Selling Fresh Food in Micro Markets Is a Challenge with a Silver Lining

August 15, 2022

As office populations fluctuate wildly from day to day, many experienced micro market operators are calling 2022 the toughest time ever to provide fresh food. Amid the challenge, a silver lining is emerging, as high-quality fresh food in micro markets is gaining acceptance. A study for Whole Foods by YouGov reports that nearly 70% of millennials said they were willing to pay more for high-quality foods.

Food sales by convenience services operators are clearly trending upward. According to the 2021 Automatic Merchandiser State of the Industry Study, combined vending machine and micro market revenue gains in the food category (sandwiches, salads and entrées) were up 170% over the pandemic-impacted 2020, surpassing 2018 results and gaining on 2019 numbers.

No More Five-Dollar Footlong

“Customers are starting to recognize that fresh food in micro markets is quite a bit better than the fresh food they used to buy from vending machines,” said Aaron Lawton, founder and president of Oasis Northwest, based in Boise, Idaho. “Customers are willing to pay more for quality. I think people realize that there is no such thing as a five-dollar footlong today.”

Favorable Pricing

William Mandile, director of customer experience at Marché, is seeing the same reaction from customers as Lawton. “We're in Manhattan, so we're in a favorable market for pricing, because you're not getting a salad or sandwich in Manhattan for less than $10. In some places, a salad costs you $13, $14. Over the last several months, as everyone knows, prices have gone up,” said Mandile. “But you have to be committed to providing the highest quality fresh food, which is exactly what we are doing at Marché.”

Food Must Stand Out

“Our fresh food must stand out for the packaging, how they're presented, but also for the quality of the bread, the quality of the key ingredients – chicken salad, tuna salad, deli meats, spinach, kale and cranberry salads,” Mandile continued. “Those are the items we find are working today in our markets, because high-quality selections outsell the lower quality selections by at least five to one.”

A Creative Approach

James Jones, Crave micro market manager at Corwin Foods in Portland, is also focused on using local food suppliers and working closely with them. “We have a local commissary that allows us to be creative and is also very creative on their own,” said Jones. “They offer new options on a regular basis. On the sandwich side, we do a specialty sandwich that rotates every month, and it could replace a popular item.”

Baja Blast Strategy

Jones said that his company, a Pepsi distributor, has learned from the bottler and applies their Baja Blast Mountain Dew strategy to fresh food. “Baja Blast is a hot seller, but it only comes out in the summer, which makes it special,” he said.

That is why Jones tries to keep the food selection dynamic and interesting, always mixing it up. “If an item is a hot seller and the customer really misses it, we can always bring it back.”

Food industry data supports the importance of variety. A study by Suillivan Higdon & Sink FoodThink reports that “40% of consumers consider menu variety to be extremely or very important to them when choosing a quick service restaurant.”

Fluctuating Employee Counts

Holden said that without a doubt, between daily swings in employee counts and supply chain issues, this is the most challenging time ever for micro market operators. “We've had to put more emphasis on our food programs in the last 24 months than we have in the past 15 years,” said Holden. “2019 was so easy. You put in products, they sold, everybody was in the office.”

A Good Combination

Holden continued, “We have found the best results from a customer satisfaction level, from a profitability level, and controlling our spoilage, is using a good combination of nationally branded foods, some frozen food that would be thawed to fresh and high-quality fresh food that we source from local suppliers.” Holden added that when it comes to supplying fresh food today, each location requires careful analysis to determine the right mix.

Customers Are Cooperative

Operators report that a small percentage of locations are insistent about the availability of fresh food for their employees and, in some cases, are willing to subsidize the spoilage. Most of the time, support comes from a cooperative relationship between the operator and the customer. “When a customer is coming back to the office slowly, like only 30%, they are generally willing to work with us,” said Jones. “We either limit the selection to grab and go, or we just do very limited long date sandwiches with the mutual understanding that when the numbers increase, so will the selection.”

Quality Is Trending

When looking at trends in micro markets, Lawton said, “Just as clients want better food, we are seeing the same interest in quality when it comes to snacks and beverages. People are willing to pull out a few extra bucks for a premium product. While the office numbers are slowly moving upward, if only we could combine this new willingness to spend more with a full office population – that would be great,” he added.

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