Vending Management Companies

[arkhusker]

I have had experience with two different management companies and neither have been very good, one being very bad. I'd like to hear others experiences and thoughts on these. Are there any good ones out there? 

[mission vending]

I have had experience with two different management companies and neither have been very good, one being very bad. I'd like to hear others experiences and thoughts on these. Are there any good ones out there? 

 

I have had a relationship with several management companies over the years, currently none, and I plan to keep it that way.

[AZVendor]

The only management company that I ever worked with was Best Vendors which is now wholly owned by Canteen, which is now wholly owned by Compass Group in Europe.  My experience in the 90's was good as I began with them while I held my own contract with a major retail chain in the Phoenix area.  Best Vendors signed a national management contract with the corporate office but honored my existing contract.  I did have to change my commission arrangement to paying Best Vendors due to their contract and this screwed the retail store employees out of the commissions that I had been paying to them.  I found out in November of that year that none of the employee associations within the stores had received any money from the commissions and could not fund their Christmas parties.  Boy, did the crap hit the fan at Worst Vendors. 

 

Due to the great service we provided to this retailer Best Vendors began feeding us a bunch of other retail business and we added lots of machines without doing any sales at all.  I always knew, however that these were accounts I could lose at any time.  What I didn't know was that BV's board of directors had a member who owned North County Vending in California, a huge regional vendor.  NCV had bought a vending company here and was struggling in the market, so BV decided to help them by feeding them the retail locations that some of us BV vendors already had.  That was the end of the deal with BV as they screwed every vendor they had been using here in Phoenix. 

 

I will say it was a good time to lose that business as BV was beginning to move toward requiring their vendors to use remote data reporting so that they could keep tabs on our sales to verify that the commissions were accurate.  This was going to be at our own expense and I wasn't the least bit interested in letting BV into my pocket.  I found it comical that BV actually represented the remote data reporting as a positive way for me to keep the client happy and for BV to entice additional client signings.

 

Canteen bought BV a few years ago so now they are the preferred vendor for any of the BV accounts now (Canteen also bought North County Vending, too).  The only BV business that is not with Canteen is where Canteen doesn't have a branch to service that business.

[arkhusker]

I had the (DIS)pleasure of working with National Vending out of Iowa. I had an auto auction that was bought by a corporation with auctions all over the place. Corporate decided to hire this management company to streamline their vending. They dictated pricing and required a 24% commission. The only thing that made that account worthwhile was that I had OCS and water coolers there which they didn't control. I had to go from $1 to $1.75 on pastries and small chips went from.50 to .85 cents. Needless to say, gross sales fell dramatically, and stales tripled. I was paying the site more $ at 5% then the VM at 24%. When they sent me this last contract, there were forms to fill out wanting to know my company's annual sales, # of routes and a few other things I had no intention of giving them. So, they found another vendor to take over (because I was out of compliance) and I was never happier to get out of there while retaining the coffee and water. 

Is Canteen buying up everything in anyone else's area? 18 months ago, we had 5 vendors servicing this little town of 23K. Canteen has bought three and I bought the other but I'm still too small for them to offer I think. 



 

[AZVendor]

National Vending is part of the Wittern Group which is USI, hence why they are based in Des Moines. To me that is a conflict of interest, as was the BV relationship with NCV and the current relationship between BV and Canteen. Of course this is of no matter to the clients, they just want money paid to them at the corporate level rather than having local independent vendors paying the commissions direct to the location. The clients look at the funds from the management companies as a new revenue stream.

There is another management company with a conflict of interest - The Pelican Group. They own bulk vending and amusement companies while at the same time managing all the vending for accounts such as AMF Bowling centers. There was a fake "press release" on Vendingmarketwatch.com (known for their fake press releases presented as news) this past week in which Pelican Group bragged about their purchase of a large bulk operator and a bulk equipment manufacturer, I believe, all in the name of "better for their clients" when it's really about the consolidation of all the business in their locations into their own pockets.

This brings me to your other question about Canteen acquisitions. In our area Canteen has bought North County Vending but I believe that has been the only one. There have been a few small operators being bought by slightly larger operators, but that is about it right now. Unfortunately I have lost a couple of service clients due to buyouts so I'm concerned about any consolidation. We've all seen how consolidation can negatively affect the industry as the result of Crane buying DN, AP and Mars.

 

You being a smaller, more streamlined operator than Canteen is in your area should enable you to target their accounts and go in for the kill on some new business.  Remember Canteen is only as good as their route drivers are.

[arkhusker]

In the Little Rock area, that I know of, Canteen has bought Custom Food Groups, C.L. Swanson, Automatic Vending of Ark, and Heritage Vending. I have heard that they budgeted from $2B to all the way up to $5B for acquisitions. 

 

AZ I think you are right, that they may be prime for the picking here. They just built a new facility in North Little Rock and are closing their warehouse where I am. My goal is to make some changes to set myself up for growth and then go after some of it.