Local Offerings Drive Success For Vermont Vendor

May 16, 2016

Vitality Vending is doing a lot to change the face of vending, one location at a time. The small, 5-year-old vending company located in Essex Junction, VT, focuses on each individual location’s needs. The planograms for each vending machine change frequently based on what the account is purchasing and what new items Brent Farrell, Vitality Vending’s owner, has brought in to try. In order to provide the best vending experience for the customer, the company only places new machines with the latest technology that accepts all payment forms. And if a customer has a problem with a machine, they deal directly with Farrell to resolve the issue.

But what really makes Vitality Vending stand out amongst the competition is its deep-rooted commitment to offering local, healthy products to consumers. “We created and are providing a service that has always been in demand but was not offered anywhere else,” said Farrell. Since it began five years ago, Vitality Vending has grown to 75 machines and doesn’t plan to stop anytime soon — the company will soon expand to a larger warehouse and is looking to significantly grow with more locations and machines this summer.

Hospitality focused

When Farrell first got into vending five years ago, he brought with him one of the most important aspects of the trade: top notch customer service. Farrell began his career in the hospitality industry, working in all aspects of the hotel business from bellman to assistant general manager and human resources director. “What I gained from decades in the hospitality business is that anyone can make a bed and rent it,” said Farrell. “But it’s how you do it and how you treat people that set you apart.”

It’s that level of service that Farrell brought to vending when he placed his first machines in March of 2011. The transition from hospitality to vending came by way of a friend who introduced him to a website for franchised healthy vending machines. Farrell was intrigued by the concept and signed a contract for 30 machines. “I knew that if healthy vending could work in other places in the U.S. it could certainly work in Vermont where consumers are conscientious of what they eat.” After just one year Farrell had placed all 30 vending machines under the healthy vending franchise, and found he really enjoyed the vending business.

Today, Vitality Vending has 75 machines, but has transitioned away from the healthy vending franchise and instead operates under the Vitality Vending umbrella. “I found that I could have a bigger voice with my own brand and offer more local items as well,” he said.

The company had continued to grow so much that about a year ago Farrell brought on business partner Greg Blunt, a former colleague, to help operate the company. “I needed someone who was capable and could help develop the business,” said Farrell. “We both have our own strengths and that’s what makes us a great team.”

Doing it differently

Vitality Vending’s focus has, since day one, been on providing customers a unique vending experience. One of the first ways Vitality does that is by placing local, healthy items in all vending machines. The reason Vitality Vending has been so successful, says Farrell, is that Vermont locations have been looking for a different option and no one else has been providing one. “There has been a big farm to table movement here in Vermont for the last 20 years or so,” said Farrell. “And it was important to me when I started to provide options that fit that movement.”

Some of Vitality Vending’s top-selling local items include Cabot cheese, a .7 ounce snack bar of cheddar cheese; Cold Hollow Apple Cider; Vermont Smoke & Cure meat sticks; and Green Mountain Creamery Greek yogurt to name a few. Farrell is constantly on the lookout for new, local products to add to the lineup. “I recently found a local hard cider brewery that just started making a sparkling cider and I decided to pick up five cases and will introduce the product as an alternative to tea,” he said.

Despite its focus on local items, Vitality Vending doesn’t shy away from traditional products. “It’s important that we are willing and able to do it all — whatever the customer wants,” said Farrell.

Vitality Vending has been able to compete by catering to each location’s needs and wants. “In one college location we aren’t the only vendor,” said Farrell. “But we have been able to compete, even with higher prices, because of what’s inside the machine. Customers really care about that.”

Farrell believes that being flexible and conscientious of customer eating trends has helped Vitality Vending thrive. “It all comes down to customer service and offering the consumer a product that they didn’t know they wanted,” said Farrell.

Customization through planogramming

As a small operation, Vitality Vending can put the attention and focus on each of its locations’ wants and needs, which makes it stand apart from its competition, says Farrell. All of Vitality Vending’s machines are planogrammed individually for the location. “I don’t just throw items in the machine because the manufacturer is having a special,” he commented. “Everything in the machine is location specific, down to the flavors.”

Vitality changes the planogram based on what is selling and what isn’t. “For example if we are moving into an office of 50 to 100 people, we start with a mix of items and if, after a few weeks something isn’t selling we take it out and let the location know. We aren’t married to a specific planogram or product offering.” Individual planogramming is part of Vitality’s customer service commitment, said Farrell. When he goes into a location to restock the machines, he and the location contact or customer will oftentimes discuss the current offerings.

It’s not just about offering a great product and creating a specific planogram, said Farrell. Service is also about prioritizing the location. “Anyone can offer the machines and products that we do,” he said. “But great customer service makes the entire difference. When you can walk into a location and know the names of the employees, that makes a difference. When a machine goes down and they see I’m there fixing it, that makes a difference.”
Farrell admits that with growth he will have to work harder to keep the same level of hospitality Vitality is providing right now. “We are invested in the company, it’s not just a job for us — it’s what we do.”

Technology for the business and customer

To make the customer’s vending experience unique, Vitality Vending focuses on what’s outside of the machine as well as what’s on the inside. Farrell made it a priority to purchase new machines from AMS so that there are less maintenance issues now and in the long run. “Combo machines allow me to offer both food and beverage and I have had great success with AMS, so it has been a win-win,” said Farrell. “The machines are all latest generation — they are plug-and-play so I just put them in place and they are ready to go.”

Farrell also believes that owning his own machines has allowed him more freedom when it comes to product offerings, which in turn benefit the customer. “We aren’t beholden to anyone,” he said. “We want to be autonomous.”

Vitality Vending made it a priority to offer all payment methods that consumers are using and has gone 100 percent cashless with USA Technologies. “I love that the USAT system allows my customers to pay with their smartphones,” he noted. “People look at the payment methods and the different, local offerings in the machine and it really does create this new vending experience for them.”

Farrell is excited about USAT’s new acquisition of VendScreen, too. “That will be great when we upgrade to touchscreens,” said Farrell, who likes to be on the forefront of technology. “That is, as long as technology doesn’t change direction between now and the time we upgrade, which is a possibility!”

On the backend, Vitality Vending uses VendSys to prekit, which Farrell says is very easy to operate in conjunction with USAT equipment. Vitality also uses dynamic scheduling to eliminate unnecessary trips to locations. “Dynamic scheduling is great because Vermont is very rural so if we don’t have to drive an hour to a location, then we won’t. It creates a lot of efficiencies for us,” he said. Farrell likes that his days are flexible, but understands that he will need to create more specific routes when the company grows. It’s a bridge Farrell says he will cross when he gets there.

Local challenges

In the last five years Farrell and Vitality Vending have faced a few challenges, one of which includes a statewide tax [see Industry Activism on page 30]. In July of last year, a Rooms and Meals tax went into effect which subjected items sold from vending machines to a 9 percent meals tax. “The Rooms and Meals tax hurt us initially,” he said. “One of our accounts is below where it used to be and that’s an account that also has a cafeteria, so their thinking is that if they are going to have to pay taxes they could just go downstairs and get some fresh, hot food.”

Farrell raised prices to cover for the tax and put notices on the machines. Early last year the company looked at its pricing in general and decided to go to two-tier pricing on Jan. 1, 2015. “We saw a huge decline in credit card revenue because the customer was basically paying more for credit. When the R&M tax came into effect we went back to “same as cash” credit card pricing but enacted a more broad approach to pricing that includes some percentage for the credit card fees that we were paying.” After Vitality made the switch back to “same as cash” it saw an immediate change back to more prominent debit and credit card usage. Today Farrell sees it is about 60/40 credit card to cash in terms of payment at the machine.

Vitality Vending faces another challenge as well, and that is one of growth. The huge expansion Farrell expects over the next several months will mean Farrell will need to invest in new technology and more employees.

Currently Farrell and his business partner Blunt work with a part-time employee to keep the machines stocked. With more locations, that will change. “We are running into a geographical issue, because we are looking to expand but locations are 45 minutes apart and there aren’t any filler locations between towns,” said Farrell. “For us to be in some towns we need multiple locations and that has been a slow process that we are working to figure out.” Vitality Vending has proposals out with four to eight machines in each facility, which means the company could grow 30 percent this summer alone.

“It’s an exciting time though, despite the challenges,” said Farrell. “Growing is a good problem for us to have.”

Rethink the machine

Farrell and Blunt are excited about the future of Vitality Vending and its ability to create a unique vending experience for consumers.

Vermont, Farrell says, is the perfect place to do just that. “There aren’t a lot of players around Vermont, especially companies doing what we do,” he said. The opportunities are there for Vitality Vending because many Vermont customers are receptive to local and fresh items. There is also, says Farrell, a strong desire to support local businesses in Vermont. “I use a local deli shop that makes sandwiches for us in some of our accounts and it’s great for consumers to see that they aren’t just supporting me, a local guy, they are also buying a sandwich from a local business as well,” Farrell noted.

When Farrell pitches to locations, he focuses on what he does differently, which is offering local items that are also health-focused. “No one in our area is doing healthy the way we do it, and that’s part of the reason why we have been so successful.” Farrell will soon be adding local cold brew coffee to some of his machines this summer and adding other new products as he finds them. Even though many of the products are more expensive than traditional, national items, he notes that consumers won’t find the items in any other machine, and that is appealing to many consumers. Some locations value healthy vending so much so that they subsidize the products.

“I’ve had people tell me, ‘I would never consider buying something out of a vending machine, but I’ll buy something out of yours,’” said Farrell. “My goal is to help consumers rethink vending.”