Automatic Merchandiser

SEP 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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OPERATION Left, president of U.S. Coffee, Doug Shindler, helps out in the OCS operation's warehouse. the company their fathers built and added the equipment and software needed to keep the operation current and competitive. They consider their greatest attribute the ability to quickly respond to evolving consumer demands and test the latest technology, including using the Internet to move into business to consumer sales. Two heads are better than one The history of U.S. Coffee has always involved partnership. The business was created by Shindler's father, Lowell Shindler, and his partner's father, Steve Trapani. Both had small, 100 account OCS operations and after meeting at a local industry event, felt they could do better together. In 1972 they merged to become Bunn Coffee Service Inc. Lowell ran the front of the house – operations. Steve ran the back - purchasing. They both focused on the future, meeting customer requests as the industry grew bigger and they could no longer know each customer personally. From fathers to sons Shindler started working for the business in 1995 as a sales representative. He had gone to school to be an attorney and after a few years, realized it wasn't a career he wanted to pursue. Instead, he felt drawn to OCS. "Being in business is just more fun and exciting," he said. "It's in my DNA." Shindler learned the business and was named president in the early 2000s. Trapani had worked summers at the company for years doing everything from stocking the warehouse to sales. When he graduated with a public relations major in 2001, jobs were scarce. He always knew he'd come back to the family business someday, so he joined U.S. Coffee in the clerical department. The next year, he launched into sales to really learn the operation. He became vice president in 2006. PROFILE Name changes to U.S. Coffee The name was changed to U.S. Coffee in the mid-90s, for two reasons. The frst was to end confusion that the operation might have a relationship with BUNN-O-Matic. The second was to choose a name that could be nationwide — since this had always been a goal of the founders. In 2012, both Lowell and Steve passed away, but Shindler and Trapani remember their mantras, which included the belief that OCS was becoming a high volume, low margin business. Shindler considers this even truer today. "It's tough to be a small company in this environment," said Shindler. "Equipment is expensive. Margins are shrinking … Our company is large enough to hire good people and invest in the current technology." Trapani agrees the business has changed. "Our fathers used to walk around with a demo machine in a box — no expanded items," he said about Lowell and Steve. Now, U.S. Coffee has more than 2,000 SKUs in the warehouse, plus an additional 40,000 offce supply items that are not stocked. "We carry anything that doesn't have to be refrigerated," he added. Requests spike for single cup Single cup, or what Trapani calls "one cup" has been a large trend for U.S. Coffee in recent years. "It's changed the OCS landscape," he explained. More companies are asking about single cup because they believe it can make a better cup of coffee and will make employees happy. However, for Trapani and Shindler, the widespread availability of K-Cups® make single-cup less proftable than it could be. "Everyone carries them — retail and the Internet — and since we don't operate on a route system it's impossible to police customers," said Shindler about where locations are buying K-Cups. U.S. Coffee also uses other cartridge style brewers, as well as bean September 2013 Servicing a national audience The founders of U.S. Coffee always had a goal to be a national player. A few years ago, current president and vice president, Shindler and Trapani, were able to achieve just that. They joined 19 other OCS companies across 18 states to form the Royal Connection. The group allows the OCS operations to provide a unifed coffee service program available to multi-state companies which can compete with national coffee providers. Each region is handled by a local, family-owned business. "Through this program, we feel we can be more responsive to customers' needs," explained Shindler. Especially in New York, where many companies have branches outside the state, the ability to offer OCS to all locations has been a growth opportunity for U.S. Coffee. USING THE INTERNET Creating several robust Websites has also allowed U.S. Coffee to reach consumers nationwide. For consumer accounts and small OCS accounts, the company ships supplies UPS. Larger OCS accounts are serviced as part of the Royal Connection. to cup brewers, in order to offer singlecup options to locations. The company is also reinvestigating pod brewers as a better tasting and eco-friendly alternative. Currently, single cup is about 60 percent of the company's coffee sales. While the increase in tea drinking among U.S. consumers continues to be reported, U.S. Coffee hasn't seen a jump in its tea sales. "It hasn't taken off like coffee has — not in OCS," said Trapani. U.S. Coffee is also aggressively selling offce supplies to customers, VendingMarketWatch.com Automatic Merchandiser 13

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