Changing broker landscape barely fazes operators
However, Konop also noted there is more change in broker assignments than there used to be, a change that he doesn’t like since he prefers long-term business relationships. Konop attributes this change to manufacturers seeking to improve their results.
The recent decision by some product manufacturers to assign their vending business to fewer brokers has not alarmed most operators. Most operators agree that the broker that services their needs properly will retain their business.
In some markets, broker expansions have given operators more sources to choose from. In other markets, consolidation has reduced the number of brokers for operators to work with.
Several operators noted that as brokers have consolidated, they have become responsible for larger portfolios, creating new challenges.
Some operators think brokers need the right number of lines in their portfolios to give the lines proper support. Too few products make it hard for a broker to be worth a lot of the operator’s time. Too many products make it hard for the broker to give the lines proper attention.
This issue is important to operators who have noticed that product manufacturers have cut back on their direct sales forces, giving brokers a larger support role.
“The nice thing about brokers is they know you and what your needs are,” said Emory Linder, president of Sun Dun Office Refreshments in Beltsville, Md., who noted that brokers have been especially helpful telling him about healthy options and “green” products.
Varying operator views
Geographic expansion in itself does not automatically translate into poorer service, most operators agree. The level of service depends on the broker’s capability and commitment.
Scott Guardino, general manager at Paramount Automated Food Systems in Pompano Beach, Fla. offered one of the more negative reviews of broker performance. The brokers that have expanded have moved the experienced sales people away from the “front lines” in the field and replaced them with less experienced people.
“There’s a dilution of talent; a dilution of attention (on the operator),” Guardino said. “The broker industry right now brings me reduced value.”
Larry Pugh, general manager of Mid-South Food Services in Aberdeen, N.C., said he gets less broker attention than 10 years ago, but the quality he gets is better. He credits G & J Marketing, with its wide geographic perspective, with giving him good insight into the changing market. “It’s a real good source of information about what’s going on in the industry,” said Pugh.
“The ones that I have now certainly are the cream of the crop,” said Becky Palazzola, co-owner of A Matter of Taste in Northridge, Calif. “I don’t feel that any line is slighted. They’re very good at bringing me the new items.”
The argument for high volume
Stu Case said strength in numbers as well as the opportunity to be part of an organization that would cover all 50 states were his primary considerations when in 2008 he and his partner, Bob Mattias, merged Yorba Linda, Calif.-based Pacific Brokerage with Hollywood, Fla.-based Burdette Beckmann Inc. Case said the declining vending market was also a consideration, but this was secondary. “This is still going to be a viable industry,” Case said.
Case said the consolidation that has occurred among brokers is a natural evolution for an industry that was launched by entrepreneurs and family operations.
“There’s much more you can bring to the table as far as coordinated marketing activities and coordinated strategies,” Case said, citing the benefits of a larger organization. He pointed to a dedicated marketing staff and a statistical group that gathers data from distributors, reporting services, rebate processors and other retail channels to assemble into a variety of beneficial reports for vending operators. “That’s hard to do as a smaller company,” Case said.
Richard Atnip, president of the Atnip Co. Inc. in Fullerton, Calif., agreed with Case. “That broker infrastructure brings a lot of strength to the operator,” he said.
