U.S. Coffee also uses other cartridge style brewers, as well as bean to cup brewers, in order to offer single-cup options to locations. The company is also reinvestigating pod brewers as a better tasting and eco-friendly alternative. Currently, single cup is about 60 percent of the company’s coffee sales.
While the increase in tea drinking among U.S. consumers continues to be reported, U.S. Coffee hasn’t seen a jump in its tea sales. “It hasn’t taken off like coffee has — not in OCS,” said Trapani.
U.S. Coffee is also aggressively selling office supplies to customers, especially in defense against these types of companies adding coffee service. “We even hired an office supply sales specialist,” said Shindler.
U.S Coffee currently offers 40,000 office supply items in its catalog, something Shindler wants to add to the company Website. The biggest hurdle is getting preferred products to show up before other products in a search, Shindler explains. If a customer is searching for hot cups, Shindler wants the company’s OCS vendor cups to show up ahead of the office supply vendor hot cups, which cost him more. “It’s a matter of prioritizing the correct vendor,” he added.
Internet offers B2C
Despite the challenges, the partners believe the Internet will be the OCS battlefield of the future. “It’s becoming less and less a [physical] territory business,” said Shindler.
“It’s certainly a different business than coffee service was.” Trapani agrees. “If you’re not on the Internet…you’re falling behind.”
Since U.S. Coffee has no prescheduled routes, locations must submit their orders via phone, fax, or more recently, the Internet. Trapani has seen more and more location managers using the Internet, especially among the millennials, who rarely call to talk to a customer service representative.
Having several robust Websites allows the operation to not only reach its OCS customers, but also sell directly to the consumer.
U.S. Coffee commits a lot of marketing dollars to the Websites’ SEO (search engine optimization) and Google AdWords. The company is also active on Facebook, Twitter and Pinterest. Once you start selling on the Internet you are no longer an OCS operator. You are an Internet retailer and that’s a totally different game,” said Shindler. It requires different skills and a large monetary investment. “Creating a Website is the easiest and cheapest part.”
Meeting customer requests
U.S. Coffee has three vending routes, separate from its OCS business. The vending business was added because of OCS customer requests. However, despite being a relatively small part of their service, they have invested in a lot of vending technology. The operation uses handhelds, prekitting, credit card readers and the partners just added vending management software to better analyze product sales and track cash accountability.
While Shindler and Trapani recognize the value in micro markets, they don’t consider them a good fit for their area. Trapani explains that being in a metropolitan market with high rise office buildings, most customers would have to get in an elevator to visit the market, and at that point, they would take the elevator down to the street and visit a convenience store. However, when the right opportunity comes along they are excited to try that too.
Sustainability just catching on
While customers have long been interested in green initiatives and sustainability, it’s only been recently Trapani and Shindler find customers are willing to spend money on these items. Therefore, the company now offers a large list of recycled and compostable products. “I wanted to come up with a good product line, so the customers could be as green as they wanted to be,” Trapani said. He finds customers start the process of going green by removing cups altogether and asking employees to use mugs. Then they ask for recycled paper goods in the breakrooms, etc.
Whether it’s for environmentally-friendly items or a particular type of tea, customer requests are something U.S. Coffee takes very seriously. “We will try to meet any request,” said Trapani. And often, he and Shindler will use the request to consider an additional service they could provide. That is how the company added vending, office supplies and water service. “We try to never say no,” Trapani added.