LAND O' LAKES, FL -- A key to building a successful business is identifying unmet -- and sometimes unrecognized -- needs, and then finding efficient ways to meet them. This approach is working well for the companies organized by Bernard (Butch) Winkler and his wife Lynn around their flagship enterprise, Holiday House Distributing.
The Winklers became involved in the office refreshment services industry in 1981 when they purchased a small coffee service business, Holiday House, serving the New York metropolitan area. Listening closely to their clients, they determined that large accounts with multiple offices would be responsive to a program enabling them to gain the greatest benefit from their purchasing power.
To meet this need, Holiday House developed a computerized reporting system to break down purchases, ensure uniform pricing across all the locations, analyze consumption and generate budgeting models. This was well received, and the experience offered valuable guidance when the Winklers launched their distribution business.
STILL LISTENING: Pictured at left, Butch and Lynn Winkler built a successful coffee service operation by identifying and meeting clients’ needs. This approach underlies Holiday House Distributing’s parts and equipment programs for OCS.
The operating company also concluded that a well thought out private-label program was the key to delivering quality office coffee service products at attractive prices. This also was very successful, building customer loyalty and increasing sales. And it further reinforced the Winklers' conviction that understanding what customers want and need is a crucial skill in building a business.
In less than a decade, the Winklers had expanded the operating company to about 15 times its original size -- and, while doing that, identified a growing nationwide need that was not being addressed in any comprehensive way: knowledgeable supply of the many specialized accessories, parts and tools required to install hot beverage equipment.
While the modern office coffee service business had been built on relatively simple pour-through brewers and glass carafes, the move toward serving larger locations and increased competition had impelled operators to add plumbed-in equipment, from automatic brewers through small postmix cold drink dispensers to icemakers and water filtration systems. As the 1980s gave way to the 1990s, operators were experiencing greater and greater difficulty in tracking down the necessary fittings at local hardware and plumbing supplies stores, and keeping track of OEM parts.
There was no single source for the fittings, tubing and other components used to connect plumbed-in machines to water lines, nor -- more importantly -- for expert advice and assistance in selecting the right ones. Since Butch had become very familiar with this product category while running his own operation and mentoring other operators, the Winklers decided that they could solve the problem, so they sold the assets of their OCS business and set to work.
They had retained ownership of the Holiday House name; and, in 1991, Holiday House Distributing came into being. It was headquartered in the Winklers' Long Island house; the office was in the attic, and orders were filled and packed in the basement, then lifted out through a convenient window for pickup by the United Parcel Service truck.
CAN DO: At left, Holiday House office manager Barbara Russell (l.) reviews a custom design project with computer graphics artist Katie. HHD offers small operators a range of services to build professional image.
TEAMWORK: At right, office manager Kathryn Bernardo (l.) confers with Lynn Winkler in present Holiday House headquarters. The company has outgrown a series of facilities since it opened for business in 1991.
A DECADE OF PROGRESS
The venture received an immediate enthusiastic response. Confronted by the need to expand, the Winklers relocated the enterprise to Florida. Holiday House Distributing capped its first decade with an industry accolade: in 2001, the National Automatic Merchandising Association presented its OCS Allied Member of the Year Award to Butch Winkler (see VT, November 2001).
The company started out by purchasing, categorizing and reselling OEM parts for coffee brewers and water dispensers, and inventorying a broad but carefully chosen variety of plumbing and electrical components. As market demand suggested additional lines and new services, the Winklers drew on their private-labeling experience and began manufacturing a proprietary Holiday House Distributing product line. Today, this extends to airpot and insulated gravity servers, carafes, condiment organizers, racks for pods and single-cup capsules, cup dispensers and other breakroom necessities, as well as parts difficult or impossible to obtain from manufacturers.
ON DISPLAY: Kool Tek president Cliff Rosen looks over array of water delivery products in showroom at Holiday House Distributing headquarters. Applying its route operations experience with private labeling as a means to maintain quality standards while reducing cost and enhancing competitive position, HHD has applied the same philosophy to equipment distribution by establishing the Kool Tek and Brew Tek brands.
As sales volume continued to grow, the company repeatedly relocated to larger premises. Its present 35,000-sq.ft. facilities, a 22,000-sq.ft. main building and an adjacent 13,000-sq.ft. structure, were constructed under a plan calling for Holiday House to occupy one and rent out the other. However, space in the second building was required almost immediately, and is being filled rapidly.
MEETING THE MARKET
The logic of assuring continued availability by manufacturing its own components designed specifically with OCS operators in mind could be applied to equipment, too, and Holiday House Distributing did: It launched Kool Tek to meet booming demand for pure water systems in the office market. The Kool Tek line includes point-of-use and bottled water dispensers, as well as an under-counter water chiller, countertop icemakers and even commercial microwave ovens -- all of which are desirable appliances that operators can lease to accounts. These are supported by a wide range of accessories, including water-treatment systems from leading manufacturers including Everpure and Omnipure, as well as ozone sanitizers. Kool Tek was among the first manufacturers to market a point-of-use cooler with a U.S. Department of Energy Energy Star rating. Its newest models, the G5 and G8 brewers, will be spotlighted at the National Automatic Merchandising Association's Coffee, Tea & Water show in New Orleans in mid-November.
The swift and enthusiastic acceptance of the Kool Tek initiative by the industry led Holiday House Distributing to launch a sister company, Brew Tek, to develop and market coffee brewing equipment for the OCS industry. Planning began in 2008, and the initial Brew Tek line made its debut at the National Automatic Merchandising Association's 2010 OneShow.
QUALITY ASSURANCE: Debbie and Tony complete final assembly and thorough testing of brewers delivered by Brew Tek’s suppliers before the equipment is sent on to the fulfillment department for packaging and dispatch. Rigorous attention to functionality verification and quality control before shipment eliminates time and trouble for all parties.
With three companies under a single umbrella, the Winklers recruited two very experienced industry executives to lead the new divisions. Cliff Rosen was named president of Kool Tek, and Steve Hyde became Brew Tek president (see VT, April 2010).
Incorporating advice and suggestions from HHD operator customers, the Brew Tek line now includes 15 models. These include a novel adjustable-height design that can be configured to accommodate servers ranging from 7.5" to 19" in height, as well as a range of pourover and automatic brewers including energy-saving pourover thermal and airpot machines.
Brew Tek also distributes bulk-loading countertop single-portion dispensers for soluble condiments and allied products, lowering operator cost and reducing solid waste on location.
A new pod brewer series is ready to launch, and the first two models will debut at the Coffee, Tea & Water show.
In planning its brewer line, Brew Tek strove to attain the greatest possible parts commonality among models; the company had applied for a patent on this universal architecture. Its equipment is available for 110V. and 220V. mains power, and are UL-listed and NSF-certified. The user manuals have been written for easy comprehension. The guiding principle is "designed by you, delivered by us."
Besides looking for previously undefined needs horizontally across the OCS market, Holiday House Distributing also strives to identify them within vertical segments. This has led the organization to undertake a variety of initiatives. It has developed professional graphics capability including computer-controlled vinyl film imprinting and cutting in order to offer operators custom styling for brewers and dispensers. This service allows even small operating companies to install breakroom equipment of distinctive, uniform appearance themed to the location, when appropriate.
LOSS PREVENTION INITIATIVES
The company also is responding to the growth in "total refreshment services" that includes multiple plumbed-in appliances by devoting close attention to technology that minimizes damage from leaks, as well as to best practices that operators can apply to reduce their exposure and protect their reputations in the event that a leak occurs. Working with its own insurance company and with the manufacturers it represents, HHD Risk Management has drafted a one-page summary of policy guidelines (available at hhdonline.com/risk.php).
On the engineering side, the company offers a range of leak defenses including leak detectors and the new Water Block, a safety valve developed by a major Italian appliance manufacturer, which monitors water flow and shuts off the inlet if it exceeds a preset volume. The valve is entirely mechanical and hydraulic in operation, so it will work even if power fails.
Efficient management of an increasingly large and complex warehousing and shipping operation also is a benefit to customers, the Winklers observe, keeping costs low and speeding service. The company now maintains satellite warehouses in Chicago, Los Angeles and Rosedale, NY (near LaGuardia Airport in the borough of Queens), as well as a strategically sited distribution facility in Mississauga, ON, Canada. Another shipping hub is under construction in St. Louis, MO.
The organization has worked diligently throughout its history to keep its processes aligned with its growth. Items specified on pick-tickets are sorted in order corresponding to the location of each product on the warehouse shelves, so stock-pickers can pull them in succession without wasting time and effort in backtracking. Equipment undergoes final assembly, "pre-support" and quality assurance in a spacious, well-equipped upstairs shop facility.
Orders are packed in boxes cushioned with shredded corrugated cardboard, rather than the polystyrene "peanut" pellets commonly used for impact protection. The shredding machine paid for itself quickly, the Winklers explained: not only has it eliminated the need to buy filling material, but also the expense of getting rid of empty boxes.
Completed orders are shrink-wrapped in black shrink film, so damage in transit will be evident upon receipt. The Winklers persuaded United Parcel Service to bring a trailer to the warehouse every morning, leave it there all day for loading, and simply pick it up in the afternoon, which produces efficiencies for the distributorship and the delivery service alike.
Holiday House Distributing will describe its products and programs at NAMA's Coffee, Tea & Water show in New Orleans on Nov. 14. It is online at hhdonline.com, and has sites specific to Brew Tek coffee brewing equipment at brewtekbrewers.com and Kool Tek water delivery systems at kooltekcoolers.com.
STAYING FOCUSED: Holiday House Distributing has turned its cataloguing skills to its website, which is profusely illustrated and carefully indexed. At left, the company’s Amy checks focus and composition of items arranged for a new product illustration.
PRINT TO FIT: At right, Mike of Holiday House Distributing prepares the company’s powerful Roland printer for a run of custom-imprinted vinyl airpot skins. In-house printing and diecutting capabilities enable HHD to offer professional customized graphics to OCS firms of all sizes.
PHOTOS, FROM LEFT »
LOAD AND GO: Materials handling specialists Andrea and Kris load trailer left onsite by UPS for afternoon pickup, saving time and labor at the end of the day.
QUICK PICK: Corey and Kelly follow computer-generated pick tickets to locate and pull merchandise from shelves in HHD’s warehouse for packaging and shipping.
READY: HHD warehouse expert Ed speeds the journey of merchandise from packaging to shipping. The company uses shredded corrugated cardboard to protect boxed items in transit, saving expense, annoyance and solid-waste burden of foam plastic “peanuts,” and works diligently to find and implement faster and more efficient processes.