American Food and Vending is welcoming back-to-school season with cautious optimism. Not only are teachers and students returning in person from COVID-19 quarantine, but parents and caregivers free from the childcare obligations imposed by remote learning can now rejoin their workplaces in force.
After navigating COVID’s extraordinary challenges and reinventing its services accordingly, the full-line vending, micro market, office coffee service and water provider based in Woburn, MA, has extra reason to celebrate its 40-year milestone as a convenience service leader in the New England market.
At the helm are chief operating officer Jim Roselando and vice president Patrick Arone, who carry on the legacy of Jim’s father, Jim Sr., who remains active in the business.
The senior operator began his career working for Canteen as a route driver and moved up the ranks into a managerial role. He and a coworker on the sales team eventually joined forces and left Canteen to apply their respective vending operations and sales know-how to start AFV.
“They started from scratch, developing loyalists through hard work, dedication and exemplary customer service, one snack, one beverage at a time,” Roselando commented. “We continue to hold true to those values today.”
Jim Sr. assumed sole ownership of the operation a decade later. Jim Jr. grew up in the business and joined full time in 1990 after graduating from college. Arone was a seasoned industry veteran with stints at Coca-Cola and Nestlé under his belt when he joined AFV in 2001. Both lead the organization today.
A testament to AFV’s enduring success throughout four decades is that it still services some of its earliest accounts. Key to its loyal following and steady growth has been the company’s readiness to diversify and evolve to serve all refreshment needs and adopt the latest technologies to enhance both the customer experience and operational efficiency.
ONE-STOP SHOP
AFV operates 31 routes that provide vending, micro markets, and office coffee service and water filtration to colleges, universities, businesses, industrial complexes and healthcare facilities in Boston and the surrounding areas. Its reach has grown over the decades, spanning beyond Massachusetts into New Hampshire, Rhode Island and Connecticut.
The company recognized the need to provide a total refreshment solution and added office coffee service to its repertoire in the mid-1990s. OCS grew to be a strategic part of its business but is also the segment that has been hit hardest by the pandemic shutdowns and subsequent shift to remote work.
Nationwide, the OCS business is slowly coming back as employees return to the office and the operators have everything in their arsenal from premier coffee brands to portion-pack and bean-to-cup brewing systems to provide the coffeehouse experience in the breakroom that employees have come to expect and that employers have found value in delivering.
“When we began with OCS, it was a drip-coffee world and then it evolved to single-cup with Keurig and Flavia and now bean-to-cup machines that make drinks like lattes and cappuccinos that are all the rage,” Roselando commented.
Water is another service AFV added to be a one-stop shop for its clients. The company’s bottle-less water filtration systems plumbed to an existing water supply provide an endless stream of clear, fresh, filtered drinking water. AFV has also met surging demand for sparkling and flavored water by adding the Bevi system to its offerings.
“We never sub-contract our water services. This means we’re accountable to our locations. We’ll keep the water flowing, the filter working and their taste buds happy,” Arone said. “One thing about our company that’s been a big part of our success is we don’t just jump into anything. We watch and figure out what works and doesn’t first. Anything brand new does not necessarily work well so we make the move once we know what’s sticking with customers and the technology has proven itself.”
MICRO MARKET MOMENTUM
This wait-and-see approach made AFV relatively late to join the micro market revolution in 2013, but that didn’t hinder the company from emerging as one of the largest providers of the self-checkout stores in New England.
Pre-COVID, the company operated 120 micro markets. Currently, 65 are open and the others are still on site, awaiting the return of enough employees to reopen.
“We expect a surge in business by October as kids go back to school,” Roselando predicted. “We developed some unique approaches during COVID that have helped us through and will continue to be key as businesses reopen and employees return.”
Specifically, in the wake of COVID, AFV has found new opportunities by partnering with several contract foodservice companies to provide micro markets as a labor-free alternative to the cafeterias that they have been forced to shut down without enough employees on site to support them.
“We’ve been very successful with micro markets replacing cafeterias because they’re not labor intensive and let us move in on the foodservice side with that strategy and then follow behind with coffee and sometimes vending,” Arone noted.
What’s “unorthodox,” he added, and a paradigm shift in these uncertain times, is that AFV has eliminated its financial risk when installing micro market area treatments and fixtures, which it has learned all too well throughout the pandemic are not readily relocated and not easy to store.
“With business that’s lost and transitioned, all of the equipment and fixtures typically come back,” Roselando observed. “It’s now a foodservice business, and now we hardly have any micro market fixtures coming back into stock.”
“We sell our markets differently,” Arone added. “Multi-tenant office buildings that had cafeterias are turning to micro markets; it’s a definite trend. They understand that we have a weekly minimum number to cover shrinkage and spoilage, just like manual foodservice, when we go in. We need to be paid or amortize our investment with a three-year program. In these uncertain times, we protect ourselves as we go.”
FOOD FOR THOUGHT
Micro markets and fresh food go hand in hand and embracing the interplay between the two is the only way to succeed, according to the New England operators. “Vending companies have looked at fresh food in a different way than the rest of the world,” Arone commented. “It was always the lowest performer in a bank. But with micro markets, if they don’t have good fresh food, they’re not successful.”
On average, 35% to 40% of micro market SKUs should be fresh food to be optimally merchandised for the swiftest sales, Arone advised. “AFV even in a COVID environment still sells and merchandises over 9,000 units of fresh food per week!” he exclaimed.
AFV has proven this point time and time again by replacing competing micro market operators that had only provided frozen food.
“That’s where the big win is,” Roselando said. “Most New England companies want to mitigate loss by avoiding fresh food versus go after the sale. Frozen food is not going to get people back again and again. It’s fresh, truly good, quality food that does that.”
In fact, AFV recently kicked it up another notch by adding sushi to its repertoire, which has reportedly been selling off the shelves.
The convenience services company has opted out of operating its own commissary because the variety and quality offered by its supplier meets contemporary tastes and is second to none.
One measure of the high-end appeal of AFV’s fresh food is that the vending and micro market provider supplies items like parfaits, grape and cheese platters, and Mediterranean snacks to several hospitals for their grab-and-go programs.
“In vending, food was always a headache with a lot of shrink,” Arone emphasized. “We manage customers’ expectations that it’s not a vending program. It’s food and a shared risk with a short shelf life. If some goes bad, it’s part of the deal that it’s a shared loss just like cafeterias do.”
OPPORTUNITY ABOUNDS
For one hospital group that will not reopen its cafeterias, AFV installed three micro markets at different hospital locations. Some Boston-area locations, like one pharmaceutical company that has eight of AFV’s micro markets, for example, never shut down and now rewards its employees for their dedication by completely subsidizing the markets. Likewise, a multi-tenant office that AFV serves has 15 micro markets on location to maintain and attract occupants.
“One thing for sure is the world of foodservice is changing and we’re just thankful we’re on the right side of the tracks,” Arone remarked. “Micro markets are a gamechanger because they remove labor and provide more variety. We partner with foodservice companies that just have had traditional foodservice and put together a total solution.”
AFV customizes micro markets to the unique needs of workplaces using Three Square Markets and Avanti Markets’ technologies to provide a large variety of healthy snacks, beverages, and fresh and frozen food, along with everything from health and beauty supplies to windshield cleaning solvent and scrapers during the winter months, with hundreds of options from which to choose.
“It’s a mini c-store and no market is the same. AFV can customize all selections, as well as price points, making it easy for employers to subsidize snacks and beverages for their employees with 100% detailed and accurate reporting,” Arone explained. “And with so many top-quality food options on hand, employees no longer need to leave the building for breaks, reducing travel time and time spent away from the office.”
VENDING REFRESH
Despite the obvious attraction of micro markets for both locations and operators, the mini c-stores require buildings with a closed customer base to limit theft and central locations that accommodate them, which is why vending still has its place and always will, according to the AFV executives.
When the pandemic abruptly shut down locations and the machines that AFV operated within them, the operators took advantage of the downtime to rescale, reexamine planograms and inventories, reroute and reschedule.
“Vending works for all places including those that are spread out and where more security is needed than with a micro market where we always have to be hawks to curb theft,” Roselando pointed out.
Over the past three months, AFV acquired a new round of vending business in healthcare and B&I locations through its partnerships with foodservice companies and contracts with hospitals.
Many locations are attracted to its own branded “Choose Well” and “Here’s to your Health” wellness programs with food, snack and beverage options that have become increasingly sought after.
“Stickers on our machines designate them as the go-to place for people who want healthier options and we can customize programs to company goals and even slowly phase them in and allow people time to adapt,” Arone remarked.
“You name it, we’ll deliver it, from fresh and frozen food to ice cream, to specialty coffee,” Roselando added. “No one on a client’s premises should ever walk away frustrated or disappointed by the fare they offer in vending, micro markets and coffee service.”
One of the most pronounced trends in vending that supports the movement toward healthier and more upscale fare, which often come at a higher price, is that cashless payments now represent 85% of AFV’s vending sales.
“It’s an unbelievable thing how quickly it has ramped up to such a level, and it shows the importance of accommodating all payment options on all machines,” Arone observed.
In a highly competitive environment, AFV sets itself apart from many local vending machine operators with a one-hour response guarantee for emergency repairs and by providing service 24 hours a day, seven days a week, with route technicians on call around the clock. Its route drivers are also trained in repairing equipment, which helps facilitate most machine repairs and minimizes downtime.
SEEING GREEN
AFV’s mantra, in line with a growing number of its customers, is “Reduce, Reuse, Recycle” wherever possible. “We care about the environment as much as our customers do,” Arone emphasized.
The company exclusively installs Energy Star-certified equipment, which uses ecofriendly refrigerants and is 40% more energy-efficient than standard machine models. Energy Star-certified vending machines incorporate more efficient compressors, fan motors and lighting systems to keep beverages just as cold and the machine visible while consuming less energy. They come with a low-power mode option that allows the vending machine to be placed in low-energy lighting and/or low-energy refrigeration states during times of inactivity.
AFV also provides recycling containers at the locations it serves and regularly schedules removal and maintenance of its products and bins. The company also uses biodegradable packaging and recycles all of its own cardboard.
TURNING THE CORNER
Roselando and Arone are hopeful that they have turned a corner on COVID’s darkest days, with far more opportunities than challenges ahead. Right now, the most significant of remaining challenges they confront, like most operators in all regions report, are supply chain disruptions across all categories and labor shortages.
“All companies have supply issues from a giant blip on our planet with COVID that paused the world and it’s further compounded by hiring issues,” Roselando commented “Encore Casino in Boston recently announced that they don’t have enough dealers for their poker tables, which shows just how crazy it’s gotten.”
AFV was forced to reduce its staff from 75 to 25 employees within the early months of the pandemic and has been on a relentless hiring spree to boost its team to a staff of 72. Ramping up its staff to higher levels in a tight labor market will be a welcome problem to have if it means more business to be had, Roselando added.
“If vending companies operate the way they have been without micro markets and a good coffee program and understanding customers’ changing needs, they will be out of business,” Arone concluded. “The large companies get it to a point but for many local guys, it’s a tough thing for them to realize they need to provide all areas of service. OCS was decimated by the pandemic and even now many companies are not coming back; leases are turned over. You need micro markets and vending or you can’t cover that loss. The good news is, there are new opportunities for our industry that are ironically a direct result of the pandemic.”
