RE Services’ Sale Marks The End Of A Market Leader, But The Ledbetters Insist Automatic Merchandising’s Future Is Bright

Don’t be discouraged by today’s announcement that RE Services Inc. has been sold. I have it on good word of co-owner Stan Ledbetter that the company, one of the nation’s largest vending/OCS/foodservice providers, was on a growth curve, as are all the acquiring companies – Chattanooga, Tenn.-based Five Star Food Service Inc., Tucker, Ga.-based Southern Refreshment Services, Hampton Roads, Va.-based Cardinal Services, corporate Canteen and HIG Capital.

Brothers Stan and Steve Ledbetter, age 65 and 62, came to a decision last March that after spending many years building the company their parents founded in 1963, the time had come for a change in lifestyle. Stan Ledbetter is anything but pessimistic about automatic merchandising’s future.

He noted that RE Services took its share of hits in 2008 and 2009 when the recession struck. But since that time, sales have improved. More importantly, the ability to offer better products and services spells a bright future for the Ledbetters’ 600 employees who have moved to the acquiring companies.

Ledbetter insists that the combination of vending, manual feeding, OCS and micro markets is a powerful business proposition. The brothers have long been technology leaders in automatic merchandising, and they think the innovations of the past few years have raised the bar.

The brothers started Debitek, one of the first prepaid cashless systems introduced to vending, in 1986. They sold Debitek in the early 1990s and it is now part of Heartland Payment Systems.

The brothers continued to expand cashless vending as the systems improved over the years. Stan Ledbetter claimed that 8 percent of all vending sales are now cashless, and rising.

The brothers were paying close attention to automated warehouse packing and to remote machine monitoring and they were planning to invest in these areas.

They were also paying attention to micro markets, which they see as a powerful complement to manual feeding. Ledbetter said the micro market offers a great solution to the need for satellite cafeterias, which are often unprofitable. Large cafeteria customers often ask for secondary feeding sites to save employees from having to walk long distances to eat.

The micro market allows the fresh food to be provided in a satellite site with minimal overhead, Ledbetter said.

The Ledbetters’ own commissary sales have reflected the recent growth in micro markets. Because of micro markets, commissary orders from other Canteen franchisees were rising in the last year. Ledbetter said micro market orders accounted for 10 percent of commissary sales this year.

Don’t get me wrong: the Ledbetters will be missed. Stan and Steve have been strong operators and active over the years in industry organizations. They invested more in employee training than most operators.

After buying the company from their parents in 1992, they grew the company tenfold, acquiring 13 operations in eight years. Automatic Merchandiser honored them as 1997 Vending Operator of the Year.

The decision to sell the company was based on personal needs and was not a reflection of the industry’s future.

Congratulations to Stan and Steve for their contributions to our industry. And a heartfelt thanks for their optimistic assessment of the industry’s future.

 

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