Office coffee service is still a booming business. Consumers with a taste for specialty drinks and open café-style work environments have created opportunities for OCS providers. Across the country, companies are investing more freely in coffee, tea, free food, and other OCS-related amenities for employees to increase engagement and meet the changing demands of their younger workforce.
In order for OCS providers to grab a piece of this business, they must stay relevant. Here are several OCS business must-dos discussed during the 2017 NAMA OneShow's session "Brewing New Business."
1. Be The Equipment Expert
Because today's coffee drinker is more educated about coffee and brewing techniques, the OCS provider needs to be prepared. Every location wants the latest and greatest coffee, but that is not always the best solution based on their needs and wants.
"You have to know the customer, and the limits, of each machine you offer," said Mike Flanagan, president at Canteen. "Does it serve 100 cups per hour? Does it need to? Do you have support for the coffee machine at the location?"
No matter how expensive or new the equipment is, it still has to meet the location's expectation. Ensuring that it does, doesn't have to be challenging. The equipment manufacturers are great resources for becoming educated on what the equipment can handle, and also how to maintain and repair it, explains Paul Tullio, general manager of Gourmet Coffee Service. For him, being able to repair brewers is imperative as an OCS expert. "After all, when the vending machine is down, it's a problem. When the coffee is down, it's a catastrophe," he joked.
2. Cater To Customers
Beyond fast service, Tullio also finds that OCS customers want to feel valued and as though they are getting personalized service. That means having the right variety of equipment options to match what the customer wants instead of offering them a menu of services and products to pick from. "It's more effective when you can tell them 'I see your need and this solves it,'" he said.
Flanagan agrees. "OCS customers want to be catered too," he said, calling them "high touch clients." This means operators should focus on how to make the customer feel valued with individualized service instead of focused on collecting money or restocking supplies.
3. Sell On Service
Scott Halloran, co-owner of Trolley House, shared that in today's competitive landscape of big box and Internet coffee retailers, it is even more important that OCS providers sell on service, but make it personalized. "When we go to market, we provide a whole level of service that they don't," he said.
"But, we also have to be conscious about being competitively priced." Halloran offers different service levels, gold, silver and bronze, so the location can choose their level of cost versus service according to preference. However, even the Bronze level doesn't make coffee and the ancillary supplies a commodity. It still is enhanced service because that is what sets OCS apart and needs to always be front and center when talking to locations.
Flanagan wants to talk about what the big guys can't get, such as Artisan roasters or cold brew coffee. "We don't make anything," he said. "We make a great experience. If you're business has deteriorated to a commodity, you'll be hurt by that." He argues that it has to be about better service.
4. Evaluate SKUs Continuously
Warehouse SKUs are growing in OCS, putting providers between a rock and hard place. On the one hand, they need to provide the variety of products their customers want (and need) to earn and retain business. On the other, those numbers have become huge and make management difficult. Halloran says that it takes Trolley House 160 SKUS to support just their coffee business paper goods.
Large OCS branches are doing thousands. Flanagan says some of his are handling 3,200 SKUs for pantry, OCS and micro kitchens. "It's a logistical nightmare," he added. He also admits it is needed to keep the customer happy.
SKUs are really customer driven that also need careful consideration by the operator, says Tullio. "They want it, so you take it on. Once you get it set up in your system, they have moved on and want something else," he shared. It means when adding SKUs, operators must be cognizant of how much product is being bought. Have the sales team pushing the product elsewhere. Operators must also be constantly evaluating their SKUs, striking a balance to be strategic and profitable.
5. Have Passion...And Reports
One thing that every OCS provider needs is passion. Flanagan finds that successful operators know about their products, the origins, the brewing temperatures, the quality, etc., much more than in vending. On the flip side, passion doesn't make a succesful business. With all the different SKUs, and segments of a full-service operation, it is imperative to know how each contributes to the business. "Don't lump it as one item," he warned. "Is it profitable? Is it driving margin? Measure. Don't just look at the top line. You need to look at the bottom line," Flanagan added.
Halloran has personal experience with the need for examining OCS deeply. "Once we committed the time and resources, that OCS piece started to thrive," he said. "Look at that bottom line. Having an accountant to help is imperative."
Whether contemplating a new OCS division, product line or how to run OCS more efficiently, consider these tips from long-time experts. It's all about what's right for the customer, choice, personalization, selling service, having passion and ensuring it's making a positive difference to your bottom line.