Several months ago I received an email from a human resource manager. The company was a small manufacturer of electric motors in Sarasota, FL where they have a total of 142 employees and they are open 24/7, six days per week. The basic premise of the email was that the company was looking for a vending company who could offer food choices for their employees. The next line in the email said that if we were like two other vending providers they had dealt with in the last ninety days who had sandwiches with brown lettuce, products that were out of date and mold on a number of food items, please do not respond to the email.
My email answer to the HR manager was that our company had an employee refreshment program that is 100 percent guaranteed NOT to have any of the types of headaches she was experiencing with the other vendors. We made an appointment to meet the next day.
First impressions were good
As I drove into the parking lot the next afternoon I noticed that this factory had all of its overhead doors open and large fans going full speed. I knew right then that if serviced properly this could be a very good vending location. Even though I have lived in Florida since 1973, I am still amazed at the number of manufacturing plants that are not air conditioned.
When I met with the HR manager, we went into her office and I told her why we would have the solution she needed. I then proceeded to tell her that we do not install cold food machines that typically maintain a temperature of 40 degrees and the reason they were having the problems described in her email was the fact that refrigerated food products have a very limited shelf life.
We then proceeded to their employee breakroom to take a look at the vending machines they currently had. There were a total of four vending machines in the breakroom. Two cold drink venders that were bottler supplied, a four wide snack machine and a carousel style Rowe 548 cold food machine. I started in vending in 1994 and the cold food machine they had was from the early 90’s.
The cold food machine was stocked with Ramen Noodles, Gatorade, Yoo Hoo and some fresh sandwiches from a local purveyor I had never heard of along with some oranges. I told the HR manager that this was normal because most vending companies absolutely abhor cold food machines and they only put in items that have as long a shelf life as possible in a 40 degree cold food machine.
I then shared information with her about our frozen food program and all of the benefits that their employees would enjoy. Some of the benefits were that we only offer name brand products, frozen food items like Jimmy Dean, Red Baron, White Castle, El Monterrey, Hot Pockets, Michelina microwaveable entrees, Nathans Hot Dogs, Nestle Ice Cream, etc. When I saw the smile on her face I knew this was going to be our newest location.
Frozen beats refrigerated
There can be no doubt the reason the overwhelming number of vend operators are basically against cold food machines -- spoilage, low profit margin percentages, high vend prices and low sales volume, as well as the number of times the machine has to be serviced. We have found installing frozen food machines will solve all four of these issues. Here’s how frozen foods will help you land new locations and also have increased sales and profits over cold food machines.
Reduce or eliminate spoilage. Frozen food products have a much, much longer shelf life shelf life than refrigerated. Spoilage is something that almost never occurs as some frozen products have up to six months shelf life.
Change how you view profit margin to raise profits. One thing I have a hard time understanding is the issue of low profit margins. I realize that a general rule of thumb in vending is that whatever the cost of the item, you at least double the price to get your selling price. Bearing that in mind if a bag of large single serve (LSS) size chips cost the vendor 40 cents, then the selling price should be at least 80 to 90 cents. The actual cash gross profit is 40 to 50 cents. My next observation is if the vendor is satisfied with a 50 cent cash gross profit on a bag of chips or a can of soda, why would you not be happy with 50 cents cash profit on a frozen food product. Have you ever gone to your bank and tried to deposit a percentage of your sales instead of actual cash? The banker would no doubt ask 'are you nuts, you cannot deposit a percentage in any bank account anywhere.'
Also, my experience shows that there are two main reasons people are hesitant to buy food products from a vending machine. Price and that they don’t know if they will like the taste. If you are willing to make 50 to 75 cents on a food item just like you do on a snack item, you will sell thousands of frozen food products. Another benefit is if you can get the employees at your location to buy a food item they almost always will buy a beverage and a snack of some kind to go along with their food purchase thereby resulting in three products sold. If they bring their lunch from home, you may get them to purchase a beverage. Maybe.
You are probably going to think I'm crazy with my next statement. Here it it. The first day or two after you install a frozen food machine, set the machine on free vend. That’s right I said FREE VEND. Why? Because we know that one thing preventing your customers from buying your food products is they have never tasted most of them. When you go to the grocery store how many items do you purchase that you have never tasted. The reason that supermarkets offer free samples is they know if you taste it and like it, you will probably buy it. New state of the art electronic frozen food machines also give you the option of having sale prices on products at different times of the day or week, which will increase sales.
Panera Bread Company, who has approximately 2,040 stores in North America with sales of approximately $2,060,000,000 in 2016, gave away a free cup of coffee or a free bagel everyday to every customer who had a Panera card during the month of February. I am pretty sure the reason is not because they just wanted to give away millions of cups of coffee or bagels. They are doing it, because they know it will increase sales and profits. I will guarantee you that their research shows that by giving away a cup of coffee or a bagel, many of their customers will purchase something else.
Enjoy more time between services. Frozen food machines will reduce your labor cost because you will not have to be concerned about spoilage or out of date products. It will reduce trips to your locations who have refrigerated cold food machines. Fewer service calls will increase productivity and reduce costs.
It matters to employees
Three surveys in 2016 conducted by Employee Benefits Adviser Magazine, Food Management Magazine and EZ Cater, Inc reveals the following:
- Millennials, 62 percent, stated having something more than traditional chips, cookies, candies, when they go on break and lunch is very important
- 3,000 employees were surveyed and 80 percent responded 'yes' when asked if having a workplace café would make their workday more pleasant
- 68.5 percent of respondents answered 'yes' when responding to the question, 'would having meals, sandwiches, microwaveable foods available increase morale and productivity?'
If you are not providing the employees and staff of the locations you currently have with food items, someone else will. Frozen food products can be the answer to increasing sales and profits at your current and new prospective locations. It comes down to the fact that if you change the way you look at offering your locations frozen food choices, the way you look at offering frozen food choices also changes.
