One of the key take-aways from the 2017 CoffeeTea&Water show was that OCS providers are repositioning themselves. They don't just sell coffee and provide the commercial grade machines to brew it. They don't just sell coffee (and brewer) service. In today's environment, the successful OCS provider has to become a consultant with solutions (or at least have partners that can provide solutions) to the specific needs of the location, including improving the company culture, rewarding employees, driving up productivity and retention, and assisting in wellness programs. This might seem like a tall order for the industry, however, forward-thinking operators are meeting these needs and finding them a lucrative piece of the business.
One well-attended CTW session focused on transforming a break room into a workplace cafe. Greg McCall of Five Star Food Service described how the company has taken advantage of the tight labor market, becoming a partner to locations that want to encourage employees to come into work. They call the concept the "micro market lounge." It's a place to spend time on site, collaborate with co-workers and even take customers for meetings. Their showpiece location has high top tables, iPads, TVs and comfortable furniture all with a micro market wrapped around it. They partnered with the location on design and implementation, with the location picking up most of design costs.
There is strong support for this emerging concept. McCall cited some of the statistics from the locations Five Star has partnered with when placing a micro market lounge. Turnover rates dropped in these locations, providing hard numbers for the human resource professional at the company to use in support of the idea that morale and productivity will increase with a better break area, such as a workplace cafe. However, what does that better break area or workplace cafe, entail?
Steve Orlando with Fixturelite told CTW attendees that it meant adding amenities you wouldn't normally add to a break room. John Healy of the Vending Marketer said that at the core of the workplace café is coffee. He believes customers want high quality coffee offerings, with or without a micro market, but that the café does need to have great furniture options and access to technology.
Enticing the Millennials
Deciding which options to include in the workplace café also means understanding what inspires Millennials. During a panel discussion of NAMA's Emerging Leaders Network (ELN) members, C.J. Recher of Five Star talked about how Millennials are looking for: an experience, authenticity, connectivity (to each other and to brands) and customization. Millennials are starting to adopt mobile payments too. Another panelist, Sarah Miller with Vistar, mentioned the importance of technology when it comes to executing on effective refreshment solutions in the workplace. Millennials grew up with technology, but the next generation, Generation Z or iGEN, has never seen a world without it. They won't understand not being about to pay with a credit card or mobile wallet, text about a problem or use social media to share their eating occasions throughout the day. Jen Tonio, 365 Retail Markets, talked about how important work-life balance is to Millennials, so if the location (and operator) can bring in opportunities to do what Millennials are already doing outside work, but at work, it is a big draw.
Jon Snyder of Snyder Food Services Inc. has found a picture is worth a thousand words when showing off the additions, which could be added to a break room to impress employees. He takes a photo of the existing break room or one that's just OK, and then in his presentation to the decision makers, he compares that OK photo to one he has taken of a more upgraded offering that will fit into the location's budget and goals. It's a tried and true strategy. He also likes to loop in the human resource manager when meeting with the facilities person, as these two positions have different agendas when considering service providers and types of services to purchase.
Pantry service payoff
While tech companies are known for the extras they offer employees, more and more companies outside of technology industries are looking at this type of benefit for employees, making it the ideal time for operators to offer solutions. In an attempt to help operators be prepared for pantry service needs, Associated Services brought in a top pantry service customer and talked about what made the program so successful. The location, POPSUGAR, which is situated in the Bay area of California, has two fully stocked kitchens in its office. The budget is $4 a day per employee, a number that Kim Lenz with Associated Services works very hard to keep in check on a weekly and monthly basis. In fact, watching the budget was one of the most important functions of her job because it is a sticking point with the customer. It determines what types of products go into the pantry as well as restocking schedules. Another popular feature of the pantry service is the quarterly refresh, where Lenz finds new products to offer in the pantry. It's important to customers because they bore of many of the snack items, but love to try new things. The most popular items in the pantry are yogurts, dairy products, hard boiled eggs, fresh fruit, and other perishables.
Lenz finds the ideal time to start working with a customer is when their employees number 30 to 40, and if they are already doing some sort of food in the workplace.
Usually the decision maker in these locations is looking for an expert that can take over the stocking of the kitchen, as it is normally not their main job function, but is becoming too time consuming. In these situations, there is also a budget already set aside for employee refreshment. Lenz finds it is easier to grow with a company, than take over a company of 200 to offer pantry service, but either can work as long as there is frequent communication and monitoring of the budget.
With the evolving needs of businesses today, it's imperative that OCS operators not only know what is available within the channel and have these available to customers, but also have partners that can offer even more. These outside services should be what locations are searching for, such as break room design services. As a $5 billion industry, OCS is a strong segment with more growth potential for operators willing to partner with locations and share their expertise.