why?” Joe responded, “Here we are a Catholic and a Jew planning to move to Tupelo with our black maids… this deal isn’t going to work.” “Well then, guess we are not moving to Tupelo,” Sam, Sr. said. Keeping things happy at home was more important than another business opportunity. The deal was off. From these and other ventures (those seized upon and those passed over), Sam J. learned that there are many factors to consider in any business decision—and some of the most important factors are those on the home front. Some opportunities come to you; others have to be chased down. Some arrive with perfect timing, while others ultimately have to be let go. And others involve… well, really big chickens.
70 Susser Holdings Burger Chef—Learning to Go Big or Go Home If you want to launch big ships, you’ve got to go where the water is plenty deep. —John D. Harkey, Jr. Joe Craine become a franchisee for Burger Chef, a fast-food restaurant chain that got its start in 1954 in Indianapolis, Indiana. At its peak, it had over a thousand locations throughout the United States, and even some in Canada. Although Sam, Sr. was not interested in pursuing this endeavor himself, he was happy to help Joe. After three years as a Burger Chef franchisee, Joe decided to open a new fast-food concept—a place called O’Brian’s, which would sell hamburgers and fried chicken. Prompting this new venture was the fact that Church’s Chicken was planning to enter the Corpus Christi market. Joe Craine saw an opportunity to compete against them. If he could deploy a go to market strategy and open stores before Church’s did, he could own the market, was his thinking. He knew that diners already had plenty of other options for fulfilling their burger and chicken cravings, so he developed a plan to distinguish his business from the competition. To differentiate the chicken he was offering, he purchased the largest poultry he could, with an average weight of 3 to 3.5 pounds each—these were big birds! An existing establishment, Chicken Shack, also provided chickens for lunch, so Sam, Sr., Joe, and Sam J. went to have lunch at Chicken Shack and talk with the owner, R.D. Shepard, about the fast-food chicken business. When Joe mentioned the size of the chickens he was planning to offer, R.D. assured him that he would be wasting money on those extra-large birds and told Joe that a two-pound chicken was sufficient for the customers. Not to be dissuaded, Joe held to his plan, confident that hungry customers would appreciate the larger serving size. Though Sam, Sr. did not invest in O’Brian’s, he helped his friend work through the business plans, and soon those three-plus pounders were hitting the plates. O’Brian’s was another successful endeavor, thanks to its huge fried chicken platters, and sold a lot more chickens than
Susser Success Continues—Sam J. Susser 71 Chicken Shack. Many years later, as Stripes family convenience stores got into the food business, this experience sparked Sam J. and Jerry’s serving selection. They took a page from Joe’s playbook and insisted they have the biggest, plumpest fried chicken drumsticks available. These became a huge hit with the customers buying two drumsticks for 99 cents. Sam J. and Jerry were always watching, and listening, and learning—soaking up what they saw, in order to apply it later. University of Texas Enterprises From these and other experiences, Sam J. learned a lot from watching his father, so by the time he entered college, he had already developed a good sense for the marketplace. Still, college was an opportunity to further polish his skills for starting and running businesses. The University of Texas proved to be an excellent institutional choice for his plans to further his education, both in an academic sense and as a budding entrepreneur. That education wasn’t always restricted to the classroom, either. During his freshman year, Sam J. became ill with Mononucleosis and returned to Corpus Christi to recover. At home, his mother asked him, “What are you going to do when you get back to UT?” Well, the question set his internal wheels in motion, and he started considering something to do with his time other than just going back to his classes. His mother would soon provide further inspiration. While he was still at home recovering, his birthday arrived, and his mother made him a cake. Then the light bulb flashed on. He realized that he was only getting a fresh-baked cake because he was at home,
72 Susser Holdings a special treat that he would have missed out on if he had still been on campus. It was such a nice, familiar custom, and made his day. But most students didn’t get to enjoy a cake on their birthdays while in college; the special day came and went without much fanfare, just more classes and studying. He thought, Maybe I can change that situation and make some cash in the process. Sam J. had a plan: he would send letters to students’ parents, offering them an opportunity to purchase a freshly baked cake that he would deliver for their child’s birthday. When he returned to UT, he launched his first business, based on this premise. It was a big success. The registrar’s office supplied the addresses for students’ parents, and Sam J. wrote up the letters and mailed them out (with the help of the Registrar’s staff that he hired to work on nights and weekends). Many parents responded positively and sent the money, and in turn Sam J. purchased and delivered the cakes. The students were thrilled, and the parents were happy to be able to make this loving gesture and be part of their child’s birthday again. Meanwhile, Sam J. pocketed a tidy profit, as he got a ton of business selling his cakes for $3.75 with a cost of only $0.75. He was on to something, and it didn’t stop there. The second year, Sam J. expanded the “Happy Birthday Cake” business to three additional college campuses—Oklahoma University, Louisiana State University, and Southern Methodist University. The third year his business launched at the University of Wisconsin, University of Kansas, and University of Illinois. For the remote campuses, he brought aboard a student to deliver the cakes and paid him fifty cents to do so. It was a win-win for everybody, and a terrific business model. The entrepreneurial fire in Sam J. was being stoked, and he knew he wanted more. His father interjected with a plan to seed his credit worthiness. “Sam, there’s a bank right off campus. Go sit down with a banker and tell him you need $500 for working capital. Sign a note for it. Pay it back a month early. This will establish a good credit foundation for you the rest your life.” Wise and forward looking was Sam, Sr.’s advice.
Susser Success Continues—Sam J. Susser 73 Floral Service By this time in college Sam J. was dating his future wife Pat who was on the Panhellenic Council at UT; a group that supported the advancement of the sorority experience on campus. She knew all about the inner workings of sororities. She suggested to Sam J. that he might consider flowers for new pledges who had just been initiated into their sororities. Sam J. liked the idea; another opportunity to expand a collegiate enterprise. Pat was able to get names and addresses for these pledges and dates of their initiations. They composed a letter to send to pledges’ parents in order to start a new tradition at UT. The letter sent to the parents read: Since it is a tradition for new sororities initiates to receive flowers at their ceremony, you can select from three types of floral arrangements and we will deliver these flowers to your daughter. To this day, this has become a long-standing tradition at UT. After all, ladies love flowers. Maid Service Growing up, Sam J. always had a maid at home in Corpus Christi. At college, he missed that, so he hired a lady to perform cleaning service at his apartment. The thought occurred to him, why not sub-contract out her service to the other students in his apartment complex? Brilliant! Business was good. And now with surplus cash on hand, Sam J. hired a maid to clean his apartment. Then he struck a deal with her: he would find additional clients for her, in exchange for a portion of the proceeds. Sam J. outsourced this cleaning service at $5 a week to other students living in apartments, putting more money in his pocket as well as the maid’s. He convinced seven other apartment dwellers to sign up for this $5 weekly cleaning service. When Sam came to collect, the last person offered him an alternative to payment: gamble a game of gin rummy for the $5 due. This guy was a card shark and took Sam J. every time.
74 Susser Holdings Their gin rummy games developed into a lifelong friendship. One day, the card shark told Sam, “Susser, my roommate is about to flunk out of school. You have an extra bedroom and I like your lifestyle. How about I become your roommate?” Sam thought about this and knew one thing: Having this guy as his roommate would vastly improve his gin rummy skills. Why not? Sam would come to find out later some interesting background about his new roommate. The most important aspect of this entire story—not just for Sam J.’s time at college, but for Susser Holdings and what would become their tour de force, Stripes—was his relationship with his roommate Jodie Thompson, whose father founded 7-Eleven, the most successful convenience store chain in the world. The 7-Eleven Connection Jodie Thompson and Sam J. became close friends. Their relationship would expand in the years to follow, developing a complex and mutually beneficial web interwoven between the Sussers and Thompsons as they worked closely together, investing in enterprises and joint ventures. Their friendship deepened over the years; they shared many happy times and a few sad ones as well. When Sam J. graduated from the University of Texas in 1962, he had built up his skillset and his storehouse of business knowledge, both from classroom instruction and from firsthand entrepreneurial passion. He was now in a prime position for expanding the ever-growing family enterprises. Sam J. would add more businesses, build on his father’s success, and take the company to a whole new level. He made an indelible mark on his own. Sam, Sr. and Sam J.
Susser Success Continues—Sam J. Susser 75 Back in Corpus Christi, after his college graduation, Sam J. hooked his wagon to his father’s growing business. Early on, his father started floating • problems Sam J.’s way to see if his son could handle working through them. It was a way of testing his son, of finding if he had the right stuff. Problems came front and center quickly, offering plenty of opportunities for Sam J. to prove his mettle, and that’s just what he did. Sam, Sr. and his friend Jack Kins, the distributor for Jax Beer for Southern Texas, acquired an oil lease close to Three Rivers, Texas. They drilled 28 straight successful wells at a depth of only 1,500 feet. These wells produced heavy crude and sold to Tulsa Trading and Transport Company. Tulsa Trading and Transport moved the crude to their small refinery in Three Rivers, Texas, where it was converted into printer’s ink (mostly for newspaper ink) and asphalt for residential and commercial roofing purposes. Sam, Sr. and Jack Kins fell in love with a plexiglass pipe they placed on the well for the purpose of seeing the crude come up before entering the tanks. They called it a “promoter’s dream.” Though they didn’t sell this add-on pipe to others, they certainly loved to visit their wells and see the black gold moving through glass. Unfortunately, they did not renew the lease after the wells were depleted. Still, these wells became profitable and helped Sam and Jack seed other investments. Today that lease sits in the epicenter of the highly profitable and prolific Eagle Ford Shale play. Hauling Asphalt The family’s Three Rivers oil play of 28 producing wells had continued for 10 years. During year six there was a big problem. Their primary customer, Tulsa Trading president Mr. Boudreaux, called Sam J. to advise him that they planned to shut down the refinery for sixty days because of space limitations for storing the asphalt. Sam told him, “We need the income to pay off our loans on these wells. You
76 Susser Holdings can’t stop.” When Mr. Boudreaux still balked, Sam quickly thought of an idea and asked, “How much asphalt do you have?” Mr. Boudreaux replied, “One hundred truck loads.” “Don’t shut the plant down,” Sam said. “I’ve got a plan. Give me twenty-four hours and I’ll get back to you.” Sam, Sr. summoned Sam J. to his office and told him, “Go find out what this asphalt is selling for on the market.” Sam J. called around to lumber companies, roofers and vehicle dealerships— where asphalt is applied as a coating underneath to prevent rust—to ascertain the market value of this over-supply and its demand. Once the value was known, Sam called Mr. Boudreaux back and gave him a price that he accepted. “I’ll have ten truck loads hauled out of your yard tomorrow and we’ll continue to haul until it’s all gone,” Sam said. “Now, please don’t shut the refinery down.” The plan worked; the refinery stayed open, and another product was added to the growing portfolio of Susser Petroleum. Now all that remained was to sell one hundred truckloads of asphalt, but Sam, Sr. had the help of his young son, Sam J. They first focused on selling the asphalt to local businesses, then expanded their efforts to other markets. This proved to be a good new business venture for the Sussers because they were able to find contractors that needed this asphalt, and they ran with this arrangement for a five-year period. Plus, Sam, Sr. and Sam J. were discovering how well they worked together as a team, capitalizing on each other’s strengths. Soon thereafter, Susser Petroleum got a blue-bird opportunity from Oscar Wyatt. Expanding Susser Petroleum Legendary Texas oil man Oscar Wyatt and Sam, Sr. had developed a relationship over the years. Late in 1962, Oscar called Sam: “I just bought the Sinclair Oil refinery in Corpus Christi and want you to buy your gasoline from me now.”
Susser Success Continues—Sam J. Susser 77 Sam replied, “I’ll buy all your fuel I can, as long as you give me the lowest price you give to any customer.” Oscar agreed. Sam J. called the plant manager and started pulling gas that day. Now with a volume supply contract and a low-market price, Sam J. worked hard to bring in new customers that needed gasoline. Susser Petroleum could now sell wholesale to customers. Recognizing his son’s potential, Sam, Sr. told him, “Why don’t you take over Susser Petroleum and see what you can do with it?” Sam J. agreed. At the time, Susser Petroleum was selling 200,000 gallons of gas and diesel a month. But young Sam J. saw much more potential, and this was just the opening he had been hoping for. Now he had a business to run. Sam J. rolled up his sleeves and got to work. He brought on new customers at a rapid pace, supplying gasoline and diesel to their privately-owned tanks in the Corpus Christi and South Texas area. Sam J. also started to sell and install gas storage tanks for new customers for their fleets. Within a short time, Susser Petroleum was selling a million gallons a month. Yes, there seemed to be blue skies ahead. Still, even the fairest day can have storms roll in…. On November 22, 1963—the day John F. Kennedy was shot in Dallas—Sam, Sr. and Sam J. were in a coffee shop, where they were discussing how Oscar • Wyatt was raising their price by two cents a gallon. This was unheard of, as the normal rate increase was only an eighth or a fourth of a penny. This massive price hike was due to the fact that Albert Alkek, the largest buyer of Wyatt’s supply, was receiving the same pricing structure as the Sussers. Alkek was not pleased; the way he saw it, being the biggest customer means getting the best pricing, which was not the case. Alkek put the screws to Wyatt, telling him, “You can have Susser’s business or my business... but not both.” These were the kind of issues that Sam J. had to address and negotiate, and he learned to do so. But there was another concern that, in spite of any efforts, would never go away: he was the son of the owner. After a year of working the business and expanding it with new customers, Sam J. realized that this problem
78 Susser Holdings would not be overcome by the passage of more time. If a problem arose, the employees called his father, and looked to him as the ultimate authority. Sam J. desired to make his own mark. To expand the business on his terms, Sam J. called his college roommate, Jodie Thompson. This phone call would be a watershed moment for both their families, as this contact initiated a formidable partnership between the Sussers and Thompsons. 1963—Susser-Thompson Wholesale Fuel Partnership I n 1963, Sam J. called up Jodie Thompson, whose father had founded 7-Eleven, and who had two brothers—John and Jere. After some catching up, Sam J. said, “I want to expand our gas distribution business in Dallas. Why don’t you three Thompson brothers and I get into this together? I’ll move to Dallas and we can grow this business.” The Thompsons were in favor, but Sam J. did face some resistance from his father. Sam J’s son, Sam L., had been born by this time, and Sam, Sr., now a grandfather, was not in favor of his son picking up roots and moving to Dallas. First, Sam, Sr. had doubts about the feasibility of his son’s expansion plan. Second, he didn’t want his only grandchild, Sam L., to be in Dallas. He told Sam J., “How can you leave and take my only grandchild to Dallas?” They continued to talk, and Sam J. pressed his case, and finally Sam, Sr. relented. He agreed when he realized the Susser Petroleum brand would have a new market entry; anything was good if it expanded the Susser brand, which was good for the family as a whole. The Thompsons agreed to split the percentages, a 50-50 partnership. The well-connected Thompsons introduced vendors and customers to Sam J., who solicited their business and transported fuel to these customers. Sam J.’s fair customer pricing structure was well received. The new venture was a success. Further augmenting Susser Petroleum transportation requirements was Coastal Transport. Years before, Whitey Whitehurst and Sam, Sr. had started Coastal Transport to haul petroleum products throughout South Texas. Over time,
Susser Success Continues—Sam J. Susser 79 their ten-truck transportation company grew significantly, and Farah Fawcett’s father became a partner in the business. Eventually Whitey bought out his partner Sam, Sr. and Fawcett. In 1958, Whitey sold this business to the Atwell family, headquartered in Houston, Texas. In 1989, Coastal bought the Sussers’ trucking fleet, and Coastal Transport became the Sussers’ preferred transport company through the sale of the business in 2014. Today Coastal Transport is a large enterprise still owned by the Atwell family. The CEO, Rich Atwell, is a dear friend to Jerry Susser. 1965—Fertilizer Business While in Dallas arranging wholesale gas distribution, Sam, Sr. supplied an old tank truck to the growing enterprise. A year later Sam J. bought a larger truck. Now with an extra truck, Sam J. thought of a way to utilize the spare. He began a liquid fertilizer business for residential lawns. Flyers were distributed in area neighborhoods, and soon customers, wanting a greener lawn, signed up. Andy, the truck driver, was hired to spray their lawns on Saturdays. It was going great for the first handful of weekends, but then Andy called with a problem, “Mr. Sam, I don’t think we can keep doing this.” “Why?” Sam J. asked. “What’s wrong?” Andy replied, “It done eated out the bottom of the tank…” The strong liquid fertilizer had destroyed the tank, eating right through it. No more lawn servicing, just a large mess to clean up. You win some, you lose some. Thankfully, over the years Sam J. won a lot more than he lost. And he wasn’t the only Susser with an impressive track record— not by a long shot. With Sam J. occupied in Dallas growing Susser Petroleum, another Susser was needed to manage the fuel distribution business in Corpus Christi and South • Texas. The timing was perfect for the second son, Jerry, to make his mark too.
80 Susser Holdings Keep a good reputation. SAM SUSSER, SR.
Another Driving Force—Jerry L. Susser 81 Another Driving Force— Jerry L. Susser Entrepreneurs are simply those who understand that there is little difference between obstacle and opportunity and are able to turn both to their advantage. —Victor Kiam I learned that you don’t get anywhere by sitting comfortably in a chair. —Conrad Hilton Like his father and brother, Jerry L. Susser also showed an entrepreneurial streak that would serve him well in the marketplace, one that would help raise the family business to new heights. Six years younger than Sam J., Jerry also worked in the Corpus Christi warehouse at a young age, learning the business from his father by watching, listening, and taking part. He developed a strong work ethic and keen instincts for making successful decisions. After his tenure at the University of Oklahoma, Jerry returned to the Susser enterprises in 1966 to lead endeavors that added to the family coffers. Jerry was a driving force for the company, bringing to bear a combination of practical knowledge, technological expertise, sharp attention to detail, and savvy business acumen. And like his brother, he soaked up the wisdom and instruction imparted by Sam, Sr. Jerry said this of his father: “He taught me that you never go wrong by doing the right thing, and you never learn anything while you’re talking. So listen.” You can never do wrong doing the right thing. —Sam J. Susser
82 Susser Holdings And Jerry did… and he learned a lot. Then he put it into practice in powerful ways. Of course, many of the Susser ventures were joint projects that different family members contributed to in various ways, and such was the case with an exciting new drink that would serve the family well. Success is best when it’s shared. —Howard Schultz, Chairman and CEO, Starbucks A Frozen Opportunity A great opportunity for the Susser family, one that Jerry would take hold of and run with, came along in 1965. Susser Petroleum had a customer by the name of Sy Lynch, the Schlitz Beer distributor. He happened to have recently wet his whistle on a new icy drink that pleased his palette—one that made such an impression on him, in fact, that he called Sam J. up on the weekend. “Hey, what are you doing?” Sy asked. “Just playing with the kids,” Sam J. answered. It was Saturday, after all. “I’ll come pick you up,” Sy said. “You have got to try this new frozen drink at Dougherty’s Drug Store. It’s amazing!” After arriving at Dougherty’s, Sy asked a young man who worked there to bring them two drinks from a new machine. Sam J. tried the drink, which was slushy, sweet, and blissfully cold. He was duly impressed: “Man, these are terrific!” On the way to the office on that following Monday, Sam J. picked up two ICEE® drinks and delivered them to the Thompsons’ secretary with enthusiastic instructions, “Tell them that 7-Eleven needs to install these machines. It will make them a lot of money!” Sam J. was right. ICEEs were a massive hit, becoming a part of American culture, even if they sometimes went by another name. And soon Jerry Susser would leverage this delicious beverage product and launch another successful new business for the Sussers.
Another Driving Force—Jerry L. Susser 83 The ICEE® and Slurpee®—A Short History From the microwave oven to penicillin, x-ray images to potato chips, Post-it Notes to Coca-Cola, plenty of great inventions have been created by accident. So it was with the ICEE. Many terrific ideas come out of the blue; it’s the ability to capitalize on that idea, turning it into reality and bringing it successfully to the marketplace, where the real genius lies. Late in the 1950s, Omar Knedlik of Kansas City owned an old Dairy Queen location where the machinery was constantly failing. After his soda fountain broke down, he put some soda bottles in the freezer to keep them cool, and when he served them his customers discovered a slightly frozen, slushy surprise. They loved these slushy sodas and started asking for them. So Knedlik used an air conditioning unit from a car to build a machine in his back room that would create a slushy soda by combining and freezing water, a flavor mix, and carbon dioxide. He held a contest to name the new product, and the winning entry was “ICEE.” The ICEE machine was soon redesigned and sold to a few convenience stores throughout the early 1960s. And after Sam J. delivered those ICEE machines to the Thompsons, 7-Eleven licensed the machine—and that’s when things really took off. 7-Eleven gave the drink a new name to make it unique for their stores: the Slurpee.® A 7-Eleven ad agency director came up with the name based on the sound it makes coming through a straw. Slurpees were an instant hit, especially with the younger crowd and the Woodstock generation. The cups had colorful designs and flavors that were edgy for the time, with names like For Adults Only, Pink Fink, Moonshine, Kissin’ Cousin, Gully Washer, Sticky Icky, and Redeye. In fact, the 7-Eleven ads for Slurpees were so well-received that radio DJs got call-in requests for Slurpee commercials. Whatever name they went by, ICEEs and Slurpees were now indisputably one of America’s favorite new treats. “I Slurped A Moonshine” pin
84 Susser Holdings The Koolee Mastermind Because 7-Eleven was installing Slurpees full bore, Jerry Susser saw an opportunity to similarly take advantage of the popularity of this delectable frozen drink. Customers wanted them, so he told his brother, “We should do this in South Texas.” Jerry purchased the machines from a Dallas-based distributor, Lane & McLean, and then developed the brand “Koolee.” Jerry started leasing them to convenience stores throughout South Texas. This was a hit, and people lined up to try the latest flavor, and hopefully avoid a brain-freeze. At the same time, Jodie Thompson was leasing and installing the same machines in Mexico City. However, sales of the beverage struggled to reach satisfactory levels, as there were reports that Mexican consumers thought the icy drink would give them a sore throat. It was just too different from familiar products on the market. The need for currency exchange was another concern. Sam, Sr. had tickets for the Cassius Clay and Ernie Terrell fight in Houston on February 6, 1967. The Sussers invited Jodie Thompson to come up from Mexico City to join them for the fight. While visiting at the Lamar Hotel, they discussed a problem and an opportunity. The machines that both Jodie and Jerry were marketing had an issue with Hispanic customers, many of whom believed that the frozen drink would give them a sore throat. The ever-wise Sam, Sr. piped in, “What you boys need to do is find a place that is summer all the time and takes American money.” Jodie responded, “How about Puerto Rico?” Jerry studied the situation, considered options, and came up with a plan. He thought that if they pooled their resources together and found a location with a tropical climate year-round, and one that utilized American currency, they could achieve higher numbers of sales and improve their prospects with Koolee machines. After considering possibilities, Jodie, Jerry and Sam decided to fly to Puerto Rico to ascertain the marketing potential there. Together the three conducted research and learned more about this island in the Caribbean Sea, which lies east of the Dominican Republic. It has a land area approximately three times the size of Rhode Island at about 3,500 square miles. The climate, they found out, is tropical marine, with average temperatures
Another Driving Force—Jerry L. Susser 85 year-round near 80 degrees Fahrenheit in lower elevations—a perfect fit for cool, tasty drinks. Also, the people speak Spanish, but also English, and importantly the currency is the United States dollar. They discovered that Puerto Rico, a self-governing commonwealth in association with the US, is under the jurisdiction of US customs, and borders are open between Puerto Rico and the US. This allows for the free movement of people and merchandise—a factor that would certainly smooth out the process. The island’s name means “rich port” in Spanish, and Jerry and Jodie hoped it would prove to be just that for them, too. In Puerto Rico, they analyzed the potential, talked to locals, scouted possible locations, and did their due diligence to see if this island really offered everything they had anticipated that it would. By all measures, it looked like a winning option. Jerry pulled the trigger and moved his twenty-five South Texas Koolee machines to Puerto Rico. About a year later, Jodie moved his Mexico City machines there too. The island’s inhabitants were about to be in for a treat. To oversee penetrating the market in Puerto Rico, Jerry moved to San Juan, which is the island’s capital and largest city, located on the Atlantic coast. In addition to the locals, the Koolee machines would also cater to travelers, since San Juan is a popular tourist destination, with its cobblestoned streets in Old San Juan featuring colorful Spanish colonial buildings, massive fortresses overlooking the water that date back to the sixteenth century, and a bayside promenade. There in San Juan, Jerry started promoting the leasing of machines to the island’s convenience store owners. It was a sweetheart deal for these shop owners: no money down, and they got to share the profits—70 percent for Susser / Thompson, and 30 percent for the store owner. Many shop owners took him up on the offer. The business proved successful, with a nine-month return on the machine cost. Soon, Koolees were a popular drink not just in San Juan but around the island, proving the wisdom of their choice and bringing another revenue stream to the Susser enterprises. The Sussers sold their equity in the Koolee business to Jodie Thompson in 1969 as Jerry wanted to move to Dallas to work with his brother, Sam J., in a newly formed auto parts enterprise. Today, Jodie still owns Koolee machines in Puerto Rico. San Juan, center of Koolee operations in Puerto Rico
86 Susser Holdings Super-Slide While in Puerto Rico, Jodie and Jerry found a location suitable for installing a super-slide—a stand-alone structure 30 feet high with steps leading up to the departure point with six lanes. The purchase was made, and the slide was built. It was an instant hit. Customers slid down the Super-Slide time and time again—and all enjoyed Koolees there as well. It was a phenomenal success, with long lines all day long, every day. Because of its success, a buyer soon came forth to acquire their interest. Another successful enterprise started and sold. Jerry returned from Puerto Rico in 1969, trading the Caribbean for the Gulf Hi Ho Silver Hi Ho, Hi Ho, and off to work they went… on another Susser venture. In the early- to mid-1960s, a coin shortage had developed in the United States. Because of this shortage, the price of silver had soared, passing the $1-per-ounce mark. The U.S. government had to take steps due to the fact that the silver contained in its coins was actually worth more than the denomination stamped upon the coins. So, in 1965, the U.S. began striking copper-nickel clad dimes and quarters. Jerry Susser realized that the majority of the coins collected from Koolee machines were made of silver. This prompted him to develop a plan to accumulate as much silver as possible and then store the coins in a U.S. bank. First, he advertised in the local newspaper that residents of Puerto Rico could exchange their coins for a premium price. The residents showed up to make a profit, and soon a new Susser business began, one they nicknamed “Hi Ho Silver.” As volume started to overwhelm their process of hand-sorting to separate silver from copper-nickel coins, and to prevent human error, the Sussers purchased an automated coin separator. This sped up their process and ensured more accurate separation of the coins. When the supply of silver coins from Puerto Rico dried up, the Sussers closed another successful enterprise.
Another Driving Force—Jerry L. Susser 87 of Mexico, but at least he was still close to the beach. He came back to Texas to work at Susser Petroleum. Jerry soon proved that he was as comfortable with handling oil and big business in Texas as he was with selling frozen drinks on an island. He was adept at both, and he kept growing the family business in South Texas. Jerry even started a new company, Apache Oil, to extend the Susser mid-stream fueling operations to tugboats and barges at Redfish Bay Terminal in Aransas Pass. Redfish Bay is a southwestern extension of Aransas Bay, north of Corpus Christi Bay, which separates the cities of Aransas Pass and Ingleside from Port Aransas on Mustang Island. This terminal would serve the many boats coming in and out of this important waterway. With Susser Petroleum’s extended reach in Dallas, in South Texas, and now at Redfish Bay, the brothers considered buying a seat on the New York Commodity Exchange to further control their fuel pricing and hedge contracts if needed, though they ultimately decided not to do so. And meanwhile Jerry Susser kept his eyes open for new opportunities. $ave A-$ Convenience Stores As is often the case, one small turn of chance—or twist of fate—starts a new enterprise. Such was the case with $ave A-$ Stores. In 1968, Jerry Dean, a friend of the Susser family and owner of Arrowhead Petroleum, decided to give up his five gas stations. He visited with the Sussers and simply handed over the locations to them. “I’m out of here,” he told them. “I can’t handle the accounts receivables, and I need to focus on my fuel distribution business. You can have them.” The Sussers had the organizational systems in place to collect on the outstanding money due, so they agreed to take the stores over. Because there was no initial cost, it seemed like a decent venture. Why not give it a try? A new $ave A-$ sign was placed atop the stores. These were very simple gas stations with two gas pumps outside, while inside the most basic auto needs were sold. They were not exactly superstores. With his keen eye for spotting potential and bringing new value, Jerry looked for ways to expand the stores’ offerings.
88 Susser Holdings He decided to start selling cold drinks and snacks, and he placed a large ice chest with soft drinks, milk, beers, and snacks outside the stores under a metal lean-to. It was not long before the brothers realized that these drinks and snacks had a higher profitability than the gasoline did. Jerry looked to add more locations. Still, his father dug in his heels and maintained his negative view of retail, seeing little reason to expand in this direction. But Jerry had seen the possibilities. Sunburned Girl Windshield Washer At one of the $ave A-$ Stores, the gasoline sales were sub-par, only achieving about 20,000 gallons a month. To boost fuel sales, the brothers hired young ladies, clad in bikinis, to wash customers’ windshields. Sales blossomed to over 100,000 gallons a month. They wanted to keep this momentum going; however, the girls quit, due to severe sunburn. SuPetCo Jerry and Sam J. wanted to show their father what could be accomplished if they added more of the food and drink offerings. While their parents were traveling, gone on a round-the-world trip, the brothers constructed a new $ave A-$ Store convenience store to show their father the future when he returned… a glimpse into the glorious world of what could be. They named the store SuPetCo (Susser Petroleum Company), located at Ayers and Baldwin streets in Corpus Christi. Upon their father’s return, he was surprised—but not in a good way. Despite the brothers’ best efforts, Sam, Sr. was unimpressed. Unable to convince their father of the potential represented by SuPetCo and $ave A-$ convenience stores, Jerry closed one location and kept the remaining five. One of the original convenience stores, now closed.
Another Driving Force—Jerry L. Susser 89 The Sussers learned a lot from this experience. Although at this point the timing was not right for achieving consensus on their venture, it provided much in the way of insights and perspective that would lay the groundwork for radical success in the future. Eventually the Susser family fortune would be vastly enhanced by the convenience store business, and dipping this toe in the water was just a precursor to the days in 1988 when they would dive right in. Better to make a slow dime rather than a fast nickel. —Rich Russo Susser Environmental Services The ever-expanding Susser Petroleum’s fuel distribution company had many customers that wanted to install Underground Storage Tanks (USTs) at their locations, such as commercial fleet customers and other fuel wholesalers. This became still another revenue source for Susser Petroleum, who controlled the market for UST and fuel supply in a large swath of South Texas. As part of their service, they would inspect these tanks to ensure they were up to environmental and safety standards and maintain them accordingly, adding to their expertise and building a stellar reputation for service and integrity. Integrity is doing the right thing when no one is looking. —Anonymous In 1987, new federal and state regulations stipulated that UST owners must be in compliance with these mandated laws. Many Susser clients were unfamiliar with these stricter guidelines and needed assistance to be compliant. The Sussers decided to establish Susser Environmental Services (SES) to help UST owners navigate the many new laws and requirements by providing them with complete regulatory environmental services. Ready for a fresh challenge, Jerry Susser headed up this organization. Jerry had developed the expertise and gained the contacts necessary to hit
90 Susser Holdings the ground running. He had worked closely with the State of Texas and Governor Ann Richards, who appointed him to the State Underground Storage Tank Committee. He became the foremost expert on how the laws and regulations impacted UST owners. In fact, Jerry helped pass Texas House Bill 1588, which set up a reimbursement fund for UST owners with contaminated sites. His knowledge, talents, and connections helped to grow the SES list of clients. Services provided to UST owners included registrations, tank removal, upgrades, and remediations, among many others. As well, this experience provided many new customer contacts, giving the Sussers an advantage when looking at future acquisitions. This successful enterprise would later market to convenience stores, truck fleets, and any company with storage tanks, and eventually become a division of Stripes convenience stores in the future.
Another Driving Force—Jerry L. Susser 91 The Big Blunder Texas state regulations mandated the removal of dirt around leaky storage tanks because they contained contaminated hydrocarbons. The state even offered reimbursement for purchasing the necessary equipment for this removal. To comply, the Sussers purchased a giant, complex Dirt Burner from Raytheon Technologies, a large mechanism that burned away the dangerous hydrocarbons. When they submitted their invoices for the Dirt Burner services, the state refused to pay, having changed its stance. The Sussers were stuck with this expensive contraption—a painful blunder they still laugh about.
92 Susser Holdings You have to put yourself in the way of opportunity. SAM J. SUSSER
Continental Parts Company—1967 93 Continental Parts Company—1967 The key is not the ‘will to win’… everybody has that. It is the will to prepare to win that is important. —Bobby Knight The large Susser warehouse in Corpus Christi was under-utilized in the late 1960s as demand for bonded warehousing declined. It was built by Sam Susser, Sr. in the 1940s on land next to the ship channel, leased for 50 years from the Port of Corpus Christi. A bonded warehouse is a secure location in which imported goods can be stored or even undergo manufacturing operations without the importer or warehouse owner having to pay duty. Private bonded warehouses, like the one the Sussers owned, require a posted customs bond and some customs supervision. With a bonded warehouse, items can be stored until they are able to be moved elsewhere, or until permission is received to bring them into the country. But as San Antonio became a more popular logistics hub than Corpus Christi and the upgraded highway system between the two cities allowed for improved transport, there was a decline in demand for a bonded warehouse in Corpus Christi. This would end up being a catalyst for expansion into other ventures. The Sussers kept looking for new clients to store their goods, and in 1967 an auto parts distribution opportunity fell into their lap. You have to put yourself in the way of opportunity. —Sam J. Susser An auto parts salesman named Joe Hargis approached the senior Susser with an offer. “I can get the Ford brand of auto parts (Auto Lite) and I’ll get out and sell them. Since you have ample empty space, you have room to store these parts—spark plugs, oil filters, condensers, shock absorbers, batteries, you name it. You will make more money through this business than renting warehouse
94 Susser Holdings space to others.” Sam, Sr. believed this was a logical way to fill up space and to make money selling auto parts. A company was formed, and a new Susser enterprise entered the fold— Continental Parts Company. Sam, Sr., Joe Hargis, and a Ford Motor company executive met to create the initial inventory of parts. A total of $250,000 in inventory was delivered within 30 days. Sam J. remembers that part of the conversation included an imminent price increase on spark plugs. A year later, Sam, Sr. called Sam J. and announced, “You have a problem.” Sam J. replied, “Have you seen our latest P&L? It’s the best in our history. I don’t have a problem!” Sam, Sr. then responded, “Yes, you do. Joe is not selling as we thought he would. He can no longer pay the rent and YOU need to get busy and figure out how to sell those parts.” Sam J. dialed up a Ford dealership in Orange, Texas, to inquire about its needs. The manager told him, “We get our spark plugs from Ford directly. We have all we need.” Sam J., said, “Oh…” It seemed to be a lost sale. But then the customer added, “I’m just curious. On BF82s… what’s your spark plug price?” Sam J. knew their initial cost was 38 cents and also knew that it had recently increased to
Continental Parts Company—1967 95 42 cents and responded, “Forty-five cents.” There was a long silence, long enough that Sam J. knew he had this customer on the ropes. The amount mentioned was a winning price. So, he went in for the close, “If you buy a pallet, I’ll pre-pay the freight. If it’s not pre-paid, just refuse the order. If it is pre-paid, open it up to ensure it’s original Auto Lite spark plugs. If satisfied, pay the invoice in 30 days.” “I’ll have two pallets,” the manager replied. “Also, what can you do with FL1s?” Sam J. put him on hold and looked at his father, “What’s a FL1?” Their quick investigation landed the answer: oil filters. He quoted a price, and once again it was music to the dealership manager’s ears. “I’ll take five pallets of FL1s.” The inventory was now moving. And from that first telephone call sales success, it was clear to the Sussers that to expand rapidly their best strategy was telemarketing. With that, the Sussers began hiring personnel to telephone part managers at automobile dealerships. This became the first auto parts telemarketing company in the United States. The first sales manager hired was Roy Cherry, nicknamed Phil Sparks— after filters and spark plugs. As the company continued to grow and additional telemarketers were hired, they all became Phil Sparks. The problem began when a customer called in and wanted to talk with Phil Sparks. They had to make sure the territories were clearly delineated to ensure the customer got to the right Phil Sparks! Another marketing strategy initiated was sending their customers’ wives S&H Green Stamps to further strengthen their bond with these customers. Another brilliant marketing strategy was shipping Coors beer to Georgia—where it was restricted and therefore impossible to get—and delivering a six-pack to each customer. That worked out well until the Susser delivery person was arrested and thrown in jail for crossing state lines with alcohol without a permit or paying the state tax! After two years of growing the business, Continental Parts Company needed a more centralized location geographically. With the Dallas-Fort Worth Airport
96 Susser Holdings newly opened, they seized on an opportunity to expand their auto parts warehousing. Delta was flying Lockheed L-1011 aircraft—a wide-bodied design like the Boeing 747 and the Douglas DC-10, capable of carrying massive amounts of cargo. Jerry Susser moved to Dallas in 1969 to lead the company’s expansion and moved the main Corpus Christ auto parts warehouse to Dallas. He brought aboard Donald Katz, a family friend, who had earned an MBA from Wharton and contributed hefty financial experience to the company. With this new, more cost-effective and faster way of transporting goods, two Continental Parts warehouses were added in Atlanta and Cincinnati. By 1978, Continental Parts had an annual revenue run rate of $25 million. After twelve years of very successful operations, a West Coast auto parts distributor wanted to expand operations nationwide and offered the Sussers a price they could not refuse. With a big check in hand from the acquisition, Sam J. showed the windfall to his good friend Jodie Thompson, who was impressed. “So, Sam,” Jodie asked innocently, “what are you doing now?” “Well, Pat and I are planning a trip to Europe for a month.” Jodie was not about to let them jet off to play for a month, not when he believed that 7-Eleven needed Sam J. back in Dallas. He told his friend as much, but Sam J. held firm—that is, until the offer included a private jet, with unlimited access…
Continental Parts Company—1967 97 1968 Ford Model lineup
98 Susser Holdings Just as energy is the basis of life itself, and ideas the source of innovation, so is innovation the vital spark of all human change, improvement, and progress. TED LEVITT