Operation Profile: Pee Dee Food Service delivers southern hospitality

Pee Dee Food Service has built its reputation as a leader in northeastern South Carolina by treating its customers like its guests and serving up its own freshly made foods in vending machines, micro markets and at catered events as small as a backyard barbecue and as grand as a white tablecloth plated occasion.

Based in Florence, S.C., the company has been focused on meeting the on-site food and beverage needs of its customers since 1988. It began as an offshoot of Pepsi Cola of Florence, S.C., a multigenerational independent Pepsi bottler started by the Avent family in 1936. With the launch of Pee Dee Food Service, the bottler dove into full-line vending and office coffee service complete with a commissary to differentiate itself by producing its own fresh food.

“From the beginning — when the Avent family owned Pepsi of Florence — they prided themselves on being strong supporters of and partners to the community,” said Nick Foong, Pee Dee Food Service director of foodservice, who also heads up the repair service department for Pepsi of Florence and Pee Dee Food Service. “Our owners and executives sponsored events, served on boards and foundations, and participated actively in community activities. As a result, Pee Dee Foods developed a reputation for being a strong, integral part of the Pee Dee region we’re named for, which encompasses 10 counties in northeastern South Carolina.”

The company’s owners and team grew the full-line vending business steadily by focusing on delivering top-notch service and bolstered their market penetration by acquiring South Carolina’s Premier Vending and Five Star Vending.

In 2005, the Avent family sold Pepsi of Florence and Pee Dee Food Service to Carolina Canners Inc. (CCI), a Cheraw, S.C.-based corporation formed by five North Carolina and South Carolina-based independent Pepsi bottlers. Another significant milestone was in 2008 when Pee Dee Food Service became a Canteen franchisee.

Food focus

As one of very few vending companies in its region to have its own commissary, food remains a central point of differentiation for Pee Dee. With the same catering manager, Phil Stephenson, at the helm since the beginning, the Pee Dee Food Service commissary built a reputation for consistent, top-quality offerings. The commissary averages 35 freshly made items, rotated regularly, and supplemented by a wide array of packaged frozen or cold foods.

“We can make it fresh today and sell it tomorrow and are unique in variety and value for the end user,” said Foong.

Pee Dee Catering hired a classically trained executive chef in 2017 and recently launched peedeecatering.com to market its capabilities beyond its core corporate and community-based business to pursue private functions for 20 to 1,000 guests, including weddings, birthdays, anniversaries and holiday parties. The sky is the limit, from local regional favorites like sausage or chicken biscuits, pancakes, waffles and barbecue, to a prime rib and lobster white-tablecloth affairs.

“The pandemic dealt a blow across our business and corporate meetings — and catering, especially — with so few employees in buildings. We’ve done some weddings, but most are rebooked for next year,” Foong said. “We’re streamlining and still evolving across our operation in response to the pandemic and trying to make up for its negative effects.”

Keep on trucking

He added that during the height of the pandemic, Pee Dee Foods took measures not to close a single route or furlough any of its drivers.

“Even as their commissions shrank because of lower sales, we found different opportunities for them to buffer up their take-home pay,” added Les Ward, general manager of Pee Dee Food Service of Pepsi of Florence. “We went above and beyond to help our drivers make extra money.”

Several five-day routes went down to four, and on the fifth day, drivers helped in other parts of the business by refreshing markets, remerchandising machines, and helping Pepsi of Florence reps with merchandising at convenience and grocery stores.

“Our first priority is to take care of employees, because without them, we can’t take care of our customers,” Ward remarked. “This challenge was put right in front of us with the pandemic. It is easy when times are good. With business down so suddenly and significantly, we found ways to go above and beyond. If we do right by our employees and customers, the bottom line will take care of itself. We’re still betting it will come back.”

Foong instanced Pee Dee’s responsiveness during the early days of the pandemic, when a large customer with three micro markets and multiple vending machines had its first COVID case.

“They sent all their employees home and cleaned and sanitized and wanted us to clear out all the items from our markets,” he recalled. “With one day’s notice, we sent a team of 10 and emptied all the micro markets. The customer sanitized everything over the weekend, and we returned on Monday morning to refill all the markets. We leveraged our resources and infrastructure that let us turn on a dime.”

Refresh and remerchandise

He also pointed out that Pee Dee has not closed for a single day since the pandemic began. The company used the time to go through every location that allowed its drivers access to rotate and add new products, refresh and clean equipment and markets.

“We set things up so even with business lower, when employees come back, we have fresher product and variety and increased some prices so we could rebound as quickly as possible,” Foong noted.

As part of that process, the company upsized many of its snack SKUs to large single serve (LSS) and cans to 20-oz. bottles in closed-front and glass-front machines that accommodate a broader mix of beverages including energy drinks, juices, iced tea and coffee. This move also provided another way to assign different jobs to route drivers to fill the void of one less day on their routes.

“We’re betting when business comes back, more options and variety will sell more product and boost revenue,” Ward said.

In addition to preferred pricing and economies of scale from its bottler parent company, Pee Dee gets an added boost from its geography, where for three months a year 90°F. to 100°F. heat is the norm. Several of its larger customers subsidize coolers or vending machines during for their employees, supplying unlimited drinks for free or for 25¢ or 50¢ during the hot weather.

Pee Dee’s office coffee service, five-gallon water and point-of-use filtration business took the biggest hit from COVID-19.

“Coffee pots are viewed as high-touch devices so many accounts have shut them down during pandemic,” Foong said. “Coffee was an area we neglected to focus on, and we only have a single route, but we aim to grow it as a top area of focus in 2021 as offices reopen — and with more touchless solutions available.”

Micro markets are the wave of the future

The company has 19 hybrid vending/micro market routes. It installed its first micro market eight years ago and believes this unattended retail format will continue to be the wave of the future.

“Without the barrier between consumer and product, employees can view nutrition information and product details before making their purchase, and micro markets offer so much more variety,” said Foong. “We encourage every customer — where it’s possible — to consider micro markets, and we’ve been adding them at a steady clip. Conversions from vending to micro markets that we had planned have been delayed but will come back in three to six months, and others have expressed interest. Sales revenue increases by double digits when we convert from vending to a micro market, and no one ever wants to go backwards.”

Pee Dee currently has 44 of Troy, MI-based 365 Retail Markets’ self-checkout stores in operation with six more already lined up for installation — and more expected close behind.

“Our clients are happy if their employees are happy. Because it is a business-to-consumer interaction with micro markets, the host company is not paying us for the product. Due to its format, we can provide a more satisfying, enjoyable experience for the consumer,” Foong commented.

USA Technologies’ ePort cashless readers are installed on 90% of Pee Dee’s vending machines, but cash is still king to most of its customers, which are almost exclusively manufacturing-based and spread out across a rural geography.

“They like to use cash and feed dollars into the machine and get change, even in micro markets. We’re a little further behind in terms of technology adoption,” Nick commented. “We have not yet had one new request for touchless purchases, but it’s already available using Apple Pay at our machines and kiosks. The 365Pay app is available on their phones so we can activate that feature on a moment’s notice. Our next frontier will be spending some energy on identifying touchless solutions because the pandemic won’t be 100% gone anytime soon.”

Optimizing operations

Pee Dee serves its accounts from its main headquarters in Florence, and by shuttling product to satellites in Andrews, S.C., to the south and Cheraw, S.C., to the north daily in a refrigerated box van, including freshly made food that is stored in walk-in coolers.

Pee Dee dynamically schedules all its routes, delivering to the item level when it is needed, facilitated by remote monitoring through Cantaloupe’s Seed Pro vending management system. In the warehouse, the company leverages Duluth, GA-based LightSpeed’s pick-to-light technology to facilitate picking of snacks, drinks and fresh food for its vending machines and micro markets.

“It originates with Seed and sends information on to LightSpeed, which sends it to iPads for the picking crew,” Nick explained. “Drivers get their daily routes sent to their iPads.”

Further streamlining operations is a strong in-house service department shared by Pee Dee Food Service and Pepsi Cola of Florence, with an expert team that is highly efficient and skilled at installs, repairs and refurbishing.

“Vending machines and coolers can have a long life like vehicles, and our team refurbishes them and swaps them out to keep them looking fresh and working at peak efficiency,” said Nick. “We also have the benefit of Pepsi machines any time we need them.”

Pee Dee benefits from shared resources and economies of scale as part of the Pepsi of Florence family, including management expertise and support, fleet service, and vending and cooler equipment and service, which all help the company deliver superior service and value to its customers. Additionally, as a Canteen franchise, Pee Dee can tap into the nation’s largest convenience service company’s knowledge, programs and buying power, which includes purchase rebates, all of which benefit its customers.

As it navigates the post COVID-19 world, Pee Dee Food Service continues to pitch its value as a one-stop shop to provide vending, micro markets, water and office coffee service, and — as circumstances permit — resuming catering of on-and off-premise events like monthly birthday breakfasts, employee-of-the-month celebrations and manager meetings.

Nick reiterated that the culture and philosophy of the organization is quite simply to provide customers with excellent service and meet their every need.

“It sounds like a given, but we have the privilege of enjoying leading market share in our geography that we do not take for granted,” he said. “On a daily and weekly basis, we have meetings to keep reminding our team that we earn our customers’ business every day and to give the type of service we’d want to receive. That’s what we preach and strive for.”