Balancing Act

June 25, 2018

Healthy has become a buzz word in the food world. From a growing number of consumers to human resource managers, nutrition and wellness are getting more attention in the break room. It has helped businesses like Patrick Connaughton's, which balance offering tried and true snacks and drinks along-side healthy counterparts. He even put healthy in his company name, Cleveland Healthy Micro Markets. A one-person operation with 10-micro markets based in Cleveland, OH, Connaughton has learned a lot since he started his business. He is at the size where he wants to hire at least one part-time employee so he can grow his business, especially the idea of bringing new and delicious healthy items to workplaces around Cleveland.

Road to independence

Connaughton has always been a salesperson. For most of his career, he worked for an online learning company that specialized in delivering technical skills and compliance learning in the gas and oil industries. However, three years ago, his employer was bought by a Houston, TX-based company, which wanted him to move from his home in Cleveland to Houston. Connaughton didn't want to leave his family and friends, so decided to start a business.

When considering a business that appealed to him, Connaughton thought about his own preferences. "I eat healthy and exercise," he said. "I noticed healthy was trending upward. I thought I could make a business from the idea of healthy eating."

A desire to provide healthy food and drinks led him to the healthy micro market business "At the beginning, I didn't know what I didn't know. Looking back, I would have done some things differently, but ultimately it's led me here, which is a good place," said Connaughton.

Efforts in food safety

Providing micro markets in Ohio means Connaughton has some of the strictest micro market regulations in the country. From technical drawings for the break room area to food licensing fees and inspections, it costs him $300 to $500 just to get a license for each micro market he installs. Part of the installation means a cooler that will automatically lock if the temperature becomes too high for a specified length of time. He uses the TriTeq FreshIQ electronic cooler lock, which can be installed to any cooler and meets the strict health department requirements in Ohio. "It works very well," said Connaughton.

He is also planning to test TriTeq's newest aftermarket lock, which will require users to make a purchase before the cooler unlocks. "There is one location I have where the theft is a bit high, maybe 5 percent, and I would like to address that in some way," said Connaughton. He is hoping that by having the purchase happen first, it will reduce the shrinkage but a cooler still offers more room than a vending machine.

Niche in medium locations

Most of Connaughton's locations are between 125 and 135 employees. "It's a good size for me. If the location is too big, they usually have a national contract or a cafeteria," explained Connaughton. "If they are too small, the volume just isn't there." What surprises Connaughton the most about his locations is that he can't anticipate sales. "Some of my smaller locations do a lot more sales than larger locations," he admits. "It is really difficult to tell based on industry or number of people how well the location will perform." This is true for both traditional products and items considered healthy.

Micro market makeup

Connaughton likes to provide healthy items and makes every effort to bring great tasting options to the table. He usually goes to specialty stores in his area looking for what is new and trending in the healthy arena. He then tries to find those items from a distributor, so he can offer them in his micro markets. "I work mostly with UNFI and Vistar," said Connaughton. UNFI carries many of the alternative products considered healthy that aren't available elsewhere. Connaughton will also supplement his orders by getting unique items at big box stores.

Connaughton aims for healthy, but is the first to admit that the definition of healthy is different for everyone. He segments items into three larger buckets: tradition, healthier, and healthy, but doesn’t analyze each group for consumers. He leaves it up to his micro market patrons to make their own choices based on their nutritional needs.

His best-selling products in the healthier and healthy-segments include: hard boiled eggs, yogurt, fig bars, raw ingredient healthy bars, bean chips, pumpkin seeds, edamame, natural jerky, tuna kits, lightly carbonated and sweetened sparkling juices, sparkling waters, and small bags of cookies and crackers made without refined sugar or chemicals. (see sidebar) Many of his items are from national brands, which sell better. "People like brand names," he said. He has tried many types of oatmeal, for example, but the well-known brands sell the best, regardless of ingredients.

Mixing it up

While healthy is always part of his micro markets, Connaughton isn't ignorant about the popularity of traditional products. "This is a volume business. A lot of volume comes from more traditional items," he said. He also gets asked to include the tried and true snack and drink options by the facility managers and human resource professionals he works with when installing a micro market. "These people are sometimes worried about a revolt from employees," joked Connaughton. He finds that in reality the decision makers what to encourage healthy eating choices, but also meet the demands of the workers at the location, which includes indulgence options.  

There are locations that skew more towards healthy, however. At those location, Connaughton sees that the consumer is willing to pay higher prices for specialty products. "Where people read labels, they will spend more on healthy items, such as $3 on a completely raw health bar," he said. The difficulty is in trying to look at a location and determine the type of consumers who are on site. So far, Connaughton hasn't had much luck predicting the type of location he will have. "It's a roll of the dice," he said. Because of this, Connaughton has a basic mix of products and then uses technology and feedback to optimize each micro market. "I start with a basic set and ask the location for any guidelines. Then I tailor it in the following weeks based on requests and sales," said Connaughton.

Opting for shelf-life

Food is an area Connaughton has changed since he started his company 3 years ago. "When I began I was getting food from a local restaurant," he said. "The problem was in one week, I would sell 10 sandwiches. Probably could have sold 15. The next week, I threw out 10 sandwiches." The short-shelf life of the products made it even harder to manage the inconsistent demand from consumers. "Those sandwiches had only a two day, maybe three day, shelf life," he said. "It was really hard to manage inventory."

Now he supplements his food items -- sandwiches, salads, etc. -- with premium prepackaged items from food manufacturers who can offer a longer shelf life on the items. To maintain safe food handling from warehouse through delivery, he uses a mobile refrigeration unit for food items. The items are stored in the unit in his warehouse, and then the unit is put into his delivery van each day when he restocks the micro markets.  

Connaughton enjoys this new industry, but he is planning to evolve his company. "I would like to spend more time growing my business than maintaining it," he said. "I have visions of really cataloging healthy options and doing tastings to bring new products in front of people." He hopes to find up and coming healthy items and travel to the different locations with them, offering free samples. "People won't spend a lot on something they are unsure of, but once they taste it, I find they usually will pay the higher price," said Connaughton. In the meantime, he will continue to create the balanced product offerings his customers want and use technology to promote them. All the while, bringing healthy front and center.