TIMONIUM, MD - This year A&A Global Industries' Ed Kovens celebrates 50 years in the industry. As the second generation to run the firm, Kovens steered the company through some of its dramatic changes and periods of growth.
During his tenure at the firm, he has witnessed not only the birth of capsuled items, but also changes in pricing, product and customer base. Under his management and through his foresight, A&A Global became the bulk vending market leader, introducing new types of products that quickly became industry standards.
Among the first companies to begin importing products from overseas, A&A quickly established itself as trendsetter, which eventually led to its dominant position in the bulk vending industry.
None of this, of course, happened overnight. For Kovens, as with the most successful members in the industry, progress has meant slow, but steady growth resulting from hard work, dedication and belief in the concept of bulk vending as the most effective automated retailing mechanism.
VT recently sat down with Kovens to reminisce and learn his opinions on the industry, A&A and its myriad changes that have taken place over the years.
VT: I understand that it's a story that's been told before, but how, exactly, did you get into the bulk vending business?
Kovens: It's a story I'm happy to tell. In 1938 my father, Irv Kovens, needed some extra money, so he started tinkering with a few stamp machine venders in his basement. He sold them to a few acquaintances and soon became successful enough that he formed his own company and distributed machines nationwide. That company, Parkway Machine Corporation, eventually became A&A Global Industries. Just like the A&A of today, as his business grew he branched out into other avenues of vending. He even started manufacturing the stamp folders himself. The distribution of bulk vending machines, parts and supplies seemed like the logical progression for us.
In 1953, while I was still in school, I was hired part time to make catalogs and helped in the shipping department. By 1956 I was working my way through college with a small route I had built up and continued to help out my father whenever I could. Finding a major in college was difficult because no matter what I studied I knew I had a passion for vending and manufacturing. After settling on a Business Industries major, I graduated from college in 1960 and started working at Parkway Machine right away.
During my tenure with A&A I've done it all. In the early years I traveled state-to-state introducing customers to the latest in bulk vending wares. Once a sales force was in place I concentrated my efforts on products and made trips overseas frequently. I've seen a lot of changes over the past 50 years and we've been able to change along with them.
What were some of the most significant landmarks for A&A and the industry?
They pretty much go hand in hand. As a leader in this industry, our company has always supported new products, machines and changes. So naturally, our landmarks coincide with the industry's. To be specific though, there are a lot of highlights I can recall. The introduction of toy capsules, along with the move to a quarter vend, were milestones we all acknowledge helped push the bulk vending operator into the vestibules of major retailers and therefore mass market America. With this widespread acceptance, the industry also benefited significantly with the establishment of our trade organization (the NBVA) along with our notable community involvement through charitable associations. For us as a company, some of our other landmarks include when we started making machines and candy. Manufacturing has always been a part of our long-term plans. Recently, over the past few years, setting up our Graphic Arts Department was also a milestone. That gave us the creativity to set us apart from our competition. But the most significant milestone for our company and me personally was when my sons, Steven and Brian, made the decision to come on board. Their energy still drives this company today. As their partner, I'm impressed with their performance; as their father, I'm bursting with pride.
Looking back on it, what are some of the most dramatic changes you've seen in the bulk vending business in terms of pricing, product and machines?
That's easy. To sum it up in a word: BETTER. Through licensing we've seen better product. The increase in quality and value for our end user has been dramatic. Everything from licensed figurines, world-class toy fashion accessories and innovative novelties keep the public interested in vending , and coming back for more. In terms of machines: BETTER. Better looking machines available in more colors and styles than ever before. This allows operators to find location possibilities they never dreamed of. I believe the pioneering of innovative machines like our "E.B.V." will pave the way to the future. Also, different machines will keep the market fresh. Like the introduction of our sensible, yet exciting "Spin Center." We've taken existing vending "technology" and repackaged it into an attractive, interactive unit. Pricing is also better,believe it or not. Comparatively, vending machine operators today enjoy lower product costs than ever before. Confections, flat vending and even jewelry have come down in price considerably. Adversely, costs for operators are running higher than ever. We'll see a move to 75¢ or $1 in the very near future. My experience tells me the vending community is ready for that change.
No doubt things have changed dramatically over the past half-century. Do you see those changes taking place at a faster pace? If so, what do you think is responsible for this increased rate of change?
At my age, everything seems to be changing faster and maybe we're seeing that in some areas of our business, too. Because our industry was founded on simplicity we've always been immune to sudden changes. The actual operation procedure for servicing locations hasn't changed much. Even though we're isolated from unexpected economic impacts like the retail sector, this industry will still be forced to keep up with the demanding changes in the marketplace, particularly where products are considered. That means we've got to be on top of ever changing trends and fads. Living in the information age has seen to that. As mass-market retailers target the global market, the bulk vending supplier needs to be "hip" and savvy. This sets a very fast pace for toy developers like us. Since the fundamental idea of impulse vending has not changed, there is still a thrill of someone having his or her fancy caught by a vending machine. The excitement of turning the handle and the delight in opening the capsule remains universal. I say that the pace of change we share is a good blend between the fast-paced information age world with the solid traditions of bulk vending.
Product lines and types of products have expanded a great deal over the past several years. Stickers, to cite one example, has moved from a niche market segment to a mainstream product segment. What do you think accounts for these types of changes?
Marketing has a lot to do with it. Licensors have always seen vending as a last resort. We've shown them it should be the first in line in their marketing campaigns. You see, kids always have change for a sticker or tattoo, but not everyone has $20 for a lunch box. Vending provides the licensor an inexpensive mass-market outlet to let their customers get in on the latest craze without breaking their piggy bank. Likewise, a vending rack can also be marketed as a "boutique." This way, the machines can be presented to match the flavor of the retail environment it's placed in. Collectability also aids in the expansion of product lines. When done correctly, today's vending toys are perceived as part of Americana, and as a result, mainstream. You've got to know the who, what, where, why and how of your customers. When you do, the product will follow unsurprisingly.
Bulk vending is an industry built on the routes and hard work of "little operators." Lately there's been a lot of talk about the little guy getting squeezed out of the business. Do you think this is true?
Absolutely not! The fact is, there is a need for the small operator. The heavy hitters quite honestly don't want the small mom and pop locations. They're not set up for it and it's not cost-effective for them to take on. They need high volume , high profile locations to make their deals work. The "little operator," as you call them, is just as important as the big guy. They're the backbone of our industry. After all, there are a lot more small guys than there are big ones. That says something. The larger operator has to be structured, sophisticated and be well versed in corporate culture. The smaller vendor enjoys the informality that only a local operator can bring to his area. There's plenty of room for every type of operator to coexist. In any event, one thing remains true. Regardless of the size of your route, this business will always be built on the hard work of the operators and route men.
A&A may be largest supplier of merchandise. Where can the company go from here? And, how do you plan to maintain a dominant position?
I don't plan to do anything; you see A&A is not just me, Steven or Brian. We've got an exceptional team of professionals that are dedicated to this company and our industry. We don't have to get bigger. In fact that's not even our focus. Our goal is to get better. Always improve and we don't rest on our laurels. Better products, more services and higher customer satisfaction. That's our plan in a nutshell. Quite simply we stay the leader because we don't look back. We plan a year ahead , if not more. We react to the market place quickly and efficiently while keeping the satisfaction of our customers always at hand.
Your sons, Brian and Steve, are known in the industry for their hard work. Is this a family tradition? What kind of hours did you put in?
Sure I worked hard and they know it. But that reminds me of the old joke'"When I was your age I had to walk to school in the snow , in the heat of August. It was uphill, both ways." Though I never thought it was an example I would expect them to follow. If there's work to be done, we do it. I never said to them that I expect long hours. We've made an investment in this business. Our customers and employees count on us. Working hard for them is the least we can do.
What do you think A&A's most significant contribution to the industry has been over all these years? I don't want to get too sappy, but 50 years of reflection makes you reminisce. I'm proud of where we came from and where we're going. As an employer we've provided a good living for our employees and a stable working environment. All our future plans include them. Our charitable contributions to the American Cancer Society also stand as a proud achievement. A cure for cancer falls very close to my heart. Industry-wide, our support of the NBVA and the legislative committee are contributions that will have long term effects on our industry. Sales tax exemptions are very important to every operator. But the truth is, every time I see a child buy something from a vending machine the smile on their face is priceless. I think after all, we're making the world a better place for kids.