Bernick's Fresh Food Revamp Puts Destinations In Locations

Posted On: 5/15/2019

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WE ARE FAMILY: Back row, from left, are Dean Bernick, Tara Bernick, Charlie Bernick, Jason Bernick, Melissa McDonnell, Ian Bernick, Mark Bernick. Front row, from left, are Leah Bernick, Roy Bernick, Pamela Bernick, Dick Bernick, Leslie [Bernick] Netter.
 
 
   Dean Bernick
WAITE PARK, MN -- Bernick's has been quenching Minnesotans' thirst since the early days of carbonated soft drinks, when husband-and-wife partnership Charles and Elizabeth Bernick began hand-bottling carbonated beverages and delivering them by horse and wagon (or sleigh, in season). From those modest beginnings, the fifth-generation family-owned company has grown into a leading wholesale soft drink and beer distributor and a major full-line vending operator in the upper Midwest.

Led by Dean Bernick, representing the family's fourth generation, a team of 740 employees, and growing, runs some 5,000 machines on 40 vending routes. Bernick's also is the seventh-largest independent Pepsi franchise in the U.S., with 80 direct store distribution routes serving more than 10,000 customers. It's headquartered in Waite Park, MN, in a 265,000-sq.ft. building on a 13-acre property built in 1975, as well as branch warehouses and offices throughout Minnesota and western Wisconsin.
 
OLDIES BUT GOODIES: Above, pictured in Dr. Pepper-branded late 1930s Model T Derby are Francis “Snooky” (driver) and his wife Betty Bernick (on passenger side running board) spreading goodwill with St. Cloud area community members. Below, in the early 1920s in front of Bernick’s original St. Cloud facility, Chas. Bernick stands near the driver door of late-teens model T delivery truck (center). Late 1910s International delivery truck is a rolling billboard for Nu Grape brand, and a Chevrolet delivery truck on right rounds out the fleet.

 

Bernick's has survived and prospered since its 1916 founding by staying in front of consumer trends and readily adapting to changing conditions. The company began distributing non-alcoholic beer in 1920 when Prohibition was enacted, and then became one of the first distributors of legal beer in Minnesota in 1933 when the amendment was repealed. Bernick's was able to keep on growing, too, despite the sugar, glass and rubber-tire shortages occasioned by rationing and allocation during World War II.

The company established itself as a Pepsi-Cola franchise in 1952 when the brand was relatively unknown in many parts of the country; and, as they say, the rest is history.

Bernick's has continually grown, both organically and through acquisition of distributors and territories over the decades. It has expanded its product range and scope with the addition of many big-name soft drink and beer brands, along with water, juice, energy and sports drinks, in response to changing consumer demands.

As a wholesale beverage distributor, Bernick's provides hot beverage and soft drink fountain programs, cold brew coffee systems and bottled drinks to locations ranging from convenience and grocery stores, mass merchandisers, bars and restaurants to event and convention centers and recreational venues. It handles installation and ongoing maintenance of equipment, and assists with annual planning, marketing and advertising, retailer training, launch plans and event support.

This diverse experience was good training for Bernicks' move into vending in the mid-1980s when the company acquired a full-line vending business serving the St. Paul area, and then extended its radius into surrounding markets.

Enter Vending

Reed Stevens joined Bernick's in 1984, and has kept his finger on the pulse of consumer desires over the decades. He transitioned to lead the company's vending division in 2015.

"Health isn't a current 'trend'; it's an overall shift in consumer behavior that's here to stay," he stated. "Healthy choices are easy to make when people have the options presented to them in an appealing, accessible way. Our vending and micromarket solutions are the best of both worlds – healthy, handmade food prepared locally, plus the 'indulgence' category, which is still very relevant to consumers. A little chocolate never hurt anyone!"

To satisfy growing demand for a wider range of more appealing and better-for-you fresh food options, Bernick's deployed its first micromarket four years ago. It currently has 80 of the self-checkout stores in operation, with more rolling out steadily. 365 Retail Markets is its supplier of choice.

"More larger existing customers with vending machines are seeking more fresh foods and choices for their employees, and we have had a lot of success upgrading them with micromarkets," Stevens said. "A micromarket program also is a great tool for securing new business; locations see the market as a benefit for employees, and we see employees gravitate to the food. They like that they can pick it up, look at it and read the labels, and they're willing to spend a little more for a more artisan, higher-end product that's not boxed behind a glass window."

This inspired Bernick's two years ago to rebrand its locally made fresh food offerings across the board for its  refrigerated vending machines and micromarkets, starting with a menu that had remained largely unchanged for more than a decade.

 
CHECK IT OUT: Above, Reed Stevens admires fresh-from-the-deli appeal of EATS-branded fresh food items with coworker Emily. Below, customer Nicole patronizes company’s first micromarket, installed two years ago. The company has 80 self-checkout stores in operation and is focused on ramping up deployment to satisfy growing workplace demand for convenient access to a broader array of premium fresh foods and beverages.

 

Meet EATS

The company challenged its culinary team to work with its commissary partner to make its food a point of differentiation and its vending machines and micromarkets favored destinations. Its marketing team hosted an internal competition to create the new concept, and the EATS brand was born. EATS stands for Enjoyable and Tasty Selections.

"We have five graphic designers, and the majority of what they focus on is beverage-based initiatives for brands like Pepsi, and beer initiatives and projects," Stevens commented. "It was fun to unleash a little flexibility and creativity on a new line of business, so to speak. From initial selection of the acronym to an entirely new product development process – including packaging and flavors – aligning our offerings with what the marketplace is looking for was integral to the rebrand."

 
THIRST QUENCHERS: Pepsi and its portfolio of soda brands take center stage as Bernicks’ Brandon (above) and Rick (below) ready soft drinks for delivery. As the nation’s seventh-largest independent Pepsi franchise, Bernick’s has 80 direct store distribution routes serving more than 10,000 customers.

 

Bernick's worked closely with its longtime local culinary partner, St. Cloud, MN-based Custom Catering by Short Stop, which crafts sandwiches and other fresh foods for the company five days a week. Together, they upgraded the menu with a close focus on the contents of each selection.

At the beginning of the R&D process, Bernick's considered not only overall the food trends across the nation, but also whether each specific product would be a fit in local communities.

"We tried to take the approach of adding new twists to some familiar items, so as not to overwhelm consumers with a new brand that seemed disconnected or too far from its predecessor," Stevens explained. "We took what we knew to be popular and added a spin, like upgrading to a Nathan's-branded all-beef hotdog and topping it with jalapeños and cheddar cheese."

Throughout the development process, Bernick's also remained focused on its price-points, testing different buns with carefully weighed portions of protein to determine the sweet spot. "When you cut into a sandwich, the ratios and portions have to be just right," Stevens emphasized. "We put emphasis on every item's quality. We source local ingredients whenever possible, including meats and breads."

Each month, Bernick's and Custom Catering by Short Stop collaborate on three new items to introduce to consumers that will drive engagement and increase brand loyalty, thus keeping the operation's micromarkets and vending machines destinations for their customers.

A sampling of the EATS-branded menu includes honey sriracha chicken sandwich; pear and bleu cheese salad; kale power salad; and "Power Packs" – a snackable assortment of hard-boiled eggs, fruit, cheese, peanut butter and whole-grain snack bread.

As the upgrade moved forward, Bernick's hosted product launches with private tastings to obtain patron feedback and revised its new menu items accordingly before introducing the line to customers.

"Our goal with the new brand was to continue to deliver delicious food to consumers while increasing the overall integrity of the products we offer," Stevens said. "We feel good about the ingredients and preparation matching their expectations. We'll continue to bring fresh takes on favorites as a way to foster loyalty while maintaining our position as a true culinary-focused company."

Stevens added that some consistent, tried-and-true micromarket favorites are string cheese, hard-boiled eggs and smoothie drinks because they're perceived as better for you, and are also "open, eat and trash-type" items ideal for today's busy, on-the-go consumers. "Millennials often can't be bothered with a bowl and spoon, which makes healthier handheld breakfast items especially popular in both vending and micromarkets," he observed.

Also popular with micromarket customers are multi-serve packages of sweets and snacks that they can keep in their desks and share with other employees. Bernick's has also tested extending micromarket sales beyond the workday, by selling full-size pizzas and quarts of milk that customers grab at the end of the day to take home.

Coffee is another draw in many micromarkets, where Bernick's provides a single-cup brewer and sells the coffee capsules, since micromarket regulations in Minnesota don't allow for other brewing methods.

OCS Success

Bernicks' vending division provides office coffee service to locations including offices, healthcare, colleges and housing complexes, while its DSD business continues to serve the hot-beverage needs of convenience stores, bars and restaurants among other retail stores.

Stevens said the most popular beverage equipment with Bernicks' OCS customer base is fresh-brewed coffee in 1 ½- gallon insulated servers. "Thermal brewers preserve the brew quality and we try to make preparation as easy as we can with fresh-brew frac packs. Our drivers constantly clean the pots and wipe down the equipment," Stevens said.

While customer interest in bean-to-cup coffee machines is growing because of the variety and convenience they provide, it takes a high-volume location to justify the expense and Bernick's is selective in placing this kind of equipment. The vending and OCS veteran added that Bernick's is seeing less growth in demand for single-cup capsule and pod brewers.

TOTAL REFRESHMENT: C-stores are a major segment of Bernicks’ DSD business. Its one-stop beverage solutions include everything from packaged and fountain soda, juices, teas, water and sports drinks and beer to countertop hot beverage stations with all the amenities.
 
Logistics

Bernick's route drivers provide vending, micromarket and OCS service from one truck.

"Many accounts are rural, so it would require a lot of drive time to split it out," according to Stevens. "We used to have a hot beverage route for retail and vending customers, but we changed that 18 months ago when a driver retired, which made it more efficient to serve OCS accounts from vending trucks and retail hot beverage accounts from soft-drink trucks."

Bernick's provides bottled and point-of-use water coolers to accommodate existing customers seeking a one-stop shop. And with the exception of a few locations in Minneapolis-St. Paul, the "pantry service" trend of employers wooing employees with a wide range of complimentary refreshments and specialty beverages has not yet taken off in Bernicks' Midwestern market like it has on the East and West coasts, according to Stevens. But the company is standing ready to expand its offerings and services should demand rise.

On the technology front, Bernick's uses Cantaloupe Systems' vending management system and 365 Retail Markets' software to manage its micromarkets. About half of its vending machines presently have cashless readers, and the company is systematically expanding this capability throughout its fleet of machines.

"As we update accounts and equipment, we try to address the Cantaloupe piece first with telemetry, and then look at adding cashless machine by machine," Stevens explained.

Bernick's has an in-house refurbishing center with a team of a dozen employees dedicated to keeping its equipment shipshape. This includes making repairs and upgrading equipment with new technology, deep-cleaning machines and beverage coolers, and applying new graphics as needed.

AT YOUR SERVICE: Bernick’s route driver Dave (above) is ready to hit the road to service vending, micromarket and office coffee service customers. Bernick’s delivery vehicles are even emblazoned in Pepsi’s iconic blue – paying not-so-subtle homage to the soda superbrand. Below, Dave prekits products in Bernick’s warehouse to maximize service efficiency for drivers servicing the company’s 40 full-line routes.

 

Giving Back

 
  Jason Bernick
   
Bernick's places strong emphasis on community and takes pride in giving back 5% of its net income to the communities it serves. Its ongoing commitments include partnerships with local nonprofits like the YMCA, Boys & Girls Club and United Way.

Director of corporate affairs and fourth-generation family member Jason Bernick – the great-grandson of founders Charles and Elizabeth – devotes most of his effort to serving the community through grants, local-event sponsorships and donating products and money, along with coordinating time for its employees to assist whenever possible.

"Giving back to the community is something Chas. and Elizabeth supported from the start, with way smaller resources than we have now," Jason summed up. "We live that legacy, along with their way of never being afraid to take on new challenges and try new things to provide whatever the consumer wants. That continues to be at the core of the way we run our business."