4 Tips To Stay Ahead Of Micro Market Regulations

April 27, 2015

There are a lot great things about micro markets. Not only do they help increase sales, but they engage consumers, create the ability to offer more better for you options, including fresh fruit and sandwiches. and allow for customer loyalty offers and promotions among other things. While micro markets are not new in the industry, they are increasing rapidly and gaining the attention of consumers and media outside of the industry. They are also gaining the attention of federal, state and local regulators and elected officials who - in many instances - have taken issue with the new retail concept.

On Wednesday, April 22, 2015 at the NAMA OneShow in Las Vegas, NV, NAMA Senior Vice President of Government Affairs Eric Dell hosted a panel discussion on the current issues impacting micro markets. Dell was then joined by panelists Chip English of Continental Vending located in California, Ron Urbano of Aramark located in Ohio and Chuck Walton of Ace Vending located in Arizona. Each micro market operator spoke about their own experiences facing changing regulations and fees in the micro market segment, as well as recommendations on effectively dealing with local, state and federal regulators.

Opening a micro market can be an exciting process, but it can also bring challenges, the panelists note. In order to avoid violating health and food regulations, operators should be proactive and follow these four simple steps.

1. Get to know your local regulator

First and foremost, introduce yourself to your local regulator. So how do you know who to approach at a local level? English recommends starting with the county environmental health specialist  or a government regulator of comparable stature . From there, exchange emails and get on a first name basis. “Get involved at local level with regulators,” said Urbano. “All your work can be taken away by regulators who aren’t fully informed but are fully powered.” Walton agreed. “Get out in front of regulations so you can drive the ship,” he said. Walton described how his company worked with regulators to lower fees in Arizona. “They were treating it as a retail food establishment,” he said, “It used to be $615 to submit the plan and we got that down to $270. The per-location annual fee used to be $350 which we got lowered to $155.”

It’s also important to support your regulators’ agencies and initiatives. By supporting the regulators’ initiatives, operators are creating a relationship of cooperation. “Play by their rules,” said Walton of regulators. “It’s easier to change the rules from within.”

2. Bring the regulators to a current, active micro market

Once you have established contact with regulators, panelists recommend bringing them to a current location you operate. “It’s hard for regulators to recognize the difference of what makes micro markets different than everything else,” said Urbano. In order for regulators to understand a micro market, it’s best if they see one, he said. “The best thing to do is it to host a regulator on site and introduce them to the market,” said English. Walton then added, “The first thing they will talk about is the fact that you can touch food items and put them back. That’s why you need to have a locking mechanism on coolers and you can show them that food safety feature during their site visit. You can also explain that non-micro market features, such as a location’s kitchen, is not part of your market.”

3. Be forthright with regulators, don’t lie if you forgot to do something

“I’ve seen an inspection take hours and others that take days,” said Urbano. “It all depends on your regulator, whether they are rural or urban. It depends on your state.” Despite the state to state discrepancies, each panelist agreed that it was best to be honest with regulators and customers alike -- be transparent. “At one of our early locations, once I had reached out to the regulators, they informed us we needed to complete a process before we could sell fresh food,” said English. “So we had to pull all the fresh food out of the market and put in a vending machine on free vend while the paperwork went through. That process took about three weeks.” English ended up placing signage around the break room letting customers know exactly what was happening, as well as why it was happening.

4. Stay on the process and be proactive

Eric Dell recommends that operators get ahead of regulators and stay proactive as the micro market industry expands and more regulators become involved. “You can do things like put your name and contact information on the kiosk,” he said. Urbano revealed that working with micro markets even led him into “accidental advocacy”. “I became involved early on because my goal was to win exception or release for bean hopper machine in the micro market,” he said. “That included letter-writing and face-to-face meetings. From those early debates came a new licensing agreement and a new definition of ‘micro market,’” he said.

Although language is being drafted to protect micro markets and their consumers in the Federal Food Code, the process could take years to come to fruition, said Dell. Dell continued, “It may take time,  but rest assured, NAMA is at the forefront of this work to ensure success for the micro market industry.” Until then, micro market operators should work closely with regulators and stay ahead of the curve to avoid hefty fines and protect their consumers.