By Laura Aiken
The Canadian Automatic Merchandising Association (CAMA) celebrated the 60th anniversary of its annual trade expo in the heart of Quebec City. The expo was held at the Quebec City Convention Centre from Oct. 12-14.
For the first time, CAMA co-located its event with the Canadian Bottled Water Association (CBWA). In all, there were 76 booths (68 CAMA, 8 CBWA), and 214 attendees (164 CAMA, 50 CBWA).
And the winner is…
On Friday, Oct. 13, CAMA hosted a banquet dinner at the Quebec Hilton to honour several award recipients.
The Don Storey Memorial Award, which recognizes outstanding commitment to the vending industry and is only given in years where merit is obvious, was given to Ed Kozma. Kozma, who entered the vending industry in 1991 through a co-op, played a tremendous role in bring Interac to the vending industry in Canada. He is currently the North American sales manager for Crane Payment Innovations and is a past president of CAMA.
The Stuart Daw Gold Service Award, given in honour of Stuart Daw, is designed to recognize leadership, commitment and professionalism. Gordon Berry is the 2017 recipient. Berry became friends with Brian Martell, who later hired him as sales director for eastern Canada at Heritage Coffee Company. He served on the CAMA board of directors for six years.
The CAMA Customer Service Award, given in honour of the late Albert DeNovellis, was given to Jonathan De Guise a senior sales manager with Crane Merchandising Systems.
Cafection Enterprises took home the best booth award. Denis Dufour of DenFour was awarded recognition as the best salesperson.
Educational sessions – Day 1
Jim Jackson, general manager of Quality Vending & Coffee Services, opened the educational programming with a morning session on the evolution of CAMA and the vending industry. He began by noting that CAMA, founded in 1953, is lot more than automatic merchandising now. This changing nature of the industry is also reflected through the U.S. counterpart’s rebranding to NAMA/Bringing convenience to life.
He noted that vending began as a strong business, and the post-economic slump era has not seen a full recovery of profits. Vending is trending flat to negative year over year. To grow again, he says the industry needs to diversify. At one time vending added coffee as a supplemental business, and now Jackson says micro markets are the next opportunity. Micro markets, which are self-serve breakroom solutions that include fresh healthy fare, are experiencing a 400 to 600 per cent growth annually. The initial capital investment is around $30,000. Companies with around 200 employees are an ideal candidate client for a micro market instead of a cafeteria or vending only solution for staff meals.
“You might have to sacrifice a vending account for a micro market account, but the uplift in sales is worth it,” he says. Micro markets also help address providing healthy eating options that are mandated now. Jackson has 12 micro markets installed with one more planned to set-up by Christmas.
Micro markets get around the perception of shelf life that prevents people from buying fresh food out of a vending machine, he says, and their ability to provide a fresh nutritious menu, variety, 24/7 availability and a convenient self-checkout kiosk make them basically sell themselves. Operators are often still nervous about the unattended nature of micro markets, but Jackson assured that this is not much of a concern. One would worry if inventory shortage hit three per cent. Surveillance cameras are used. In most cases, employees would not want to be caught stealing at work.
He also identified pantry services as a relatively new but upcoming opportunity. Pantry service is the wholesale delivery of a wide range of food and beverage products that customers can re-sell or gift. He identified IT companies who like to provide perks as a potential client, as are hotels and other corporations with a health and wellness program. Pantry services provides smaller quantities that can be typically bought from wholesalers. He recommends stocking a good variety of healthy items.
Vending is still the largest money maker in the business portfolio, he says, and what the industry has been in the longest.
Jean-Pierre Ayotte, a senior analyst in the currency department at the Bank of Canada, followed Jackson’s session with an informative update on the next bank note and current counterfeiting efforts.
He pointed out that the bank issues new notes to help deter counterfeiting. The fight against counterfeiting involves combined efforts of R&D, compliance, communications and distribution (good quality bank notes in circulation).
The next commemorative note, which will be issued at the end of 2018, will feature Viola Desmond on a $10 bill. This will be the first time a Canadian woman will be on the front of a Canadian bank note. Desmond is an icon of human rights because she fought against racial segregation.
The Bank of Canada has a new issuing strategy, he says. The issuing strategy used to be to put all notes out in a short period, but he says now they are spreading it out to better respond to changing technology, counterfeit problems or a problem with a note.
The bank is also conducting Banknote Equipment Manufacturers (BEM) outreach, as they are a key part of cash handling. The bank has a BEM basic non-disclosure with a two-way confidentiality agreement. Pre-issue note purchase is available. The outreach involves annual (or as needed) meetings to discuss products, machine readiness, policy and sensor development. Some of that outreach resulted in changes, such as the way the transparent window on Canadian currency evolved to be.
On the topic of counterfeit trends, he says prior to 2015 the problem was mostly $20 counterfeit, and now more polymer and $50 and $100 counterfeit notes are surfacing.
Lesya Balych-Cooper, president of the Coffee Association of Canada, wrapped up the Friday morning sessions with a presentation on coffee trends.
Coffee in Canada is a $6.2 billion industry, she says, and coffee is the most popular beverage among Canadian adults.
The association’s proprietary research suggests Canadians focus on technology and how the coffee is made.
“People want the choice,” she says of lattes, Americanos and the many types of beverages now enjoying popularity. “People think they are wealthy when they have choice and now we don’t have to sacrifice quality because of technology.”
The association’s research further shows that in 2016, 69 per cent of coffee drinkers said they have a workplace coffee area. The other 39 per cent wanted one but don’t have one. Single cup brewers are most coveted option for the workplace: 42 per cent want one and 40 per cent already have one. Just 38 per cent of employees were very satisfied with their workplace coffee. Complaints could be the quality of coffee or the area (lack of cleanliness).
The 2016 overall coffee trend highlights say innovation is driving growth. Data suggests the same old thing is not good enough anymore. The biggest change is growth in specialty beverages such as lattes and cappuccinos. In the Ready to Drink (RTD) sector, association research shows three per cent of past day coffee drinkers drank ready to drink coffee. She expects that figure will grow.
Educational sessions – Day 2
Saturday’s educational morning opened with a presentation by Dan Stewart, president of Savco Food Services on CAMA’s Smart Pick program.
The Smart Pick program helps operators determine healthy choice offerings and comes with a full promotional package to help brand and sell. It’s a new way of doing business, said Stewart, as Smart Pick can be used to change the profile of your company.
The program is designed to be a turn-key solution and was developed by a CAMA committee in consultation with April Saunders, a dietitian. The program is only available to CAMA members.
While the machine can be branded healthy through Smart Pick, and the goal of the program is to empower members to offer healthy choices, it doesn’t mean all the products in the machine need to be healthy, says Stewart. If 20 per cent of the products meet Smart Pick criteria, that still leaves lots of room for traditional sellers.
There are five main criteria products must meet to be Smart Pick eligible. They must be less than 250 calories, contain less than 10g of total fat, have 0g of trans fat, less than 250mg of sodium and less than 15g of sugar. Fat from nuts and seeds are exempt, as is sugars from fruit, and milk in any form.
Develop planograms to group healthier items together, recommends Stewart, but placement is up to operator and is flexible. Don’t leave it up to route person: make plan and implement. Consider placing healthier options at eye level.
While CAMA isn’t going to maintain a running list of qualifying products, the association has developed a starter list that members can use to build on.
There are competitive pricing opportunities. Operators can reduce the price of Smart Pick items and raise the price of traditional products to encourage sales, Stewarts says. “The results aren’t earth shattering in terms of sales,” he says, adding that it’s not really about selling products so much as recognizing that it is essential to have this type of program.
“Be prepared for a slow start. You have to promote and keep working at it. Adjust, seek out new products and promote!” concluded Stewart.
The second and final educational event at the expo was on micro markets and led by John Chidiac, president of 365 Retail Markets – International, a self-checkout technology company.
Chidiac reiterated Jackson’s opening theme that vending is undergoing a shift in thinking: it’s not just vending anymore. As vending offers services like micro markets that can compete with services provided by convenience stores, companies like 7-11 “will be coming to compete with you in the next five years with the creation of micro market models,” he says. Chidiac cited stats indicating 7-11s were losing about 12 per cent in sales when they were within two miles of a micro market.
Looking to the future, the next generation of technology will focus on data and consumer attraction with features like facial recognition and ability to know very specific behaviours of individuals, he says.
American micro market sales data shows US $1 billion in 2016. The average micro market generates US $54,000 in product sales, with 1.7 products per transaction. People pay once but buy more.
365 Retail Markets installed their first micro market in 2009 and are currently doing about 400 a month. The Canadian numbers are small, but they tripled in Canada in the last six months, he says, so the market is moving in a positive direction.
Chidiac outlined a few reasons why micro markets are popular. Micro markets are PCI certified, customizable, feature multiple payment options, keep employees happy, low cost, familiar store environment, endless product variety/freshness, 24-hour security, nutritional information on all products, convenience and operators triple revenue when they open a micro market in North America. With these benefits comes a common operator concern of theft and shrinkage. Expect a 2.5 per cent theft/shrinkage, Chidiac says, with averages worldwide running between 2.2 and 3 per cent.
Looking ahead, 365 Retail Markets is releasing a global account/one report system that provides live inventory data. Mobile payments and nano-markets are also on the horizon.
The show floor
Here’s a highlight of some of the eye-catching products, services and news on the show floor:
• Folgers flaked coffee: The coffee uses new milling technology to create a bigger surface area on each flake that allows for better flavour extraction during brewing. The flaked coffee uses less ground per brew than non-flaked coffee. Folgers is selling the flaked coffee in fractional packs available in Classic Roast, Classic Decaf, 100% Colombian and Black Silk. The coffee is also packaged in ready-to-brew 39.7g filter packs. The filter packs are available in Classic Roast or Black Silk.
• The Fleetmatics booth featured its Reveal Fleet Monitoring System, which is a Software-as-a-Service system that provides a number of vehicle and driver based reports.
• Heritage Coffee Company is now carrying steep by Bigelow tea. The premium line comprises 13 certified organic teas. The flavours are a mix of classical, such as Earl Grey, and more unique twists like dandelion peach rooibos green tea.
• Heritage Coffee was also showing new flavours in its Victorian Inn line of solids: gingerbread, salted caramel, pumpkin spice, wintergreen and shortbread.
• Crane Payment Innovations is now accepting Interac Flash.
• Three Square Market micro markets are now building and selling own their own fixtures so nothing is outsourced.
• PROLINK, CAMA’s business insurance program, was on hand in CAMA’s booth to answer questions about vending company specific insurance needs.
• Montreal based Candara Foods is now offering the iBar, 45g chocolate bars with fruit.
• Nestlé put its focus on its breakfast shake and meal replacement product lines (Carnation and Boost). Booth sales material provided data showing the breakfast shakes category has more than doubled in the last two years.
• Herr Foods, distributed through Vending Products of Canada, noted the popularity of hot chip flavours.
• Covered Bridge was proud to have six of its potato chip flavours qualify for CAMA’s Smart Pick program. The company’s number one seller is Sea Salt, follow by BBQ. The chips have a seven-month shelf life, which the company reps outlined is particularly long for a potato chip.
• OMG’s Candy entered the vending market seven months ago. Their top seller is the milk chocolate clusters.
• Cafection Enterprises, who took home the prize for best booth, had a number of coffee machines on display. The Encore 29 model features a touchscreen and the system can manage media files and send preventative maintenance and audits to operators. The system uses a private cellular connection.
• Denfour’s Denis Dufour won CAMA Expo’s top salesperson award. The booth was spreading buzz about their cappuccino and iced coffee/Frappuccino machines as well as Jones Soda slushy machines.
• The Vending Products of Canada booth identified K-cups, Cliff bars and Vitali-T products as big buzz generators.
• Vitali-T cookies use apple sauce instead of sugar, are low in fat and made with natural ingredients. Banana Chocolate Chip is the bestselling flavour.
• Mindful Snacks carried a variety of healthy options, many of which made CAMA’s starting Smart Pick list.
• Dure is focused on lifestyle products, which include powder supplements for health and wellbeing.
• BeanCounter was a first time exhibitor based in Halifax that specializes in vending and coffee business management software.
The next CAMA Expo will take place at Blue Mountain Resort in Collingwood, Ont.