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Vending Business Information, Issue #067
November 01, 2015
Office Coffee Service
The office coffee service business is a $4.75 billion dollar business. In the last year that started in the second half of 2014 and included the first half of 2015 it saw a 5.5% jump in sales versus the previous year. One reason why sales are up is that operators have been adding pantry items (snacks, soda and other items) to their trucks. These items are invoiced to the employer and then the employees eat or drink for free while they are at work.
The best selling item the OCS operators sell is private label coffee. Then the national brands (Folgers, Maxwell House and others) come in a close second to the private labels.
Single cup brewers are the most requested brewers that OCS operators have. Thirty four per cent of consumers consider the single cup brewer to be the preferred coffee for the workplace while 29% prefer the traditional coffee pot brewers. Reasons given for the single cup brewers popularity is the variety of coffee options that are available with a single cup brewer and the speed at which a cup can be brewed.
The customers understand that coffee from the single cup brewers are more expensive but seem to be willing to pay the difference. The big challenge for the OCS operator with single cup brewers is making a large enough profit margin. Online ordering and office supply retailers are coming in with lower prices than the OCS operator can offer. One thing that the competition doesn’t offer is maintenance and the cleaning of the equipment. Regular cleaning is a must with the single cup brewers.
Many operators have added web sites with ordering capabilities for the customer. This is helping to make for larger orders for the route drivers when they deliver. One operator that we know of automatically sends an email to the route drivers customers a couple days in advance making them aware that their route will be run soon and asking them to add any additional items they would like the driver to bring when he/she comes. If the customer doesn’t place an order then a second reminder email is automatically sent to the customer.
Getting the customer involved in the order process has proved to make for larger orders and has also helped make the customers happier with their OCS provider.
The number one type of OCS account is the white collar (office jobs), 47% of an operators accounts are white collar. Over 35% of operators are using a software program designed for the OCS business. The software is helping them run a more cost effective operation and that is helping to drive profits up.
The biggest competition for the OCS operator is coffee houses and office supply companies. The best counter is an ongoing dedicated sales staff that is able to add value added amenities.
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Give Harry a call at 1-330-687-3222 and tell him Dennis from vending business information sent you.
Eleven reasons to go into the snack box business.
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