Canadian Vending

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Growing Lean Machine’s bottom line


February 3, 2012
By Canadian Vending

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leanmachineFebruary 3, 2012, Halifax – When she drafted her first business plan for a healthy vending company, April Glavine was a Saint Mary’s University business student with a passion for eating well. Fast-forward a dozen years and today that ambitious business student is an award-winning entrepreneur with hundreds of branded vending machines operating across Canada.

 leanmachine 
 

Lean Machine CEO April Glavine believes
healthy eating is a lifestyle choice that's
here to stay.
 

February 3, 2012, Halifax – When she drafted her first business plan for a healthy vending company, April Glavine was a Saint Mary’s University business student with a passion for eating well. Fast-forward a dozen years and today that ambitious business student is an award-winning entrepreneur with hundreds of branded vending machines operating across Canada.

Lean Machine Inc. launched in 2005 with a single machine selling wholesome products. At the time, Glavine was juggling several jobs to generate much-needed capital to invest in her brainchild. As the company began to post strong growth figures – roughly 300 per cent per year – Glavine transitioned into a full-time role.

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Despite growing from one to 100 machines in just three years, Glavine felt that she needed to be doing more to nurture her business. She sought the advice of a fellow entrepreneur who recommended that she read Michael Gerber’s The E-Myth: Why Most Small Businesses Don’t Work and What To Do About It. Glavine gave the book a try and her Halifax-based vending start-up hasn’t been the same since.

“As soon as I read E-Myth I just started brainstorming different ways that I could grow the company that didn’t necessarily mean that I had to one-on-one manage every machine,” says Glavine. “That’s how the start-up began and I never thought that there was another way to run a healthy vending company.”

Lean Machine currently operates with a three-pronged strategy. A franchising program allows entrepreneurs who share the company’s core values to bring Lean Machine to their area.

The second prong, a re-branding program, is designed for existing companies that want to compliment their traditional foodservice strategies with a niche, healthy vending operation stocking Lean Machine’s dietitian approved products.

“I had a couple of companies wanting to enter the market and minimize risk. They were already established with regards to traditional vending and they didn’t know how to approach healthy vending,” says Glavine. “I thought there was an opportunity to partner or re-brand their company, and if they were to go in and put 100 per cent healthy vending machines in a location, it would be a great way for them to do it.”

Last but by no means least, the third prong is the Lean Machine Way entrepreneurial program. Launched in 2007, Lean Machine Way lets participating schools purchase a machine outright. Students run the machine, guided by a blueprint provided by the company. Once the initial investment is paid for, the schools begin to reap the benefits of higher profit margins. After recovering the initial capital cost, a school may see its return on investment jump from five or 10 per cent to more than 50 per cent. This revenue can be funneled to athletics, arts and other extracurricular activities, bringing benefits to all students, not just those learning business skills hands-on by participating in the program.

Over time, the Lean Machine Way program has expanded its reach. Participating groups now include health care facilities, gyms and other businesses. Halifax’s Izaak Walton Killam (IWK) children’s hospital is the most recent organization to sign on.

Glavine says the entrepreneurial program is “just now starting to gain some traction,” despite the fact that it’s been a success for both Lean Machine and partner organizations. “I honestly think it’s our key performer but for whatever reason people look at it as them taking on that capital cost as a major risk.”

Lean Machine currently stocks a catalogue of 50 healthy items. Inventory in a machine is tailored to suit the location, so the choices offered at a high school in Halifax may be different from those available at a Vancouver hospital

“That’s the one thing that’s unique about us: we don’t have one plan that’s standard and that’s the only product mix you get. Everything at a location is tailored and personalized to those needs.

To ensure that this personalized product mix is right for a location, Lean Machine monitors sales volumes carefully. The company has a good idea of what the first 80 per cent or so of a product mix should look like; educated guesses based on past experience fill in the rest. After a month or two of sales, Glavine says they begin to change the mix, swapping products in and out until the machine is hitting the desired sales volumes.  

Glavine sees a bright future for healthy vending across Canada and around the world. Although the company has fielded inquiries from the United States and Europe, Glavine says right now they’re staying focused on building a strong brand here at home.

“I would like to see the company be known as the healthy vending company – when people think of healthy vending, they think of Lean Machine, just like when they think of pop, they think of Coke or Pepsi,” says Glavine.

“We have the right partners and franchisees in place, now we really just need the market to start demanding more, which is what we’re seeing day to day. It’s more of a pull approach from the industry than us pushing the information on them.”

With the company poised to top the 500 machine mark this year and a target of 1,000 machines in operation inside the next two years, Glavine is betting big that healthy eating is here to stay.

 “It’s the same as wearing a seatbelt, or not drinking and driving, or smoking around children, or recycling. All of those things became lifestyle choices in a positive way and I believe healthy eating is the exact same. I do believe that it is a lifestyle.”


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