With a slow recovery underway, now is the time to ramp up the OCS sales effort

June 18, 2024
It was a common theme at the recent NAMA Show: OCS growth is slow; pantry service growth is steady and micro market growth is explosive. This condition presents an excellent opportunity for OCS operators that extends well beyond coffee service.

Even when considering the challenges faced by OCS operators since 2020 — and there have been many — I was surprised to hear from more than one operator about their plans to scale back their efforts to sell office coffee service (OCS). One operator told me he would consider selling OCS only if he knew the client had a significant workforce that was coming in regularly. Another pointed to their post-pandemic success with micro markets and pantry service as a reason to not pursue OCS business. This type of thinking is a mistake.

A slow recovery

Amid inconsistent office populations and some unreasonable client demands for equipment, there is no question that the OCS business has been frustrating for operators. In my Automatic Merchandiser’s Vending & OCS Nation podcast episode on June 18, Joe Webster, founder of Newco Enterprises, a leading coffee equipment manufacturer, acknowledged that the OCS business is coming back slowly. What is more important, however, is that it will come back differently, he said, noting that workplaces will be willing to pay more to keep their in-house employees happy. “That 75-cent cup of coffee from an operator looks pretty reasonable to an employer,” said Webster.

A matter of perspective

As industry consultant Orrin Huebner pointed out, “It is a slow slug back. If you're at 60, 70% of what you had, that's probably the max at this point,” said Huebner. “If you're new to the industry, and I always say this to people, that 70% is what you need to work with. If you were in business pre-COVID, and you are down 30 to 40 percent, you're looking at it as a negative. Instead, ask how you can build the business, and don't give up on it. We need to adjust our mindset.”

Make it work

“It's more profitable — believe it or not, a lot of people won't say this — but it's more profitable today at that 70 percent than sometimes it was at 100 percent. The definition of OCS is different than it used to be. It’s not just 40 bags of coffee with a cream and a sugar canister. It’s pantry service, premium point-of-use water, ice machines, cold brew, and those things. It's pantry service, water, ice machines and much more. Enjoy it. Make it work. That is what I am advising my clients to do,” Huebner added.

Higher margins

Huebner noted that “OCS has higher margins than just about any other part of an operator’s business. When we charge for the service side of the OCS business, it really pencils out,” he said.

“I think you have to look at how to monetize everything that we're offering. When we think about COVID, and I hate to even keep bringing it up, but what was the most important piece about COVID? How do we get healthy? How good is the water? How do we make sure that everything is sanitized? The world looks at things differently. They want equipment maintained properly.

“A good percentage of your OCS business should be profitable, incremental charges. It's rentals, filter changes, line flushes, periodic maintenance on ice machines and water lines. Clients want white glove treatment. You don't go into a white tablecloth restaurant and expect not to pay for excellence.”

An emotional product

Jon Fishman, my longtime partner at Gourmet Coffee Service, sold OCS for over three decades. He believes that there is no easier way to get in front of a decision-maker in a workplace than by offering a gourmet coffee tasting.

“Coffee is a product that people get emotional about,” said Fishman. “As a sales rep, if you can set up a coffee tasting in a workplace and don’t forget the decaf, the tea and the flavored creamers, there is an incredible opportunity to earn the prospect’s trust and ultimately their business. An OCS appointment gives an operator a chance to see exactly what is happening in the workplace, and it opens to door to a tremendous amount of additional business — like pantry service, vending, drinking water and of course, micro markets.”

One of the other comments I heard at the NAMA Show from some of the many newcomers to the convenience services business was, “I need to learn about OCS, because prospects are asking for it.” Why were they asking for it? Because the big local operators are ignoring their requests for an OCS proposal.

Getting in the door. That is why it makes sense to double down on OCS selling. Take the road less traveled and enjoy the expanded opportunity that comes with being a committed OCS operator.

About the Author

Bob Tullio

Bob Tullio is a content specialist, speaker, sales trainer, consultant and contributing editor of Automatic Merchandiser and VendingMarketWatch.com. He advises entrepreneurs on how to build a successful business from the ground up. He specializes in helping suppliers connect with operators in the convenience services industry — coffee service, vending, micro markets and pantry service specifically. He can be reached at 818 261-1758 and [email protected]. Tullio welcomes your feedback.

Subscribe to Automatic Merchandiser’s new podcast, Vending & OCS Nation, which Tullio hosts. Each episode is designed to make your business more profitable.