How adding coffee service drove a small Delaware water provider into the big time

A water company like Pine Mountain Springs Inc., based in Wilmington, Del., might seem an unlikely candidate for an operation profile in Automatic Merchandiser, but its savvy addition of office coffee service, and continued pairing of the two services, has created a successful company. Of its 4,000 customers, 70 percent are commercial locations which purchase both water and coffee services, noted Renee Ridenour, president and owner of the company.

Ridenour added coffee service three years after starting the business when one of her water locations requested it. She considers it a great move.

“Coffee is fun,” said Ridenour. “It’s all about making the customer feel like a king.” She loves going into a location and finding the right mix of equipment and coffee that will increase employee morale, whether that’s a reliable Newco, Keurig single-cup or Tassimo premium drink brewer. But she’s never forgotten her beginning, and water continues to be an important part of her business in both 5-gallon water coolers and point-of-use filtration units.

Water business born of necessity

In 1994, Ridenour was working in another industry. In her spare time, she helped keep the books for her then boyfriend, now husband, Tom, who was a commissioned salesperson selling 5-gallon water coolers for a small spring water company. While Tom was successful, many coolers waiting for locations found their way into their living room.

“They were the ugly, old, metal, brown, water coolers,” Renee Ridenour remembered. “I started a water business in self defense…so I could get my pristine living room back.” In June, she started Pine Mountain Springs and found locations for all the coolers.

In 1997, a water customer asked her if she offered coffee because they were unhappy with their OCS provider. Ridenour decided to try it, and she still has that same customer today.

“They (water and coffee) are great companion services,” said Ridenour. She realized right away that by adding coffee service, she sold more water, since most of the coffee is made with filtered or bottled water. Ridenour noted that run-off water from farms in rural Delaware and the naturally occurring sulfur in water reservoirs makes filtered water or spring water a high priority in her area.

In 2005, the customer who had suggested OCS to Ridenour encouraged her to expand into vending. She tried it, and while it was successful, a number of factors convinced her to sell that portion of the business in 2008. First, she noticed a lot of consolidation among companies in the area. Then her residential water customers started to diminish. Both were signs of a crumbling economy. She was also diagnosed with breast cancer. She and her husband were unsure how her treatments would go and decided to stick to the services they knew best. “Plus, I never liked getting a call from that irate customer on Saturday who lost 50 cents in a machine,” Ridenour said.

Ridenour has since recovered from the cancer treatments and considers herself cured.

Division of labor

Ridenour handles the marketing, advertising, Website, and anything that plugs into the computer. She also does the product and equipment sourcing and looks after the purchasing. Her husband, Tom, is the service department, manages the drivers, installs equipment, and orders inventory.

While they once had a few more employees, cutbacks during the recession and more efficient use of computer systems forced the elimination of some positions. However, business is back sufficiently that Ridenour is building another route and planning to hire a new driver this fall.

Customers want water

Pine Mountain Springs still offers the traditional 5-gallon water coolers. While Ridenour has noticed a trend towards filtration at offices, this summer she actually saw a reversal. “It (5-gallon water sales) has gone down every month for the last couple years, but the last three months have seen an increase,” said Ridenour. It’s too soon to tell if this trend will continue, but 5-gallon water is still strong.

The strength of 5-gallon coolers could have something to do with cost savings, Ridenour noted. In an office that has 10 or fewer people, she often recommends the 5-gallon cooler because it costs less per month than filtration. However, about half of these small offices choose point-of-use water instead, whether it’s to prevent lifting 50-pound bottles, regain the storage areas previously taken up by 5-gallon water bottles, or because they want to add coffee service as well.

When Ridenour installs a point-of-use system, she installs the stand-alone unit that looks just like a 5-gallon water cooler. She said it gives the employees silent reassurance that the water is better quality, whether it’s the spring water or just filtered water.

Ridenour doesn’t offer reverse osmosis filters because she hasn’t seen a filter that can keep up with high water demands. “Reverse osmosis in an office that’s a heavy consumer would take a long time, and the tank would have to be huge,” she said. It’s just not right for her locations.

Brewer selection challenging

Ridenour loves connecting the right coffee equipment and products with a location. Going in and replacing old equipment with something new or offering a better coffee boosts morale, she noted. In a location that’s downsizing, where wages have been frozen and there are cutbacks, switching to a single-cup brewer can help customers feel better about their jobs. “It says to an employee that the employer still cares about me because they’re giving me a premium cup of coffee,” said Ridenour. While Keurig is well known to customers, she also offers Tassimo brewers to higher-end clients who want coffee shop quality drinks, such as café mochas, espresso and lattés. “It’s an excellent product for that,” said Ridenour.

For customers that are more concerned about cost, she offers almost exclusively Newco equipment. “They’ve gotten the science right on bulk coffee,” said Ridenour. “The brewers won’t brew unless the water is at the right temperature, etc.”

She also offers soft pod brewers as a less expensive single-cup option. Ridenour always thought soft pods were a good idea, but the equipment broke down often. Now the equipment is reliable, and will make a good cup of coffee consistently and easily. She uses the Newco Fresh Cup pod brewer. Soft pods are especially useful if a location prefers a brand of coffee unavailable as a K Cup. “There’s a lot of providers and no restrictions,” she said.

Technology makes a difference

Ridenour recognized the value of experts early on. In 1997, she paid $30,000 to get a software system for invoices, inventory control and to run back-end operations.

New software costs less, does more

In 1999, the software technology had evolved so much, it only cost her $10,000 to get a superior system, Advantage Route Systems. The new system eliminated data entry, addition errors, price discrepancies, and filing and delivery issues. “It’s a fabulous little program,” said Ridenour. Every driver has a computer. And each location has an account, so if it’s a branch location that can only order certain products, those are the only products the location sees as options. It provides customers a copy of each invoice by email, notifications of missed deliveries, and statements. “The cost savings the program gives us is phenomenal,” she said.

The new system helped her win back a major account she’d lost in 2010. The large plant needed water delivered to 13 different locations. Ridenour knew from running routes herself that being hot, tired and working hard meant one or more of those stops might get missed. So, she made each stop a separate invoice, rather than one for the entire location. It made it easier for a driver to know whether or not they had visited every stop. It was this attention to detail and service, using technology to make delivery easier, which brought the location back. “I actually had people shake my hand and say, ‘I’m so glad you’re back,’” said Ridenour.

Quality Website a must

Ridenour hired a professional Website designer in 2005 to create www.pinemountainsprings.com. The site allows her to communicate with existing customers about the new products she offers. She drives them to the site by asking them to place orders online where they can see all the new coffee selections in color. Ridenour also sends out emails before a scheduled delivery or when she adds a new product. These emails link back to the Website.

Having companies order online allows her to keep prices consistent. What the customer sees on the Website is the current price. The only exceptions are a few high volume customers who are told privately that they get a discount.

“We also get a lot of people who buy (online) that aren’t our customers,” said Ridenour. She has people ordering coffee from all over the country and ships product using UPS.

This year, she hired a search engine optimization (SEO) consultant to help Pine Mountain Springs rank higher in Internet searches for water, coffee service and other products. “There’s just too much I don’t know, too many other directions I’m running,” Ridenour said about her decision to hire a consultant.

In the end, Ridenour’s business strategy was straightforward: Recognize a good business opportunity when you see it (and recognize one you don’t want to invest in). Then use technology to make the service better. It’s a winning combination that’s kept her successful for 18 years.

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