Changing broker landscape barely fazes operators

This past year, Jim Evans, who operates a vending/OCS business in Moonachie, N.J., felt he needed a new single-cup system to offer his customers. The single-cup business had been good to him over the years, but Evans felt he needed something new. Fortunately, a broker had just what he needed.

National Coffee Service & Vending Inc. (NCVS), a nationwide product brokerage based in Lake Worth, Fla., introduced Evans to Café Classic and Barnie’s coffee pods for his manual pod brewers. Evans wasn’t aware of these lines, but they proved successful. He’s grateful for his relationship with Brent Toevs, president of NCVS, a brokerage that has nationwide contracts with several product manufacturers.

“Brent represents quite a few different products,” Evans said. “They (NCVS) have a real unique knowledge of what’s going on out there, not only in my region, but also throughout the country.”

In Pompano Beach, Fla., Scott Guardino, general manager of Paramount Automated Food Systems Inc., had a very different broker experience this winter.

In January, a broker sales team from a company that has expanded its geographic reach called on him a full month after he had finalized his 2011 buying plans. “Why talk about it now? Talk about it in December,” Guardino complained. In years past, the brokers who called on him were “calendar conscious”; they had “pre-planogram meetings” on their calendars. Guardino attributes the bad timing to the fact that brokers used to cover smaller territories, so they knew their customers better.

The contrasting experiences of these two operators represent the extremes vending operators have reported in working with product brokers as of late. While operator/broker relations have always varied, many observers agree this past year witnessed more changes in broker assignments than normal. And changes can be difficult for operators accustomed to long-term relationships.

Broker consolidations, manufacturer consolidations and new sales strategies on the part of some manufacturers are among the reasons cited for changing broker assignments.

Broker’s role remains key

Product brokers have always been important resources for vending and OCS operators. They identify products from other classes of trade and persuade manufacturers to adapt them to vending. They introduce operators to new products. They make operators aware of rebates and promotions.

More recently, some brokers have begun providing operators with useful sales data, thanks to evolving data management tools.

But as the industry has matured, consolidation among vending operators and product manufacturers alike has made the vending industry more competitive for brokers. In response, many brokers have expanded their geographic territories.

Those expansions have increased, and at least three brokers now claim national coverage for vending and OCS products.

National brokers emerge

The brokerages that have signed national contracts have taken different approaches. All three happen to be based in Florida.

G & J Marketing in Palm Harbor, Fla. and Burdette Beckmann Inc., based on Hollywood, Fla. have expanded sales teams to include offices in all geographic markets.

G & J Marketing has a nucleus of managers that oversee contracted sales people. (See sidebar on page 26.)

National Coffee Service & Vending Inc. (NSC&V) in Lake Worth, Fla. subcontracts other brokers for its national contracts, noted Brent Toevs, who has sales managers in every geographic region.

Most vendors give brokers high marks

An informal, nationwide operator poll revealed that most operators remain satisfied with the level of service they get from their product brokers. Operators agree that brokers continue to play an important role in their need to know about new products and promotions.

Operator Tom Konop, president of The Konop Companies Inc. in Green Bay, Wis., said there are fewer brokers today than 10 years ago, but the ones he buys from are more attentive to him. He attributes this to operator consolidation; since there are fewer customers, brokers must work harder to earn and keep their existing business.