Canadian Vending

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Reflections In A Cup: Knowledge and Change

Knowledge and Change

April 30, 2008
By Stuart Daw


As I recall, the very first issue put before the marketing class by our professor at the University of Toronto was, “What are the customer’s buying habits?”

As I recall, the very first issue put before the marketing class by our professor at the University of Toronto was, “What are the customer’s buying habits?”

In other words, it was not a matter of what the prospect intended to do, or might do, but what does the prospect do now?

In that vein, the recent NAMA-sponsored survey presented at the Las Vegas convention, in trying to decide coffee service customers’ preferences, was a worthwhile exercise. There is no question that we are seeing the whole coffee service business undergoing some radical if gradual changes, and it’s good for operators to keep abreast.


The results of this particular survey may surprise some, but it’s important to evaluate these findings in the context of one’s own forward planning, as it holds a wealth of information to consider.

First, NAMA was careful to select a survey organization with an impeccable reputation, Harris Interactive, represented at the show by Bill Dalbec. The methodology was to seek responses from a vast database of people who were contacted in their home environment by Harris’ “online panel,” and asked various questions about the coffee drinking habits of people in their own offices.

But to qualify, the respondents had to be employed in offices with at least 20 people. This number was selected because a pre-survey sampling of actual operators indicated that it would not be useful to speak with people from smaller businesses. Unfortunately it did not include Canada, but we assume the numbers would relate anyhow.

While the total of 278 people interviewed, roughly one for every million Americans, may seem to the layperson a rather small sampling, we are assured that number is statistically valid. And on this basis, the survey revealed that 42 per cent of American offices with a minimum of 20 employees have between 20 and 99 people working there, while 35 per cent have over 500. Further, of the 278 people mentioned above, only 152 seemed to have a coffee service. Perhaps this could be because at the upper reaches of this population, it becomes blurred as to whether the office is qualified for vending as opposed to straight coffee service.

Where does OCS end and vending start anyhow? Over many years there has been this overlap. The vending guy took a jaundiced look at those little coffee machines, and only reluctantly purchased them as needed for special situations. The OCS guy was at the opposite end. He had a customer growing in volume to the point that vending became inevitable. Totally disoriented and reluctant to spend the big money needed, he nonetheless plunged in, and found himself in vending. But with many notable exceptions, his heart was not really in it, and he had great difficulty making the adjustment.

Here also we have to be careful to remember the many exceptions that should be considered, such as a large customer with branch offices not meeting the twenty-plus criterion, small populations of heavy eaters, to say nothing of many other mitigating circumstances.

Speaking of office populations, I am inclined to inject a humorous incident that happened when we were in coffee service and honour snacks. Although we had certain rules in snacks about location population, the “tray average” – the money in the cash box on pickup – was everything.

One manager reported that a typically satisfactory tray seemed to suddenly fall off in volume. The route driver reported that the problem was a one-person office where the lone worker, weighting perhaps 350 pounds, had suddenly decided to go on a crash diet. 

Getting back to the survey, some other findings were surprising to me. One example was in answer to the question, “Are employees happier in offices where coffee is supplied to them by the company?” Sixty-four per cent “strongly agreed.” Does this mean we are living in a far more benevolent society than many of us had believed, where the other employees would actually rather pay for their coffee than ask their employers to do so? But on the whole, it would be well for OCS operators to study the results of the survey to get maximum benefit.

While we are dwelling on the demographics of office populations and trends affecting vending and OCS, a situation has come to my attention that seems worthy of some long-range thought. In many medium sized cities across North America, large corporations headquartered in major metropolitan areas traditionally have maintained sizeable sub-warehouses to handle the substantial local demand for it products. You need an item such as a machine part? You hop in the car, drive across town, and get it.

But an unusual thing may be developing, as evidenced by a lowering in the construction of new, fairly large buildings of say 40,000 square feet and up in the smaller cities, with a larger proportion of much more modest buildings of 2,000 to 4,000 feet being erected.

What seems to be causing this is the tendency for buyers to go on the Internet, peruse available material, and order it for delivery tomorrow by a UPS-type service. The beneficiaries of this are the large, head office cities that can centralize the warehousing. The losers would be the smaller centres missing that traffic.

If this is indeed a real trend, there may be a corollary effect. People more and more seem to be willing to drive even longer distances to work. One only has to be a car commuter to big cities such as Atlanta, Chicago, New York, Toronto, etc., to grasp this. How far is too far? Some experts in the field see an even greater trend in this direction, including a higher dependence on train commuting than now. What might be the long-term effect of this? Will there be more large companies (vending) in Bigtown, and more little ones (OCS) in Smalltown?

One other trend is the Internet’s ability to create home-based entrepreneurs. No coffee service or vending involved here. This is a fast-growing segment of the business world. It may be relatively insignificant, but it does mean at least some drain of people from offices. o