Bottler affiliated CS operation taps tech to overcome challenges

The success of DC Vending & Distributing, a longtime convenience services leader in the Pacific Northwest, can be traced to two closely related factors: a supportive owner and an ongoing commitment to new technology.

The company, which was known as Coca-Cola Vending Yakima & Tri Cities before 2019, has withstood the setbacks of the Great Recession and COVID-19 and is currently riding the Pacific Northwest's economic growth.

The company is owned by The Dolsen Companies, a Yakima, Washington-based firm, which also owns Coca-Cola Bottling Co. of Yakima & Tri-Cities.

The Dolsen Companies formed Coca-Cola Vending in 2006 by combining the bottling company's two beverage vending routes with Automat Vending, a full-line vending operation the Dolsen organization acquired in 1986.

Early investment in technology

With the support of its parent organization, Coca-Cola Vending began investing aggressively in technology in the late 1990s as new vending management software and DEX handheld computers became available.

That investment created operational efficiencies that allowed the company to withstand the Great Recession that struck in 2007.

"Our ownership really cares about the people," Jeff Hemp, who was general manager in the late 1990s and now serves as on-premise manager, told Vending Times in a phone interview.

Coca-Cola Vending at the time shared office and warehouse space with the bottling operation. But by 2019, the owners recognized the rapid growth of micro markets and decided to have a separate facility for the convenience services organization.

Dedicated focus on convenience services

DC Vending & Distributing now works out of a 60,000-square-foot facility that is adjacent to the bottling operation.

"Our owners and controllers just realized we just need to have this company stand alone because the businesses (convenience services and bottling) really are quite different," Hemp said.

That move proved fortuitous when COVID struck in 2020.

Sales tumbled by 35% to 40% as locations closed or reduced staff.

Rather than reducing its own 34-person staff to cut costs, the company focused on fine tuning its operations.

They cleaned and organized the warehouses and reconditioned equipment. They cleaned their data, making sure the right contacts were in the system. They also spent more time communicating with customers to strengthen relationships.

Some agriculture industry accounts actually increased staff.

COVID brings acquisition opportunities

The company also took advantage of acquisition opportunities that became available during the pandemic, a move that helped to maintain existing staff.

In 2020, DC Vending & Distributing expanded its service area by acquiring two companies: Blue Mountain Vending in Walla Walla, Washington, and Northwest Vending in Lewiston, Idaho — adding 450 machines between the two companies.

The company also continued to invest in technology. One of the most significant investments in the last three years has been LightSpeed Automation warehouse management technology for both company warehouses.

The Lightspeed Automation warehouse picking system allows the company to pre-kit all products for its nine micro market routes and 95% of the products for its eight vending/office coffee service routes.

More recently, the company has invested in the LightSpeed Level software that helps consolidate warehouse information, allowing them to see on-hand product quantities at any time, to use sales and inventory data to suggest optimal pricing, and to verify products received against purchase orders.

"It's really a cool program," Hemp said. "You get down to 10 or 12 cases of Coke and it knows to order another pallet or two."

The company has since added four warehouse positions, boosting its headcount to 38.

Multiple software systems

As technology has improved efficiencies, it has also demanded more IT resources.

The company currently uses five different software systems: "There's Avanti Markets (a micro market system), 365 Retail Markets (another micro market system), Vendmax (a vending management system), LightSpeed Automation (a warehouse management system) and Level (an inventory management system)," Hemp said.

365 Retail Markets is currently working on integrating its software with Avanti Markets and LightSpeed Automation, both of which it acquired in 2021.

Business is growing as people return to work. The government accounts, which comprise a large number of accounts in addition to agriculture related business, are requiring people to be in the office at least two days a week.

The company recently introduced 365 Retail Markets' PicoMarkets and Stockwell 2.0 systems, both of which Hemp sees as economical technologies for accounts that historically were not large enough for micro markets.

PicoMarket is a standalone self-checkout kiosk with amenities such as NFC payment, chip insert, a webcam for loss prevention and a barcode scanner.

Stockwell 2.0 features dual-climate zones, AI product recognition that eliminates product scanning and enables versatile payment options.

"I think those are definitely our future," Hemp said. "The equipment is affordable and they have a lot of technology behind them."

Micro markets lead growth

Meanwhile, micro markets continue to be the fastest growing part of the business.

They offer coffee in the micro market using vending and single-cup machines. For markets with a Cafection brewer, the customer presses a button on the kiosk for a small or large cup and a cappuccino or regular coffee, then they pour themselves the cup. For Keurig brewers, they scan the K-Cups at the kiosk.

Breakfast and fresh food are the fastest growing product categories. The breakfast items are very price competitive from the fast food offerings, as are coffee and energy drinks.

"I think people are looking for a way to get it at work and save a couple bucks," Hemp aid.

Hemp echoed all his colleagues when asked the biggest challenge, which is labor.

"It's just really hard to get them and keep them," he said.