The thing that sets Elite Cuisine apart from other operations is a passion for food. Co-owners Jim Schweppe and Steve Closser describe Elite Cuisine as more of a corporate dining business that offers full scale vending and office coffee service options, than the other way around. So when they decided to add micro markets to the 10-route operation last year, they took everything they knew about food and grew it into a program that’s made them a huge success in the St. Louis and Kansas City, Mo. areas.
In just a year, Schweppe and Closser added more than 20 markets, all filled with entrées and salads prepared under the direction of certified chefs. This attention to quality food has set their company apart from other Missouri vendors.
Schweppe and Closser first started Elite Cuisine in 2004, as a corporate dining company dedicated to providing an alternative to the cookie cutter vending business. “It gives us a competitive advantage,” Closser said. “We’re retail-minded thinkers — we think a little differently than your average vending company.”
They built the company from scratch and went door to door soliciting accounts. They began to add some cashless payment options to vending machines in 2010, but didn’t want to rush into technology.
When micro markets were introduced more than 5 years ago, they took an interest, but didn’t add their first one until 2012. After implementing the 365 Retail Markets system, they collected data for six months and analyzed the findings. During this time Schweppe and Closser also lost an account to a micro market, so they knew they had to take the new system seriously.
They aggressively started installing micro markets in the second half of last year and currently have 22 up and running.
“Our first priority is account retention and customer service, but as far as our strategy, micro markets are our number one priority for the next year,” Schweppe said.
Markets lead to growth
Elite Cuisine has seen 30 to 40 percent organic growth since implementing its micro markets, called E-Marts. Schweppe and Closser believe many operators fear micro markets will replace vending. They argue that micro markets are an additional channel designed to help augment vending costs.
“If vending doesn’t adopt micro markets it’s going to be a problem,” Closser said. “The vending model doesn’t really work with the younger generation. We have to change with the times.”
Elite Cuisine uses vending machines for price sensitive customers, but, with micro markets, customers have the opportunity to get the tactile benefit that convenience stores have by allowing customers to touch and examine product.Additionally, micro markets allow for a price point that rivals a c-store.
“There’s an opportunity for real margins and organic growth if we all manage it correctly and stick to price integrity,” said Schweppe. In an Elite Cuisine E-Mart, a 20-ounce soft drink costs $1.49, for example, compared to $1.25 in a vending machine. Customers don’t mind paying extra money for a multi-product transaction at an E-Mart.
“Micro market customers aren’t vending customers. They’re convenience store customers,” Schweppe said. “[They aren’t] concerned with comparing the prices to the vending machine, [but] comparing it to a convenience store.”
Schweppe and Closser have even declined sales opportunities because the client wanted the micro market prices to match vending. “We couldn’t do it,” Schweppe said. “We could not destroy the micro market segment to match vending prices. We’ve got an opportunity to finally make good margins and keep up with inflationary costs that have plagued the industry lately. We have to be diligent.”