Canteen Acquires The Family Vending Company In Sunrise, FL

Dec. 8, 2014

Barry Frankel, founder of the Family Vending Company, confirms that Canteen has purchased his operation in Sunrise, FL, including the vending, micro market and coffee service routes. “I just felt that the timing was never going to be better than at that moment for me to sell,” Frankel told VendingMarketWatch. He was approached by Marc Rosset, principal of Professional Vending Consultants, Inc. from Chicago, IL, who brokered the acquisition. “I got a very good, very fair price for my company,” said Frankel.

Frankel, Automatic Merchandiser’s Vending Operator of the Year in 2012, started the Family Vending Co. in 1984, after selling Electro Brewed Coffee Service, his original start-up. He added coffee service to his vending business in 2010 and micro markets in 2012.

Canteen officially took over the Family Vending Company on August 25 and retained all 42 employees. “I believe they were extremely happy with the company and the various things we did and they’re trying to use a lot of our ideas,” said Frankel.

Anatomy of an operation

Vending was doing well for Frankel, but competition was fierce in South Florida. “We all vend basically the same things ­­­--­­­ soft drinks and snacks [from large companies], and we all use the same machines,” said Frankel.  The customer can’t often see the difference.

Frankel didn’t want to start offering commissions he couldn’t deliver on, so needed another way to set his business apart. This was one of the main drivers behind his launch of micro market service. “It was a game changer,” said Frankel.

It was important to Frankel to focus on products in micro markets that the customer had not seen in vending before. “I recall the first one I put out, I went around shopping in all different kinds of places to find things we didn’t have,” recalled Frankel. In that first market he remembers offering four different Jamaican sodas as well as a Caribbean and Spanish drink. Plus, a full array of energy drinks.

“When we opened the market, the employees were going literally crazy that there was Jamaican soda there,” said Frankel. He believes taking the time to put in products the customer had never seen before in vending was imperative to his success. He also put in products the consumer had seen. It was the creation of more variety that made markets become a greater value to the customer.  “It’s no longer about the percentage that they get back for the commission. All of a sudden we don’t need the commissions anymore, what we need is that variety of products,” explained Frankel. He found that the variety in a micro market becomes such an employee benefit to locations that the little bit of money they get at the end of the month becomes meaningless. “We were able to gain these large accounts with no commission and the best part is they did three times the business that they did with the vending machines.”

One of the things Frankel insisted of potential micro market customers was that they went to see an existing market. He found that while brochures and videos were great, until the customer actually saw a live market, the concept didn’t “click”.

“When they see it, that’s what they want,” said Frankel. He also focused on a different decision maker as well. In large corporations it’s the facilities manager or the purchasing manager who usually chooses vending, but for micro markets, Frankel went to the human resources department. “I used to say, ‘Look, we realize you probably have some kind of health initiative, and you probably don’t know what to do with it. We have a wellness program.’ They were like, ‘What? Come in!’”

The Family Vending Co. didn’t make its own food, but didn’t use the same food products as vending either. “I wanted to make the markets look very different than vending,” he said. Instead, he partnered with a local company that already delivered fresh and healthy entrees to homes and offices, called Catered Nutrition.

In 2014, the Family Vending Company had 48 micro markets.  

Wake up for coffee sales

For coffee, Frankel faced the same problems as vending. Every vendor in his area was selling much of the same coffee, creamer, sugar, cups, etc. “As an industry the only way to get a customer is to beat the other operator’s price,” said Frankel. “That’s very unhealthy.” In 2012, at the same time he was investing in people and resources to launch micro markets, Frankel also invested in a shopping Website, ShopFamilyVending. “What it did was open up so many new products that our customers could and did purchase.” Frankel knew that most businesses have cut back on staff to the point that everyone is very busy and thought he could offer an online one-stop-shop. He added 10,000 items he thought an office could use from mops to cases of water.

“Once we went into an account and sold them on our coffee service, they were able to purchase cases of water and soft drinks that they would normally buy for meetings and other events,” explained Frankel. While the coffee products had to be competitively priced, Frankel found that for other items, customers weren’t as price conscious. When they logged on to place weekly orders, they would add additional items for delivery focused more on convenience. “The invoice ended up much more profitable than it used to be,” said Frankel. “It also locked in business because competitors knocking on doors didn’t have anything like this to offer the customer.” Canteen has since changed the branding of the shopping Website, but kept the premise.

Invest in people, before business

Probably the biggest piece of wisdom Frankel has to offer is that investing in the people to support new initiatives is as or more important than investing in the technology. He hired people to manage the Website and visit accounts to show customers how to use the shopping Website while he was building the site. “Most companies will try to just do things with the people they have, who are already busy. To make it work, you have to invest not only in the Website, but you have to invest in the people to get it there,” said Frankel.

He applied the same technique to micro markets, hiring something for that segment before he even had his first micro market account.

Vacation, not retirement

Frankel assisted with the transition of the company immediately after the sale, but is now enjoying his free time. He plays sports and golfs regularly as well as attends live music concerts, something he’s been passionate about for years.

An industry legend, Barry Frankel may not have immediate plans to return to the industry after the sale of his company, but he isn’t in retirement. “Don’t rule anything out yet,” said Frankel. “I’m just taking some serious time off.”  And he certainly isn't done with vending – you’ll see him at the 2015 NAMA OneShow in April. 

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