From Vending Times
Blind Operators Plan Private Sector Push And Rally To Stop Rest Stop Commercialization by Emily Jed Posted On: 11/17/2017
NASHVILLE — The National Association of Blind Merchants drew record crowds of entrepreneurs for four days of learning and networking at its recent Music City BLAST conference. The event, which stands for Blind Leadership and Superior Training, took place in mid-September at the Airport Marriott Hotel here. NABM, a division of the National Federation of the Blind, consists of visually impaired businesspeople who are either self-employed or part of Randolph-Sheppard’s vending program. The 1936 law gives preference to blind people in bidding on the provision of refreshment services on government properties.
More than 600 industry members attended the information-packed educational conference and exhibition, and a record-breaking 78 exhibitors filled the tradeshow floor, where operators had the opportunity to explore the latest equipment, products and technology to stay on the cutting edge of vending, micromarkets and coffee service.
Dan Frye, executive director of the New Jersey Commission for the Blind and Visually Impaired and president-elect of the National Council of State Agencies for the Blind (NCSAB), was among the many officials welcoming BLAST participants. He explained that blindness agencies play two unique roles. The first is to ensure that people who are blind have access to nonvisual instruction and live their lives with independence, grace and poise. The second is to promote independent blind entrepreneurs through the Randolph-Sheppard program.
NABM president Nicky Gacos presented Frye the NABM Gold Star Award, the group’s highest honor, for his support of the Randolph-Sheppard program and advocacy work for blind people overall. Frye will become president of the NCSAB in January.
Rest Area Unrest
The most pressing legislative threat to blind vendors at the federal level is the commercialization of highway rest stops through public-private partnerships. A collective effort to oppose the proposal was a major focus of discussion throughout BLAST.
NCSAB policy consultant Catriona Macdonald of Linchpin Industries LLC (Washington, DC) explained that an infrastructure bill expected to be introduced next year would permit states to grant concessions for foodservices at the highway rest stops they maintain on federal interstate highways.
The legislation would amend Title 23 of the United States Code, specifically Section 111, which presently limits food and beverage service at interstate system rest stops to vending machines, and requires states to give priority to machines operated by blind vendors licensed by the state under provisions of the Randolph-Sheppard Act.
The President’s proposed budget for fiscal 2018 includes the $1 trillion infrastructure initiative, $200 billion of which would come from federal revenue, with the rest raised through private-public partnerships, which includes rest area commercialization and highway tolling.
“The Trump administration said it would introduce a bill over the summer, but that did not happen,” Macdonald said. “But the Secretary of Transportation continues to talk about the proposal, and the White House is still working on the details. We don’t know when it’s coming, but it’s on the way.”
Congressional offices are suggesting that commercialization could be good for blind vendors, Macdonald cautioned. He emphasized that blind vending advocates do not consider that to be the case. “The assumption is that blind vendors would manage other stores, but that’s not likely how it would play out,” NABM’s legislative expert cautioned. “The assumption is also that commercialization would bring more business to the rest stops for blind entrepreneurs, but will people buy from the vending machines in front of the building, if they can buy their drinks with their food inside?”
Requests for proposals for rest area business would be for multimillion dollar contracts, Macdonald continued. They would require the winning bidder to pay to build the travel plaza, parking lot and highway ramps, and to maintain the parking lot and grounds.
“The company that wins gets a 20- to 25-year exclusive,” she added. “But I don’t know a single state licensing agency for the blind that’s in a position to compete for and win any of those contracts.”
She put BLAST-goers into the big picture that legislation for rest area commercialization was defeated resoundingly in the 1950s because of concern over competition to small businesses off interstate highway exits, but at that time it was proposed as an amendment. What’s different and more concerning to blind entrepreneurs this time around is that the Trump administration is asking Congress to include a provision for commercialization in the underlying bill.
“There’s a bias against changes to legislation that can work against us instead of for us,” she explained. “If Congress kills it, they would have to have an amendment and come up with another source of funds. If we wait until it’s introduced we’re dead in the water; we have to advocate to keep it out of this bill.”
She assured blind vendors that NCSAB, NFB and NABM’s government affairs teams are in front of legislators, promoting the interests of the Randolph-Sheppard program and voicing opposition to rest stop commercialization through education and outreach. This has proven critical.
“When we talk to legislators, many never heard of Randolph-Sheppard and do not know that a group of entrepreneurs would be damaged,” she said.
To support its efforts on Capitol Hill, NCSAB conducted interviews with 15 blind rest area vendors to give lawmakers first-hand accounts of how crucial the vending business at these locations is to their livelihoods.
“The thing only you vendors can do is put an appealing personal face on this priority and the numbers behind it,” Macdonald said. “We need to share your compelling personal stories and the impact on blind entrepreneurs in your state. Write letters to your elected officials; invite them to tour your rest areas.”
Another major legislative concern to blind vendors is the potential loss of priority at Department of Defense locations under the Randolph-Sheppard Act, and NCSAB, NFB and NABM are leading the charge to oppose changes to the existing rules.
In June 2016, the DOD published draft regulations in the Federal Register that would eliminate the priority for blind entrepreneurs to operate these contracts in the future. When DOD published the draft rules, it received more than 4,000 comments, most of which were in opposition to the proposed regulations. But, Macdonald cautioned, DOD insiders are saying it is the department’s intent to move forward in promulgating the regulations.
National Automatic Merchandising Association senior vice-president of external affairs Eric Dell praised the relationship NAMA and NABM have been building in recent years, which he said has been strengthened by Gacos being the first blind vendor to serve on NAMA’s board of directors. He said the two organizations are working more closely than ever on legislative issues at all levels of government.
Dell observed that there has been an uptick in proposed legislation around health and wellness at the state and local level, including sweetened beverage taxes, since many health and wellness advocacy organizations foresee roadblocks at the federal level with the new administration.
He added that NAMA is working closely with the American Heart Association and the Alliance for a Healthier Generation to ensure that vending operators have the resources they need to provide and encourage healthier options in their machines.
Officials from both advocacy groups addressed the blind entrepreneurs. Katie Bishop Kendrick, state and community advocacy manager for the American Heart Association emphasized that states and communities can be role models by exemplifying healthy vending in their own facilities, many of which are served by blind vendors. She encouraged operators to leverage AHA’s resources, including holding sampling and promotional events to highlight the better-for-you choices they are already offering, adding new ones, and posting signage to promote healthier lifestyles.
Elizabeth Vegas, director of business sector strategies for the Alliance for a Healthier Generation and a member of NAMA’s Nutrition Advisory Council, informed operators that there’s an online calculator at the Alliance website where they can input nutritional data to see whether a product meets the U.S. Department of Agriculture’s Smart Snacks in Schools standards for snacks and beverages sold in vending machines, school stores, snack carts and a la carte lines.
Additionally, the Alliance for a Healthier Generation has partnered with Amazon Business to curate an online store where operators can buy Smart Snack-compliant products at wholesale prices. Shipping is free for orders over $49.
“We have 300 items in the store now, and want to have 2,000 by the end of the year,” she said. “The goal is to ensure access to every product, once we identify that it meets the guidelines.”
BLAST’s extensive educational program examined opportunities for blind entrepreneurs beyond vending, into micromarkets and coffee service, and expansion beyond the government facilities they serve under the Randolph-Sheppard program into the private sector.
Food For Thought
Vistar vice-president of sales Sean Mahoney encouraged blind entrepreneur who aren’t doing so already to pursue the correctional market by working with the nationwide vending distributor and its new partner, TurnKey Corrections (River Falls, WI. TKC is the parent company of micromarket manufacturer Three Square Markets.
The way the three-way partnership works, Mahoney explained, is that blind operators secure contracts to service the facilities, many of which fall under their Randolph-Sheppard priority, and provide the personnel required to operate onsite. Turnkey supplies the kiosks through which inmates purchase all of the products and services available to them, and Vistar supplies the commissary items. Blind vendors who already have the vending business at a correctional facility have the potential to expand their services by adding a TKC kiosk.
TKC’s kiosk streamlines inmate access to commissary supplies, email, phone calls, video visitation, MP3 player music downloads and more. The operator receives all of the revenue generated from the kiosk, minus a percentage that goes to TKC and a commission to the institution.
Vistar and Turnkey provide blind vendors with all of the necessary support, from helping them secure the account to implementing and executing the program.
“We sell direct to municipal jails, county jails and federal prisons, and 50% of our corrections business is through contractors, like you,” Mahoney said. He added that Vistar’s 2016 acquisition of Jenny Service Co., a distributor to the correctional commissary market, doubled its existing business in the channel and expanded its breadth of products beyond food to include clothing, footwear, stationery and electronics. The acquisition also brought a dedicated, experienced corrections sales team onboard.
TKC president Rob Allen explained that the inmate kiosk system works with a locking wristband that inmates hold to the kiosk, and then enter a PIN to log in. The same wristband can also be used by inmates to pay at vending machines, debiting their accounts.
“We run our kiosks in jails, and there are a lot of good operators like you out there who can get the technology from us and the logistics from Vistar, and it’s a win for all three of us,” he said. “The operators get in the door, and Turnkey receives a percent of sales, and the operator receives the rest and we help educate you to be your best. Once you secure a meeting, Turnkey Corrections and Vistar will send people to support you in selling the account.”
365 Retail Markets’ Amber Tucker encouraged blind entrepreneurs to expand beyond vending into micromarkets, and provided a synopsis of the benefits of the self-checkout technology.
“Micromarkets increase sales, improve customer service and employee satisfaction with enhanced variety, and reduce operating costs. And they are open 24/7, 365 days a year,” she said. “They can provide more options, including fruit and vegetables, sandwiches — anything with a barcode. You can sell family-size frozen meals for customers to bring home for dinner.”
She emphasized the value today’s employers recognize in providing a fresh, healthy mix of food and beverages onsite to encourage employees to stay on campus.
Tucker also informed blind vendors that 365 is adding Braille to its kiosk interface to facilitate checkout for blind consumers. The kiosks already feature voice output each time a customer scans a product and once the total price of their purchase is tallied.
Office Convenience Services
Office coffee service veteran Ken Shea, vice-president of coffee service for Palm Harbor, FL-based food and beverage broker G&J Marketing and Sales Co., emphasized to BLAST showgoers that the time couldn’t be better to branch into OCS, if they have not yet done so, and to expand that segment of their businesses if it’s a service they already provide.
“OCS today stands for ‘office convenience services’ rather than office coffee service. The operators with the most success bundle services,” Shea said. “Ninety percent of offices give coffee away as an amenity, which is a small price to pay to have a happy office. Water is fun and simple to get into ,and there’s high demand for it.”
He emphasized that account retention should be the number one focal point for blind vendors, and the more products and services they provide, the less likely their existing clients will be to look elsewhere.
The trend from batch brew to single cup alone presents an opportunity for operators to grow same-account sales by the inherently higher cost per-cup and the addition of SKUs to satisfy demand for crowd-pleasing variety, Shea pointed out.
And today’s employers provide many amenities besides coffee, with complementary snacks and cold drinks becoming the norm in the breakroom to keep employees onsite, Shea added. “With the products you have in vending, you’re a step ahead of the game over many OCS operators,” he said. “You can come into the same account with snack products with 35% to 45% profit, and not necessarily have to even place machines.”
The OCS veteran emphasized to newcomers the importance of understanding the different opportunities not only at different types of locations, but also in different parts of locations. The warehouse in one facility may require a bowl brewer, while a bean-to-cup machine would best suit the executive offices, he instanced.
“Make contact with the decision maker and build the ticket. Look at the brewing space as your retail space; add flavored creamers and other extras,” he suggested. “Entice people in the office and guests who visit with more choices, and consumption will increase.”
Shea also advised operators to pursue providing coffee service in c-stores and other retail accounts and restaurants. “Many established operators find those market segments to be lucrative,” he said.
Other industry experts rounded out the educational program with ways blind entrepreneurs can expand their existing businesses and secure new ones.
Plans are already well underway for 2018’s BLAST, which is set for Nov. 12-16 at the San Antonio (TX) Hyatt Regency Hill Country Resort.