The Businesses Were In

People were running vending machines, delivering coffee to offices in convenient formats and operating coin-actuated amusement equipment before there ever was a vending, a coffee service or a music and games industry. The pioneers in all these fields looked at an invention -- basically a process for delivering a product or service -- and envisioned potential markets for it. When they went out to sell it, they often discovered additional opportunities in those markets. And those perceived unmet market needs might lead to the adoption of other inventions.

The question that often arises when following such a path is, how far is too far? Many former vending operators who eagerly took up coffee service as a much tidier business -- no midnight emergency service calls, no equipment vandalism, little capital investment -- found themselves back in vending after a few years, because a good account asked for it and it seemed like a great vending location. A larger percentage of full-line vending operators found themselves in coffee service when a valued customer asked for it in the front office, though they often did not go out prospecting for OCS accounts -- until the vending market turned down.

By the same token, a decade earlier, operators of jukeboxes might add pinball machines and pool tables, if their clients expressed an interest in games. Operators of vending machines, including cigarette venders in street locations, might well add jukeboxes and/or games, just as those jukebox and game operators might add cigarette machines. Some operators of catering houses saw the first refrigerated food machines as a fine solution for high-volume accounts that could not be served around the clock by mobile catering trucks.

Today's micromarkets are the latest manifestation of this tendency. For a vending company, especially one that has a commissary supplying its refrigerated food machines, the addition of micromarkets seems straightforward enough. The contemporary micromarket is based on vending payment systems that originally were adapted by supermarkets for use on self-checkout lines. Imaginative vending operators streamlined that self-checkout concept and coupled it with wireless remote monitoring and cashless payment technology to produce the micromarket. It is much easier for a full-line vending operation to add micromarkets to its menu than it was for the first vending firms who ventured into selling fresh prepared food.

Similarly, the advent of single-sup hot drink vending machines prompted the development of small, modular water treatment systems that would prevent the hot-water system from "lime scale" buildup, and that were easy to replace in the field. That technology was available to coffee service operators when an increasingly demanding market required the addition of automatic brewers. Some creative OCS companies perceived a consumer desire for purer water than their municipal supplies, and conceived the idea of housing a vending filter adapter and cartridge in a service stand, adding a faucet and a plumbing connection, and leasing it to their clients. The client got better water and coffee, and paid for the filter. This solved a number of problems at once.

In reviewing the very diverse paths taken by the pioneer operators in all of these segments, one may wonder whether some principle might be recognized that could help identify contemporary market niches that imaginative operators might find a way to fill. There certainly is not one correct answer. If something can be done profitably by an operation that serves customers on local routes, it probably will be.

It always has been possible for a narrow focused operator to form alliances with people similarly interested in concentrating on other segments, so when a client asks for something in addition to the present service, the operator can recommend a good local provider. Someone who is not prepared to plan and execute substantial changes in process probably will do better to follow this course. It is one thing to put in a coffee brewer for a good vending client who wants coffee for his front-office staff; it is quite another to implement the sales and service methods that underlie a successful coffee service operation.

It is worth keeping this in mind when considering micromarkets. A full-line vendor surely has more than enough expertise with food preparation, distribution and administration to make a smooth transition into micromarkets. However, the route personnel assigned to the new segment will require training and inspiration if they are to deal successfully with the different demands of stocking reach-in merchandisers, keeping the market orderly and presentable and responding to customer requests. Some companies have found OCS route salespeople easier to retrain for this than vending route drivers.

There is a tendency for people to wax nostalgic about the good old days when good business was easier to get and to serve. Those with more accurate memories will remember the thorns among those roses. Moving ahead, operators will continue to be asked whether they can do this or that different thing. Those who succeed will be the ones who are prepared to respond.