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Issue Date: Vol. 41, No. 3 / March 25, 2001 - April 24, 2001, Posted On: 3/25/2001


Allans Vending Makes Growth Decision, Builds New Headquarters; High-Quality Food Is Catalyst For Continuing Profitable Expansion


Emily Jed
Emily@vendingtimes.net

WHITE RIVER JUNCTION, VT - Allans Vendings new headquarters here, at the junction of two major interstate highways, is symbolic of the crossroads that most operators face at some point in their career whether to reinvest heavily to meet demand and realize potential opportunity, or to slow the companys growth and enjoy the adminstrative benefits of a smaller operation.

Allans Vendings region spanning the state of New Hampshire and Southern Vermont has experienced a major boom in recent years that enabled the company to grow as rapidly as its principals wished. That growth has been far beyond the expectations of owners Steve and JoAnn Allan, when they bought the business from JoAnns father 26 years ago (see V/T June, 1996).

The Allans, whose son, Scott has been active in the business all his life, and his wife, Sherry, a long-time member of the management team, realized that they were at that crossroads. And they decided that they are in it for the long haul. This decision meant moving out of their original facility and making a substantial investment in a new, larger one.

The full-line operation now has nine routes, including one dedicated to food and three to office coffee service. It employs a staff of 20.

We could have retired in June, but we decided to take the next step with the business and move into this building and to work another 30 years, Allan told V/T. Lets hope we live long enough to pay it off!

The company, originally based in the familys two-car garage, left its former 3,000-sq.-ft. building and two rented sites in December. It now occupies a new 9,000-sq.-ft. building, designed with room to add up to 8,000 sq. ft. in the next few years. The Allans built the facility around the remains of a historic motel that closed years ago, and they strove to preserve its New England charm while adding every modern convenience.

Steve designed the entire facility and drew the plans to exact scale, specifying the doors, windows and electrical outlets. This gave him complete control over the functional and aesthetic elements of the design. Renovations were swift, beginning September 1 and concluding December 12. The new facility complies with all Americans with Disabilities Act regulations, is constructed of fireproof sheetrock, and boasts fuel-efficient furnaces serving seven different heating zones, as well as energy-efficient lights and thermal windows. State-of-the-art communication and electrical wiring have been installed to accommodate future growth.

The new building is conveniently situated at the junction of two major highways, I-89 and I-91, which is extremely convenient for the companys route and service vehicles. Before, they had to go through eight sets of lights; now they pull out, right onto the highway, said Allan. This new location saves us a lot of time.

FOOD BUILDS BUSINESS

According to Allan, the vending operations reputation for premium fresh food has been the prime driver of its growth, with food sales increasing by 15 percent in 2000. The company produces more than 10,000 items per week, including sandwiches, salads, entrees and soups, in its new streamlined kitchen, which is three times larger than the original commissary.

Food preparation and packaging personnel enjoy an additional perk large picture windows that overlook a meadow, affording a panoramic view of New Englands picturesque seasons and wildlife.

Its such a beautiful setting, JoAnn said. We made sure we put in windows so people can enjoy the view while they work. We looked for a place for two years, in both New Hampshire and Vermont, and we just fell in love with this location and its potential.

To keep up with the brisk demand for its fresh foods, which has been created entirely by word of mouth (Allan Vending has no sales force), the company has doubled its commissary staff to four people since the move. Steve, a former chef with a passion for creating new dishes, spends much of his time in the kitchen as well.

We roast our own beef and turkey. We make a sandwich on our own pumpkin bread, containing turkey, ham, cranberries and sliced apples; it has become a signature item, Allan told V/T. We make a ginger pork wrap that goes like crazy, and a jambalaya that customers love. We have a lot of recipes that weve used for years that have remained very popular, and we always keep up with new trends.

Customers today crave more ethnic choices, he added, and he has fun keeping the menu appealing. Allan gets many of his recipe ideas from the websites of spice manufacturers such as McCormick and McIlhenny Co,, which produces Tabasco hot pepper sauce. In fact, the firms website www.allansvending.com will soon cross-link to such recipes at the manufacturers sites.

Allans Vending has a large upscale client base with sophisticated tastes. This demographic sector continues to grow, as nearby Dartmouth College has spawned a number of high-tech startup companies in recent years. We have a lot of vegetarians; we cater to them with items like our homemade black bean hummus that we put in wraps and make into veggie rollups, Steve instanced.

Homemade comfort foods are also a hit with the operations clientele. Favorites including baked macaroni and cheese, made with premium Vermont Cabot cheddar, and a variety of signature soups.

Like most vending operators, if you look at all our business, we still sell more hamburgers than anything else, Steve reported. But we make them 15 different ways and we use a great precooked pub burger, so its not just a run of the mill vending burger. Even with our grilled Reubens, we hand-carve a marble rye and cook our own corned beef brisket, just like youd get at a restaurant.

MAKING MONEY WITH FOOD

Not only does Allans Vending pride itself on its premium food but, notwithstanding a traditional industry belief, the company makes a profit from it.

We have broken the $2.50 barrier with many of our items by providing better quality ingredients, including meats, cheeses and breads that people are willing to pay for, said Allan. We make a huge 14-16-oz. calzone that sells for $3.50, for example. We also find that people are bringing our meals home for dinner. Business is growing at locations where we know the clientele cant possibly be eating so much just for lunch.

Allans Vending has ventured into the frozen food arena, placing machines in larger accounts alongside two or three cold food machines. Amazingly, it hasnt touched our cold food sales, said Steve. The frozen food machines are filled with high-end ice creams, burritos, Budget Gourmet entrees and other items that dont compete with our fresh food.

Catering business is also on the rise and the Allans equipped the new commissary with a Curtis batch coffee brewer that brews three gallons in a flash. We cater a huge police officers event in the summer and I used to be up all night brewing coffee; this new brewer will save so much time for catering, said Steve.

In addition to food, much of the companys growth has been in coffee service, which today accounts for 40 percent of Allans Vendings business. Single-cup has taken off. Patrons like the choice, the freshness and the coffee shop type of coffee, with no pots to clean, said Scott. The company primarily places Crane National Vendors Caf© 7 and Mars Flavia brewers to meet this demand. High-end portion-pack OCS coffees with name brands, such as Starbucks, Green Mountain and Imus Bros., are also highly requested.

Giving the customer control of what they drink is a big asset today, in view of the diverse choices available outside the workplace, added JoAnn. And businesses see the variety and convenience of single-cup systems as another perk to retain help.

Bottled spring water represents another booming market for Allans Vending. The growth of this segment, which has more than doubled in the last few years, did much to accelerate the move to larger quarters. The company turns 22 pallets of water weekly in the winter, and 44 pallets in the summer months. One room in the new warehouse is dedicated to bottled water storage.

The move has also provided the operations service department much-needed elbow room in a new full-fledged refurbishing shop. We finally have room to strip machines, update software and reface them regularly, said Scott. In the coffee equipment service area, multiple electrical outlets were installed at counter level to ease repairs.

The service staff has had its hands full over the past year, updating all of the companys vending equipment to accept the golden dollar, added Scott; and the reaction has been mixed.

The general public is still not spending dollar coins, even though every machine says Use the golden dollar here. If we dont eliminate the dollar bill, it wont happen, said Scott. But in locations like large factories, they take them right from the changer and put them in the machines; they use them like tokens, and they love to change a $10 bill and get 10 coins.

A bigger, better-organized warehouse streamlines daily operations, but not without the skill and dedication of two new players on the Allans Vending team. Moving to larger quarters allowed us to create two key positions, for a warehouse manager and a technician, JoAnn told V/T. Their functions used to be handled by many people, including Steve, Scott and myself, and weve now brought all those related tasks together. The new staff members have taken a big burden off the family members. Now we can all be more administrative, rather than running around the warehouse looking for a case of coffee, or out trouble-shooting a vending machine.

With a warehouse manager on board, the route sales force calls in orders at lunchtime, the manager picks them, and the drivers load their trucks at the end of the day, JoAnn explained. Hes there for the drivers whenever they need him, so we can be on the phone or visiting clients.

Also contributing to warehouse efficiency is a planogram program that Scott implemented two years ago. The planograms implementation begins with the organization of product in the warehouse, and continues with the order in which merchandise is stacked in the trucks, so effort is minimal at the machines.

LARGE SIZE SNACKS

One unusual feature of the Allans Vending planogram is that the core five salty snacks are only offered in large-size LSS packages. Scott told V/T that this has been a huge success in both white- and blue-collar locales. Not only do we get a higher profit margin with LSS, but we get more vends because the larger size is what customers want, Scott explained. Every machine has a cereal bar or other healthy snack, a pastry or other breakfast item, and a cracker selection. Maybe those crackers are not the biggest mover, but the philosophy is to cater to everyones tastes, for all times of day, and to offer alternatives.

The Allans were recently chosen as 2000 Business People of the Year by the Lebanon, New Hampshire Chamber of Commerce for their companys steady growth and their reinvestment in the community.

One of the largest contracts awarded to Allans Vending, contributing substantially to its growth in the past year, was with the State of Vermont. It includes service at a visitors center on the Vermont/Massachusetts border, as well as state office and municipal buildings. These highly public sites serve as further advertisements for the company.

We are involved in a lot of high-profile community events on a charitable basis, including a race where we give out water to 10,000 runners, said JoAnn. We do all we can to provide water, coffee, and snacks to local events and causes, because we are grateful to the community that has made us successful.

That feeling of gratitude extends to the Allans Vending staff as well. We have such high esteem for our employees, especially the ones who have been with us for a long time, added JoAnn. They are directly responsible for a good portion of our growth. Our family members are not as visible as we used to be when the business was smaller, so we really depend on our employees to represent us out there. We reward our people with good benefits, and weve managed to maintain our staff in a very competitive market.

Steve added that a recent report stated that there were only 50 people unemployed in neighboring West Lebanon, NH, but he has had to turn job applicants away.


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