Vending with values: Patrick Moran, owner of Moran Refreshments, shares his secrets to success

Nestled in the rolling hills of Tyler, Texas, one company steals the spotlight. Originating from humble beginnings, Moran Refreshments blazed its way to the top of the industry with sheer grit and unstoppable determination.

Moran Refreshments is born

Moran Refreshments – a vending, office coffee service and micro market powerhouse – began in Dale Moran’s garage in 1989 when he decided to scratch his entrepreneurial itch. He ate a penalty to cash in on his retirement and purchased a faltering vending company. “I thought it was a crazy idea!” recalled Patrick Moran, Dale’s son and current owner of Moran Refreshments.

Patrick reflected on his upbringing, noting that vending machines were far removed from the world he and his father knew. “In our family growing up, we didn’t have any extra coins,” he said. “So, if we were to put a coin in a jukebox or a pinball game, or any other type of coin-operated machinery, that would just be unheard of. The idea that he would go into that business was really shocking to me.”

Despite his reservations, Patrick agreed to join his father for a trial run. The 24-year-old resigned from his job and temporarily left his wife in Oklahoma for a cot in his father’s utility room. After a month of interstate trips and assessing the potential of the business, Patrick’s wife quit her job to join her husband in Tyler. They were all in on Moran Refreshments.

Moran Refreshments acquired 47 snack machines, many of which could be classified as historical artifacts today. “Not a single machine accepted dollar bills,” Patrick recalled. “We had several pull-knob machines that didn’t even require electricity. You put the coins in and you pulled the knob and the little flap dropped inside.”

Even three decades ago, the machines were considered outdated, so the father-son duo had to get creative to make them work with the times. “For many of our machines, the highest price they would go to is 35 cents,” Patrick explained. “In 1990, we were selling candy for 50 cents. So we priced it at 25 cents and loaded every other slot with a piece of candy. You would put in a quarter, pull the lever, put in the second quarter, and pull the lever to get your candy bar. That’s how we figured out how to make things work when we had hardly any money or equipment.” Patrick still keeps one of the company’s first machines in the office breakroom today in homage to those early days.

Doing it themselves

In the early years, Moran Refreshments only purchased used equipment on a one-off basis. With an arsenal of old machines from varying manufacturers – and before the age of Google – Patrick and Dale needed to learn to do all of their own repairs. “In this business, you have to know a little electricity, a little refrigeration and a little programming,” Patrick said. “At first, we would call the tech from whatever manufacturer it was, and they guided us through the repair. Eventually, my dad and I started learning to repair the machines on our own. We were entirely self-taught.”

Despite an incredible mechanical aptitude, Patrick still faced problems that were outside of his abilities. When one of his customers called about a faulty coin mech, Patrick stopped running his route and jumped into action. “I took the coin mech out, drove two-and-a-half hours to the repair place in Dallas, and put it on their desk,” Patrick said. “Once they fixed it, I drove two-and-a-half hours back to the location, put it in the machine, and then went back to the truck and finished my route.”

After 27 years of being the primary mechanic for Moran Refreshments, Patrick is finally able to step back from repairs, with three knowledgeable techs taking the reins, but the vending veteran is also always available when his employees need to turn to him for his expertise.

“Just the other day, I was with one of my techs to advise him on repairing an old drink machine,” he said. “It was one that I had worked on years ago and knew all about, so I met him down there and showed him the ins and outs. I’m still the number-one call for tech advice when they get stuck.”

Low funds, high speed

On a shoestring budget, Moran Refreshments needed to differentiate itself. The two-man company compensated for its lack of resources with relentlessly fast service. “My father and I ran the route every day because we were the only employees of the company,” Patrick said. “We had a stipulation between us that we would respond to a service call within two hours. When a service call came in, we stopped whatever we were doing, went to the service call, and then we came back and resumed the route.”

Patrick and Dale’s uncompromising work ethic and dedication to their customers began paying off. The company began to grow, despite never hiring a salesperson. “We have never had somebody on the street selling our business,” Patrick said. “Our business has grown organically by word of mouth. Any time our customers had a need, we met the need. We did all of our business dealings ethically and properly. That’s how we established ourselves.”

Big break

While the growth of Moran Refreshments was steady, it felt a bit slow for the then 20-something-year-old second-generation operator. “I was more impatient as a young man,” Patrick laughed. “I wanted to see bigger and better. My dad would tell me, ‘You need to be grateful for the little guy. Don’t take the small accounts for granted. Right now, every little penny matters.’”

The company’s big break came in 1996 when the operators won a 10-year contract with the largest school district in Tyler. While the enormous influx of business was exciting, it also posed a daunting task for the ultra-lean team. Moran Refreshments had just hired its third employee but took on servicing 47 more machines.

“During that period of time, we worked around the clock, through the night,” Patrick recalled. “We had to run the routes and we had to prepare the machines. We just kept working until somewhere around two or three in the morning, went to Ihop, had breakfast, went home, took a shower, and worked all day the next day.”

Years of accruing sweat equity eventually paid off. Today, Moran Refreshments is housed in a 17,000-square-foot facility with 24 employees. The company operates 11 routes servicing 200 accounts across 10 counties.

Small companies with big promise

In 2006, Moran Refreshments purchased a local vending company. When seeking acquisitions, Patrick is extremely selective to ensure high value. “Oftentimes, people would call us to sell us their business,” Patrick said. “We would find that most of the equipment had been purchased through a ‘blue sky’ promise – ‘work five hours a week and make $3,000!’ Usually, they bought lackluster equipment, and we weren’t interested in that. We were looking for equipment that allowed us to quickly take over and start operating.”

Patrick reflected on why some companies, even with top-of-the-line equipment, end up failing. “You know how to end up with $1,000 in vending? Start out with five,” Patrick joked. “People get into the industry with high hopes but can’t figure out a way to repair their own equipment or fix their truck. Many of the operators are great people with great intentions, but they either didn’t have the business acumen, the tenacity, or the mechanical ability to do what was necessary. In this industry, you need to be a jack of all trades.”

Moran Refreshments added fuel to its growth when it became a Canteen franchise in 2007. The company was able to supplement its regional expertise and presence with global resources and knowledge. “My Canteen resources have been invaluable,” Patrick said. “We are able to offer a world-class service packaged in a family-owned business. It’s a perfect fit.”

Staying strong through the pandemic

Like most of the world, Patrick thought that the pandemic would blow over in a matter of months. When the PPP loans kicked in, he promised his employees that they would be covered through the summer, and things would return to normal for the upcoming school year. “It’s almost laughable to think about that now,” he reflected.

Despite the suffocating restrictions, Moran Refreshments persevered throughout COVID without a single layoff. In fact, Patrick gave all of his employees bonuses at the end of the year.

“It wasn’t because we didn’t suffer significant sales losses,” Patrick said. “We did. But our employees are so important to us that I assured them that they will be the last to feel it. For us, the financial impact was secondary to the wellbeing of everybody who worked for us.”

Backed against the wall, Patrick displayed his complete dedication and loyalty to his employees. In return, his employees have stuck around. “We hired Ric in 2001,” Patrick said. “Cliff came in 2006. Bob came in 2008. They are all still with me today. That’s a good track record. As we grew, the people who came stayed for the most part. Our employees know that they are valued.”

Unlikely heroes

Just as life seemed to be returning to normal, Texans were dealt another brutal blow. “Snowmageddon,” the infamous storm, shut down the Lone Star State’s electric grid and wreaked havoc on its infrastructure.

“One of our largest clients had a good portion of their facility collapse under the weight of the snow and ice,” Patrick recalled. “Most facilities we serviced were closed for an entire week. When we came back from that week, one of our biggest clients had their roof collapse, and they were closed for several weeks after that. We had supposedly survived the COVID thing through 2020, and then when this happened, we said, ‘Well, this is interesting!’”

When the University of Texas at Tyler – one of Moran Refreshments’ accounts – lost water in its dormitories, Patrick once again set his self interests aside and jumped into action.

“My contact at the university emailed me to see if there was any way we could bring them water because they had a dorm full of students without running water,” he said. “There was ice on the roads, temperatures were sub-zero. My son and I both drive four-wheel-drive pickup trucks. At 9 o’clock at night, we drove the 45 minutes through the ice and snow to our warehouse, loaded up our pickups with bottled water, and met them to give to those students.”

Patrick doesn’t view this deed as an act of heroism, but rather a natural extension of the company’s core ethos. “We’re not just a snack or beverage provider,” he proclaimed. “We want to add value to wherever we are, in any way we can.”

If you can work, you got a job

When Patrick is hiring, he places one qualification above all else: a great work ethic. “If you can’t work, you won’t last,” he said. “If you know how to work hard, come aboard!”

Once that simple prerequisite is met, Patrick goes above and beyond to position his employees for success. Caleb, an 18-year-old warehouse employee for Moran Refreshments, is deaf. Patrick affirms that Caleb’s lack of hearing is no detriment to the tremendous value he brings to the business. “One of the primary motivations to adding LightSpeed [warehouse pick-to-light system] was so I could bring my nephew Caleb in to work,” he said. “With LightSpeed, Caleb can do everything in the warehouse. All the picking, packing, cleanup, back stocking, everything. Caleb is an instrumental part of our team.”

While Patrick loves keeping good people around for a long time, he also pushes his employees to grow, even if it means leaving Moran Refreshments. Mikey, a former employee, had both of his legs amputated due to a heart attack. “He came in for an interview, and he said that he had no legs,” Patrick said. “I asked him, ‘Well, can you work? I don’t care if you have no legs.’” Mikey successfully worked for several years on the warehouse floor.

One day, Patrick met with Mikey to discuss his long-term goals. Patrick asked him, “What do you want to do? You can’t work in a warehouse your entire life.” When Mikey revealed that he wanted to go to school for dental hygiene, Patrick modified Mikey’s schedule so he would be able to attend classes while continuing to work. “Mikey left us about a year ago now,” Patrick said. “But he left us with a blessing. He worked for us for three years and left in a much better place than when he came.”

Outside the box

Moran Refreshments doesn’t just stock machines and refill coffee. The company kickstarted a series of innovative programs to provide a truly unique, educational and fun refreshments experience. For instance, Moran Refreshments offers “tokens” that can be used for free products from vending machines and micro markets. From achievement awards to birthday celebrations, tokens are a fun gift for employees to indulge at no cost.

For clients who wish to promote healthy lifestyles for their employees, Moran Refreshments offers its Balanced for Life program. It’s designed to educate consumers about the elements of a balanced diet and the importance of physical activity.

Moran Refreshments also partners with various vendors to offer vibrant, customizable designs for vending equipment. Whether it’s a logo, brand or simply a fun design, the unique service transforms machines to best fit any company or event.

Taking on Capitol Hill

Patrick’s workday rarely ends after leaving the office. When he isn’t hustling to feed the growth of Moran Refreshments, the operator suits up to uplift the vending industry on a macro scale. His political activism began in 2004 when the State of Texas was reviewing legislation that would threaten vending machines in public schools. “At the time, about 50% of our revenue was in public school sales,” Patrick said, “So I took immediate interest.”

In his signature action-oriented fashion, Patrick found the policy’s hearing date, drove to Austin, and testified against the bill proposed by the Texas Department of Agriculture. Shortly thereafter, he joined the Texas Merchandising Vending Association, serving as the association’s president from 2011 to 2012. His political presence only blossomed from there. From participating in the annual NAMA Fly-In in Washington, D.C., to forming personal relationships with senators and policymakers, the longtime operator works tirelessly to shape legislation that affects the industry.

Patrick believes that industry representatives like himself are essential for ensuring well-informed legislation. “Sometimes, they will propose policies that are illogical or downright impossible,” Patrick said. “Now that I’ve built relationships with elected officials, they can turn to me to come up with solutions that make sense.”

Today, Patrick is advocating for SNAP/EBT acceptance for vending machines and micro markets, removing sales taxes on vended goods, and lowering the age barrier to enter the trucking industry.

Industry trends

Patrick sees that as businesses make a push for workers to return to the office, vending plays a crucial role. However, basic snacks and old machines aren’t going to cut it. “One of the ways of getting employees back in the building is with great amenities and offerings,” he said. “People want fresh, high-quality foods, ease of purchase and great technology.”

As inflation continues to eat away at companies’ margins and peoples’ spending power, Patrick believes that price increases are an unsustainable solution. “In the short term, customers understand you have to raise prices. But you can’t end up with a $5 candy bar, right?”

To avoid implementing never-ending price hikes, Moran Refreshments is leveraging advanced technology, such as LightSpeed Automation, to optimize operational efficiency and maximize its bottom line. Patrick foresees the industry capitalizing on artificial intelligence to further improve operations.

Your 2023 Nama Operator of the Year is …

When Patrick received the call notifying him that he had been nominated, he was in shock. “I thought it was unbelievable,” Patrick said. “I held the previous winners in such a high regard. I really appreciated the honor.” He was delighted to bring his entire family – who witnessed the journey of Moran Refreshments – to receive the award.

Only one person was missing in Atlanta that day: Dale Moran, Patrick’s father, business partner and best friend. “My father was the greatest man I ever knew,” Patrick reflected. “Even though we were a generation apart, we built the business together for 27 years, side-by-side, almost as brothers. That was an incredibly special experience, and I’m very grateful for it.”

The company is on its third generation of Morans, with all four of Patrick’s children having played roles in the business. Currently, Patrick’s younger son works for the company as he finishes college.

Moving forward, Moran Refreshments has no plans of slowing down. “I’m not going to tell my team that they shouldn’t be excited to be in the position we’re in,” Patrick said. “But we need to remember what got us here. This company was built on honorable business practices and work ethic. That is just how we operate. We’re on the move.” ■