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increasing revenues, as long as the industry can respond to demands for item diversifcation and a 21 st century experience in the breakroom. Increase the OCS ticket One area of opportunity for opera- tors in 2016 will be in OCS and the operator's ability to provide a pleth- ora of products to consumers with ever-changing beverage preferences. "Diversifcation looms large as we think about products and services that we will be offering in 2016," said Jeff Deitchler, general manager of PrairieFire Coffee Roasters in Wichita, KS. "I can't remember a time when we've seen so many new products, coffee brewing equipment and methods of delivery in recent history." Despite already being exten- sive, the number of OCS SKUs Prai- rieFire offers continues to increase. Dietchler is always looking for the next item PrairieFire should add to its inventory that will inspire customers to increase their purchase "ticket." One of those items is alternative cold beverage options. "At PrairieFire Coffee, we have been exploring some of the best options in delivering non-traditional OCS beverages," Deitchler said. He is aware that carbonated soft drinks are less in demand, and yet consumers still want a similar drink experience. "Now, OCS providers have options that are easily manageable from inventory and space requirements with soft drinks that can be made by the serving right in the breakroom, and are very user-friendly," he said. These units use cartridges or can be part of redesigned equipment. In fact, PrairieFire offers a combination cof- fee and tea brewer that brews iced tea right into a decanter under the brewer and can then be stored in the refrig- erator. "This allows us to provide a gallon of iced tea for less than the cost of a single serve cup or pod," he said. Consumer demand is driving a lot of ingenuity and non-coffee sales, too, especially in places where companies must offer competitive benefts to keep top employees. This will cause an acceleration of the OCS sales represented by pantry sales. Pantry service includes delivery of a variety of different products to a loca- tion which can include soda, snacks, food, paper products, etc. that are offered to employees, but paid for by the employer. "Offce coffee is changing its face," said Pete Tullio, CFO of World Wide Vending and Gourmet Coffee Ser- vices in Van Nuys, CA. "It's really become more of a pantry supply offering." Businesses in Tullio's area incentivize their employees with everything from fresh coffee to free snacks in the offce. They are con- stantly paying for new products and services to be offered to their employ- ees. "Our SKUs have doubled," said Tullio about the OCS business. As the economy is recovering, companies are again beginning to value good employees and contracting services that will keep them in the offce. Tul- lio sees more of this happening in his area than even three years ago. While coffee is still experienc- ing growth, vending has fattened. "If you're maintaining in vending, you're doing well," joked Tullio. It has been a hard area to grow especially as micro markets have transformed the better vending locations. Better micro market food Micro markets are certainly a growth area that will continue in 2016. Cus- tomers love them, and with additional efforts being put into fresh food, a driving factor, and consumer-focused technology, they are prime to con- tinue. Paul Schlossberg, president of D/FW Consulting is most optimistic about the potential of food in micro markets. "We are entering an entirely new generation of food," he said. Challenges to the industry While the forecast for 2016 is growth, there are some factors challenging the industry be- yond product costs and healthy vending restrictions. Government/Advocacy. The uncertain outcome of the next presidential election has some operators less inclined to make major investments as they are unsure how politics will affect businesses that they rely on in their local economy. Fighting against bills that will burden the industry as well as for those that will assist vending opera- tors is also an important con- sideration in the next year and one all industry members need to lend their voices towards. Equipment costs. Both micro markets and newer offce cof- fee service equipment offer a superior consumer experience. With that comes a price tag that is challenging for new entrants. This will likely create even more of a legacy industry that is diffcult for startups and the addition of new operators. Competitors for the food dollar. If operators don't innovate food programs to rival local quick service restaurants or food- focused convenience stores, micro markets might not reach the potential many people are anticipating. Industry competi- tors are recognizing the con- sumer eating trends and acting to increase their take of the consumer's food dollar as well. December 2015 VendingMarketWatch.com Automatic Merchandiser 19 F U T U R E O U T L O O K