Five Star Food Service Continues Growth Opens 400th Micromarket

CHATTANOOGA, TN -- Five Star Food Service celebrated the opening of its 400th micromarket in early March. The installation at a Jostens production facility in Clarksville, TN, reportedly marks the 133rd micromarket Five Star has opened this fiscal year, which ends this month.

Last July, the Chattanooga, TN, Canteen franchise, announced that it had become one of the nation's first independent vending operations to surpass the 300 micromarket mark.

Five Star attributes the growth to its dedicated micromarket organizational structure, spanning from the corporate office to the branch level, including area managers and route drivers who specialize in merchandising the self-checkout stores.

"In order to sustain scalability, we made the decision to invest in the infrastructure on the frontend," said Five Star president and chief executive Alan Recher. "We recruited the best people to manage micromarkets and involved all levels of management from the beginning to ensure buy-in and adoption."

Headed by vice-president of micromarkets Mark Stephanos, Five Star has a team of more than 50 employees exclusively dedicated to its micromarket business.

Recher said Five Star quickly learned that micromarkets were very different from traditional vending and that it needed to adapt. "From the onset, we knew this was a retail concept and learned over time from errors made in the planograms," the Five Star chief said.

Along the way, Five Star has focused on continuous improvement in its processes, products, promotions and execution. "Our unique approach to choosing the 'right' products and promotions for our micromarkets truly differentiates us from our competition," Stephanos said.

Five Star also invested in technology to keep pace with internal growth and end-user demands. About 18 months ago, Five Star partnered with 365 Retail Markets to power its micromarket kiosks and backend reporting.

"Partnering with 365 was a major switch in the kiosk technology we use. It has proved to be advantageous to our growth and negated many technical issues we encountered early on," Recher said.

While Five Star's core business continues to be traditional vending, Recher said senior leadership foresees a future in which micromarkets will comprise 50% or more of the total business. "We see continued growth in the micromarket space. I believe improved technology will play a key role in the future expansion of the industry," he said.

Founded in 1993, Five Star Food Service has grown to one of the largest privately held operators in the Southeast.