Manufacturer of the Year: Paul Cunningham, ConAgra Foods Inc.

As the vending industry has matured, consolidation has affected all segments of the vending industry: operators, brokers, distributors and manufacturers. The survivors are the leaders.

Paul Cunningham, regional sales manager for Illinois, Wisconsin and Minnesota for ConAgra Foods Inc., believes that manufacturers have an important role to play in making sure operators have products that meet customer needs and allow operators to make a fair profit. This is a big responsibility, and he is committed to working closely with operators, brokers and distributors in making it happen.

Cunningham, the 2008 Automatic Merchandiser Manufacturer of the Year, has the benefit of having worked on the broker and distributor sides of the business. He also had the benefit of learning first-hand from a well established manufacturer executive, his father, Ted Cunningham, who served many years at Golden Valley Microwave Foods Inc.

The junior Cunningham learned a lot from his dad, who was very popular in the industry. He learned the importance of being direct with people and always being honest. “He did what he said,” Cunningham said of his father.

BEGINNING ON THE BROKER SIDE OF THE BUSINESS

Paul Cunningham joined Hanson Sales & Marketing Co., a Hales Corners, Wis.-based product brokerage, in 1993 as a sales rep shortly after receiving his undergraduate degree from Troy State University in Troy, Ala. Fortunately, he got the opportunity to work with a successful veteran broker, Phil Hanson, Sr.

Cunningham was responsible for vending and convenience store accounts in the Midwest. “He (Phil Hanson, Sr.) was such a bull dog,” he said of his mentor. “He wouldn’t take ‘no’ for an answer when it came to new items.”

Cunningham recognized that Hanson’s confidence came from knowing what makes a good seller in vending, which is something that takes time to learn. Hanson had introduced Gardetto’s Snak-Ens and Act II Microwave Popcorn to vending operators.

“I liked working for the small family-owned businesses,” Cunningham said. “It was a good training ground.”

After five years at the brokerage, Cunningham moved to VSA’s Pewaukee, Wis. center as a sales rep. “It was a great learning experience, seeing how the distributor interacts with the operator,” he said. “As a distributor, you play a very important role in the operator’s business.”

This position was phased out two years later when VSA (now Vistar) folded the operation into its northern Illinois service center.

Cunningham joined ConAgra Foods as a Midwest regional manager in 1999. “I could see the manufacturing side was a side I wanted to be on,” Cunningham said. “As a manufacturer, you ultimately control your own destiny with the products you come out with.”

ConAgra Foods experienced a major boost when it acquired American Home Foods, which brought some well established brands such as Bumble Bee, Chef Boyardee and Crunch ‘n Munch, and the acquisition of Goodmark Foods Inc., which brought Andy Capp’s.

Cunningham said the challenges facing the industry today are multiple. The most critical are the downsizing of the larger accounts, the consumer’s unwillingness to spend money, and the decline in blue collar accounts.

ConAgra Foods is taking a closer look at health oriented products, which it recognizes is a growth opportunity. The company also has an opportunity to develop its frozen food brands — Healthy Choice, Banquet and Marie Callender’s — for vending. Cunningham said they need to extend the shelf life for these products in a thawed state. He does not believe they can market them for frozen machines only since some operators will place them in cold food machines, which are not appropriate for these products.

The fastest growing product the company carries is Swiss Miss, an OCS product, Cunningham noted. “The coffee craze is still alive and well,” he said.

Cunningham recognizes that cashless transaction capability will allow vending operators to raise prices more easily, but given the current challenges that operators face, he doesn’t expect a lot of investment in this in the near future.

Operators also need to invest more in education to improve their business skills, he said. He was encouraged to see that many have attended the NAMA executive development program at Michigan State University. He attended this program in 2005 and found it very beneficial.