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Johnson increased the gram throws on coffee and cappuccino to create a "coffee house" coffee and cappuc- cino. All of Johnson's micro market locations are high-volume, with more than 450 employees, so he needed a solution that did not require a lot of maintenance and could accom- modate the numbers. His solution was to place a hot beverage machine on free vend with 12- and 16-ounce cups that the customer then scans at the kiosk. The 12-ounce cups are $1.00 and 16-ounce cups are $1.50. He has seen sales slightly increase. Johnson will continue to use a hot beverage machine for locations with 400 to 600 employees. "When I open a micro market with 150 people or less, I will need to fgure out another method, but I'll cross that bridge when I come to it," he said. Since 2013 Johnson has bought two new hot beverage machines; he has also taken some hot beverage machines from vending locations and updated them with new sign panels and fxed brewer parts and placed them back into micro markets. For many operators, fnding a micro market coffee solution depends on the individual location. Single -serve and bean-to-cup machines work well in many smaller micro market locations, although some single-serve cartridges do not have UPC labels. Operators can get around this by either printing off their own UPC labels and placing them on the item or by making each single-serve drink one price. "Single-cup has been doing well in micro markets because the customer is already in the micro market purchasing items," said Kevin Searcy of deORO Markets in Odessa, TX. That was not true for all of Searcy's locations, however. "At one location the company was already offering 5 to 6 different brands of high quality coffee through airpot brewers. When we moved to micro markets I tried a higher-end single- serve machine and it busted because the employees were used to good, free coffee," he said. In other locations he has found pod machines to work the best, especially because pod packages can ft well onto shelving. Searcy charges either $.45 or $.50 per cup on the lower end and about $.80 for higher quality hot beverages. In each of Searcy's micro market locations, the employer is providing either cups or mugs for the coffee, which has helped keep the end sale price down. He noticed that some locations are more willing than oth- ers to pay for gourmet coffee. In Utah, Trevor Booth of Fuel Vending has seen tremendous suc- cess with single-serve coffee in micro markets. "I use a single-cup brewer in every location with the exception of two highrise offce locations. At those I use a bean-to-cup machine which is much more expensive, but they are willing to pay for it," he said. Coffee makes up 5 percent of Booth's overall micro market sales and is the number one selling product, even above fresh food. "I was hesitant at frst to get into coffee in micro mar- kets, but since I've put resources into it we make about $3,000 per month in seven locations just off of coffee sales." Booth prices cups of coffee at $1.00 at the majority of his locations. "The right location makes all the difference when it comes to maximizing coffee profts in micro markets," he said. Future forward Although operators are making cof- fee a part of their strategic plan in micro markets, many are waiting for other operators to move, to fnd the best option. It is unlikely that one standard will work for every location and operators are quickly fnding that it takes trial and error. "Operators should be aware of their customer profle in selecting what coffee solu- tion to offer in a micro market loca- tion and how to price it," said Caston. "It's a question of understanding the customers." Caston advises that oper- ators avoid looking at coffee service and micro markets as two separate entities. "Integrate coffee service into your micro markets and into initial micro market design," he said. "There is an opportunity for cross pollination, so to speak," he contin- ued. "Marrying coffee service and micro markets should be an emphasis for full-line operators." Some operators use UPC labels on hot beverage cups. '' Marrying coffee service and micro markets should be an emphasis for full-line operators. '' 22 Automatic Merchandiser VendingMarketWatch.com April 2015 O C S U P D A T E