Tom, Don and Rick Diffendal are brothers who grew up in the foodservice industry. From a young age, they watched their father, Tom Diffendal Sr., succeed as a salesman, manager and later in his own vending and coffee business thanks to a good work ethic. It inspired them to follow in his footsteps and carry on the family-owned business, Laurel Foodsystems, while also reinventing it with cutting edge technology.
All in the family
Tom Diffendal Sr. started working in his family dairy and ice cream business, Royal D Dairy, at a very young age. In 1965 he left and became a salesman for Servomation Corporation. Servomation was one of the early national vending companies, along with Canteen and Aramark. In the early 70’s, Tom Sr. became the Midwest regional coordinator. Not long afterwards, corporate changes would make it difficult for Tom Sr. to be promoted further, which inspired his idea to become his own boss. In 1974, Tom Sr left Servomation and began building his own vending company.
“That is when he started American Vending and Food Service,” said Don Diffendal, now treasurer, vice president, CIO and CFO of Laurel Foodsystems. Tom Sr. always found the concept of vending appealing, especially compared to opening a retail store. “If you have a bad store location you can not just pick up the store and move to a new location,” explained Don. “Vending gives you that opportunity.”
American Vending & Food Service, which would later become Laurel Foodsystems, Inc., began with Tom Sr.’s purchase of ten used coffee vending machines. At the time, the price for consumers to buy a 7-ounce cup of coffee was 10 cents.
Expanding beyond vending
From 1974 to 1983 the business was all vending, and then in the mid-80’s the Diffendals expanded into other areas. In 1986, they bought the Servomation branch where Tom Sr. started his vending career. Because of this acquisition, the Diffendals got into manual foodservice, and at one point had 37 cafe locations.
A cafeteria at one of the early food service locations needed American Vending to supply coffee to its office building. Tom Sr. thought it complimented the services the company was already offering, and the office coffee service division was born.
In 1992, Tom Sr.’s eldest son, Tom, became the CEO of the family company. In 1997, they acquired Laurel Vending and changed the company name to Laurel Foodsystems, Inc. Over the next decade, Laurel made numerous acquisitions including Faith Vending in Altoona, Serex Services in Pittsburgh, Bachman Vending in Wheeling, WV, Nationwide Coffee, Amity Vending Services, Tri-Best Vending and many others. They also expanded into the Northeast Ohio market. In March 2009, Laurel became a Canteen franchise.
Paving a new path
The Diffendal brothers became interested in micro markets at a NAMA show when micro markets were first getting off the ground. At that show, Laurel Foodsystems had a meeting with the president of Company Kitchen and decided to delve into the micro market industry. They liked Company Kitchen because they believed it was innovating in the growing micro market business. They installed their first market in July 2011. Right from the beginning, it was focused on prekitting, warehouse automation and other technology that Laurel has found beneficial through the years.
As a Canteen franchise, Laurel also started using 365 Retail Markets’ Avenue C micro markets at national accounts.
Being in the business of both vending and micro markets often means dealing with multiple back ends. For this reason, Laurel Foodsystems has been working to make things more integrated. Laurel uses Streamware by Crane as its vending software which integrates with Lightspeed to generate prekit orders. Lightspeed also pulls reports from Company Kitchen and Avenue C into the Lightspeed System similar to the vending routes. Laurel is currently working with Streamware to use its vending management system (VMS) as the micro market backend system, “which is run pretty much the same way as prekitting a vending machine,” explained Don, who works with all of the information technology. By implementing Streamware, the driver only has to learn one system, which is simpler and more efficient. “With that in place, we could use multiple market providers and driver training is simplified,” said Don. For example, if there is one Avenue C location and one Company Kitchen location, Streamware does a good job of pulling all the data from both backends. Another thing about Streamware that makes the drivers job simpler is that both the vending point-of-sale (POS) and the micro market require the same steps, because both are prekitted. The problem Don has encountered is getting Lightspeed to work with inventory systems and getting the kits going for those systems. However, a bonus is that unlike systems that depend on Wi-Fi at the kiosk, Streamware’s integration doesn’t require it.
Like most operators in the micro market business, the Diffendals have found that they have the most success with their micro markets in controlled environments not open to the public. Places such as businesses and distribution centers, operation and call centers, and factories. Rick explained, “Any place where all the people in the building are known.” This eliminates the risk of theft for both the client and for Laurel Foodsystems.
A competitive advantage
The Diffendal brothers have a large and profitable commissary that supplies their micro markets and some of their vending machines. Twenty-eight people work in the commissary making 7,000 to 9,000 sandwiches and meals a day. Commissaries are fairly common in the northeastern part of the country, so it’s important to show exceptional efficiency and a quality product. What makes having a commissary different than buying fresh food products from a distributor is control. “When you make your own product, that’s something no one else can get. You’re able to control the pricing, because you don’t have the mark-ups that a lot of third party commissaries have,” said Rick. “You can control the quality and react quickly to trends in the market,” he added.
While having a commissary is a lot of work, it has given Laurel a competitive advantage. “We win new business by having a better fresh food program,” said Rick. In fact, Laurel tries to be better in every aspect. “It’s about the privilege of providing the service,” said Rick. “We strive to provide a better food program, a better coffee program and better employees.”
The Diffendals explain that when it’s your own food, it’s a different way of dealing with food safety, spoilage and turnover. “You have to be prepared to be hands on,” said Rick. “You need to walk through it [the commissary], eat your own food, look at labels, etc.” This, he explains, is the only way to know if you are making and putting out a good product. Having a commissary, Laurel is able to produce products at a lower margin than if it was to buy a similar product from a distributor.
The commissary at Laurel Foodsystems is inspected by the Food and Drug Administration (FDA), the Pennsylvania Department of Agriculture and three different local county health departments. In order to keep its food fresh in its markets and in vending, it uses health timers with auto-locks on all of its food coolers. The Diffendals also use open-dating with a “best by” date on all of their products. Many commissaries don’t do this, using some other system that the customer cannot interpret. The Diffendals prefer open-dating, because they want their consumers to be able to trust the quality of the product.
Driven to innovate
Technology has come a long way in the vending industry, and the Diffendals have taken advantage of some of the new innovations that have proven to be game-changers. One such technological advantage that the Diffendals use is Google glasses through Wizzan Mobility. They met the Wizzan team at the 2017 NAMA trade show and were introduced to the technology.
Laurel Foodsystems was one of the first companies to adopt the glasses for vending. It now uses the glasses instead of handhelds. The glasses work with a BlueDex dongle which is connected through bluetooth to the glasses. This gets the machine DEX information to the glasses, which is uploaded to the vending management system (VMS) at the end of the day. There is also a bluetooth scanner used to scan products for inventory and product changes. With the glasses, drivers are able to inventory a machine in less than a minute. Laurel uses FoodMax as a part of Streamware and Wizzan Mobility modified the technology to work with that system so Laurel could inventory its food machines on the glasses. Currently the Wizzan product works with the Streamware VMS.
Starting off with five pairs, it found that the drivers using the glasses were able to work more quickly and efficiently. The glass technology was also fairly simple to learn, especially for Millennial generation drivers. The Diffendals now have eleven routes on the glasses and their drivers love using them. They plan to convert the rest of the company now that the glasses work with micro markets. By using the glasses, Laurel’s drivers are saving an average of over an hour a day per driver on their vending routes. With 38 routes, this is a total of 40 hours per day saved. The Diffendals estimate that once fully implemented, the glasses will facilitate route volume increases of $100,000 per year, getting them closer to their goal of $1,000,000 per year per route.
Don explains the difference between using a handheld and using the glasses. The driver has to use both hands to enter information using either an iPad or a handheld. “Whereas with this [glasses], the driver, just by talking, interacts with the glasses; his hands continue to work,” said Don. “And it talks to him, too. So the glasses will, say if he leaves the DEX in the machine, it will say ‘don’t forget the DEX dongle’ or ‘remove DEX dongle,’” added Tom. Another feature of the glasses is tapping the side of the glasses and saying, for example, “go to A3,” and it will bring up the pictures of the products in that column, all from the glasses. “With other devices, the driver still has to touch the device. The glasses have voice commands and reminders. You can work with two hands versus one hand,” said Don, who has been really impressed with the success of the glasses.
The Diffendals like Wizzan because it looks at the driver’s process and makes it more efficient. “It doesn’t just take what’s on the handheld and port that over to the glasses,” explained Tom. Instead, it looks at the workflow, making it simpler and cutting steps out. “They do a nice job of analyzing how the route driver actually works,” he said. Wizzan’s software also helps Laurel’s drivers to save time on truck loading and unloading the dolly at each location. The glasses summarize all the pick lists and totals them for the driver. In short, Wizzan looks at the workflow and makes it simple.
The Diffendal family has spent their careers in convenience services. Tom Diffendal Sr. began the legacy first in the dairy business and then with Servomation, and led his sons to embrace their entrepreneurial spirits. The Diffendal brothers have risen to the challenge by evolving through technology and other advancements. The key to their success has been as simple as this: “It’s about the privilege of providing service,” explained Tom.