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to-cup machines featuring multiple varieties of coffees to
appease a wide variety of preferences.
Additionally, many offices today offer far more items
to their employee base, from basic refreshment (water, soft
drinks and light snacks) to significant pantry-style programs
with literally 100 different snack items (e.g., granola or protein bars, beef jerky, chips, crackers, fruit, yogurt), including
specialty coffee drinks and cold brew offerings. To call today's
segment office coffee services is a misnomer; it should be
called office refreshment services.

OFFICE COFFEE SERVICE CONTINUES TO BE A

to single-serve, which drives materially different and more
expensive equipment, and the related service to keep it
operational. Simply put, the business model is becoming
infinitely more complex. To be successful and address those
challenges, we believe organizations like ours need to be
representative of who we are and not try to be somebody
else. It is very difficult and typically not very profitable to
try to be all things to all people. Clearly, operators need to
embrace change and constantly innovate AND balance that
against their core competencies.

SUSTAINABILITY IS IMPORTANT TO ROYAL CUP.

GROWING SEGMENT FOR OPERATORS IN

CAN YOU SHARE A LITTLE ABOUT HOW THE COMPANY

CONVENIENCE SERVICES. DO YOU EXPECT THIS

WILL MEET ITS 2020 GOALS DETAILED IN THE MOST

GROWTH TO CONTINUE THROUGHOUT 2020? HOW

RECENT SUSTAINABILITY REPORT, AND LONG-TERM

CAN OPERATORS CAPITALIZE UPON THIS AND GROW

GOALS LIKE GOING CARBON NEUTRAL BY 2025 AND

THEIR ACCOUNTS?

BECOMING A CERTIFIED B CORPORATION?

A: Generally, we believe the office coffee services segment
will continue to grow throughout 2020 as more employers
continue to provide enhanced refreshment services to their
employees to be more competitive with other employers, as
well as to drive enhanced efficiency with their employee base
(i.e., if the snack or beverage is already in the office, then the
employee doesn't have to leave or walk down the street to
find what they are looking for). Capitalizing on the opportunity generally means the ability to offer a larger variety of
beverages, snack or meal options to customers to meet the
demands of their employee base and being able to offer flexibility over regular intervals.
A couple of items could slow down or indefinitely suspend
that growth. Historically in recessionary times, we have seen
employers pull back on free refreshment offerings to employees as a means of reducing costs. Or, as employers offer (or
find it necessary) to provide more flexible work schedules for
a variety of reasons, that could result in a slowdown.

A: Royal Cup strives to both operate in a sustainable manner and to do what's best for our employees, customers,
vendors, the communities in which we serve and operate,
and, more broadly, within the coffee and tea industry. Our
Sustainability Team is focused on making sure the company
accomplishes its 2020 goals and is committed to finding
ways to familiarize our team members with our sustainability efforts where and as needed.
As far as our stated long-term goals, we are committed to evaluating our progress frequently and expect to be
challenged by others in unique ways. By setting long-term
sustainability goals, we are making a commitment to report
on the progress we achieve against defined metrics in our
annual sustainability reports. We will leverage the knowledge
of both internal and external experts to guide us along the
path towards success.
Defining our carbon footprint [and] educating our teams
on changes we can - and should - make, is an important
step. Making decisions that support the reduction of our
carbon footprint, such as a review of our company travel,
also means consideration of carbon credits. Being granted a
B corporation certification is an aspirational goal that aligns
well with the fundamentals and vision of our leadership
team. We have begun to embark on this achievement and
remain committed to this goal.

IN YOUR MIND, WHAT ARE THE MOST

SIGNIFICANT CHALLENGES FACING THE INDUSTRY?
WHAT IS YOUR ADVICE FOR OPERATORS IN
ADDRESSING THOSE CHALLENGES?

A: We believe many of the opportunities to grow also pose
some of the most significant challenges. There is a demand
for more products and [for] the flexibility to change out
products more frequently. While this provides an increased
revenue and related profit opportunity, it also brings more
challenges from a supply chain perspective - managing procurement through more vendors with more inventory and an
ability to adjust more quickly.
Additional challenges facing the industry are the move

WHAT IS YOUR FAVORITE COFFEE DRINK?

A: My favorite coffee drink is a cappuccino made with any
one of our H.C. Valentine coffees (our artisan roasted coffees
from our Specialty Plant). Royal Cup sources and roasts
some of the highest quality coffees in the world - it's pretty
tough to compete against that. ■

April 2020 * VendingMarketWatch.com

http://www.VendingMarketWatch.com

Automatic Merchandiser

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