Recession Further Diversifies Customer Demand: Don’t Jump To Conclusions

A difficult business climate can challenge ones commitment to quality, which is something everyone in our industry claims to focus on. I recently had a conversation with a product supplier about the impact the economy is having on his business. He commented that the recession has made refreshment service operators more aggressive price shoppers than any time in recent memory.I argued that coffee service operators have learned from history the importance of not commoditizing their product, which is why coffee service sales have held up better than vending sales in the current recession.During the 1970s, many coffee service operators switched to lower pack weights to save costs. Their sales suffered, and it took years before they learned to focus on quality. Once they did, their sales and profits recovered.Coffee service operators, I claimed, recognize the consumers demand for a quality coffee service and know they must provide high quality products.The supplier responded that coffee service operators, as a rule, will change their buying plans if they can get a lower price.I, in turn, responded that operators always want the best value for their money, but based on all evidence available, they have not traded down to lower quality products. I further suggested that because a lot of coffee service today is provided by vending operators (as opposed to dedicated coffee service operators), these operators are less quality focused.I maintained that dedicated coffee service operators are not trading down en masse, evidenced by the fact that coffee service sales have held up much better than vending sales during the recession.I suggested that it may be difficult for a supplier to see the distinction in behavior between dedicated coffee service operators and vending operators who do coffee service.We continued our discussion for a few minutes more and ultimately he did agree with my observations.But I wondered: Operators, like their suppliers, are facing a more cost conscious customer these days. Some customers are asking for new options to save costs.Operators and suppliers alike need to realize the demands are more diverse than ever, and this calls on them to listen to customers more carefully.

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