Is pantry service still your golden goose?

April 26, 2023
After the concept emerged from the Silicon Valley over 20 years ago, pantry service is evolving, creating new opportunities and some interesting challenges for operators.

Around the year 2000 during the dot-com boom, I recall being amazed when I first heard about the concept of a full-blown pantry service. While operators were seeing corporate dining rooms, special-occasion beverage deliveries, and maybe some free crackers delivered usually for executive consumption only – the idea of free snacks and beverages for the rank-and-file employees was a rarity.

Pantry service was seen as the golden goose. Thanks to this incredible concept from the Silicon Valley, we were suddenly generating five-figure monthly invoices for beverage and snack delivery, with limited competition. Over 20 years later, now in the post-pandemic era, operators are still attracted to pantry service, despite several challenges that have emerged, including endless product requests, an extreme variety of dietary concerns, stressed-out budgets, predatory pricing, competition from big box stores and the mystery of how to service locations on a hybrid work schedule.

Despite these challenges, pantry service business is still coveted by operators and is increasingly important to their clients.

William Mandile, director of customer experience at Marché in the New York metropolitan area, said that there is an increasing flow of employees coming back to the office in 2023, as many companies are upping the number of mandatory in-office days. “Every company is different, but a lot of companies we work with are looking to create a mindset to get people to want to come back to the office,” he said. “Pantry service and creating a communal setting in the breakroom is one way to do that.”

Pantry service aesthetics and decor

To create that communal feeling, free product alone is not enough, said David Carroll, president/owner of Seventh Wave Refreshments in the Atlanta area. According to Carroll, his company has put an increased focus on breakroom aesthetics, something that was not always a consideration when setting up a pantry service.

“We used to put in some racks and some plastic containers, and we thought we were good to go,” Carroll said, as he compared what operators spend on micro markets, as opposed to what they spend on pantry service locations. He pointed out that it does not make sense for an operator to spend thousands on fixtures for a micro market account that does $1,000 a week and then be reluctant to spend money on the aesthetics of a pantry service account that does $50,000 a month.

Carroll said that Seventh Wave Refreshments has taken a different approach from the beginning, adding high-end fixtures and furniture to enhance the look of the pantry service breakroom.

Mandile has seen his company’s approach to pantry service move in the same direction. “We’re buying specialized bowls and specialized racks,” he said. “We’re shopping at Crate and Barrel for displays because these clients are spending tons of money on aesthetics, and the last thing you really want is for a driver to open a box, rip the top off and leave it on a counter. It happens, we see it out there when we are visiting a potential new account.”

Pantry service and corporate culture

“What hasn’t changed in pantry service is the need for niche items or specific products that align with the company’s values or their culture – that’s stronger than ever,” said Arthur Siller, SVP of operations and business development at Evergreen Refreshments in the greater Seattle area. “So, just like we focused on before the pandemic, we still have to put a lot of attention to making sure we can bring in the right items for the right customers and satisfy their needs quickly.”

One encouraging development in corporate culture is a move by some blue-collar locations toward pantry service. C.J. Recher, vice president of marketing for Five Star Food Service in Chattanooga, sees multiple reasons for this shift. “We’ve had manufacturing facilities that have taken on some pantry-style programming to help recruit people to come work for them,” said Recher. “They are using our services to be creative, to get people in and keep them in – to stop turnover.”

Emerging product trends

Debbie McGaw, director of sales and OCS services at Five Star Food Service, is seeing several pantry service product trends in the greater Atlanta area, such as a rising concern for sustainability, including ingredients and packaging and how that’s affecting the environment. “Healthier snack choices, going beyond the calorie count … Customers are talking about low or no added sugar, no artificial ingredients. They are taking the time to seek out healthier, higher-quality snacks and beverages,” said McGaw.

“The biggest trend I’m seeing right now in the pantry world is in beverage choices,” McGaw continued. “There is strong interest in healthy, alternative energy drinks and functional waters – coconut waters, sparkling waters, energy waters, waters that have added minerals or vitamins, electrolytes, even natural herbs and fruit flavors. There’s a huge demand for non-dairy milk alternatives; we probably carry 20 different types.”

Bulk is back

When the pandemic hit, bulk sales disappeared and were replaced by packaged products.Judson Kleinman’s operation, at Corporate Essentials in New York, was committed to bulk snack products and had the concept down to a science. For Kleinman and other operators who sell bulk snacks, that portion of their business is up and running again.

Kleinman said that even though no one is talking about touchless anymore, bulk snacks in pantry service are experiencing a slow recovery, but he is optimistic, because bulk snacks make sense for all the right reasons. “I just think it’s a matter of time before the bulk snacks come back,” he said. “There’s a huge sustainability factor in it. You’re not using all that extra packaging and there is the convenience of it and the cost. I do think it’s going to come back strong. We still are very hopeful that we see much more of a comeback during 2023.”

The competitive advantage

Seattle-based Siller believes there is more competitive pressure on margins than ever before, largely because it is becoming easier for clients to source pantry service products from big box stores and the internet. He said operators need to differentiate themselves in the variety of products they carry and the variety of products that they actually have access to. “It doesn’t do you any good to say you can bring in an item if it’s really difficult for you to source,” Siller noted.

“What is most important is demonstrating the level of service you can provide – that they just can’t get if they’re sourcing the products themselves, online or through a third party,” Siller said. “People still care about service. When it comes to pantry service, that’s where we get a competitive advantage. If it was easier and better to do it themselves, they all would do it that way, but most have figured it out. They realize it is a lot easier to rely on a company with staff, equipment, expertise and the resources to manage their pantry service.”


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