Adapting To Market Challenges Secures Success

June 17, 2019

The Allan family has weathered the tides in growing their vending business, Allan’s Vending Service. Their ability to adjust to trends in the industry – from recessions to increased taxes – has helped them expand from the company’s beginnings in selling gum and peanuts in 1946 to the thriving, complex operation it is today. Scott Allan has embraced the service and teamwork components inherent in his family’s business, which now employs two dozen people who run accounts in two northeast states with micro markets, office coffee service and vending operations.

Making it a family business

Scott’s maternal grandparents, Charlie and Enes Adams, started the company in 1946 as a simple gumball and peanut vending machine company to make some extra income. Over the years, the couple grew it into Consumer Cigarette Service, a cigarette machine and post-mix machine business. Post-mix vending was an early form of canned soda machines that was similar to fountain machines.

“That was the total scope of the full-line vending,” Scott said.

The company began its operations out of a two-car garage in New Hampshire before the family bought a building in the area.

Scott’s mother, Joann Allan, grew up in the business, running routes when she was young, and Scott’s father, Steve Allan, a former chef, also worked part-time for the Adamses. When Charlie’s health started to fail, Scott’s parents decided they wanted to keep the business running. Steve and Joann bought the business around 1975 and renamed it Allan’s Vending Service.

Scott joins the family business

Scott grew up in the business, like his mother, and while he enjoyed working in the business, he wanted to explore other options as well. He went to college and received a degree in general studies in 1986. 

Through a summer of work at the company after college, he became confident the vending business was for him, and he officially joined the company that year.

"At that time, we were seeing some good growth, so I thought that would be what I wanted to stick with,” Scott said. “It’s what I had known my whole life.”

Scott said in the early 1980s, he and his parents decided it would be best to eliminate the company’s cigarette machines.

“During the early ’80s, they were slowly banning [cigarettes] from areas where a teenager could buy them, and we could see the writing on the wall that unless [the machines] were inside a bar where you had to be 21, they would be asking us to pull them eventually,” Scott said.

Responding to clients’ needs

Around 1988, the company began receiving more requests for cold food vending at bigger accounts. As Allan’s Vending Service was just branching out into that area, they had limited offerings. The family decided to partner with a local deli to provide customers with supplies such as sandwiches through food machines, but the deli’s provisions weren’t measuring up to what the family wanted for its clients. 

“We were getting a lot of inconsistency as far as what we thought the product should be. Especially with my father being a former chef, he tended to be a bit picky about what was coming through,” Scott said.

With Steve’s experience as a chef, the family decided it would be best to open their own commissary instead of trying a different deli. Since the company was still working out of the two-car garage at the time, the family decided to buy a commercial building to house the commissary. Scott and Steve would start making food at 3 in the morning before delivering it through the day’s routes.

“As our business grew, and as we got larger customers, the commissary grew with it. We now employ four full-time and one part-time food preparers,” Scott said.

Allan’s Vending Service offers items including sandwiches, salads and hot entrees through the commissary. It also caters events for its customers. As times change, the company is able to adjust to food trends. For example, with the keto diet, it has debuted a chicken fajita bowl and other keto-friendly choices. The family likes the flexibility of producing the food independently, as that allows them to adjust to clients’ needs. 

“Many times, a company will call and say they are having a picnic or closing down for a period of time and will not need food that week,” Scott said. “We have the control of production, so it is easy to make adjustments.”

He added that, over time, the company has modified its product line. While it still sells chips and candy, which are the biggest revenue producers along with beverages, the company now sells a lot of organic, healthier items, especially in its micro markets. Scott said the company is also trying higher-end chocolates and a variety of locally made products. One of its bestsellers in its micro markets is snack-sized portion packs of smoked Goudas and pepperoni from a local farm.

“We definitely just try to keep up with the trends,” Scott said.

Strategizing in sales

The office coffee service division of Allan’s Vending Service has grown over time. The company brought in bottled water and bought another OCS company in the 1990s, moving the business from 20 percent OCS and 80 percent vending to a nearly 50-50 ratio of sales between micro markets and vending. Scott said the company is now pushing to increase micro market accounts by recommending the service to their existing clients and marketing through wordof-mouth and media advertising.

The company has never had a full-time, dedicated salesperson, as a lot of its competition has been fairly friendly, said Scott.

“Back in the day, everyone would respect others’ territory, to a point,” Scott said. “Considering that we were already good friends with the people who owned the vending companies serving in most of the areas we had potential in, we never felt the need for someone to go out and pound on doors.”

Scott said Allan’s Vending Service’s territory has substantial geographic gaps between clients, so long-distance routes need to include financially worthwhile accounts to warrant the travel required.

“Once you get up in more of the rural areas, I don’t think it’s quite as cutthroat as it might be in the more metropolitan areas,” he said.

Supporting the community

Scott said that while box stores are taking over “mom-and-pop” stores, Allan’s Vending Service has been able to remain an independent, familyowned business. The business sticks to its roots and values, which Scott said includes supporting local nonprofit organizations.

“Our focus is giving back to the community as much as we can, since that’s what’s kept us in business over the years,” Scott said. “We’re very community-driven.”

Allan’s Vending Service contributes to its community by supporting fundraising events, including supporting The Prouty™ athletic charitable challenge for cancer research as a major sponsor. The business also helps fund playground projects and other support for youth.

Success in foodservice

Following double percentage growth in the late 1990s, the company outgrew its facility in New Hampshire around 2001. Scott credited the commissary with bringing in larger accounts, as all the area vendors have the same equipment and shelf-stable foods.

“Our food was our biggest selling point,” he said.

The family found a building just three miles away in Vermont, and for a better deal than what they had seen in New Hampshire. The Vermont building, which they are still in today, had been partly constructed prior to their purchase, and they were able to customize the interior to suit their needs. The family was able to design a larger service shop with walk-in coolers and freezers they didn’t have in their older warehouse. They were also able to add more commissary equipment, such as commercial mixers, convection ovens and larger food prep areas, as well as packaging and labeling equipment. The commissary is now housed in the same building as the rest of the company’s operations.

Scott said their territory has remained largely the same over the history of the company. They have been able to service companies since their beginnings as just a handful of people a few decades ago that have now grown into companies of roughly 1,000 employees.

He said one of the achievements he is most proud of is the company’s ability to withstand economic recessions.

During most of the tough times clients experience, they have been able to keep working with Allan’s Vending Service.

“We would cut back on machines if needed and just kind of roll with their flow,” Scott said.

Sustaining a team atmosphere

Another one of the company’s successes is its formation of strong relationships with its employees, which has been witnessed through employee retention, Scott said. “We’ve been lucky enough to have people with us for 20, 30 years,” Scott said.

He said the family has run its company as its own sort of family, with an emphasis on unity instead of titles.

“We’re all one, basically,” he said.

He added that the company makes an effort to be very accommodating to its employees by being flexible in route scheduling, especially when a parent needs to pick up his or her child from school. Scott said these efforts are mirrored in how employees treat each other.

“They all basically cover each other’s back,” he said.

For example, when an employee cannot take a route shift, he or she tends to give advance notice to the next person lined up for the route.

“They really work very well as a team,” said Scott.

Scott added that when an employee shows interest and effort in the work, the company will also try to move the person up in the company. 

“I think you’ve got to be innovative and come up with incentives in this environment with unemployment close to zero,” he said. “I remember years when we would get 60 to 70 applicants for a job, and now they will trickle in two or three at a time.”

Emphasis on customer service

Scott is also proud of the company's history of customer service. Staff respond to clients’ service calls within an hour, and if a client should run out of stock, the company strives to do a major refill the same day.

“I’ve gone out on weekends to deliver to restaurants when they’ve misjudged their stock,” Scott said. “We try to just go above and beyond.”

One of Scott’s favorite aspects of the vending business is working with customers, and one of his favorite memories is how the company was able to help a veterans’ hospital account on Christmas Eve. He recalled the appreciation people showed when they saw that his company had come in to help.

“That instance stands out because of how impressed and happy our main contact was,” he said. “The hospital cafeteria was shutting down for two days, so the vending was the only option. It was only one machine out of 10 that wasn’t working. So they had said they hated to call us, figuring we’d leave that one machine down until the day after Christmas, but we were there to fix it in 20 minutes.”

Vermont’s Meals and Rooms Tax

One of the challenges Allan’s Vending Service has recently had to deal with is the Vermont Meals and Rooms Tax, a vending tax Vermont rolled out in 2015. All items that are sold out of vending machines are subject to a 9 percent sales tax, which convenience stores do not face. He said some customers blamed the vending operators more than they blamed the state.

“We had some upset customers, and we took a good 20 percent hit in sales in the first six months until things started to level off,” Scott said. “But it definitely had a significant impact on the state of Vermont vending companies because most of us aren’t large, national companies. We’re smaller, family-owned operations.”

To keep up, Allan’s Vending Service participated in a NAMA Fly-In regarding the legislation. The company also adjusted prices to cover the tax, watched costs and explained the reason for the price increases to customers.

A future in micro markets

Another topic on Scott’s mind these days is the direction micro markets are taking the industry.

“You’re starting to see more and more [product] offerings, both smaller and larger,” he said.

He has noticed that customers have responded positively to the expanded options micro markets provide in terms of a variety of products, more healthy offerings and the overall look.

“People love it when you take a bank of machines out and put a micro market in. It looks much cleaner, more professional,” said Scott.

He said that the company has started receiving calls for micro markets, whereas in the past Allan’s Vending Service needed to sell the micro market concept to clients.

“It’s the way things are evolving,” he said.

Allan’s Vending Service has succeeded in taking on the challenges the business has encountered over the past nearly 75 years. As it continues to serve customers in New Hampshire and Vermont, it will likely see other changes in the industry – and succeed in adjusting accordingly to ensure it continues to thrive.