OCS is a steady growth area. However, one thing many operators forget is that OCS doesn’t have to mean just coffee. Sometimes, the largest OCS accounts, per revenue, drink very little coffee. What is making up the rest? A large portion is pantry service. The remainder could be anything.
Offering the extraordinary
Pantry service is a lucrative add-on to OCS. It is simply defined as charging a location for delivery of coffee and other items, such as food, that is served freely to the employees at the location. Really, the delivered items could be anything.
“Strawberries. Mayonnaise. Pickles. You name it, they want it. They want it now,” said Chuck Walton, managing partner at Ace Vending Inc. in Tempe, AZ, during the 2015 OCS Thought Leaders’ Breakfast sponsored by Smucker’s Foodservice. “It’s employee retention,” Walton added. And it works. Walton decided to test it in his own company. His warehouse workers wanted a raise. Instead, he built them a pantry. “Now they can make their own sandwiches. They didn’t get a raise, but are happy because they are eating for free,” said Walton.
“In the pantry business, coffee only represents 14 to 15 percent of our total OCS volume,” said Scott Berman, vice president of refreshment services at Canteen. “The young people aren’t drinking coffee. They are drinking iced tea, or iced tea combinations, specialty beverages, non GMO, healthy, grown right, etc.” This has been one of the drivers to the Canteen pantry service. Berman has noticed that in competitive job markets, companies must provide free, high-quality food and beverages, because along with pay and insurance, edible perks are on a job candidate’s checklist before accepting.
Becoming a distributor on wheels
There are many operators in the OCS segment who are beginning to see themselves differently, according to Chip Potter, vice president of communications and information services at NAMA.
“Some operators are seeing television advertising of the office product companies actually in a breakroom. These operators are nervous the office product companies will start advertising about refreshment products. It’s causing them to think twice about their own businesses. ‘Do I need to step back and change the lens of what business I’m in? I have a truck and it’s on the road visiting these accounts. What should I put into that truck that is really going to lock a customer in for me?’” said Potter. This is where pantry, and other supplies, such as paper towels, cleaners and even printer paper might be an option for the operator to offer.
“We do whatever we can at this point,” said Kevin Searcy with Golden Brew Beverage and deORO Markets. “There’s so much competition out there, there are so many different specialties…these different companies, they only sell this or they only sell that. We sell everything.” While this is a focus for Searcy, he sees even more potential out there and is often limited by what will fit on his truck. “We’ve tried really hard over the last few years to maximize our trucks and with the prekitting and stuff that we’ve done, there is now more room for add-ons. That’s made a huge difference,” said Searcy.
To expand OCS, to grow revenues, it’s worth putting a different lens in front of your business. OCS isn’t just coffee, but pantry service, office products and anything else that can grow incremental, same-location sales.
