Read For Success

July 27, 2017

One of the things I've noticed in my years of writing about the industry is that there is no right way to run a business. There are many successful vending, micro market and office coffee service operators, but no exact blue print for maximizing profits and minimizing losses. It would be great if there were, but there are too many regional differences to make that a reality.

Regions and people differences

Regional differences might apply to an area of the country, such as the reaction to coffee in the Northwest. As the birthplace of Starbucks and other coffee chains, the coffee culture is much different than other areas. Therefore, office coffee service is affected, never being the huge growth area, at least for coffee specifically, that it can be in other parts of the country.

Often even dividing the US into geographic regions isn't enough, however. What works best in an operation is even more dependent on the city the operation services, the local economy, the tastes and preferences of the location's employees, the population of the area, etc. And all this changes over time. The industry doesn't look the same as it did 10 years ago, and in some areas the strong revenue generating segments have changed.

For example, in the August issue of Automatic Merchandiser, you will read about an operation that was mostly vending 10 years ago. In 2017, half of the medium operation's annual revenue actually comes from dining, including workplace cafes, catering and onsite foodservice (non micro markets). The founders looked at their area and what was working and then invested and adapted their business, hiring chefs and opening a commissary. They continuous have an eye on the outside, looking for new ideas they can work into their business, getting ideas and gauging the success of technology or other new services from the stories of others.

In fact, each operation profile brings new concepts and new ideas, as well as tried and true business processes that can be attributed to the most successful operations. Some of the interesting differences include putting solar panels on the warehouse to save on power, going 100 percent to micro markets and selling vending, roasting coffee in-house, adding more pantry service to OCS including hiring Baristas to make coffee at customer locations each morning. In each case, the business was adapting to the needs and wants of the area, focusing more on what worked, but never satisfied with business as usual.

Why it matters

With things being so different depending on the area you serve, what really is the point about reading about or talking to other operators? To start, not all the business is that different. Some of the similarities include always looking outside for ideas, at other operators, competing eating locations, retail merchandising, trade shows, etc. Another is regular meetings of executives. In nearly all of the successful operations I've written about, there is an emphasis on discussing what is going on across the business on a regular basis, weekly or even daily. This is often supported with reports generated by technology, but not always. The unifying element is an emphasis on discussion and hearing from all the departments and segments on sticking points causing frustration in the warehouse or on the routes, what is happening in the field as far as hiring or lay-offs, what new promotions are the local fast food or convenience stores running, etc. It's not just about bottom line sales.

The differences are also important. Reading or talking to other operators offers the opportunity to get ideas and understand how other people overcame challenges or experiment with new concepts within the channel, such as bringing cold brew into locations. Some operators use kegs, while others have launched it using pitchers and cold brew packs, while still others offer it solely as a ready-to-drink option. Admittedly, not everything an operator across the country does will work in your area, but some of it might. Hopefully it inspires anyone reading to step back and take a look at what they could add or change in their own business to drive revenue and remain relevant as the industry continues to evolve.

About the Author

Emily Refermat | Editor

Emily has been living and breathing the vending industry since 2006 and became Editor in 2012. Usually Emily tries the new salted snack in the vending machine, unless she’s on deadline – then it’s a Snickers.

Feel free to reach Emily via email here or follow her on Twitter @VMW_Refermat.