Family Ties

Aug. 14, 2020

St. Joseph, Mo. has a rich history. Located on the Missouri River in the northwest area of the state, the city once served as the starting point of the Pony Express in 1860. St. Joe, as the locals call it, is also where famed outlaw Jesse James met his death in 1882.

St. Joe’s Acme Music & Vending Co. is a long-running family business that is still going strong. Founded in 1938 by current president Thomas Cobb’s parents, Acme started as an amusement game company and eventually expanded into full-line vending, micro markets and, more recently, office coffee service (OCS).

“We are one of the few businesses that started 83 years ago that is still here, and I think that says something about us,” explained Michelle Cobb, CFO at Acme, and Tom’s wife. “It makes me proud. I’m glad that we are all here together, working towards a goal every day to service our customers and our community.”

Expansion into vending

Tom Cobb started working at the family business in 1970 after he graduated from college.

“I came back [to St. Joseph] and went into business with my mom and dad, and we ran the business as solely an amusement game company,” Tom recalled. “We grew it to the point that we had large market share.”

By the mid-80s, Tom and Michelle had two young sons. Hoping that they would someday join the family business, Tom grew more interested in expanding Acme.

“The amusement game business wasn’t large enough for us to support three families, so the vending business was a logical place to expand,” Tom said. “About the time I was having those thoughts, a local longstanding vending company gentleman had called me and asked if we’d be interested in getting in the vending business, and we purchased his business. That was really the reasoning behind getting into vending: to diversify and grow the business.”

Acme continued to acquire other vending operations throughout the years, eventually becoming a Canteen franchise in 2009. Tom says that Canteen introduced Acme to the concept of micro markets when he and his general manager, Dave Rich, attended a regional Canteen meeting.

“Canteen did a presentation about micro markets, and we looked into it and thought it was a viable concept,” Tom explained. “Back then, we all were trying to determine an application and where you would put these, and of course that’s all changed dramatically with the addition of going into smaller employers.”

“I remember seeing Tom hopping on the plane on the way back, and at the time, 250 [employees at a location] was the low number to put these markets in,” Dave added. “So, we were thinking in our small town here that we might have eight or nine markets, and here we are now hitting 40, so it has changed a lot. Now, to have a market, you don’t need to have 250 or more [employees].”

Dave said that the addition of micro markets in larger locations had such a positive impact on sales that Acme started transitioning some of their smaller vending accounts into micro markets early on.

“We started setting the markets, and we’d seen the increase in sales — every market we’ve put in has at least doubled in sales — so we thought it was a no-brainer to take a look at some of our other locations where we had vending and put these in,” he said. “At smaller locations, it allows us to have one machine and one cooler there, and we’ll put in some food items including salads and fruits.”

“It gave the company the chance to give smaller locations more variety with less equipment,” Michelle added.

Tom said that selling fresh food through micro markets offered new opportunities for Acme.

“People are hesitant to buy a sandwich that is behind the glass in a traditional vending machine versus having that same sandwich in a micro market cooler that they can open up and reach into, touch the sandwich and look at the nutritional data. They’re more likely to purchase that,” he said. “A lot of the [sales] increase that we see is with the food. So, people are more likely to buy the food if they can look at it and touch it. We’ve been fighting that psychological problem for many decades in the vending industry. The micro markets alleviate that.”

The diversification was so successful that Acme was eager to expand further. Three years ago, the company purchased two office coffee businesses.

“One of the companies we purchased was a business that had been around for a long time,” Dave explained. “We have been updating equipment and our overall service with these clients for the last year or so. Moving forward, we are wanting to expand our OCS business in a couple of ways.”

Dave said that the company hopes to grow water cooler and OCS business throughout all of its vending and micro market accounts. He noted that some of these accounts currently have other water and coffee service providers and sees an opportunity for Acme to offer contactless options — especially important in light of the COVID-19 crisis — and mobile payments to ensure a safe experience at all their locations.

“We know with COVID that we are going to be asked about options for providing contactless and reduced contact experiences for our clients and customers,” he said. “All of our markets are with 365 [Retail Markets], so we are going to really promote mobile pay. We are looking at cellular phone applications for our bean-to-cup.”

The challenges of COVID-19

Acme covers a 60-mile radius around St. Joseph, which has about 80,000 residents, serving customers in Missouri, Kansas, and Nebraska. Dave said that roughly 70% of Acme’s business is traditional factory locations, but the company has a diverse customer mix that also includes educational institutions, healthcare facilities, offices, and correctional institutions. Like most operations, the COVID-19 pandemic negatively affected their vending, micro market and OCS business.

“We were down about 30%; we had a few larger clients that stayed open but would not allow us to come in and service the locations,” Dave explained, noting that the hospitals, nursing homes and a federal prison account experienced large drops since visitors have been prohibited since the beginning of the coronavirus pandemic.

Tom said that some of Acme’s industrial manufacturing clients rolled out significant restrictions due to COVID-19, and the company’s office clients instructed their employees to work from home. And while the vending, micro market and OCS accounts experienced a downturn, the amusement game business ground to a halt.

“When the COVID restrictions hit, [the amusement game business] went to zero immediately,” Tom said. “They shut down all the bars and restaurants within a few days, so that income went to zero.”

Both vending and amusement business has started to pick up, and Tom is optimistic that this upward trend will continue.

“Things are better now; bars and restaurants have reopened, and the restrictions have mostly been lifted, with some phasing,” he said. “And, we have people coming back to work in stages at different locations.”

Tom added that at the onset of the pandemic, Dave implemented procedural methods for the entire company to follow to prevent the spread of COVID-19 in Acme’s facility and in their clients’ locations. The company’s measures include taking each employee’s temperature daily, sanitizing equipment (vending machines, keypads, touch screens, etc.) and instructing drivers to wear gloves and masks.

“Dave sent out emails to all our clients with a detailed description of what our COVID practices were going to be,” Tom explained. “It gave them confidence that we weren’t just bringing people into their place of business who weren’t conducting business in a safe and thoughtful manner.”

Technology drives business

Tom said that Acme embraced all forms of technology across the board, starting with credit card technology, which they began implementing over 15 years ago in all accounts that had cell service, except correctional institutions.

“A long time ago — from a regional Canteen meeting again — Dave and I were made aware of the application for credit cards on vending machines,” Tom explained. “We both saw the direct benefit in credit card installation in our sales, and we started putting them on every machine, everywhere. We have 95% deployment of credit cards, and it’s been a very big help to our business.”

Tom said Acme uses LightSpeed to pick and Gimme handhelds for the route drivers, and that they are currently running Streamware in parallel with the Gimme VMS, which they installed earlier this summer. Acme’s relationship with Gimme started at The NAMA Show in Vegas five years ago; Dave said that Acme was having trouble with the handheld system they were using at the time, and Gimme supplied a workable solution.

“I met Gimme and I liked what they had to say,” Dave recalled. “They flew in the following week and showed us what they had on the handhelds, so that was the beginning. We started using their handheld system. At the time, we had a few of our older drivers that were hesitant, but once we implemented it, they came and told us that it was probably the best thing we had done for them. So, now we’re running Gimme’s VMS in parallel with Streamware, but we’re not completely switched over to their VMS system yet.”

“The Gimme iPad installation for the drivers five years ago was one of the easiest transitions we had ever made with any piece of technology,” Tom added. “The training that they provided was superior, and as Dave said, we had almost every driver come up and say, ‘This is the best thing that you have ever done for me to make my job easier.’ It was just a really good move, to get rid of all the old technology and embrace the new technology with Gimme. They will do the same thing with the VMS program as well once we get past the testing stage.”

A family legacy

Acme’s involvement in the community extends beyond strict business. Dave is currently on the board of Missouri’s vending association, Tom has served on the board of the state amusement game association, and Acme has supported area charity organizations for decades.

“That’s part of the business as well; we try to give back to the community because the community gives to us each day, Tom said. “We try to keep that mindset in the forefront of our thinking.”

Running a family operation is especially important to Tom and Michelle Cobb, and they treat their employees as part of an extended family, united in service to their clients.

“What makes our company unique is that we are all representing a company that has been in business for almost 83 years. We have family involved, and Dave has been with us long enough that he is a third son — I have two sons biologically and Dave is my third,” Tom said. “We have very low employee turnover — we have people who have been here for 40 years. We treat people and their families with respect. Obviously, that employee retention is very, very important. It really travels from Dave, the GM, down through all of our employees.”

Dave has been working in the vending industry since he was a teenager. His father worked for Canteen, and he started with Canteen in 1983. He’s worked with the Cobbs at Acme for 18 years. One of his favorite things about his role in this industry is working directly with customers.

“The interaction with the customers — I would miss that if I didn’t have that,” Dave said. “I’ve gotten to know so many people over the years and have become really good friends with a lot of my customers. Working with Tom and Michelle, it is really like a family here. The people are the most important thing to me, and taking care of them.”

Michelle came from a corporate environment 30 years ago to work with Tom at Acme, and while that transition was initially difficult for her, she loves working at a family business that has been in St. Joseph for several decades.

“You do get to know everybody, and it’s nice to hear stories about Tom’s mom and dad, and it’s great to hear stories about Tom,” Michelle said. “People have known this family for years, and that gives you a sense of pride that you’re doing something good for your community and you want that to continue on with your family. I think that’s why we don’t have turnover of employees; we treat everybody here like family and nobody wants to leave. They enjoy coming to work every day. Some days can be really stressful — because, we are like family and we get mad at each other — but we all love each other.”

“Closely held family corporations offer their own set of dynamics, of course,” Tom added. “For me, it’s about being a second-generation business owner and having my sons be third-generation and preserving the legacy that my parents worked so hard to establish and maintain. The sacrifices they made every day for the business were very important for our family, and for the industry.”

Tom enjoys being able to come to work every day with this wife and sons, and with Dave and the rest of Acme’s employees.

“For me, it’s knowing that we’re servicing a wide variety of customers and taking care of those folks every day,” he added. “And we do it with 24/7 service. We never close. That’s the thing that separates us: the service.”