Vending Market Watch Report

Industry pulls together to help Hurricane Katrina victims
Vending and OCS operators and suppliers serving the Gulf States shared the grief and loss, both material and psychological, from Hurricane Katrina in late August and early September. Two weeks later, many businesses were still trying to track down the whereabouts of some employees. Businesses in all but the most severely affected areas were up and running, but face a long road to recovery.

Automatic Merchandiser attempted to contact operators and suppliers in the affected regions. By the end of the second week following the storm, many companies in the affected regions still did not have working telephones.

The only positive aspect of the tragedy was the outpouring of support given to people in the industry from their colleagues and, in many cases, even competitors.

Vending and OCS operators nationwide joined many of their suppliers in trying to help hurricane victims recover by donating food, beverages, money and supplies.

A.J. Palermo, owner of Long Leaf Canteen in New Orleans, La., was able to get ahold of most of his employees the week the hurricane struck. He attempted to contact New Orleans-area customers to see if he could service them from his Houma, La. location.

Displaced from his own home, Palermo was living with Chuck McMath, owner of M&M Sales, a Canteen franchise in Lafayette, La.

The Standard Companies Inc., one of the nation’s largest OCS companies, had a disaster plan in place and relocated its operating headquarters from New Orleans to a temporary facility in Dallas, Texas. Anthony Gregorio, president and CEO, said the company was maintaining its service to customers nationwide, and that only a handful of routes in the affected areas were disrupted.

After one week, all of Standard Companies’ routes were back to normal except for those in New Orleans. Gregorio said that some inventory for routes in affected areas was reallocated.

Gregorio said a transition team went into action setting up the new facility the weekend before the storm actually struck New Orleans. Over the course of the week the storm battered New Orleans, the entire Standard Companies headquarters staff relocated to the Dallas facility, which Gregorio said is the size of two Wal-Mart stores.

Standard Companies employees are currently staying in temporary housing facilities, he said, and the company is making use of production facilities outside of New Orleans. Distribution and repair operations were relocated to a facility in Lubbock, Texas. The company has accounted for almost all of its employees, he said, and none were seriously injured at this writing.

As for the company’s New Orleans facility, Gregorio said reports indicate the building has not been seriously damaged, but he is not sure when it will become operational.

Gregorio said many friends in the industry, including competitors, reached out to help the company.

Community Coffee Co., a roaster and OCS provider based in Baton Rouge, La., did not suffer damage to its facility. The company attempted to contact all its customers and notified them that its routes were fully functioning.

All three nationals, Aramark, Canteen and Sodexho, worked to make sure employees were accounted for.

Sodexho, which had 30 locations and nearly 1,400 employees in the affected regions, went as far as hand delivering paychecks and wiring money to employees. Funds were made available to cover temporary housing, damage to primary residences, replacement of personal effects, and temporary transportation.

Aramark worked to ensure the safety of its employees, customers and communities. Since evacuees began arriving in Houston, Texas from the Gulf Coast areas devastated by Hurricane Katrina, Aramark served meals to as many as 26,000 evacuees seeking shelter at Reliant Park, which includes the Reliant Astrodome, Reliant Arena and

Reliant Center, and the George R. Brown Convention
Center. Aramark also served meals to law enforcement officials, American Red Cross and medical personnel, and volunteers. Aramark is providing all facility services, including cleaning and garbage collection, at these locations.

Compass Group also leveraged its expertise and network of distributors and suppliers to tend to those affected by the disaster. Over a dozen of its operating companies specializing in different markets (healthcare, education, offshore, corporate dining) mobilized in the affected areas to feed thousands of evacuees, relief workers and clients.

Vistar will acquire Vend Source
Vistar Corp. has agreed to purchase the stock of Vend Source, a vending and OCS distributor based in Phoenix, Ariz. Shawn Finnerty, the owner of Vend Source, will join the Vistar management team as president of Vistar/Vend Source of Arizona.

Vistar plans to transition its business in three of its facilities into the current Vend Source facility. The Arizona vending, OCS, theater, and related business customers serviced from Vistar of Ontario, Calif. will be integrated into Vend Source. The Arizona theater customers serviced from Roma of Arizona will also be integrated into Vend Source. Vistar will continue to operate the Vend Source cash and carry, as well as the MerchantSmart Phoenix cash and carry, both under Finnerty’s direction .

GAO report: U.S. middle schools have too much ‘junk’ food
The Government Accounting Office, the investigative arm of Congress, recently issued a report critical of the amount of “junk” food available in middle schools. “Parents should know that our schools are now one of the largest sources of unhealthy food for their kids,” Sen. Tom Harkin, who asked for the study, said in an interview with the Associated Press.

Harkin, the senior Democrat on the Senate Agriculture, Nutrition and Forestry Committee, wants the government to set nutrition standards for food throughout schools, and not just in the cafeteria.

At issue are so-called competitive foods — snacks such as candy, soda, pizza and popcorn available in a la carte lines in cafeterias, in vending machines and in school stores. Apples and milk are also competitive foods, but the GAO said candy and other “junk” food crowd out healthier stuff in vending machines and school stores. Competitive foods are largely unregulated.

NAMA Foundation will award seven scholarships in 2006
The 2006 National Automatic Merchandising Association Foundation Scholarship Program is officially under way to award seven $2,500 scholarships for the 2006/2007 school year. The program is open to all undergraduate students who are a son/daughter/legal dependent of an employee of a NAMA member company and must be sponsored by that company.

Students must be a graduating high school senior or student enrolled full time in a college undergraduate program at an accredited college or university. They also must maintain and verify a cumulative grade point average of at least 2.5 on a 4.0 scale or equivalent.

Applicants may reapply each year for as long as they are eligible, but they may only receive one scholarship award.

The deadline for applications is March 1, 2006. The scholarships will be announced at NAMA’s Spring Expo, which will be held March 23 and 24, 2006 in Las Vegas. Application and complete details are available at For more information, call 312-346-0370.