Altruistic Values And State-Of-The-Art Technology Spur Success In Colorado

For Gary Nelson, vending was a calling. He loved the business from childhood, being raised in it by his parents in the 1970s. More importantly he loved how it gave him an opportunity to aid others. From serving the snack and coin-op needs of Colorado residents to working to improve the opportunities and success of visually impaired operators under the Randolph-Sheppard Act, Nelson has strived to help his local community and the industry through his Aurora, CO-based operation Liberty Enterprises Inc.

The Randolph-Sheppard Act

“We are vending operators who happen to be blind and work to achieve the same goals and operational standards as commercial vendors,” explained Nelson. This idea drives him to operate the best vending company he can under the Randolph-Sheppard Act. First enacted in 1936, the Randolph-Sheppard Act provides blind persons with remunerative employment, enlarging their economic opportunities, and encouraging their self-support through the operation of vending facilities in federal buildings. Under the Randolph-Sheppard Program, state rehabilitation agencies recruit, train, license and place individuals who are blind as operators of vending facilities located on federal and other properties. The business is also usually run differently than commercial vending operations and varies by state. In Colorado, the vending operator has an operating agreement with the state licensing agency (SLA) detailing his or her commitment to servicing locations, financial matters, management, etc. The SLA then buys equipment and places it at a location under permit. The operator services the equipment, placing product, and managing the business independently. A portion of the operator’s profits are paid as a fee to the SLA to fund further equipment acquisitions. While this might sound like an easy business model, it requires constant attention to federal rules and regulations as well as relationships with government agencies that enforce the Randolph-Sheppard Act in addition to attention to the vending location and end users. Operators within the state compete against each other and rely on their own business acumen to optimize operations. Still, the Randolph-Sheppard Act offers a viable opportunity to those who are visually impaired or blind, and Nelson considers it a privilege to be among the operators it assists.

“As an operator under Randolph-Sheppard, I believe my locations are not an appropriated right. Rather, it’s a privilege to serve those facilities. It’s about serving the customers in our venue,” said Nelson. Over the years Nelson has done that by adding technology whenever it improved his customer service and operation management, acquiring new business, proactively transitioning vending to healthier products and giving back by volunteering and sharing his knowledge. His motto has always been: “You have to be competitive, relevant and profitable.” Adapting to the times as well as sharing what he knows helps him ensure he does just that.

Raising a vending superstar

Serving customer needs was something Nelson learned from his parents. Don and Irma Nelson had a market/vending company in the 1960s in Colorado, running it for 56 years. In fact, they were early customers of Vistar, then VSA. Both being visually impaired, they were glad to be given an opportunity to be successful under the Randolph-Sheppard Act, and instilled that view in their son. “As I grew up — I was raised with a strong Christian faith and integrity. It’s not about getting as much profit as you can, but how you can benefit others,” said Nelson summing up his beliefs.

When he graduated in 1987 from Liberty University in Lynchburg, VA, with a degree in business administration, Nelson knew he wanted to be part of the industry and help Randolph-Sheppard operators. He began Liberty Enterprises in 1987 with a small 30 foot by 30 foot snack bar which he calls an early micro market with a cash register. In the late 1980s he expanded to three fully-functional cafeterias and acquired multiple vending machines at government facilities in the Denver and northern Colorado areas. In the 1990s Nelson brought on 60 venders, equating to three new routes for his operation. In 2005, Nelson proved he could take on more and started servicing the laundry and vending machines at multiple state parks. Currently, he services vending machines and coin-op laundry facilities in nine counties in central and northern Colorado. “It’s not the largest operation,” Nelson joked, “but we are large in collaborations and partnerships within the industry.” It also helps that Liberty Enterprises is a family affair. Nelson’s wife, Karen, runs the operations side and his son has excelled at implementing new merchandising strategies as well as guaranteeing they meet the calorie disclosure regulations taking effect this December.

Embracing technology’s benefits

One area where Liberty Enterprises excels in collaboration and partnerships is with technology companies. Since 2005, 100 percent of Liberty Enterprises’ vending machines came online with Cantaloupe Seed systems. Nelson opted for the vending management system (VMS) because it was an end to end solution offered at an ideal time.

When it came time to switch over, he found that it wasn’t a difficult transition, because he was already doing many of the processes the VMS does automatically, manually. For example, Nelson had been prekitting before that was the accepted term. “We have always prekitted,” said Nelson. “We wanted each and every team member to cross-train on all aspects of the business; some did not feel comfortable driving large delivery vans.” That mindset drove Nelson to pack totes for locations instead of loading the vehicle with excess products from the warehouse. Deliveries are made using vehicles such as Suburbans sans seats and pickup trucks.

To create the pick lists, he tracked sales data, at an individual item level, even including acceptable par levels. He used a Microsoft Excel spreadsheet and did a lot manually. The Seed system just automated the tracking, forecasting and prekitting he was already doing. Plus, it gave him access to more reporting functions. He also appreciates the audio feature of Cantaloupe Seed. “I can listen to reports,” he said. “I don’t have to try to read it or have someone read it to me.” Yet, to reap the greatest rewards, a VMS like Seed still requires someone to manage it full time to change out slow moving products, maximize rebates when ordering and identify problems. Plus it integrates seamlessly with another technology Nelson is “beta testing for solution enhancements” to improve self-sufficiency of blind entrepreneurs — LightSpeed, which aids efficient prekitting in the warehouse. “I consider it a tremendous blessing, LightSpeed offering us the opportunity to implement a complete system. I can’t thank them enough. We can now work with them to educate more blind or visually impaired vendors,” finished Nelson.

Temperature monitoring has been one of the more helpful features of having telemetry on the vending machines, Nelson has found. It has eliminated going to restock a machine only to discover that all the ice cream melted hours ago due to an equipment failure. With telemetry, an equipment failure triggers an alert so service can happen immediately.
One challenge Nelson is currently having is that he was an early adopter of the Seed telemeters. They are using AT&T’s 2G network, which is being phased out. “We are having to switch to Verizon and repurchase devices,” said Nelson. “We are working through that.”

Meeting today’s trends

While Nelson has placed many different brands of vending machines, most of his inventory is from Crane Merchandising Systems. He plans to place more machines with digital displays. “It will be a great way to satisfy the calorie disclosure requirement and we’re very excited about it,” said Nelson. “Everything in the machine is integrated from the screen to the cashless reader.”

Micro markets are also in Liberty Enterprises’ future. At least three micro market proposals are being considered in state budgets for 2017. Nelson hopes they will pass as it will be an exciting new addition to the segment for the locations as well as his business.

Cashless payment acceptance is another area that has Nelson excited for the industry. He remembers putting in his first bill validator to the recyclers he uses now. The evolution of payment technology on vending machines will continue straight to cashless. All his equipment has a cashless payment option. It might not all be credit cards, however. He has been working with PayRange to offer mobile payments on nearly all vending machines, and in the next few weeks will be adding it to the coin-op segment. “This fall we are converting all our coin-op laundry over to mobile with PayRange,” explained Nelson, “making it more convenient.”

Another trend where Nelson leads is healthy vending. He has proactively put alternative items in vending machines and communicated that to locations. As a result, he has not been required to have healthy products or a certain percentage of healthy items in each vender. “I’ve been very fortunate,” he said. He has three different categories of products that his wife manages. He has traditional items, transitional items and healthy items. “Transitional items (a term coined by Karen Nelson) are a step in the right direction,” he said. They may include snack packs, lower calorie cookies or beverages, meat and cheese trays, etc. They help the location and consumer step towards the healthy products that include whole grains, natural ingredients and minimal processing. Nelson has had success with Kind bars, fruit, yogurts, veggie trays, cold brew coffee, micro brew teas, real sugar colas, whole grain snacks and natural bakery items.

Recognized service

Nelson has a true commitment to his customers and the industry. He has won numerous awards including the Customer Service Award for Colorado Randolph-Sheppard in April of 2016 and Entrepreneur of Excellence Award from Hadley and the National Association of Blind Merchants (NABM). He attended and graduated from the NAMA Executive Development Program as well as being active in NAMA’s government affairs committee, NABM, and RSA Management Group in addition to presenting at BLAST and attending nearly every industry event.

One of his greatest honors is that he has been asked to provide training for every new Colorado operator under Randolph-Sheppard. “The honor speaks to our good service program. We genuinely care about the customer. We put in the selections they want, merchandise the products, do the job correctly and — most importantly — smile,” said Nelson. “That is more profitable than speed.”

Nelson’s training program is 30 hours and includes nine functions from servicing the machines to maintaining proper warehouse inventories. “Some people consider it training my competition,” he said. “But I’m of a different mindset. It’s supposed to be a collaboration and whether it’s NAMA or Randolph-Sheppard, I want to be a benefit.”

Over the years, Nelson has taken a “pay it forward” attitude. He is grateful for the advocacy of the National Federation of the Blind and the opportunities he’s been offered under the Randolph-Sheppard Act and tries to share his good fortune by hiring many people with disabilities. “I am visually impaired,” he said, “and I want to make sure we help others.”

Nelson’s mindset has led to partnerships with nearly every major manufacturer in the vending industry, not to mention that he has become one of the largest blind vendors in Colorado. He works hard to provide for his customers, exceeding expectations, and embraces new technologies with apparent ease.

He gives back by providing valuable feedback about the challenges of blind and visually impaired vendors as well as training to others in his home state — many of whom will be his competitors.

He advocates for the industry both within the visually impaired vending and commercial associations, driving it to be a better industry than he found it.

Operator Profile: Liberty Enterprises Inc.
Founded: 1987
Owner: Gary Nelson
Headquarters: Aurora, CO
Routes: 3
VMS: Cantaloupe Systems
Cashless: PayRange & USA Technologies
Warehouse system: LightSpeed