The company invested in dedicated software for OCS inventory management and billing.
OCS Requires a Dedicated Focus
When Jim Evans graduated from college in 1984, his father offered him a job as manager for a newspaper cafeteria in New York City.
Two years later, Jim was promoted to manage the company’s 25-employee commissary. The mobile catering business was still fairly significant in the mid 1980s. But membership warehouse clubs were offering product and equipment for mobile caterers. This competition, in addition to the growth of fast food restaurants and convenience stores, took its toll on Evans’ catering business.
By 1990, the company’s mobile catering business had fallen from 70 to about 30 trucks.
The company had diversified over the years, but in 1990, it found itself at a cross road. Mobile catering, the mainstay, was declining. Manual feeding was also declining since industrial customers were losing interest in subsidizing cafeterias. Vending and OCS were small, but they were growing.
Around this time, Jim Evans moved out of commissary management and joined the company’s 5-person sales team, which was focused on expanding the OCS and vending businesses. He found himself natural in the sales role, and soon became sales manager.
OCS, while a growing business, faced its own challenges.
OCS Faces Challenges
A spike in coffee prices in the late 1970s resulted in a massive downgrading of OCS pack weights through the 1980s. Operators were competing on price, and profit margins suffered.
By the early 1990s, some national coffee brands began selling OCS fractional packs to membership warehouse clubs, putting further pricing pressure on OCS companies.
Little did Evans know that these pressures would ultimately push the OCS industry to a stronger position.
The competitive pressures forced OCS operators to better understand the importance of customer service. “It forced us to look at things differently, to take on different products,” Evans said. “We’re a service, we have to remember. We’re not a club store.”
Evans formed a partnership with Martinson Coffee, a private label roaster, to offer a coffee line to compete against the national brands. Martinson Coffee’s own sales force assisted Evans’ sales team.
Automatic thermal brewers were also introduced, giving OCS operators a new way to reduce wasted coffee.
The most significant development of all was the introduction of single-cup systems which were being introduced at OCS trade shows. Most OCS operators rejected these systems as too expensive, too labor intensive and too complicated. But not Evans.
Evans studied these early hopper-based systems and recognized the customer convenience and the high product quality they provided.
Single-cup Takes Center Stage
He claims he was one of the first operators in the country to begin offering customers Café System 7 machines from Crane Co., mostly on a lease basis. The system won office accounts. The company ultimately placed 100 Café System 7s, including 20 units in one hospital alone.
Being a vending operator, Evans had the staff to understand the technicalities of the unit, such as whipper motors and solenoid valves, and perform the maintenance. This was an advantage many OCS operators did not have.
The Café System 7 did present space issues for some accounts, he noted.
Then there was the Lavazza Espresso Point machine. This was a single-cup espresso machine for offices and restaurants. Evans placed about 50 of these machines.
The company expanded into bottled water in the mid 1990s, mainly as a defensive measure. By switching to slightly larger trucks, they could deliver boxes of 16.9- and 20-ounce water bottles in addition to OCS products.
In the late 1990s, a breakthrough development came in the form of the coffee cartridge single-cup system. These machines were less expensive than the hopper-based single-cup systems and provided reliable quality in a smaller footprint. The hopper-based systems had won a lot of business for the company, but the expense and the large size limited the number of locations they could go in.