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a laugh, as his mother now works in the accounts receivable department of the operation. Klong incorporated the company in 2000 and grew the services and clientele into vending and OCS in 2005. It was during this time that Klong met Jim Carbone. Carbone had been selling vending equipment for a num- ber of years. He worked for Atlas Dis- tributing, then branched out on his own to form an equipment distribut- ing company called Pro Vending. He sold that company to Betson Distribut- ing in 2005. He got to know Klong well during that time and after briefy try- ing his hand at the convenience store business, Carbone returned to vending and joined Klong as a business partner at the Classic Group in 2007. Klong and Carbone decided to sell the amusement segment. "Amuse- ment is a different business," said Carbone. "You need to specialize in it." After divesting the amusement business, the pair refocused the com- pany on vending and OCS, which led them straight to some less traditional revenue generating opportunities in the coffee market. Focus on customer needs Coffee — as the major growth area of the company — came naturally to both Klong and Carbone. It was some- thing they both felt passionate about and was growing in sales revenue. "Vending has grown as well, and it is very important to us, but when we got into coffee we wanted there to be more differentiating aspects about our company," said Carbone. That was one reason that the com- pany came up with two brands, the Classic Group for the vending, micro market and OCS side and then Chi- cago Coffees and Teas for the restau - rant and café side. "What appeals to an offce is different than a café," said Klong. Chicago Coffees and Teas took the company from classic OCS to specialty coffee, including third wave roasters. "That's the trend, that's the future," said Klong. Third wave refers to a new surge in arti- san roasters. Klong and Carbone are exclusive distributors of many third wave roasters in the Chicago area, including Metropolis, Colectivo and Stumptown's cold brew. Being distributors means also supplying these products in bulk to restau- rants and supermarkets in addition to offering them to offces. Tea has been another large seller on the bulk product side. Klong and Car- Klong and Carbone offer their front area to suppliers for training and demonstrations. 16 Automatic Merchandiser VendingMarketWatch.com September 2014 O P E R A T I O N P R O F I L E More than just a warehouse In 2013, Michael Klong and Jim Carbone were outgrowing the 10,000 square-foot warehouse space they had been renting to operate the Classic Group. They were focused on expanding their coffee and tea segment with Chicago's Coffee and Teas and needed a special type of location. They found an old factory building and renovated the 50,000 square foot space with warehouse shelves, loading docks, offces and a temperature-con- trolled, locked storage area that would be leased to a wine distributor. The building is a mile from downtown, a good selling point, and has a spe- cial coffee-shop like main entrance. "We wanted to do something that no one's done that would turn heads," said Carbone. That was the idea behind the coffee show room which includes cold brew coffee on tap, a high-end espresso machine and everything you need to make it a training space for local coffee and tea suppliers, restaurateurs and hotel operators who need to train staff. The Classic Group allows partners to use the space free of charge. And employees use it for refueling during the day. "We are proof productivity increases when you have good coffee around," said Klong.