Office Coffee Service (OCS) is a reliable source of revenue. There are different options to deliver the details, such as brewers and types of coffee, and it is typically amenity-based, paid for by the location on a regular schedule. As the coffee side has grown, other services and offerings have gained traction. Growing other OCS offerings relies on product data or research and keeping up with trends. Successful transitioning from OCS to pantry service starts with dedication.
The first decision to make in order to grow your OCS business is to expand your offerings. Tom Steuber, president/owner, Associated Services, speaker at the NAMA Show 2018, said, "At the beginning, we weren't really doing pantry services. So we started with 50 to 60 SKUs about four years ago in addition to our current OCS." If you are only in OCS and you want to get into other parts of business, start by taking baby steps. Ask yourself, as Steuber does, "What are you already buying that you could provide? What fits into what you know / do?" In other words, is the location laying out muffins for its employees every morning, and is that something that you could provide, through a distributor or local establishment perhaps? Is there a fridge for employees with bottled coffee beverages, and could you provide that product through a supplier instead?
Melinda Grandell, channel director of coffee, tea, and water, Accent Food Services, said "start out conservatively and expand from there." By starting off with a smaller amount of products, it is easy to deduce which ones are popular or not at the location. From there, follow the pattern of consumers eating habits, and add more products accordingly. "It's important to have very dynamic product offerings, and to be constantly checking for new offerings. Things go in and out of fashion in the pantry service very quickly, just like they do in the retail industry," said Steuber. With the demand for snack and drink products, some operators find that it is time to take advantage of the opportunity to expand beyond traditional coffee services. "We have about 400 to 500 SKUs dedicated to pantry service," said Dave Carroll, vice president, OCS and micro markets, Southern Refreshments. "We've found that the menus expands out of necessity."
Growing in the right direction
Each consumer market is different depending on the area. Some locations, for instance, prefer brand-name coffee, while others prefer premium label, and still others will decidedly favor specialty / local roasters. Steuber said, "the market in San Francisco Bay is brand-oriented; we used to sell private-label coffee, but now not as much because people are interested in specific brands." Some markets are more inclined to drink branded coffee, while others are interested in coffee sourced from local roasters. "We also have partnerships with local roasters that offer premium, locally roasted coffees that are continuing to grow in appeal and demand," said Grandell, who also notes that Accent has enjoyed a 20 year partnership with their private label roaster located in Ohio.
There has also been a shift in the direction of different beverage options in OCS and pantry service offerings. "We have seen significant and growing interest in sparkling water and tea," said Grandell. "I think the biggest driver of this is a shift in focus on healthy beverages." Steuber and Carroll corroborated the growing popularity in sparkling and flavored water. Carroll added that other products seeing growth in the category are "also cold coffee and nitro coffee."
It is advantageous to accelerate an existing tea program in OCS or pantry service, because it is a healthy and flavorful alternative to coffee and other beverages, especially to younger generations, Tara King and Kristin Overstreet of Twinings explain. Tea is what Millennials are looking for, too. "They are willing to pay for the premium teas and are looking for all types of different varieties," said Overstreet. It's worth it for the operator because of the profit.
Provide a way for consumers to communicate which snacks and beverages they like. Make sure there is a gatekeeper at the location, whether it’s the office manager, human resources (HR), or someone else; you need a way to get into the mind of the consumer when considering what products will be offered to them.
The next step
If growing the bottom line is the end goal, the key is efficiency. Although there are many options in the details, stay focused on the big picture. Take time to and consider expansion in different areas in order to fulfill the needs of different consumer types.