Should Operators Be Optimistic?

May 22, 2019

Following an overwhelmingly successful 2019 NAMA Show, where the vibe was clearly optimistic, I asked some additional industry “heavyweights” if they felt the optimism was justified.  While they all agreed that these are good times for operators to be in business, a bit of caution was advised as the industry moves ahead.

 “Let’s face it,” said Judson Kleinman, Founder and CEO of Corporate Essentials, “The economy is doing well, we are at historic levels of employment, wages are up, people are spending money, businesses are growing and employers understand how important it is to invest in their employees.  It is important to position your company to be a part of the strategy of how companies are going to put a plan together to attract and retain employees.”

Challenging business climate

While the industry is well positioned, Kleinman said that the current business climate is more challenging than anything he has seen in this 30+ years.  “You need to be more in tune to what’s happening in the marketplace and you have to be able to deal with those challenges,” he said. Kleinman points to new equipment, new technology and new products that clients are demanding, some of which, operators are not always comfortable with.

“You need to spend money today. You need to invest in your business – people and technology - or I think you will be in trouble from competition, whether it be Amazon or other operators,” said Kleinman.

Josh Rosenberg, President and CEO at Accent Food Services, warns operators not to be overly optimistic, suggesting that some are not able to “see the train on the tracks” with broader competition for our services, profit dilution due to upfront payments/commissions, and significant cost increases in our channel.  “That said,” added Rosenberg, “Tools and consumer preference leave us well positioned to become a preferred retail outlet if we don’t screw it up!”

Technology - a key factor

Elyssa Steiner, Director of Marketing at USA Technologies, said that the vibe on the convention floor was optimistic and points to technology as a key factor. “I think that operators are really starting to leverage technology not just to better their business, but their lives as well. The conversation isn’t so much about telling them why they need technology to automate their business, but rather, it’s about which product is the right fit for you as you grow and the complexities of your business change,” said Steiner.

Steiner said that operators are adapting to consumer demand as they see their businesses evolve. “I had one operator tell me that they just do so much more OCS then they ever used to and with their growth in micro markets, they really needed a platform that can help them in all aspects of their business. I had another operator tell me they are doing more pantry service now,” said Steiner.  “Operators aren’t just vending operators anymore; they are unattended retailers and they see that.”

“As more and more things move to unattended, I think we will continue to see optimism in our space,” she added.

Peter Fetherston, CEO of Canteen, agrees that the industry vibe is positive overall, primarily due to the prospects for continued growth enabled by technology. “These innovations are transforming our business in ways that very few could have predicted 10 years ago, and I believe the optimism is fueled by the potential for what is yet to come,” said Fetherston.

Focus on service

Kleinman believes that operators need to focus on service and differentiation from competitors outside our industry, or everything we do will simply be commoditized.  “If you are asking the client to do all the work, why do they need to order from you?  Let them run their business while you provide the service.”

“You can maintain your business keeping it the way it has always been, but to grow, you need to evolve your business.  Clients are more demanding, they know what they want, and they know when they want it, so you have to adjust your approach,” he added.

Importance of NAMA

As Kleinman notes, some operators fear the changes that are required to compete successfully today. He said he has operator friends who tell him, I can’t make these changes, I’ve always done it this way.  “That’s where industry organizations like NAMA are becoming increasingly relevant, providing a platform to help operators navigate the changes as their businesses evolve,” he said.

Clearly, what has not changed over the years, for operators large and small, is the importance of staying connected to the industry and listening to your customers.  Operators who isolate themselves or refuse to adapt, will only see erosion of their sales from companies like Amazon and trendy snack delivery services.  Listen to your clients, understand their needs and deliver solutions.  With that philosophy, there is plenty of reason to be optimistic


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