Greater Opportunity Awaits In Vending, Coffee And Pantries

Posted On: 4/26/2017

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TAGS: Workwell, Jim Carbone, vending, office coffee service, traditional vending, new breakroom environment, Tradecraft Coffee and Tea Outfitters, Infuse Coffee & Tea Brew Bar, Michael Klong, Classic Services, automated retailing, third wave coffee

Workwell, Jim Carbone, vending, office coffee service
Jim Carbone
NASHVILLE -- From traditional vending and office coffee service to an upgraded beverage and snack experience in an enhanced breakroom environment, cutting-edge operators are adapting their offerings to meet the changing needs and expectations of the locations they serve. One operator leading by example is Jim Carbone of Chicago's Workwell, Tradecraft Coffee and Tea Outfitters and Infuse Coffee & Tea Brew Bar. Carbone and his partner Michael Klong reimagined their company, formerly called Classic Services, as three distinct divisions. This reorganization reflects the approach they are taking to reshape the services they provide to meet the new needs of employers focused on catering to demanding millennials. Workwell, Tradecraft and Infuse also are helping to drive the breakroom revolution.

"The Workplace Café of Today" themed the National Automatic Merchandising Association's recent Coffee Tea & Water conference in Nashville, TN, where Carbone spoke about the steps his company has taken to elevate the workplace refreshment experience and how other operators can do the same. Carbone believes there is enormous opportunity awaiting operators who collaborate with their clients to develop a comprehensive beverage program. In some cases, that might include barista services and fresh-food programs to keep employees engaged, which are highly prized perks that can foster peer collaboration among on-premise employees.

"Attracting and retaining talent is expensive," Carbone pointed out. "More companies are providing amenities like ping pong and pool tables -- and beer at the end of the week."

The majority of people entering the workforce at present are "millennials," and quality onsite food and beverage programs have proven effective in attracting and retaining them. "We focus heavily on pantry services," Carbone reported. "Under this model, the products are free to employees. This is better for employees and operators," the he observed, "but the employer has to be able to afford it."

Workwell, Jim Carbone, vending, office coffee service
THIRD WAVE: Consumer demand is shifting to craft and artisanal products in the food and beverage industries. "Second-wave" roasters like Starbucks, Peet's and Lavazza opened the door for a "third wave," following the path of craft beer three years ago. Savvy operators are now jumping on the trend to elevate the workplace beverage experience to a whole new level.

On the lower end, pantry service consists simply of delivering a basic variety of products. For larger firms, Workwell delivers and stocks accounts with a more extensive range, and services them daily or even twice a day.

Carbone's vending career began in his family's business. He later segued into equipment distribution, and returned full circle to operating in early 2005. This happened after he sold a bean-to-cup coffee machine to Michael Klong, who then was running the Classic Group, an amusement and vending company. That brewer purchase launched Classic into office coffee service, and led to Carbone and Klong's partnership in 2007. They acquired a small OCS company and worked to expand the segment, which rapidly became a focal point of the business.

The two built Classic into a leader in workplace refreshments in the greater Chicagoland market by embracing technology, including LightSpeed's warehouse automation system, and keeping a laser focus on serving customers' evolving needs. In recent years, Carbone and Klong have taken even bolder steps to reinvent coffee, micromarket and vending services. In 2015, they divided the company into three distinct entities to reflect the niche each one serves, in workplace refreshments and the wider market, in terms of location types and geographical boundaries.

'Pantry' Demand Grows

Workwell Food & Beverage Co. serves Chicago-area workplaces, raising the bar for the product range provided through pantries, vending machines and office coffee services. Because office pantries are the division's main focus, Carbone reported, micromarkets currently represent a small part of its business.

"Large companies want to keep employees working, and providing a higher-end range of food and beverages is one way to keep them at work and collaborating more," he said. "You have to be open-minded about doing things that are not the norm for our industry, in order to ramp up what you offer."

Carbone said employers increasingly put a premium on "healthier" snacks for their employees. Granola and energy bars and baked chips, along with less conventional fare like seaweed snacks (which have a growing following), are common requests.

Workwell, Jim Carbone, vending, office coffee service
HELP YOURSELF: Workwell Food & Beverage Co.'s Chicagoland pantry service clients see value in keeping millennials onsite and engaged with a ready supply of complementary high-quality refreshments. Glassdoor reach-in coolers and wire racking, bins and baskets are filled with on-trend snacks and drinks and bulk and gravity bin displays deliver scoop- or pour-your-own treats.

They're also asking Workwell to stock refrigerators with products like yogurt, guacamole, salads and hummus, along with cereal, and milk to go with it and to complement hot beverages. Likewise, pricey drinks -- coconut water, kombucha (a fermented tea beverage), smoothies and fresh-pressed juices -- are becoming mainstream, and employers are willing to pay a premium for them to keep employees on premises and engaged.

In pantries, Workwell uses basic glass-door reach-in coolers for beverages, and wire racking, bins and baskets for snacks. "It's important to make sure everything is always kept full," Carbone emphasized. "Most pantry clients have large-enough budgets to support a pantry program. If they don't, vending machines with subsidies can be a practical alternative."

Among Workwell pantry favorites are bulk and gravity bin displays for scoop- or pour-your-own treats, ranging from nuts and snack mixes to granola and candy.

"You need to recreate the coffee break and make your patrons want to stay, or even come in earlier, instead of having to leave the premises to find what they want," Carbone said.

Serving Chicagoland and expanding the company's reach beyond its local market is Tradecraft Coffee and Tea Outfitters. Its focus is on partnering with "third wave" craft coffee roasters to distribute their products and provide the necessary custom equipment and support solutions to permit serving these artisanal products in offices, as well as hospitality venues and a range of foodservice operations, cafés and groceries. Tradecraft is committed to sustainability and labor fairness practices with all the coffees it sells.

"High-quality coffee programs have separated us from the competition," Carbone said. "Millennials are driving the trend of sophisticated coffee palates. A lot of them don't just want soda or water. Third-wave coffees opened doors for us in Chicago, and we've expanded to other markets. If you can show your clients how higher-quality coffee can improve their employees' morale, it will help you."

Carbone said Classic, his former vending company, was in the forefront of bringing local craft coffee to offices when it started filling its bean-to-cup machines with products from Metropolis, a well-known coffeehouse and small-batch roaster in Chicago. That set the stage for the company to partner with other craft roasters, initially in order to sell their coffees to its OCS clients. Classic then carved a niche as a distributor of those coffees to competing operators, and to other channels and markets in the U.S. This is a growth area that encouraged them to establish Tradecraft Coffee and Tea Outfitters as a separate distribution division, an evolution made much simpler by LightSpeed's order-fulfillment technology.

Niche Distribution

Tradecraft Coffee and Tea Outfitters, which has found an especially lucrative market in the hospitality sector, which now represents 65% of Tradecraft's business. "Hospitality is different from OCS; it's 24 hours, 365 days a year," Carbone said. "It's presented many more opportunities for us."

Three years ago, Tradecraft Coffee and Tea Outfitters opened warehouses in Arizona and Los Angeles, and more recently in Nashville, TN, to support its third-wave coffee distribution. Its next depot will soon open in Brooklyn, NY. "These markets are huge, and there are not a lot of companies like us who distribute third-wave roasters' products," Carbone said. He pointed out that "second-wave" roasters like Starbucks, Peet's and Lavazza have opened the door for third-wave roasters.

Workwell, Jim Carbone, vending, office coffee service
SOMETHING'S BREWING: Tradecraft Coffee and Tea equips locations with drip brewers and whole-bean grinders for brewing the growing range of craft coffees it distributes. Some sites opt to step it up with superautomatic espresso machines that prepare café-quality shots and have frothing capability and 1.5-gal. batch brewers for making hot and iced tea.

"Craft coffee is on the path craft beer was on three years ago," Carbone observed. "Beer began with the basics like Budweiser and Miller, and 15 or 20 years ago, you started seeing Corona, Heineken, Sam Adams ... Then, five to seven years ago, craft brewers began creating distinct flavors and varieties."

Likewise, the first wave of coffee was dominated by national brands like Folgers and Maxwell House. In time, these market giants were followed by a second wave of specialty brands like Starbucks and Peet's.

The new third wave of craft coffees is Tradecraft's lifeblood. As a craft coffee distributor, it represents a half-dozen brands in Chicago alone, including that city's famous Intelligentsia coffees. It also distributes West Coast favorites like Portland, OR's Stumptown Coffee Roasters and Oakland, CA's Blue Bottle Coffee.

"We go to the Specialty Coffee Association of America shows and see how passionate these roasters are about their coffee," Carbone said. "We've had to prove our commitment and passion to them to earn the privilege of distributing their products."

Drip brewers and whole-bean grinders are the standard equipment for brewing craft coffee. Tradecraft also provides 1.5-gallon brewers for locations that want to batch- brew tea for serving hot or iced. Superautomatic espresso machines also are in demand in more and more locations; these prepare café-quality shots of espresso and possess frothing capability, so employees can make their own lattes and cappuccinos.

"It has to work financially, which could mean charging a lease fee if the client isn't spending enough on products," Carbone pointed out.

Kegerators are fast becoming breakroom fixtures in many of the offices Tradecraft Coffee and Tea Outfitters serves. Based on a well-known transport and serving system for beer, kegerators dispense cold-brewed coffee, kombucha (a lightly sweetened fermented tea), sparkling tea -- and even beer, for which they were designed.

Carbone emphasized that cold-brew coffee is one of today's most dynamic trends, and the slowly steeped coffee has become the drink of choice for many millennials. Employers recognize the value of providing it, the speaker reported.

Making cold-brew coffee is relatively simple: essentially, it's a matter of steeping coarse-ground coffee in cold water for 12 to 24 hours. The finished product can be poured through a filter into kegs, single-serve bottles or cartons. "It's one of the fastest-growing beverages in the country, and it can help you to stay on trend and separate yourself from the competition," he emphasized.

An even newer sub-trend in cold-brew coffee is nitrogen infusion, in which inactive nitrogen gas is forced into the coffee under pressure. The resulting beverage has a smooth, natural sweetness, and is distinguished by the way it cascades from the keg tap, with the trapped nitrogen escaping to impart a creamy texture and frothy head.

It's popular, but requires a certain volume if it's to be profitable for an operator. Tradecraft requires that clients purchase at least two kegs a week, and charges an additional fee if they do not meet that minimum.

Manual Option

The company's newest division is Infuse Coffee & Tea Brew Bars. This unit brings fully staffed manual coffee and tea bars into the workplace. This service is the group's ultimate breakroom attraction to aid a company's quest for, and retention of, top talent.

"Our Infuse managed services separate us from most of our competition, and bring in our third-wave roasting partners in Chicago and beyond," Carbone said. "We have more than 15 clients in Chicago and other markets, with our employees staffing the coffee bars."

Infuse clients pay the service for its expertise in designing and installing the facilities. They also purchase the equipment -- which Carbone said in some cases has included fountain soft-drink dispensers and even a custom-painted $15,000 espresso machine. Infuse clients also cover its employees salaries and benefits, along with the cost of the products and ongoing support.

"It's another thing we bring to the table," Carbone pointed out. "One company we serve pays for all employees' coffees and teas, and subsidizes specialty drinks and sandwiches; the employee pays the balance for those."

The in-office coffee bar concept is quickly spreading locally and beyond. A satisfied client at a technology company in Chicago requested a coffee bar for its New York office. Within six months, Infuse had the Big Apple location up and running, with its own employees managing locally recruited baristas. "After New York came their West Coast offices; and as they grow, so will we," Carbone said.

Carbone said his company invests heavily in getting the word out about the services it provides to law firms and advertising agencies -- sectors that tend to see the value in indulging employees and clients with top-tier refreshments and amenities. Carbone also makes it a point to attend events with his roasting partners, through which his company gains business and exposure.

Workwell, Jim Carbone, vending, office coffee service
ONSITE AND UPSCALE: Infuse Coffee & Tea Brew Bars brings fully staffed coffeehouses into workplaces, delivering the ultimate attraction to aid clients in their quest for, and retention of, top talent. Clients pay Infuse for its design expertise and installation, along with covering the cost of employees' salaries and benefits, products and ongoing support.