Why We Look At Trends

May 28, 2015

Often I hear vending, micro market and office coffee service operators discuss one of two customers. One is the customer that is driving growth in a new or previously small segment of business. The other is the core customer, who makes up the bulk of the operation’s revenue. Both customers are important, but the really innovative operators focus on the new segments, and they have a very good reason.

New segments are tomorrow’s core

To really benefit from a trend, you must know about it ahead of time. That way you can have the proper products (or service) before the majority of customers demand it. That is why large retailers and successful quick serve restaurants spend huge amounts of money on research to look at how the consumer taste is evolving.

Look at Target, the national retailer. According to the Wall Street Journal, it told its major food suppliers that it will be opting for less processed, prepackaged foods and instead be focused on adding fresh, locally sourced and natural items. This will be a big change because it affects some very large consumer packaged goods companies and lots of sales volume. You can bet they didn’t make this decision on a whim.

News from the convenience store industry echoes the move by Target. In a recent recap of the 2015 Sweets & Snacks Expo, CSP Daily News reported that mid-size brands are getting a disproportionate amount of the consumer’s dollar. Almost half of that growth is from Millennials. The overall message was that consumers aren’t drawn to large name brand companies, or small companies, but are instead making more of their food, beverage and snacking decisions based on other factors. Healthier items are at the top of the list, which can mean fresh, less processed, organic, no artificial additives, low-calorie or the latest “hot” ingredient that promises extreme healthy benefits.

Strike a balance in vending

With the limited number selections possible in a vending machine, it can be difficult to rationalize placing healthy or new items. It is important, after all, to meet the needs of your core user – the one buying candy or salted snacks. The same argument can be made for office coffee service. The main customer wants frac packs and pour over brewers, why look at specialty drinks or new sweeteners? However, it is this strong core that financially supports the testing of new products. The time to experiment is before the shift in consumer preference. That means its now – while you are still meeting the demands of 80 percent of your customer, it’s time to look around at what other food establishments are doing. What is the preference of the consumer coming into the workforce? What will encourage business from the consumer that will soon be promoted into a leadership role where he or she can make a decision on vending and coffee service?

Look for trends in your own data – the category that is growing fast, but might still be a small percentage of overall sales. That’s a sign of a changing consumer. And don’t be afraid to try new things. If you have micro markets, try some of those products in vending. It’s all about balancing service of the existing customer while experimenting to find just the right line of products for the new customer. That is what will keep the industry innovative and relevant for the next generation.