OCS Operator of the Year Award

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[As published in the NAMA Automatic Merchandiser, Dec 1, 2003.]

The mid-’90s was a period of change for the OCS industry. Coffee prices were rising and membership warehouse clubs were making a bid for the OCS customer with name brand OCS packs. Many veteran OCS operators wondered if the industry’s best days were behind it. But some operators, like Natalie Diodata, founder of Morning Start Services Inc. in Langhorne, Pa., saw a new beginning.

Diodata first got into the business on a part-time basis in the early 1980s, offering customers a basic service that consisted of Bunn pour-overs and name brand fractional packs. She initially saw OCS as a way to supplement her day job as a cosmetology teacher. Having a husband in the business certainly helped. Her husband, John, worked for a Philadelphia vending/OCS operation. He fed her leads that his employer wasn’t interested in.

Natalie Diodata and her husband, John, have grown their OCS business largely with single-cup brewers and higher quality coffee, including some well known consumer brands.

Challenge brings opportunity

By 1995, rising coffee prices and competition from warehouse clubs were giving OCS operators the jitters. But farsighted operators like Diodata were paying attention to a new concept being introduced — the countertop, single-cup brewer. Many OCS operators rejected these higher-ticket machines as unfeasible. Not Diodata. She saw them as the future.

Fortunately, the firm her husband worked for was divesting much of its business, including many of its Cafe System 7 brewers from Crane National Vendors. The entrepreneurial couple was able to buy these machines at a good price, and in 1995, they incorporated their new company. With John joining Natalie fulltime, Morning Start Services offered both vending and OCS.

The single-cup machines were a key selling point for Morning Start Services in 1995. "A lot of the bigger companies didn’t offer that," Diodata said. "This was a way to get our foot in the door."

50 single-cup placements in one year

The economy was still going strong in 1995, and many employers, particularly in the high-tech sector, liked the single-cup concept. Diodata placed about 50 Cafe System 7 machines in one year.

Other family members helped support the young business. Son Adam helped his father develop vending accounts. Another son, Mark, a graphic designer, developed the logo and brochures. And another son, Ralph, is an accountant who helped with the bookkeeping.

Coffee offerings upgrade

Diodata was also cognizant of the growing appreciation for specialty coffee. She began offering better quality coffees, such as Starbucks, Gevalia and Gavina. More recently, the company has begun offering Wawa, a convenience store brand that has been introduced in OCS fractional packs.

The future for OCS, in Diodata’s view, is in the single-cup machine. Her arsenal now includes the Brio, the Keurig and the Gevalia units in addition to Cafe System 7. Single-cup machines account for 30 percent of all Morning Start Services’ brewers, which is much higher than the industry average.

A tough economy? Not for her

In recent years, account downsizing has required some brewer recalls for the company, but it hasn’t dampened the demand for specialty coffee and single-cup machines. "Everyone is getting into the specialty coffees," Diodata said.

Nor does Diodata feel that small companies such as hers will not prosper as operating costs get higher. The larger companies have a hard time providing the same level of customer service. She and her husband make it a point to get to know all their customers individually.

[Source: http://www.vendingmarketwatch.com/online/article.jsp?siteSection=1&id=9903&pageNum=1]

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