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Micro markets The Classic Group recently started offering micro markets, promoted as Fresh Select. While growth in their micro market business has been slow, there are markets with a lot of potential. Klong and Car - bone have found offering freshly made muffns in pastry cases or offering a barista in the market in the morning a few times a week are very successful in certain micro market locations. The company does not oper- ate a commissary to make food for the micro markets, but uses a third party. The fresh food is delivered to the micro markets the same day it is delivered to the warehouse. Technology helps All this couldn't be done without technology. The Classic Group has been a partner with Crane's Steam- ware for many years, which added an additional software component to help the Classic Group handle the third party logistics of a wine distrib- utor that subleases part of the ware- house. In 2014, the Classic Group also updated warehouse technology to include the mobile Lightspeed appli- cation and a zoned warehouse. "Pick- ers start with vending, then OCS then specialty coffee," said Carbone. "Four people pick for 1 ½ hours. Before it used to take between 4 to 6 hours." The Classic Group added a bar code reader to the picking system as a way to ensure the correct product was pulled. "You have to pick it right," said Klong. "The bar code system is crucial to the customer experience." The company has been prekitting routes for 9 years and uses remote machine monitoring to make the prekits more accurate. The company also uses handhelds. Most of the Classic Group's vend- ing machines are no older than 10 years, according to Carbone. Old machines are retired and the com- pany purchases new machines for new locations. They have started introducing cashless payment options as well and have them available on about 250 machines. Putting it all together The Classic group offers a lot and focuses on a high-end clientele. That means overcoming pricing objections, especially in the OCS environment. "Price is always an issue," admits Klong, "even for companies like Google. We talk about what we offer. We are a mile from downtown. We are about experience and solutions." The goal is to get the location to think about what will increase productiv- ity in the offce and offer the proper product lineup. "We have a good grasp of what the employee is looking for and what the company has to offer to entice the level of employee they want," added Klong. It's a strategy that has served the Clas- sic Group well. With the addition of other revenue generating channels like service and wholesale distributing, the Classic Group has a broad revenue strategy to ensure future success. 20 Automatic Merchandiser VendingMarketWatch.com September 2014 O P E R A T I O N P R O F I L E Danny LoCash oversees the customer experience including barista training. Jason Patnaude handles operations management for the Classic Group. Operation Profle: Year founded: 1999 Headquarters: Chicago, IL Owners: Michael Klong and Jim Carbone Number of employees: 42 Number of routes: 12 Software providers: Crane Streamware, Lightspeed, USA Technologies Annual sales: $10 million