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NAMA Coffee, Tea & Water Convention Probes Office Refreshment Market Development

Posted On: 11/9/2011

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National Automatic Merchandising Association, NAMA Coffee, Tea and Water conference, office refreshment services business, office coffee service, OCS business, coffee business, vending machine industry, Stu Case, Burdette Beckmann Carla Balakgie, Ross Colbert, Rabobank's, Steve Smith, Stash Tea, Jeb Blount, Sales Gravy, Michael Kasavana, Major Cohen, Hal Steuber, NAMA Coffee Legends

LAS VEGAS -- Strong attendance and a formidable faculty characterized the National Automatic Merchandising Association's Coffee, Tea and Water conference in Las Vegas. The event, which has been expanding steadily since its inception four years ago, offered a wide range of perspectives on the fast-changing total office refreshment services business.

Stu Case of Burdette Beckmann (Yorba Linda, CA) served as chairman of the 2011 event, which was marked by the formal introduction of NAMA's new president and chief executive, Carla Balakgie.

The event led off on Oct. 18 with an evening reception and keynote presentation by Ross Colbert, global strategist for beverages at Rabobank's Food & Agribusiness Research and Advisory Group (New York City). He observed that the broad trendlines in coffee are not dissimilar to those of beer: both beverages are exhibiting a segmentation in demand, as some consumers "trade up" for higher perceived quality and others "trade down" in search of value. And the swift acceptance of single-serve systems in coffee has had a disruptive effect on the market, not unlike the impact made by craft beers. Overall, at present, the OCS industry is serving fewer customers, but prices have improved. It is important for operators to understand the very different margins provided by single-serve systems, he noted, and to remember that service is the element that differentiates them from other sources of supply.

The formal program got underway the next morning with a general session led by Steve Smith, the founder of Stash Tea and Tazo Tea, titled "What I Know About Tea." Smith, who now heads Steven Smith Teamaker (Portland, OR), noted that tea is "the king of beverages," consumed by more people than any other drink.

In an informative and entertaining history of the 3,000-year-old beverage, Smith emphasized recent developments in the United States that have made tea and related herbal infusions more convenient, available and familiar -- and much less generic. This has increased tea's appeal to quality-conscious younger consumers, Smith explained, and it represents a real opportunity for office beverage services. Its "marketing halo" includes flavor, sociability and wellbeing.

Participants then had a choice of four concurrent sessions. Author and sales trainer Jeb Blount, Sales Gravy (Thomson, GA), led a seminar on "managing the prospect pyramid," an approach to making the most productive allocation of sales resources.

Dr. Michael Kasavana, NAMA Endowed Professor at Michigan State University's School for Hospitality Business (East Lansing), moderated a technology overview. Panelists were Andrew Kuneth, Prism Visual Software (Port Washington, NY); Cliff Fisher, MEI (West Chester, PA); Rob Masri, Cardagin Networks (Charlottesville, VA); and Brian Voigt, Bank of America Merchant Services (Atlanta). Dr. Kasavana noted that the reasons for applying appropriate new technologies to a business are to obtain a competitive advantage, improve productivity and enhance profitability. "Profit is not a four-letter word, but loss is," he quipped.

Prism's Kuneth suggested that information technology is advancing inexorably toward "visual" applications on mobile networks, and outlined the features to look for when choosing route management software. MEI's Fisher observed that the object of employing a management information system is to see the world "in a granular and unified way," and to boost efficiency and customer service. Cardagin's Masri described his service, which combines a loyalty-card program with a mobile application that directs customers to participating merchants. BAMS's Voigt described the benefits of giving OCS clients the option of paying by card, which also gives the operator faster access to funds.

Major Cohen and Todd Zappala of Starbucks described a plan of action for "making tea a core product." Cohen reported that Tazo Tea's acquisition by Starbucks had enabled the chain to increase its tea revenues from less than 1% a decade ago to 8% today. He and Zappala described the principal varieties of tea in detail, and led participants in a tasting session as the first step in developing the knowledge of the product that's necessary for effective selling to today's knowledgeable, and quality-oriented consumers.

Jeff Deitchler, Prairie Fire Coffee Roasters (Wichita, KOS), facilitated a roundtable idea exchange on the best practices for communicating the importance of professional office refreshment service as a key employee benefit.

The second part of the program resumed with another round of seminars, also offering four choices. Sales Gravy's Blount led a session titled "People Follow You," summarizing the leadership principles Blount set forth in his popular book of the same title. Wendell Simonson of Eco-Products Inc. (Boulder, CO) offered an overview of the potential for marketing "green" products to office refreshment clients. Eco-Products is a business-to-business product distributor of compostable and otherwise degradable foodservice and office products, Simonson explained. He defined "sustainability" as meeting the needs of the present generation without compromising the ability of future generations to meet their own needs. Operators who embrace it can meet a real and growing demand, Simonson noted, but it is important to understand common misconceptions and address deficiencies in the present public waste management infrastructure. It's also necessary to become familiar with the relevant regulations and certifications.

Fred Parrish, The Profit Experts (Allen, TX), led a seminar titled "Find Your Profit Leaks." He observed that taking control of a business's profit dynamics involves more than mastering the usual financial reports; these certainly can identify problem areas that require correction, but they only show where the company has been. It is up to the manager to determine where it's going.

Dave McCaffrey, Predictive Assets (Elmhurst, IL), offered a five-step program for identifying, recruiting and hiring people who can do the job and who will be likely to stay with the organization.

After a coffee break, education resumed with four final business sessions. Blount returned to shine light on the "top 10 closing secrets of the new economy," and Parrish facilitated a roundtable workshop on best practices for controlling expenses, enhancing revenues, introducing new products and adjusting prices. Kerri Goodman-Small and Miles Small, respectively publisher and editor of Coffee Talk and The Daily Dose, moderated a roundtable discussion of specialty and "cause" coffees, and of single-cup systems in OCS.

Jim Nelson, Everpure (Hanover Park, IL), emceed a roundtable conversation about the often-overlooked subject of installing equipment that uses water, and the operator's liability for water damage. He emphasized the importance of keeping detailed records of equipment and component purchases, immediate close inspection of damage claims and prompt communication with insurance companies.

The 2011 NAMA Coffee, Tea and Water conference wrapped up with a morning general session at which the association's Coffee Legend award was presented to Hal and Diane Steuber, Associated Services (San Leandro, CA). The Steubers started the company almost four decades ago, and have won many industry honors, including the National Coffee Service Association's Mike Savoie Memorial 1995 Silver Service operator of the year award and NAMA's Silver OCS Award in 2008.

Sales Gravy's Blount offered a wrap-up presentation, "People Buy You," in which he stressed the value to a salesperson of becoming the sort of person with whom prospects will be eager to do business.


PHOTO: Hal and Diane Steuber, Associated Services (Oakland, CA), receive congratulations on winning Coffee Legends lifetime achievement award from Kevin Daw (center), Heritage Coffee (Mississauga, ON, Canada), whose father Stuart was the first Coffee Legends recipient. Award was made at NAMA Coffee, Tea and Water show.