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Operators said locations are either price sensitive, meaning they won't pay above a certain amount for coffee service, or they want more products and better service and are willing to pay more money for it. Compared to previous years, opera- tors indicate that fewer locations are balancing coffee service costs versus service demands. If the loca- tion's decision comes down to the price of the coffee service, operators have found it diffcult to price the coffee for good margins. Some good news is that the number of workplaces wanting to offer coffee service has increased in the past year. More than half, 57.7 percent, of OCS providers report serving more locations in 2013/2014 than in the previous year. Only 8.7 percent of operators indicated they decreased coffee ser- vice at locations. Of the locations adding OCS ser- vice, many were small workplaces with less than 10 employees. The share of sales this type of location contributed to the OCS providers' bottom line doubled in 2013/2014 (chart 9). In contrast, operators indicated that for the past year, they reduced service most often at accounts with 11 to 49 employees due to the layoffs and fnancial chal- lenges at those locations. Larger accounts, those with 50 or more employees, saw the biggest increase in share of sales. One interesting data point related to the growth of coffee service sales is the decline in sales in offce loca- tions. That segment, as a share of sales, decreased from 48.8 percent to 45 percent in 12 months (chart 8). This drop is likely due to the increase in other types of locations. Opera- tors report an increase percentage of their OCS sales coming from indus- trial plants, restaurants, convenience stores, schools and retail, supplant- ing those from offces. Coffee providers who served large military and government accounts this past year reported rev- enue declines as a result of the gov- ernment shutdown. S P E C I A L A N N U A L R E P O R T : S T A T E O F T H E C O F F E E S E R V I C E I N D U S T R Y 32 Automatic Merchandiser VendingMarketWatch.com September 2014 6% 59.1% 35.1% 2012/2013 10.3% 52.9% 36.8% 2013/2014 0 10 20 30 40 50 60 11.1% 0% 11.1% 11.1% 16.7% 0% 0% 0% 55.6% 55.6% 25% 58.3% Sales Delivery Warehouse Repair Office Other 0 20 40 60 80 100 52% 24% 83% 33% 44% 46% 32% 14.2% 18.1% 15% 9% 0.8% Sales Delivery Warehouse Repair Office Other CHART 11C: IF REDUCED STAFF, WHICH AREAS? ● 2012/2013 ● 2013/2014 CHART 11B: IF ADDED STAFF, IN WHICH AREAS? ● 2012/2013 ● 2013/2014 CHART 11A: HAVE ADDED OR REDUCED STAFF IN THE LAST 12 MONTHS ● ADDED ● REDUCED ● NO CHANGE CHART 12A: HAVE ADDED PRODUCTS THAT ADDRESS ENVIRONMENTAL CONCERNS, 5-YEAR REVIEW ● YES ● NO ● DON'T KNOW 37.1% 2.9% 60% 48.2% 2.4% 49.4% 49% 2.4% 51% 49.5% 50.5% 2009/2010 2010/2011 2011/2012 2012/2013 39.2% 60.8% 2013/2014