Automatic Merchandiser

MAY 2013

Automatic Merchandiser serves the business management, marketing, technology and product information needs of its readers including vending operators, coffee service operators, product brokers, and product and equipment distributors in print.

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MICRO "We have a local foodservice person make food weekly," said Skidmore. The food is delivered to his markets Mondays and Thursdays and is labeled under the J&J; Company Kitchen brand. His best sellers aren't even sandwiches. "We sell a lot of salads," said Skidmore. The next most popular items are yogurt parfaits and fresh fruit. "It's been unbelievable," said Skidmore about the success of fresh food in the micro markets. Supplying fresh food to micro markets has been a new line of business for Kitchen Fresh Foods (KF Foods), a third-party commissary located in Green Bay, Wis. Greg Hill, wholesale division manager at KF Foods, observes that the challenge for operators is fnding just the right inventory for each market. "What we [received] were requests for premium deli-quality items," said Hill. "Operators were looking for that $7 sandwich." Deli-quality means sandwiches with premium meats, natural cheeses and artisan breads, explained Hill. The packaging also plays an important role in fresh food success. Hand wrapped sandwiches in clear cellophane, or clear clam shell containers, display the items much better than an item bagged in the traditional vending style, KF Foods has found. Fresh salads need to look like they were just made and work best when Romaine lettuce or spring mix greens take the place of iceberg lettuce. The presentation, packaging and ingredients raise the price point while lowering the shelf life. "There is an average 30 percent reduction in shelf life for these foods [compared to vending]," said Hill, "and they cost more." Still, fresh food makes up nearly a third of market revenue and more customers are shopping the micro markets for these items than previous vending locations. Because of this trend, Hill recommends operators really think about merchandising. "In vending, an operator on the KF program has 100 plus fresh items per day to pick from, rotating through 440 fresh food items offered," said Hill. "In retail, that is too much variety to manage in the space available." The problem is how the food is presented. In a traditional food carousel, there is one product per slot. A customer can rotate the machine and shop every slot for a specifc food product. In a micro market cooler there are only 15 to 20 facings, depending on product and cooler size. Hill suggests limiting food products in the market to the facings available, adjusting volume for the location's need. This means an item could be three or four deep, instead of different varieties hidden behind each other, forcing the customer to reach in and search through the cooler. "Less food variety gives you the ability to merchandise better in the micro market [cooler]," fnished Hill. Micro market food trends quality Some of KF Foods top food sellers include the "easy peel" boiled egg MARKET said Hill. Receiving, distributing and displaying an item at the correct temperature is key to its freshness. "If a product is in ambient temperature for 20 minutes, it loses a day of shelf life," explained Hill. He feels operators need to be sensitive to how long food is outside a cooled environment, such as being transported into a location. Refrigerate even in the warehouse Maintaining food temperatures should also be considered in the inventory and picking process. According to Randy Smith, president of LightSpeed, with new technology micro market operators have the ability to take electronic pick lists directly into their coolers. Using a device like the LightSpeed mobile, warehouse staff can take the iPad into the refrigeration unit and "pick" food for a specifc micro market location based on the replenishment list from the backend system, without it leaving a refrigerated space. Our ''freshcustomers are demanding a product...with lettuce and tomato and mayonnaise.'' pack, ham or turkey fat pack sandwiches and large deli wraps. Interestingly enough, salads are the most requested item group, but are not the best movers. "Salads are only 5 percent of our sales [in micro market fresh food]," said Hill. There continues to be conversation towards healthier items in micro market products, but Hill reports the sales don't support the level operators might think was required. "One hurdle for operators launching a micro market fresh food program is understanding proper food handling with regards to temperature control," May 2013 Products: hand wrapped, fresh Jeremy Cauble, marketing manager at Winston-Salem, N.C.-based Gallins Foods, Inc., a long-time vending operation with 20 micro markets, understands the value of fresh food. He believes one of the things that sets Gallins' micro market food apart from vending food is the packaging. Gallins' food provider, also MG Foods, still does a lot of hand wrapping. "Customers can see it wasn't run through a machine," he said. The product's appearance is paramount to the consumer coming to a market. "With a lot of sandwiches, when you VendingMarketWatch.com Automatic Merchandiser 23

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