October-November 2021 - 31

Automatic Merchandiser's latest State
of the Industry report, office coffee
and pantry services were hit almost
twice as hard that year. AM's State
of the Office Coffee Service report
showed OCS sales plummeting about
75%. While almost all operators are
exuberant about the potential growth
of micro markets, many OCS providers
across the country are wondering if
their sales of office refreshment products
will ever return to pre-pandemic
levels. But not Legend Food Service.
" Because remote work is here to
stay, " Loughran said, " we don't think
companies will want as much space for
an increasingly remote workforce. We
think, over time, this will lead to workspace
consolidation and more coworking
environments. As companies
embrace remote work over the long
haul, we do not think they will spend
more on real estate than necessary. "
Ironically, the shrinking need for
office space could benefit the OCS
business in some instances, the Legend
chief executive predicted. While
companies may have fewer employees
in a smaller footprint, buildings will
then be able to support more companies.
Loughran, therefore, is anticipating
greater demand for more shared
OCS breakrooms.
In the meantime, U.S. employers
are struggling to hire workers.
" Because of the labor shortage, Nick
Duda pointed out, employers need
to lure workers back to the office and
premium coffee and snack options
are effective incentives. A reason
why OCS businesses commanded
premiums in terms of valuation, he
noted, is because of their stability
and margin profiles.
" But in the immediate post-COVID
world, it's important to think critically
about OCS - is it a program restart or a
new program? he asked. " Are new programs
more valuable because they've
been established and recalibrated
during the new normal? As part of an
Legend Food
HQ No. 1: East Haven, CT
HQ No. 2: Linthicum Heights,
MD (near Baltimore)
URL: legendfoodservice.com
Number of Routes: 32
Number of Commissaries: 1
Number of Acquisitions: 8
Tech/equipment providers:
Avanti, Cantaloupe, Crane,
Vagabond and VEI
Software providers: Avanti,
Cantaloupe and Vagabond
expected return calculation, you've got
to assign the probability to it; what was
seen as a certainty has changed and
pulled valuations down. "
Duda believes that the best OCS
transactions today are those with
partners who are willing to share risk,
which allows both operator and client
to participate in the upside.
Ben Adams echoed his colleagues'
thoughts on OCS. " The new office
environment has obviously changed,
and hybrid work models seem inevitable, "
he said. " On the other hand,
some of the largest OCS customers
- Google and Facebook, among
other giant tech companies - have
signed massive office leases during the
pandemic, which suggests employers
want employees to return, in-person.
While the at-office experience may be
different, these employers will be looking
for new ways to retain talent and
entice in-person meetings. For many
of our clients, Legend's OCS products
are a very easy give with an extremely
high ROI, compared to other perks. "
Among the recent events that an
office renaissance is on the horizon,
Depending on who you ask, some of
the biggest threats facing the vending
industry range from the at-home work
culture, convenience stores and food
delivery apps, provided by the likes of
DoorDash, GrubHub and Uber Eats,
to supply chain disruptions and rising
product costs. When asked what he
thinks, Loughran said, hands down,
it's supply chain issues and inflation.
" It is just so hard to get out in the
field and stay ahead of price increases
and product swaps, " he said. " While
remote work is a challenge, we think
it's temporary as office density will
eventually normalize. If we can
provide great and innovative products
onsite, we aren't worried about
delivery apps. "
However, food delivery apps and
convenience stores are better at passing
the rising costs of technology and
products onto the consumer, something
vending operators have been
timid about.
" Convenience services providers
are hesitant to pass through their cost
increases in fear of losing the business,
when in fact the value of the service
we provide is tremendous. That's the
big difference between those providers
and us, " Duda explained.
" We provide the best products in
the best locations - on demand - at
comparable to slightly lower prices, "
he observed. " It's just a matter of communicating
that value proposition to
the customer.
" However, rather than communicate
the value prop and drive
improved service through investing
October/November 2021 * VendingMarketWatch.com 31
which should provide a jolt of optimism
to an industry slammed by the
pandemic, Google announced last
month that it plans to buy a sprawling
Manhattan office building on the
Hudson River. The $2.1 billion deal
would be one of the largest ever for a
U.S. office building.
http://www.legendfoodservice.com http://www.VendingMarketWatch.com

October-November 2021

Table of Contents for the Digital Edition of October-November 2021

The Long Game
Up And At ‘Em
20 Months In
They Are Legend
Editor’s Note
Industry News
Social Hubs
October-November 2021 - PCOV1
October-November 2021 - PCOV2
October-November 2021 - 1
October-November 2021 - 2
October-November 2021 - 3
October-November 2021 - 4
October-November 2021 - 5
October-November 2021 - Editor’s Note
October-November 2021 - 7
October-November 2021 - Industry News
October-November 2021 - 9
October-November 2021 - The Long Game
October-November 2021 - 11
October-November 2021 - 12
October-November 2021 - 13
October-November 2021 - Up And At ‘Em
October-November 2021 - 15
October-November 2021 - 16
October-November 2021 - 17
October-November 2021 - 18
October-November 2021 - 19
October-November 2021 - 20 Months In
October-November 2021 - 21
October-November 2021 - 22
October-November 2021 - 23
October-November 2021 - 24
October-November 2021 - 25
October-November 2021 - They Are Legend
October-November 2021 - 27
October-November 2021 - 28
October-November 2021 - 29
October-November 2021 - 30
October-November 2021 - 31
October-November 2021 - 32
October-November 2021 - Classifieds
October-November 2021 - Social Hubs
October-November 2021 - 35
October-November 2021 - 36