NEW YORK CITY - It takes a hardy breed of operator to go into the nut business. With the price of merchandise subject to wild swings, neighborhood taverns closing in many regions and all the additional effort it takes to maintain machines, operators who go into nuts as a specialty must have a rare degree of fortitude, not to mention business acumen. VT recently sat down with one of New York's premier nut bulk vending operators, Al Swiderski. Better known as "Al The Peanut Man," Swiderski started out as a bulk vendor in Buffalo, NY, and eventually set his sights on New York City after he sold a successful route. Although a relative newcomer to the geographic market, Swiderski is already gaining an enthusiastic following among the Big Apple's bar and tavern owners.
VT: You've recently moved your operations to New York City from Buffalo. How has that been working out for you? What kind of routes are you developing?
SWIDERSKI: We're based in New York City, but we have a warehouse in Long Island and a back-up warehouse in Buffalo, NY. Right now we're [doing business] in Manhattan and Astoria (Queens), but eventually we're going to go into all five boroughs. We're just getting started right now.
Pardon the pun, but is New York a tough nut to crack?
It took me six weeks before one location in New York City said yes. I loaded up in Buffalo with 150 machines the first time I came down here and thought I'd get them all placed in two days, but it took me six weeks to get one sale!
What was the problem?
Well, there was one operator who left town and abandoned his machines. The second problem was that people had tasted a lot of bad nuts out of nut machines. And, I think that New York City wasn't a cashew-eating city. When I came down here, the first thing I had to do was get these people eating cashews, then I had to get them eating cashews out of machines. So I ordered 1,500 small bags of cashews and I gave away all 1,500 [by dropping some into] every bar I went into. Bar owners, bartenders, anyone who was in a bar got a free bag of cashews. Once I got them eating cashews they said, "let's try some machines." I had one bar where the owner would actually laugh at me because it would do $26 a month in sales. So I got a couple of plastic sauce-type cups, maybe 20 of them, and filled them up with nuts and put them all over the bar. The next cycle I came in and it did $90 in sales; that bar has continuously done $90 in sales after since. It's just a matter of introducing your product to your customer.
Why has the peanut business decreased over the years?
That's a loaded question. I think because a lot of people don't want to put the time and effort into building routes. There's the cost of nuts and the cost of overhead, but I think that salesmanship is probably 99% of the reason.
So nuts are still a profitable business?
For me they are because this is what I do. We roast our own nuts, and we've been doing it for 25 years. And, it's an industry that once you get into, you're in for life. For a location, nuts becomes like what ketchup is to a restaurant; once you begin putting nut machines in bars, you can't let them go empty. You actually create a brand following, if you do your job.
I've heard it said that nut machines are hard to maintain. One operator told me that when he was young his father punished him by making him clean out the nut machine globes.
I started in the nut business in the 1980s, when three nut machines in an average bar in Buffalo were doing $200 a week in sales. So, with that type of volume, we didn't have any problems. There was some damage, but you would put another globe on or put another machine in. Right now, in New York City, my vandalism is zero; it's next to nothing. The negatives are that the neighborhood bars are closing and you need to keep your machines clean. But we're going to switch to stainless steel inside to prevent corrosion.
The price of nuts, like any commodity, fluctuates. How does an operator deal with those fluctuations?
What we do is we take a position and contract for 11 months. So our price for cashews will be, say, $2.75 a pound for those 11 months. We have our own contracted roaster and he roasts our nuts for us. We make sure we have a good nut, so that every time someone goes to Al the Peanut Man's machines, they know they're going to get a good product.
Other nut operators I've spoken to take the approach of changing the types of nuts according to their price. Do you follow that strategy as well?
If we have a huge fluctuation in the cashew market, we can do what's called an "average down." For instance, we'll put a gumball machine in a bar , we have bars where we do more money in gum than we do in nuts , so we look at it as package. Our profits may not be as strong in cashews and pistachios, but we'll pick up our profits because we'll get the sales out of the gumballs. But we don't try to change the consistency of the product , we add more income to the location [with other machines.]
Are bars still the primary location for nut machines?
For the most part they are bars, restaurants and taverns. We have serviced places like the Ford Motor Co. in Buffalo, which was a tremendous nut stop. Buffalo Airport was also a tremendous nut stop. Really, anywhere you have a constant flow of people will be a good nut stop, as long as you put good nuts in.
Do people know the difference between good and poor quality nuts?
You said that you pre-package your nuts before they go out on the route? Explain how that works.
Right, we no longer buy 45-lb. cases. We package everything in 5-lb. bags so that when our machines are empty, we no longer have to scoop any nuts or anything like that. We just open up the bag and pour them in. That way nothing is exposed to the air other than the nuts that you're using.
What about inventory control, is that easier with the 5-lb. bags?
Oh, absolutely; they make your inventory smaller. Each bag is worth so much money at the end of the day.
And, of course, the bags keep the nuts fresher?
Any time you prevent a nut from getting exposed to air, it'll stay fresher. So, while you're filling nut machines on a hot humid day and have your case open in the truck, your nuts will go bad faster. By preventing them from being open to the air, they'll have a longer shelf life. But we're not only doing it for that benefit, we're doing it to prevent any risk of contamination. We're also doing it this way because speed is very important. That's especially true in New York where you can get a $200 parking ticket. So, you have to fill those machines in a couple of minutes, get in and out of a location quickly.
But what if the machine isn't empty? What if it can't accommodate an entire 5-lb. bag? What do you do with the leftovers?
It depends on what cycle that bar is on as we have different cycles. We have cycles that run 10 days, and in that case the route driver just empties the nuts in there. We have cycles that are 21 days long, so he'll also vend those out. But on a 42-day cycle he will throw out whatever nuts are left, emptying the machine, and then put new nuts in. He'll put them in a box and not vend them because by the time they do get vended, they might be 52 days old or 60 days old, and we don't want to sell nuts that old. However, we'll also adjust the amount of nuts we fill that machine with according to the volume of nuts sold in a cycle.
How old can nuts be in a machine? I've had some really bad nuts myself from bar machines.
You have to watch out for that. Since we use a fresh-roasted nut, typically with the right conditions, 60 to 90 days is the maximum I'd allow a nut to be out there. We like all our nuts to sell out in 42 days.
What type of bar location is best?
The number one bar in volume that I have in New York City is a basement bar, and [the proprietor] will have me come in there every 10 days. He had a vendor in there prior to me, but I didn't try to take the account. Still, I would always walk by and check to see if the machine was there. Well one day the machine wasn't there so I went in and [the proprietor] told me the vendor gave up, so I told him I'd take care of it for him. Every 21 days I would go in there and the machine would be empty. One day I walked by on the tenth day and it was empty, so I put it on a 10-day schedule. Now, every 10 days this account is empty. The customers are firemen, policemen and other bar owners who go there. It's just a normal bar.
How do you promote the machines?
When they see a yellow Beaver machine, they know it's mine. When they see a bald-headed fat guy coming in to fill the machines, they know they're my machines. I only use Beaver machines; I started out with Beaver before it was Beaver, when it was called Machine-O-Matic.
Why would someone like yourself get into nuts?
Because nobody else wants to be in it, I don't have to worry about competition. It takes me a little longer to build a nut route, but if it's that hard for me to build, it's going to be that hard for someone to knock me out. I like the nut business because it's very stable; I have machines in Buffalo that have been on location for more than 20 years. Once you are in the bar, you're there for life.