VendingMarketWatch Blog

Everyone over the age of 40 can remember a time when you could buy a refrigerator, a washing machine or other appliance and feel confident that it would work properly for more than a few years. The products were made in the U.S. and consumers didn’t have to buy extended service contracts because they knew the manufacturers made reliable products.
Not so today.
Nowadays, you need an extended service contract for just about any appliance. With most appliances being made offshore, quality has declined because foreign labor is cheap and less educated.
It’s about time that the vending and coffee service industries reminded customers that American manufacturers can and do make reliable products. Today, vending machines and coffee brewers are among the few appliances that are still primarily made in the U.S. They are, coincidentally, among the only appliances that have become more and not less reliable.
This is an important message.
People frequently complain that “nothing is made in the U.S. any longer.” Their concern has not been lost on politicians, many of whom at least pay lip service to finding ways to restore U.S. manufacturing.
The vending and coffee service industries do more than pay lip service to supporting “Made In America.”
The vending industry in particular has worked hard over the years to improve its reputation for quality products and reliable service. The National Automatic Merchandising Association (NAMA) has launched a media relations campaign which included a segment on the History Channel’s “Modern Marvels” series in late 2008. That campaign continues.
The PR efforts have paid off. Consumer surveys have shown that perception of vending has improved in recent years.
Vending and coffee service operators can go a step further and remind customers that their industry supports the U.S. economy since most of the machines, besides being more reliable, are made in the U.S. and support the U.S. labor force and the U.S. economy.
Products sold in vending machines are also made in the U.S.
Besides helping the U.S. economy, products made in the U.S. also help the environment by reducing delivery routes.
These may seem like small things in relation to all the benefits our industry provides. But consumers are concerned about restoring U.S. manufacturing and helping the environment. The vending and coffee service industry has a good story to tell.
How about an industrywide “Made in America” campaign?

Ben Ginsberg’s passing marks the end of an era in vending and coffee service. Ben embodied the entrepreneurial spirit that guided our industry for many years. He launched American Automatic Merchandiser with the late D.L. Mike Michael in 1958. This was a major growth period for vending, and Ben chronicled the work of many entrepreneurs who gave this industry its highly personal character.
He maintained that independent streak over the years. After selling American Automatic Merchandiser to Harcourt Brace Jovanovich in 1986, the trade publishing company where Gloria Cosby and I cut our teeth, Ben launched his second magazine in 1991, Sunbelt Vending & OCS, which later became Vending & OCS. He used his magazine as a platform to continue to observe the industry he loved.
I knew Ben mainly as a competitor. He was tough but fair.
When I was new to the industry, Ben was more than well established. It was intimidating at first to face him as a competitor, due to his longer seniority. But he did not abuse his seniority in any way that I was aware. He was personable and respectful.
I will never forget when a group of food manufacturers asked Ben to organize a meeting to discuss ways to improve food vending. Ben, playing an organizational role in this gathering, specifically invited me, a competitor, to attend. I viewed this as his acceptance of me personally, and it made a lasting impression.
Ben’s magazine focused on the industry’s personalities. His perspective was unique, and it represented the era in which he grew up.
He shied away from conducting industry research, which became more important as vending and coffee service matured.
As the industry evolves, it becomes more dependent on professional business management. We see this happening in many ways. More college educated people are managing vending companies. More sophisticated management software has emerged, requiring special skills. Not to mention the changes that new technology is bringing.
The old entrepreneurial spirit continues, but under the prism of sophisticated management practices.
For many of us, Ben Ginsberg embodied that entrepreneurial spirit.

Ben Ginsberg

We Ohioans have a long history with our burgers. It is an area in which we fancy ourselves as leaders. Before we had the Big Mac, there was the White Castle Slider, whose fame quickly expanded beyond the Buckeye state. Then came Wendy’s square burger. Dave Thomas generously shared it beyond our borders. Then came Pierre’s Big AZ burger, which, while born in Ohio, was always intended for nationwide consumption.

But none of them have anything on the “Big Yaz,” burger, which remains an Ohio phenomenon.The “Big Yaz” burger is a concoction of Firelands Food Systems in Sandusky, Ohio. Six ounces of barbecued hamburger covered with bacon strips and pepper cheese. It has been a favorite among the company’s customers for six years.

Company owner Steve Hall, Sr. has always worked hard to distinguish his food program among his heavily industrial customers. In search of a new and better burger, he tapped his associates – colleagues, employees and suppliers – for suggestions. One person whose opinion he knew he could trust in matters of taste was Bobby Yasinow of Vendors Exchange International Inc.

When Yasinow told him what makes a good burger, Hall knew he had a winner. Thus was born the “Big Yaz BBQ Bacon Burger.”

This creativity on Hall’s part is one of the reasons he has succeeded over the years. He continues to grow in a region that has been hammered by the recession. He has been a leader on the technology front from the very beginning. He was one of the first operators in the country to use glassfront beverage machines, and he has been a pioneer in cashless vending.

But one of his most important attributes is in recognizing the importance food plays in vending. As I’ve stated before, technology offers our industry a lot of promise, but if we cannot restore the food portion to its former prominence, we will continue to lose relevance in the consumer’s eyes.

As for future plans, Hall is playing it close to the vest with the “Big Yaz Burger.” Only Firelands Food Systems’ customers can get it. Marketing the product beyond his existing customer base might make Hall wealthier, but it would compromise the privilege of being a Firelands’ customer, and that’s the last thing Hall wants to do. Which is all fine and good. But I, for one, think the packaging doesn’t give the burger its due. I think most customers would agree that to do justice to the epicurean experience of “Big Yaz,” the packaging could be a little more exciting. Considering what personalities can do for a brand, I suggested a picture of Bobby Yasinow, with full smile. Hall remains unconvinced.What say the rest of you?
Steve Hall, Sr., left, of Firelands Food Systems in Sandusky, Ohio, serves a “Big Yaz BBQ Bacon Burger” to Bobby Yasinow of Vendors Exchange International Inc

The most advanced technological solutions take time to find an application. I’m pleased to say that the Starbucks “E-Cup,” a Starbucks interactive brewer with cashless capability, has found a niche, and that niche is going to become more prevalent in the future.

Automatic Merchandiser reported on the “E-Cup,” in a feature article in March 2009. The “E-Cup” has a USA Technologies’ ePort card reader that accepts both magnetic stripe and contactless cards.

I recently came across the first “E-Cup” in Cleveland, Ohio at a biomedical facility that houses a several research and development companies. The “E-Cup” was a perfect solution for this account.

This is a new building. The building wants to attract biomedical companies from all over the world to this modern medical facility.

The building, which is in the process of finding tenants, is not in a position to have a manned cafeteria. Hence, the owners realized that vending would be necessary.

The owners also understand the importance of high quality coffee for the clientele they are trying to attract. One of the decision makers was intent on having Starbucks coffee available.

They also needed a system that would allow the tenants to pay for their own coffee. Hence, the “E-Cup” was the best solution, noted Chris Terrell, general manager for Aramark Refreshment Services in Northern Ohio, which services the account.

This biomedical building represents the future for Cleveland, a one-time heavy manufacturing region that has lost most of its traditional industrial manufacturing. In its place, health care and new technology companies have gradually become dominant industries.

The employees in these types of accounts are well educated people who work irregular hours and often have a taste for the best meals and refreshments.

The owner of this account has made every effort to make the amenities attractive to the professionals they want to attract. The Starbucks “E-Cup” was part of this initiative.

The technology that our industry is developing is all going to serve its future.

The ramifications of the new health care bill on the refreshment services industry probably won’t be clear for a few years. In the meantime, vending operators should brace themselves for the need to post calorie information at the point of sale.

At this writing, we are not sure how calorie information will have to be displayed. The National Automatic Merchandising Association (NAMA) is attentively following the rule making process.

Health Insurance Costs To Rise

The new health care bill will affect refreshment service operators in two major ways:

• It will further increase operators’ health insurance costs. This is what happened in Massachusetts, the only state to require everyone to have health insurance and provide free coverage for the poor.
• It will drive up health insurance costs for our customers and cause them to reduce payrolls.

Now that that’s out of the way, let’s talk about calorie posting.

Calorie Posting Mandate

The bill includes calorie posting rules for vending machines along with menu labeling for restaurants. The federal government hasn’t determined specific regulations, such as print fonts and the sizes to be used in calorie displays.

These regulations probably won’t be finalized for a few years.

A Consistent Set Of Rules Is A Good Thing

One positive aspect of the labeling requirement is that it will halt the growing patchwork of state and local regulations and replace it with a consistent national  standard. This will be easier on consumers and product manufacturers alike.

In the meantime, vending technology providers are introducing products that will enable operators to provide nutrition information at the point of sale.

Ned Monroe, NAMA’s senior vice president of government affairs, has stated that digital displays on machines that allow a consumer to view nutrition information will exempt the operator from calorie posting requirements. Hence, the new video screens will be a way to address the requirement.

At last year’s national NAMA expo, Kraft Vending & OCS and Crane Co. displayed the “diji touch” machine that provides nutrition data in addition to other information.

Vendors Exchange International Inc. showed a retrofit screen that can update nutrition data with a standard SD card.

Since then, other products have been developed. More will be shown at next month’s OneShow in Chicago.

Operators who have been on the fence about technology have a new reason to get up to speed about these new and exciting products.

The nation’s economy continues to struggle. Many businesses are finding it hard to borrow money from banks that would enable them to begin hiring people again. Consumers remain cautious about spending.
But tax fever continues to run high among career tax advocates, and soda taxes is their latest bandwagon. These advocates are not concerned about placing new burdens on consumers and businesses at a time when they can least afford them. To tax advocates, there’s no such thing as a bad tax.
The fact that tax advocates are ramping up their calls for more food and beverage taxes demonstrates how out of touch these individuals are with the concerns of most people.
One of the most extreme examples I came across was a guest editorial published last week by the San Jose Mercury News in San Jose, Calif. from Harold Goldstein, executive director of the Davis-based California Center for Public Health Advocacy. Goldstein supports a state bill to levy a penny tax on every teaspoon of added sugar or other caloric sweeteners in commercial beverages to fund childhood obesity prevention and other children’s health programs.
Goldstein claims new research supports the rationale of the traditional “Twinkie tax,” which holds that taxing certain products will encourage healthier habits. This is a discussion unto itself. The nation’s biggest concern, however, is the economy, and the impact of taxes on jobs is less debatable than the role taxes play on consumer behavior. And nowhere is this evidenced more dramatically than in the state where Goldstein’s organization is based: California.
With unemployment above 12 percent, California has one of the worst economies in the nation. The governor declared a fiscal emergency in January that includes possible reductions in services and pay cuts for state workers.
Tax advocates like Goldstein either don’t make any connection between unemployment and taxes, or they don’t care about the economic consequences that taxes create. California’s taxes have driven businesses out of the state, eroding tax revenues paid by businesses and their employees.
Fixing the nation’s economy should be the top priority of our nation’s policymakers. Higher taxes will not help fix the economy.
If you’re interested in learning more about what you as an individual can do to fight food and beverage taxes, go to http://www.nofoodtaxes.com/
 

Politicians are famous for speaking out of “both sides of their mouth,” but the U.S. Mint and Treasury? That’s a hard pill to swallow.
During the President’s inauguration, the New England Mint, a private mint, took official  quarters and layered them with images of Barack Obama. The New England Mint then advertised these coins for sale as limited edition items.
A recent NBC TV news story reports that these Obama quarters are still being used by merchants and banks in New York City, despite the fact that the U.S. Mint does not approve them. To view the recent TV report, go to:
http://www.nbcnewyork.com/news/local-beat/Obama-Quarters-Loose-Change-85821077.html
After reading this story on the Internet, I sought clarification from the U.S. Mint about the use of these quarters.
Mike White, a spokesman for the U.S. Mint, told me the Mint doesn’t encourage or even approve of the Obama coin, but it’s not illegal. Coins have been colorized for years for promotional purposes.
Coins have been altered for various purposes, he said, and as long as it’s not represented as anything but an altered coin, it’s not illegal.
After investigating the use of colorized quarters further, I got even more confused.
A few years ago, 20th Century Fox promoted the movie, “Fantastic Four: Rise of the Silver Surfer,” by placing a printed image of the “Silver Surfer” character, along with the movie’s Web address, on 40,000 California state commemorative quarters, and releasing these coins into circulation.
The U.S. Mint objected to this use of the California quarter for promotional purposes.
Spokesman White said the 20th Century Fox coin was an advertisement. He said the Obama coin is not an advertisement “in the same way” as the 20th Century Fox quarter. The movie coin was different because it is designed to sell “a specific product,” White said.
Before you try to figure out why the Mint objected more to what 20th Century Fox did than what the New England Mint did with the Obama quarter, keep in mind that the Mint did nothing more about the 20th Century Fox promotion than make a statement about it.
White noted that the Mint has no enforcement powers; taking action against illegal currency is up to either the Justice Department or the Secret Service.
Could it be that the government agencies simply don’t want to bother with regulating coin currency issues?

Who killed Juan Valdez? Las Vegas police have a suspect, according to the news media.
Whoops! That’s the wrong Juan Valdez.

The Juan Valdez that VendingMarketWatch is interested in was never party to a street drug deal like the Juan killed Sunday in Las Vegas. We’re concerned about the guy with the mule whose image stands for 100 percent Colombian coffee, the one-time gold coffee standard.

Where are you, Senor Valdez? You and your mule got lost in the mountains while Starbucks, Peet’s, Caribou, Green Mountain, Seattle’s Best Coffee, McDonald’s, Dunkin’ Donuts, Folgers, Millstone, Maxwell House, and others changed America’s relationship with coffee. One hundred percent Colombian coffee is no longer the mark of excellence it was!

Dow Jones News recently reported that the money-losing Juan Valdez chain of Colombian coffee shops closed its Times Square branch in New York City on Feb. 28. To understand how out of touch the iconic Juan Valdez has become with the consumer, a spokesman for Colombia’s National Federation of Coffee Growers, which owns the Juan Valdez brand, said the closure was due to changing consumption patterns because of the ailing economy, and consumers buying more coffee from supermarkets to brew at home and fewer coffee drinks prepared in shops. Talk about being lost in the mountains!

Most of the big coffee chains have reported strong growth despite the sluggish economy. That’s because they, along with some of the leading convenience foodservice chains and coffee service operators, have delivered the value consumers are looking for. Coffee retailers are winning despite the recession because they are committed to quality and constantly reminding the consumer they are giving them what they want.

Juan Valdez offers a lesson in failed marketing and advertising. Brands mean everything in refreshment services. To sustain their strength, operators and manufacturers have to continue to support their brands with marketing and advertising. The responsibility rests with both parties; manufacturers must provide the creative messaging, and operators have to use the communication programs that marketing initiatives provide.

Otherwise, grab your mule, pack a lunch and give our best to Juan.

Given the state of the economy, does reading the news stress you out? Probably.
The news is stressful because times are hard. But it’s more complicated than that.
Most of us keep a close eye on the news because we are anxious for signs of change. Hence, we get more stressed.
Those of us who have been here before – such as the big early 1980s recession – already know that signs of progress are murky in the beginning of an economic recovery.
The economy is multi-faceted, and there are usually contradictory trends taking place simultaneously.
Today, for instance, we learn that U.S. banks posted their steepest decline in lending since 1942, which doesn’t bode well for the economy.
Last week, we learned U.S. manufacturing activity has been gathering strength, and major factories are gearing up to rehire workers, a positive economic indicator.
The stock market is moving up and down. One day corporate reports show great gains. Another day it’s losses.
Looking more closely at foodservice, the reports are anything but uniform.
Commercial foodservice continues to suffer as consumers remain cautious spenders. Whether that’s good or bad news for vending and onsite foodservice is a discussion unto itself; it depends on how the individual operator responds.

What can we do?
As a news editor, I feel some obligation to address the stress that these disparaging and disparate reports cause our readers.
One way to deal with the stress is to recognize what we can and cannot do, and make sure we pay proper attention to the former.
I find it helpful to make it a point to check in with friends and colleagues. On days when I’m feeling down, they share a bit of good news that improves my mood.
They, in turn, call me when they’re feeling down. I often find the reasons they are stressed are overblown, and I encourage them to put things into perspective. Doing this makes it easier for me to do the same thing.
Being organized also helps.
Setting goals with an action plan that organizes our time and making sure we stick to that plan are important.
And as part of that plan, reach out to friends and colleagues.