Micro Markets Drive Business Forward

June 24, 2016
Specifically, 70 percent of revenues for this Ohio vendor are from micro markets, helping him accelerate his recovery from the Great Recession and come out on top.

"That will never work." This was the first thought Todd Plassman, president of Maumee Valley Vending Co. in Defiance, OH, had when he was introduced to the micro market concept four years ago. He felt that micro markets would need such a unique location to succeed, and that in most places, theft would be much too high. In 2016, however, he has come a long way from that initial apprehension. The company has added an astounding 150 micro markets since 2012, doubled revenues per route compared to vending and doubled its employee count. Thanks to healthy fresh food offerings, a strong promotions program and attention to area treatments, customers in the tri-state area of Ohio, Michigan and Indiana are asking for the micro market breakroom concept as fast as MVVC can install them.

“We are very pleased with how our business is going,” said Plassman, who works alongside his sons Jordan and Jacob at the thriving family business.

Employee turned owner

MVVC has been around since 1946. Donald Plassman, the father of Todd, worked at the company as the general manager for many years in the early days, running the business for the original owners who lived out of state. When they were ready to retire, Donald was an obvious successor. He knew the business, customers, area and was dedicated to seeing the company succeed. Donald and Robert Bostleman bought a controlling share along with Donald’s sons, Todd and Scott in 1997. The two boys joined their father as everyday employees until health problems prompted Donald to sell the company to them in 2000. Todd eventually bought out Scott and has carried on the tradition of bringing in family to help. He brought his own sons onboard: Jordan Plassman in 2011 and Jacob Plassman in 2013. “I really am thankful I’m able to work with my boys,” said Plassman. “It’s been a real benefit to have them. It takes some of the burden off me.”

While the burdens of a rapidly growing vending operation can be challenging, Plassman much prefers them to the bump MVVC hit in the Great Recession. His employee number had dropped to below 50 and things were bad. “We removed 15 large accounts that closed within 12 months,” said Plassman remembering. He and his staff kept at it, and as the recession ended, business began to tick up. Once the company started placing micro markets, enthusiasm for the business snowballed. MVVC currently employs more than 90 individuals from the warehouse to the office staff. Since micro markets require prekitting, Plassman discovered a strong need to bulk up warehouse staff and currently employs 15 people in that area. Staff in the commissary has also grown, as the fresh food sales have increased with micro markets. In the office, Plassman has hired staff to manage the promotions, both implementing them and tracking the special products. “We’re very fortunate to have great people around us — and they wear many hats,” said Plassman, recognizing those that work at MVVC. “That helps us pull all this off,” Plassman acknowledged.

MVVC launches micro markets

It was only four short years ago that MVVC launched its first micro market and experienced a superior level of growth. In 2012, Terry Miller, general manager at MVVC, began talking to Plassman about the micro market concept and its potential in their area of Ohio. At first, Plassman was skeptical. “Common sense told me you’d get robbed blind,” laughed Plassman. However, after months of discussion, Plassman finally agreed to try it.

One of their longtime customers might be open to the concept, Plassman knew, so he set up a meeting. The location agreed to try the concept, but had stipulations. “They wanted to keep the vending machine too, just in case,” remembered Plassman.

MVVC installed an Avanti Markets micro market and waited. After the first day, the company was pleased with the market and told them the vending machines could go. “It was amazing,” said Plassman.

Part of the appeal was the increased selections. For example, the location had 30 beverage options with the vending machines. With a micro market, that went up to 74 different options. “People just loved it,” Plassman said. He realized just how much employees and customers enjoyed the concept, which has led to the company’s current micro market focus. Roughly 70 percent of the company’s revenue is driven by the micro market segment, with the rest being vending. “I would rather do micro markets,” he admitted, “because I know customers will be so much happier with a market.” Plus, he adds that maintenance costs go down because many issues, such as a kiosk problem, can be fixed remotely with a reboot from a cellular phone.

Promotions offer big benefits

“We do a lot of promotions,” said Jacob Plassman, micro market buyer. It helps MVVC take advantage of special offers from manufacturers as well as create excitement in the micro markets. According to Jacob, the most popular promotion is the “Buy 4 and get the 5th free”. Micro market customers must use their market card to take advantage of the program, which also helps lower cashless transaction fees and increases the information the company knows about each micro market location.

MVVC also runs promotions on social media, especially Twitter. “That creates customer enthusiasm,” said Jacob. Quarterly, Jacob will take advantage of the aggressive marketing deals USG has developed with suppliers and manufacturers. “USG facilitates the deals and promotions, and then we carry them out,” he said. “They have been very helpful.” There are always kiosk commercials running, advertising the specials and shelf danglers, which are available from USG.

Promotions are constantly being changed and reviewed by staff in order to keep them fresh and ensuring MVVC can take full advantage of rebates and special pricing offers. Promotions also keep customers engaged in addition to keeping pricing low.

Healthy is more than lip service

MVVC has made a commitment to offering an abundance of healthy items in its micro markets, and it is paying off. Jacob notes that now there are plenty of healthier items available from larger manufacturers. PepsiCo’s healthier product promotions have been very popular and many of the Dr Pepper Snapple items that fit this category work very well in the Buy 4, get the 5th free promotion. Jacob says that large manufacturers are being much more proactive with healthy items.

Just as successful as healthy snacks, is the cutting edge food made by the MVVC in-house culinary department. “We make sure the culinary staff is constantly looking for different ways to present healthy options,” said Jacob. Some of the best-selling food options in MVVC micro markets are salads — with a different one presented each day — along with yogurts, fruit plates and veggie trays. While fresh and healthy ingredients tend to be more expensive, Plassman stated, “We have actually experienced less returned food. In micro markets, putting in healthy foods makes our returns go down.” Each micro market is licensed to state and federal rules under a foodservice license.

Flex micro market technology

The Maumee Valley Vending staff is looking forward to seeing where micro markets take them in the future. “Hopefully we are not close to saturating the market,” said Jordan, micro market manager.

With the adaptability of the micro market design, layout, and the reporting capabilities based on data, he sees the micro market concept as being extremely flexible for large locations and small, in the long run. “I can see how it would be profitable,” Jordan said, about locations with 75 employees with the right demographics. Right now, he is aiming to keep revenues per route at least $80,000 per month, a good average, which almost doubles many of MVVC’s vending route revenues.

“I never thought I would see anything like this in my lifetime,” said Plassman. “The growth has been unbelievable, but more importantly, our customers are very happy with the change.”

As the Plassman family looks to the future, they plan to expand their micro market segment futher, as well as continue to excite customers with special promotions and create new, healthy menu options in their commissary.

Operation Profile: Maumee Valley Vending

Owner: Todd Plassman and Robert Bostleman
No. of Employees: 90+
Micro market provider: Avanti Markets
Annual sales: Not revealed


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