This article was previously published by NJBiz.com, New Jersey’s leading business magazine.
A market aimed at ending vending
Atlantic says its micro retail concept is popular with both employers and workers
A Grainger employee scans a sandwich inside Atlantic Vending’s micro market at company’s Robbinsville offices. The bulk of Atlantic’s business is still traditional vending machines, but the micro markets are becoming more popular with employers, and are more profitable to the company.
Imagine instead of using your loose change on chips and a soda in the office breakroom vending machine, you could get egg-and-croissant sandwiches, or garden salads and fresh apricots.
For Joe Kupselaitis, imagination is not required.
The general manager of Atlantic Vending is changing the way office buildings think about food by replacing traditional vending machines with self-service “micro markets” stocked with cereals and trail mix, and incorporating refrigerators and freezers for hoagies, salads, yogurt, cheese and ice cream.
Kupselaitis calls it “the world’s smallest convenience store.”
“People who traditionally think of a vending machine as junk food … stay away from it,” he said. But at its micro markets, “they have many healthy choices, and all of a sudden they are purchasing.”
That’s a big story on the bottom line. Where micro markets are installed, Atlantic Vending typically sees a 150 percent to 200 percent revenue increase over traditional vending, Kupselaitis said.
Jeff Kells and Dean Critchlow started Atlantic Vending in 1992 as a traditional vending machine company, and now have about 5,000 machines in about 2,000 workplaces across New Jersey. Traditional vending is still most of the company’s multimillion-dollar annual sales volume, but Atlantic sees the micro market as a significant growth engine.
With micro markets now in about 15 New Jersey locations, and new ones coming on board at the rate of two or three a month, Kells estimated in 2014, micro markets will be a $1 million-a-year business for the company.
“The vending machine business hasn’t changed in 40 years, but meanwhile, the world was changing,” Kells said. For one thing, more employers want to encourage health and wellness among their employees.
In June, Atlantic put a micro market at the Robbinsville distribution center of Grainger, a supplier of repair and maintenance products. Regina Lederman, human resources manager for Grainger, said the company’s “first concern is our team members, and we always want to provide healthy options in regard to food. The employees have really embraced it because the food is fresh and the display is beautiful.”
That’s a typical response, Kells said.
Though the client doesn’t share in the revenue — unlike in the vending machine business, where there may be a split — “the response has been so positive from our customers that we feel the opportunity is limitless,” he said.
Still, it’s not a one-size-fits-all solution, he said: “If you grow too fast, you can make mistakes.”
For instance, between 35 percent and 40 percent of the micro market’s items are perishable, unlike at a vending machine. “If you don’t manage it profitably, you can lose money,” Kells said. “We are taking a slow, methodical approach.
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