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Issue Date: Vol. 43, No. 3 / March 25, 2003 - April 24, 2003 , Posted On: 3/25/2003


Coming To Terms


Tim Sanford
Editor@vendingtimes.net

Before September 11, 2001, a looming energy crisis and an increasingly tight labor market were making it more and more difficult for operators who had grown steadily during the tranquil boom of the 1990s to continue doing business as usual.

Before anyone could adapt to those challenges, the nation was staggered by the terrorist attacks, and stringent new security measures imposed new disciplines and complexity on route delivery operations of all kinds.

As we were coming to terms with that situation, the accounting scandals erupted and the diplomatic scene began to cloud over. Now, concerns over the duration and cost of the military operations in the Middle East are vexing observers and markets.

We could extend this tale of woe farther back, pointing out that the recent Golden Age ended when the Internet bubble burst in 1999. Since then, business in general has become cautious, even defensive. As vending clients and prospects put their expansion plans on hold, so did operators. Everyone seems to be waiting for something to happen. We wonder whether they will recognize it if it ever does.

Many years ago, as the computer-and-communications revolution was heating up, a speaker at one of the industry's trade shows made a disquieting point. He said that many, perhaps most, people delay taking one or another action because they are waiting for things to get back to normal. However, he warned, things are never going to get back to normal. Things never have, and they never will. We must learn to live with this, and do what's necessary.

It is more difficult for vending and coffee service operators, who must approach the people who want their products through intermediaries who manage the locations, than for more conventional retailers to deal with this apparent state of suspended animation. However, surely there are things that can be done.

From one perspective, the problem is that the demand for vending services, perhaps food in particular, is becoming more pronounced; but operators cannot figure out how to provide profitable service to the accounts that want it most desperately. Viewed another way, large locations are the objects of intense competition; the opportunity appears to reside elsewhere along the size spectrum.

We think that, while everyone is waiting for things to get back to normal, or to see which way the cat is going to jump, or whatever it is that they're waiting for, they might improve their time by studying the current market closely and seeing whether there are not profitable ways of addressing certain important niches in it. This study should proceed at least through the stage of drafting of a business plan. What do people want that they cannot now obtain where they are? What do they dislike about the alternatives presently available to them? How might the absent items be provided, and the undesirable alternatives replaced with attractive ones?

The mantra for the late '70s was, "What business are we really in?" As we've remarked before, the answer to that turned out to be "The vending and coffee service business," which surprised some observers, who were expecting something more general and abstract.

We think the watchword today was given by a pioneer coffee service operator with whom we recently spoke. "You can never stand still," he said. "You either go forward or you drift back." That pretty much describes the alternatives.

Those who are resolved to go forward must come to terms with decision-makers who may be waiting to see what will happen, but it's worth making that effort to get through to those who really want our products, more than ever before, and are more willing than ever to pay a fair price for them. Can the demand for food in smaller sites be met by branded frozen products sold through food/ice cream machines, or branded shelf-stable items sold through glassfront venders? Or through conventional refrigerated food machines placed under unconventional agreements, or stocked with an unusual variety?

The opportunity may turn out to be something other than food: perhaps hot drinks, or cold ones, or snacks. Or something quite different. It is important to look for it. In most cases, we can't sell people the items we find most convenient to offer; we can only sell them what they want to buy.


Topic: Editorial: Vending

Articles:
  • Market Research As A Byproduct
  • We Need To Talk, And Listen
  • Perils Of Infighting Outweigh The Fun
  • Getting Serious About Career Training
  • The Smallest Locations Drink Coffee, Too

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