Just about 30 miles from the Atlantic Ocean inlet it’s named after, Casco Bay Food and Beverage is headquartered in Lewiston, Maine, nestled in the beautiful state that is known for its rocky coastline and cold winters. Ted Morton, the company’s president and CEO, grew up on the coast of Casco Bay. Niki Morton, his wife, who hails from the Midwest, joined the company as executive vice president in February 2017.
A “die-hard Mainer,” Ted’s grandchildren are the fourth generation of his family that has been in the same school system within the state. His grandfather and uncles were lobstermen, and he grew up fishing in the ocean with his father, going to the beaches and camping on nearby islands.
“I have such a passion for Casco Bay itself – it’s a beautiful part of the state – that we named our company Casco Bay [Food and Beverage],” he said.
The company, which launched in 2008, started out with just two employees. Today, it has 110. Despite the considerable growth, the company culture hasn’t changed, the Mortons say. Casco Bay ardently keeps a lookout for healthier options to provide its customers and employees through its business practices.
A start in technology
Technology is one of the reasons that the Mortons first got into the vending business in 2008, Niki said.
They had just moved back to Maine from Boston to be closer to their grandchildren and Ted’s aging parents. In Boston, he had been working for a real estate investment trust company, where he spearheaded repairs and improvements to high-rise buildings, so he was paying close attention to advances in technology.
“No matter what it is, somehow technology will find a better way to do it,” Ted said.
Upon his return to Maine, Ted started researching the local market, looking for work. He noticed a vending company selling franchises. While he was unfamiliar with vending, he saw the company used an emerging technology that he believed would prove valuable to the overall industry: VendSys, an unattended retail, remote management system.
“Eleven years ago, there were nine substantial operators in Maine, all still utilizing the warehouse truck-style vending. It certainly wasn’t the level of technology it is today,” Ted said. “And I thought, ‘I may not know the industry, but I certainly understand technology and how to move a company forward.’ Utilizing this technology made sense to me, and I knew it could be a profitable venture for us to go into.”
The Mortons decided to purchase the two franchise routes that were for sale, which landed them with 335 vending machines and the employment of two people.
“The company we initially acquired used wireless monitoring technology, so we knew exactly what sold in each machine, what we needed to bring for product and what the machine should have in it for money,” Niki said.
Ted inherited a third route that was within Maine when the parent franchise company went out of business. He quickly had to adjust to working independently within the vending industry rather than relying on support from franchise management. He had to learn as much as possible about it, “almost overnight.”
“Two weeks after purchasing our first routes, I got to work and everybody on the franchise transition team was gone. All of a sudden, I had to figure out this industry that I jumped into without the support of the franchisor,” Ted said. “Looking back, this actually helped make us a stronger company. We weren’t saddled by the paradigms of the industry; we truly looked at everything with a fresh perspective. Ultimately, we knew if we didn’t take care of our customers, we’d be in a lot of trouble. So we figured it out quickly!”
Ted began working directly with VendSys, which had developed the software for the first routes Ted had bought, and for several years had a great experience with the company.
Two years ago, however, Casco Bay made the decision to transition to Cantaloupe Systems, a VMS system now owned by USA Technologies, Inc. that allows the company to use dynamic scheduling and run consolidated reports across all of its platforms. This allowed them to efficiently analyze revenue trends, inventory and all other aspects of the business.
“The report writing functionality in Cantaloupe is very impressive. This reporting is what we believe sets Cantaloupe apart from the other VMS systems. The way they’re able to sort through data and the custom reports we can write are pretty amazing,” Ted said. “It helps us tremendously with understanding the various segments of the company and where to focus our energies.”
On Jan. 1, 2017, Casco Bay acquired its two largest competitors: Canteen of Maine and Pine State Vending. With the acquisitions, the company went from having just under 1,000 vending machines to 3,200 vending machines and 62 micro markets and grew from 19 employees to 120 employees in one day. It added 32 routes and a 5,000-square-foot culinary center. It also became a Canteen franchise.
“[The acquisitions] happened the first full business day of the new year, and we’re proud of the company we have today,” Ted said. “It was, to say the least, a challenge. The first year was a struggle, trying to merge three different cultures. We knew the culture we wanted because it was the culture we had been practicing and developing for the previous nine years, but to get that culture through to our new company of that size, at one time, was an incredible feat.”
The company then switched its focus to Cantaloupe in what Ted termed “a heck of a project.”
The mission in action
“Whenever we make decisions, we always ask ‘How will it impact the families [of employees] we support? If we’re doing a great job, that’s awesome. If we were to make a bad decision, how would that impact these families? And how do we make each one of these teams a little bit better every day?’ That’s part of our mission – helping make people just a little bit better every day,” Ted said. “They take that home with them. They spread that out to society. Our workplace becomes a happier place, a better place to be.”
The company often solicits input from employees who will be most impacted by the daily business decisions it makes and generally holds quarterly meetings to review its strategy. Management will frequently talk with employees who work in the field as they work closely with customers.
“We take that opportunity to solicit that knowledge from them and use that information to help us make our best decisions,” Ted said.
One of the most substantial examples of working hand-in-hand with staff was the transition from VendSys to Cantaloupe.
“We realized upfront that it was a huge change that could cause quite a bit of anxiety among our employees,” Ted said.
As the technology change would likely impact everyone, the Mortons wanted all staff to have a clear understanding of how the changes would improve the company. They also wanted to see if employees had any feedback. That way, the company was able to get some buy-in from employees prior to the rollout.
“We reached across the company to different departments, explaining what we saw as the future of the company, how this new technology would allow us to get to that future, the path that would need to be taken and how it affected them,” Ted said. “To me, it’s all positive effects, but it was a big change, and people generally don’t like change.”
Over the course of a few weeks, they explained to employees what operations adjustments and improvements were in store. Employees were able to recommend how to make the rollout more efficient and share concerns about the changes. Upper management was able to reassure employees and address those concerns.
“We’re really committed to having a great team, keeping the right members on the team and moving them forward,” Ted said.
Casco Bay now runs its office coffee service, vending and micro markets through Cantaloupe. Running quality reports to see the buying trends for the industries they serve is critical, Ted said.
“I strongly believe the future of our industry depends upon us understanding technology and understanding the trends of our customers,” Ted said.
Service for the state
Niki, who joined the company when Ted acquired Pine State Vending and Canteen, has enjoyed seeing the rapid evolution within the industry. She also likes the multifaceted aspects of the industry, which has the business-to-business component, in which operators work with the businesses they have as clients, and the business-to-consumer component, in which operators serve the individual people who are making product selections from the vending machines, micro markets and dining centers.
“No two days are the same because technology is advancing so quickly that it’s really allowing us to dig into the operations of our business and find new, better and more efficient ways to service our customers and our clients,” she said.
As a relatively new professional in the industry, she has also noticed that consumers, in general, don’t always notice the impact of vending.
“I think what surprised me is that people take vending for granted. They just see it as a group of machines sitting in a corner where you can get a beverage or a snack,” Niki said. “I find it surprising that so many people miss the bigger impact those machines have.”
For example, Casco Bay has vending machines in emergency rooms, where family members might wait for hours to hear about the condition of their loved ones and where staff have to eat quickly during long shifts.
“In some cases, sandwiches and entrees in our cold food machines could be the only wholesome meal some of those folks will have in a given day,” Niki said. “We’re really providing sustenance to hardworking Mainers and therefore become an extension of an employer’s benefits program.”
Casco Bay also encourages its employees to become involved in the community. It gives locally on an ongoing basis to certain organizations, like the American Heart Association, Big Brothers Big Sisters and Coffee For Our Troops, a local organization that supports American military troops from Maine who are stationed in the Middle East.
Casco Bay has partnered with Coffee For Our Troops to send snacks, toiletries, popcorn and sundries to these military members in appreciation for their service. In return, the soldiers send letters and pictures.
“We’re putting together holiday boxes right now that will include Christmas lights, stockings, games and snacks, to let our troops know we’re thinking about them,” Niki said.
Filling a variety of needs
Casco Bay has about 90 percent of the automatic retail market in Maine. Its services include micro markets, OCS, dining service, catering and more. It has an in-house culinary center with 10 employees. Clients range from small to large companies and from whitecollar offices to shipyards.
Ted said that while the technique of servicing shipyards, apart from increased security protocols, is much the same as it would be for any other vending operation in the country, Casco Bay has the extraordinary opportunity of providing foodservice on sea trials for the local shipyard. The shipyard, along with the U.S. Navy, conducts sea trials to test all the new Navy vessels, such as destroyers, that are constructed at the Maine shipyard. About 425 staff and crew participate in the sea trials and are out to sea for several days at a time.
“We take generally about 14 to 17 of our team members, load up enough food for about five days, and we provide all the meals and foodservice for the staff aboard the ship during the trial,” Ted said.
Casco Bay assumed the contract with its acquisition of Canteen of Maine, which had previously serviced the sea trials, and it has since expanded the relationship. The company is now the only one in Maine to provide foodservice during sea trials.
Unlike catering on land, the company must be certain it has enough food and plan ahead to be prepared for any adverse conditions – such as 20-foot waves that could toss the ship around – that could impact foodservice. Regardless of any rough conditions that may occur, the company still has to produce meals for the crew.
“Once you’re out to sea, several hundred miles out, there’s no walking down to a store,” Ted quipped.
Back ashore, the company has begun to expand upon its delivery of OCS and micro markets. The company hired a salesperson and a marketing associate to promote its OCS options. The Mortons have noticed while monitoring national trends that consumers, especially millennials, are demanding higher-quality, customized coffee, such as bean-to-cup.
“Based on what we knew about office coffee, there certainly was no reason we couldn’t branch out and try to capture that market and fill that need of our customers,” Niki said.
With Maine’s rural nature, it has less population density than many other states and therefore has less of a need for micro markets since there are fewer large-size companies in the state for Casco Bay to service. For its 62 micro markets, Casco Bay provides a retail business with a push toward healthy food and sustainability. Niki said the company makes most of its own fresh food in its culinary center, using whole grain breads, fresh vegetables and lean meats. The company is also the state’s only distributor of the Bevi smart water dispenser, which eliminates plastic water bottles going to landfills.
“Society is moving towards healthier eating and we’re there to provide these options for our customers,” Ted said.
Casco Bay also sells electronics, toiletries and other items Mainers definitely need, like windshield wiper fluid in the winter for customers’ vehicles. Aspirin, antacids and cell phone chargers are among the non-food items that have sold well.
“Micro markets have been tremendous for the industry. We all know that, as over the past six or seven years there’s been an enormous influx to the market,” Ted said. “It’s a much better experience for the customer. Customers can check out multiple items at a time, spending less time waiting in line to pay. As we keep evolving the micro market system, it’ll become a stronger segment in the industry.”
Embrace the trends, technology
The Mortons encourage other vending operators to continue embracing technology and reviewing trends. As the company has few vending operator competitors remaining in the state, it looks to the trends in the convenience store industry and in vending in other parts of the U.S. to see what’s ahead.
Once operators see trends that they can act on, they should act quickly, Ted said.
“We make informed decisions, but we make them quickly and move forward,” he said. “You can make a few mistakes and correct those, but you can’t wait forever to make a decision because by the time you make it, the moment has gone by and you will have missed that opportunity.”