VendingMarketWatch.com |

It sounds like a cliché to say the vending industry stands at a crossroad. But every veteran vending operator has to admit the times have never been so challenging.

Some have gone a step further and recognized that in addition to being challenging, times have never been as promising.

Southern Refreshment Services in Tucker, Ga. has recognized the opportunities and is charging into the future — cashless solutions, remote machine monitoring, coupon dispensers and video screens — aggressively. Not a small move for a company that posted its first annual sales loss in its entire history in 2009.

Launched in 1979 by Dan Hart and the late Alan Plaisted, Southern Refreshment Services became a leader in the Atlanta, Ga. market by investing in new products, equipment and staff, and taking an active role in industry trade organizations.

Like other progressive operations, the company has been shaken by the recession but has developed a strategy to position itself for the future by incorporating technology that will drive profitability.

Under the leadership of Hart and Plaisted, the company managed to build a strong management team that supported continuous growth over the years.

It stands as a testament to Plaisted’s and Hart’s vision that the company continues to move forward as the vending industry faces its most difficult period.

Multi-pronged technology rollout

Southern Refreshment Services, a Canteen franchisee with more than 50 routes, is in the midst of a multi-pronged technology rollout. The company is moving forward with cashless solutions, remote machine monitoring (RMM), and the SPIO network.

Hart and his team believe that technology promises a great future for vending. “Technology will drive our profitability and growth in the future,” he said.

With same store sales taking a 7 percent hit in 2009, Southern found DEX technology helpful in evaluating account profitability and allowing it to make changes to improve its bottom line.

While sales declined in 2009, Hart noted the company was able to improve profitability. The location profitability tools that his Streamware software provided proved to be important.

The benefits of vending software confirmed the need to continue to invest in technology. Hence, the company has increased its investment in technology at a time when same location sales have been stagnant.

Investment in technology represents a big challenge for any company, but for a large player, the stakes are higher since the investment is proportionately larger.

A history of leadership

Southern has a history of leadership. Plaisted, who passed away last year, began his career in vending in 1976 with Tom’s Foods in Atlanta, Ga. In 1979, he teamed with Hart and launched North Atlanta Vending, working from their homes.

This was a fortuitous time for committed vending entrepreneurs. The industry was growing with the advent of glassfront snack machines and bill validators. Even the recession of the early 1980s did not halt the rising popularity of glassfront machines in the U.S. work place, which remained primarily heavy manufacturing.

The company’s strongest growth came in the 1990s as employment levels remained healthy. Plaisted was active in industry organizations. He served as president of the Georgia Automatic Merchandising Council and various committees of the National Automatic Merchandising Association (NAMA). He served on Automatic Merchandiser’s editorial advisory board and was honored as the NAMA Industry Person of the Year in 2006. He also attended the NAMA executive development program in 2003 at Michigan State University.

Acquisition fuels growth

North Atlanta Vending made its third acquisition in 1999 when it bought the six Atlanta vending routes from New Orleans, La.-based Standard Coffee Service Inc. Standard Coffee Service chose to exit the vending business to focus on OCS. At around this time, North Atlanta Vending moved into its current 55,000 square-foot building.

In 2001, the company made its first major acquisition when it acquired the Canteen Vending Service’s 15 Atlanta routes, doubling its size to 30 routes. The company became a Canteen franchise and changed its name to Southern Refreshment Services.

In 2008, Southern made its second major acquisition when it bought 15 routes in Stone Mountain, Ga. from Chattanooga, Tenn.-based Five Star Food Service.

Software evolves

The company first introduced a management software system in 1991 — a MS DOS system for managing inventory and receivables. The company reviewed other systems as they were introduced.

Southern recognized that vending software was critical to profitability. In 2002, it switched to Streamware’s VendMax software. This involved educating drivers to use DEX handheld computers.

As DEX technology evolved, Southern recognized the benefits it would bring, namely in the areas of evaluating account profitability, improving route accountability and more efficient routing. With thousands of machines in the field, upgrading machines to DEX reporting was a big task.

The goal was to manage all machines using DEX. This has been a long-term project, especially as the company acquired other vending companies over the years. With every acquisition, more machines had to be upgraded to DEX reporting.

In 2005, USA Technologies Inc. (USAT), a cashless vending provider, approached Southern about introducing cashless solutions. Southern was focusing on introducing DEX handhelds to its routes and global positioning systems to its service vehicles and did not want to assume another investment.