CHATTANOOGA, TN – In early 2011, Chattanooga-based Five Star Food Service decided to embrace change with a revolutionary new concept that would reinvigorate a vending industry that had begun to falter; the micro-market. It quickly became apparent that there was real opportunity in the concept and Five Star jumped in with both feet. Five years later, Five Star has opened its 500th market.
Ask employees at Five Star and they’d characterize the past five years as: “Thrilling”, “Phenomenal”, “Sustainable”, “Collaborative”, “Remarkable”, “Laser-focused”, “Urgency”, “Vortex”, “Epic”, and “Persistence” among others.
The 500th Micro-Market
“The installation of the 500th micro-market marks a major milestone for Five Star. We are privileged to partner with our hometown newspaper and long-time vending customer, the Chattanooga Times Free Press, on our 500th micro-market,” commented President and CEO Alan Recher.
The Times Free Press made the conversion from traditional vending to a micro-market late last week. “Our employees are very excited about the market. They are always looking for a good, affordable food option that doesn’t require them to leave the office. Due to the nature of our business, it is hard to leave the office for lunch, plus having lunch delivered gets expensive,” commented Human Resources Director Sheniqua Hambrick-Thomas. Other reasons mentioned for the conversion being the ability to physically touch the product before purchase, healthier fresh meal options and eliminating the drawbacks vending machines are commonly known for [product hang ups, refunds, etc].
The Celebration
To celebrate the milestone, Times Free Press employees were treated to an expanded version of Five Star’s typical micro-market grand opening. The all-day celebration included a brief tutorial on how to use the market, cash to spend in the market, and raffle giveaways including iPads, FitBits, GoPro, tickets to local attractions, professional sports tickets, and even a four-day trip to Disney.
In addition to the celebration, Five Star and Mrs. Freshley’s have partnered to offer the new Blueberry Powdered and Chocolate Frosted Strawberry Mini Donuts at a special promotional price in all of Five Star’s micro-markets for the entire month of March.
The Retail Mindset
As micro-market growth continued, Five Star realized it needed to adopt a retail mindset versus the traditional route-based distribution vending model. Five Star SVP of Sales and Marketing Greg McCall weighed in, “to continue to be successful in the future, we will have to operate like a world class retailer. We study the strategies of the great companies in grocery and c-store channels to identify concepts and products that deliver growth.” The retail strategies employed by Five Star focus primarily on promotions, product selection, and merchandising. Additionally, Five Star has begun to utilize the retail learnings from micro-market data and to apply to the vending line of business to grow same store sales and better serve vending customers through product selection.
The Differentiators
Initially, Five Star’s ability to adapt to the retail mindset and speed to market with a concept and scalable business model gave them a leg up on their competition. Since, the retail strategies Five Star has adopted and comes to market with are not new or different. They are learned from emulating best practices of high-growth retail businesses and testing within markets. However, the breadth and precision of those strategies is a true differentiator for Five Star.
Five Star builds and executes on a robust annual promotional calendar containing 40+ promotions (3-5 per month) giving consumers opportunities to win prizes, take advantage of discounts, and try the hottest new products. Promotions provide value for the consumer as well as built-in product variety.
Each potential new product goes through a diligent selection process resulting in only the best brands and products being placed in the market. Frequently the products selected are the same top selling and emerging brands that can only be found in grocery and/or convenience store channels.
Each micro-market is merchandised with a specific planogram based on several factors such as market size, consumer demographics, and certain special client requests. The merchandising process is specific from the store layout, to point-of-sale materials, to how products are categorized, organized, and displayed within the market. Five Star uses merchandising to improve end user engagement, experience, and perception of quality and value.
The Future
With the 500th micro-market celebration in the rearview, Five Star is committed to bringing more innovation to the micro-market channel. That innovation comes in multiple forms, expanding the line of business and investments in technology. Five Star is working on new micro-market concepts that will enable profitable service for all customers, regardless of employee count. Achieving greater efficiency and flexibility as a result of advancing the technology infrastructure at Five Star is another immense opportunity for future growth.
About Five Star Food Service
Five Star Food Service is a Chattanooga, TN based food service provider specializing in full-service vending, micro-markets, coffee services, full-service dining, and catering services across Tennessee, Georgia, and Alabama. Founded in 1993, Five Star Food Service has grown to one of the largest privately held operators in the Southeast. Five Star Food Service is a franchise of Canteen Vending. For more information visit www.fivestar-food.com.
