Five Star Foodservice, which eight months ago said it became the first independent vending operator in the country to surpass the 300 micro-market threshold, recently celebrated the opening of its 400th at a B&I site (Jostens) in Clarksville, Tenn. It was the 133rd such concept opened by the company in the past 12 months, a line that could eventually comprise more than half the business for the traditional vending firm, senior Five Star executives say.
The company attributes its growth and success in the micro-market area primarily to a dedicated organizational structure that extends from the corporate office to the branch level, including area managers and route drivers who specialize in merchandising the concept.
“In order to sustain scalability, we made the decision to invest in the infrastructure on the front end,” says President and CEO, Alan Recher. "We recruited the best people, top to bottom, to manage micro-markets and involved all levels of management from the beginning to ensure buy-in and adoption."
Five Star has a team of more than 50 employees solely dedicated to the success of its micro-market business.
The learning curve involved a certain amount of trial and error.
“From the onset, we knew this was a retail concept and learned over time from errors made in the planograms”, comments Recher.
A key step was a partnership 18 months ago with micro-market technology vendor 365 Retail Markets to power its micro-market kiosks and backend reporting.
“Partnering with 365 was a major switch in the kiosk technology we use," Recher says. "It has proved to be advantageous to our growth and negated many technical issues we encountered early on.”
While Five Star’s core business continues to be traditional vending, its senior leadership foresees a future where micro-markets comprise 50% or more of the total business.
“We see continued growth in the micro-market space," Recher predicts. "I believe improved technology will play a key role in the future expansion of the industry.”
Privately held Five Star, based in Chattanooga, Tenn., is a major Canteen Vending franchisee that operates across the Southeast through a network of 14 branches. It also manages about three dozen onsite cafeterias for clients.