Push Beverages Higher Vending Margins An interview with Dave Mandella of Push Beverages
- What type of beverage products do you produce for the vending industry?
- What features does your product have over the others?
- How do you position Push Beverages to sell in locations?
- What do I do if I have bottler equipment?
- Why has Push Beverages been successful with vending operators?
- What areas of the country is Push Beverages currently being distributed?
Listen to the interview:
Push Beverages Higher Vending Margins Tom Shivers: I’m Tom Shivers, with the Vending Business Show, here with Dave [Mandela 00:00:15] of Push Beverages. Dave, thanks for being here.
Dave Mandela: Thank you. Thank you for having me and spreading the word to many operators in the country.
Tom Shivers: What type of beverage products do you produce for the vending industry?
Dave Mandela: Well, Push Beverages, actually, four years ago we created this product, actually, as a vending company, to help us with our profit margins. And we produce a line of 20 ounce soda. We have nine flavors now. We have two bottles of water. One is a purified water, and the other is a raspberry flavored water. And we also have a line of 20 ounce teas called Tribe, which are a higher price point. But they’re excellent product. It’s a real brewed product. There are five flavors of those. Those are specifically made to be used in vending machines. And it’s done well so far.
Tom Shivers: What features does your product have over the others? Push Beverages Higher Vending Margins
Dave Mandela: Well, first of all, we made sure when we created the product, we didn’t create a no frills brand. What I mean by no frills is that you go into a supermarket, and you see value brand X or value brand. We made sure we put the best flavoring in these products. Over one year, we used focus groups and mass sampling to ensure that we had a national brand look and taste. And we didn’t make it a value price product. And we also had these other little features. First of all, all of our products have less sodium, about 50% less sodium than an Orange Crush or a Fanta Orange. And that’s really important. All of our products are gluten free. Our bottle itself, it’s a thicker bottle than Coke and Pepsi would have. Whether it’s Coke, Pepsi, Canada Dry, whatever flavors they use in the marketplace … We also have very high pressure cap, which keeps the carbonation in that bottle. Therefore, instead of having your typical three month shelf life on a product, we have an eight month shelf code where we guarantee that product. Talk about savings and in your vending world, flavors don’t sell as much as the core stuff, like Coke and Pepsi and Mountain Dews and Dr. Pepper, but people should have flavors for variety. And nowadays, instead of having a three month shelf life, you’ll have an eight month shelf life. So you save a lot of money right there.
Tom Shivers: Well, how do you position Push Beverages to sell in locations?
Dave Mandela: Over time, we’ve seen some operators, especially in the southeast, they go and use what they would call a value brand and slot it cheaper than your current price. In this day in the vending industry, where you need to get that $1.25 or $1.50 for a 20 ounce soda, you just re-slot this product, and it’s going to sell as good as the product you pulled out of it, because of how the product tastes and how it looks. Don’t lose those margins, because margins is a thing that’s killing the rest of us these days. And in the vending industry, I’ve seen pricing as low as a dollar, still, and as high as $1.50, $1.75, depending on where you are. But to compete and to keep that margin out there that you need, keep that price. If your Coke’s $1.25, put this in at $1.25. Why lose that margin?
Tom Shivers: What do I do if I have bottler equipment?
Dave Mandela: Well, that’s the key question. Fortunately, some operators have their own equipment or own their own equipment over time. And you want to talk about building equity in your company? There’s actually a program through A&M Equipment in Lithonia, Georgia. Everybody knows Joe Nichols, I’m sure. Where you can get equipment from him, a push-fronted machine that costs $1495. Now, that’s not very expensive. And that equipment is fully ready, it works. He gives you his warrantee on it. In addition to that, it comes with mech invalidator. And with that you get 23 free cases of Push beverages with that. You net down to $895. Now, for $895 to get a piece of equipment that you don’t have to be loyal to Pepsi or Coke, and bring your margins back into your business is a very good price. And some areas of the country, you can also get some of your bottler equipment, they allow you for two, three slots to put other product in there, too. Over time, if you build your equity up, you have leverage power with Coke and Pepsi, too. Because we all know, at the end of the day, we do need to use some Coke and we do need to use some Pepsi to stay competitive and to keep variety in those machines.
Tom Shivers: Why has Push Beverages been successful with vending operators?
Dave Mandela: Well, I’ll give you two scenarios. First thing, there’s a company in northern New Jersey that went ahead and re-slotted their machines. They basically kept … They were a big Pepsi buyer. So they kept Pepsi, Diet Pepsi, Mountain Dew, and Dr. Pepper. The rest they eliminated. They eliminated the Orange Crushes and they eliminated some of the other flavors. And they saved five or six dollars a case. Now, the sales after initial period, when they saw the product was good … And it takes a couple weeks to get people acclimated to it. My gosh, there’s a new product in the machine. You know what? They had no complaints from their customers whatsoever. What’s this orange soda? What’s this brand? So on and so forth. Again, if it looks good and tastes good, people will buy it. After the initial sales period, which was about two weeks, the sales rebounded. And it went 7% above the sales point, 7% more than they were making before with an Orange Crush or a Fanta Orange. And no customers complained at all. Actually, at that point, they were getting calls from people saying, “Where do I find this product?” Actually, in that year, in 2009, the company that I’m talking to, they have about 20 routes. And they saved $167 that year just by re-slotting Push. That’s a significant amount of money, if you ask me.
Tom Shivers: Great. What areas of the country is your product currently being distributed in?
Dave Mandela: Okay. Right now, currently, you can find the product in the Mid-Atlantic region. You can find it through Vistar in the southwest, out of Vistar, Georgia. That will cover the states of Georgia, Alabama, South Carolina, and parts of Tennessee. And, also, we’re in Chicago. Concession Services carries the brand. And they cover four big states: Michigan, Indiana, Illinois, and Wisconsin. Right now, those are our three main distribution points. Now, we’re also going to be adding two distribution points: one in Greensboro, North Carolina. That’ll be within the next six weeks. And, also, Memphis, Tennessee. Basically, you’ll be able to find our product anywhere along the eastern seaboard coming west to the Mississippi River. And we’re excited.
Tom Shivers: Well, Dave, thanks for sharing. How can people reach you?
Dave Mandela: They can reach me. My email is firstname.lastname@example.org. We also have a 1-800 number. It’s 1-855-PUSH-B-E-V. And they could call A&M Equipment, Joe Nichols. He’s down in Lithonia, Georgia, if they’d like equipment. But if they want to know more about the brand and anything that goes beyond it, just give me a holler. I’d be more than happy to talk to them.
Tom Shivers: You’ve been listening to Push Beverages Higher Vending Margins at the Vending Business Show, a publication of A&M Equipment Sales.