It’s a common sight in offices across the globe. A worker takes time out to go on a store run. Whether it’s for breakfast, a mid- morning snack, lunch, an afternoon drink, or a chance to stock up on supplies for the office, we’ve all seen it happen at work.
But how many of us have actually stopped to think about just what this is costing our company – in time and productivity?
It’s this activity, or should I say break in activity, that is one of the main drivers for breakroom supplies sales – music to the ears of dealers, reckon many industry insiders.
Although the concept of breakrooms, or staff rooms, is an old one, the look of these staff spaces has changed dramatically in recent years.
Long gone are the smoke-filled, sparsely decorated rooms with only a table, a waste bin and a few chairs.
In many companies, staff are given breakrooms filled with an array of quality products for them to enjoy in their free time.
"The ‘Starbucks generation’ demands a higher quality breakroom offering," according to Chris Whiting, director of sales and marketing for the cleaning, breakroom and healthcare categories at Atlanta-based SP Richards (SPR).
"No longer will the stale coffee in a white foam cup satisfy today’s worker," he adds.
So, if dealers want to grab a slice of this big pie, what exactly constitutes a breakroom supply today?
Whiting believes it’s "all edible food items and non-food disposables". This includes everything from salty and sweet snacks, such as sweets, chewing gum, pretzels, crackers, popcorn and cookies, to the healthier end of the scale, with items including breakfast bars, cereal, soups, microwaveable pasta and all kinds of fruit juices, mineral water and energy drinks.
A good portfolio also needs to include paper, foam and plastic cups, plates, bowls, cutlery, straws, napkins and paper towels, adds Whiting. That’s not forgetting coffee, tea, hot chocolate, creamer, sweeteners, coffee brewers, carafes, toasters, microwaves and furniture.
So, all in all, a huge array of products, and that’s not even taking into consideration another major growth area which crosses over with breakroom – jan/san supplies.
One organisation that knows all about this growth is US-based National Industries For The Blind (NIB) which, along with its associated agencies, works to promote the welfare of blind people and helps them to find employment.
NIB operates under the Javits-Wagner-O’Day (JWOD) Act and the AbilityOne Programme, a federal purchasing programme that enables blind people to work and provide products and services.
Within the federal marketplace, NIB is best known for SKILCRAFT office supplies, but it also offers a range of breakroom and janitorial products.
Kim Zimmer, NIB’s VP of corporate communications, explains: "SKILCRAFT janitorial and breakroom supplies cover a broad range of products, including a full line of chemicals, floor maintenance products, bin liners, paper towels, toilet tissue, plastic cutlery, hot/cold cups and more."
Zimmer believes one of the major breakthroughs in this category has been the development of several strategic partnerships with brand manufacturers to provide co-branded products for the federal customer.
The organisation’s partners include 3M, Ecolab, JohnsonDiversey and Rochester-Midland.
With so much success in this area, Zimmer is in no doubt that breakroom supplies and jan/san products offer dealers a huge sales opportunity. "We see significant opportunities for growth in this category, but it requires us to provide the dealer with support and working knowledge on the specific applications and usage of the products we manufacture."
She adds: "This category requires a much higher level of support from the manufacturer in order to ensure dealers effectively position the product to their customers."
Ralph Bianculli is president and CEO of US-based The Paradigm Group, which includes the United Supply Distribution division and boasts around 50,000 breakroom and jan/san SKUs. He believes that the category could be a goldmine for dealers willing to push themselves.
"We see the dealer network as primarily a broadline industry, a one-stop shop. Currently 18 percent of our business goes through dealers, but we want to increase this. We are committed to growing our dealer network, but we are only looking for dealers that understand where they need to be in the next three years."
He adds: "Dealers really need to be in the game. In terms of training, I would urge them to get an expert or to put someone through a training process so they can become a product specialist."
Bianculli sees this area as a very broad category that traditionally covers the service sector, particularly the white collar segment.
He also believes that employers have a big part to play in future growth. "Having a well-equipped breakroom means staff don’t have to leave the office environment and this results in greater productivity."
So, with so many products to choose from, how can dealers ensure they target their offering correctly to make use of all this potential revenue?
"The dealer mantra should be upgrade, upgrade, upgrade," says Whiting. "Don’t focus on the commodity foam cups, foam plates and coffee. Bring new ideas to bring more value and enhance the breakroom experience," he adds.
Mark Pelletier, United Stationers’ director of sales for the jan/san category also believes dealers should be aiming high. "Don’t forget to include food service items into the overall breakroom mix," he says. "Look to this grouping of products for some of your higher margin opportunities."
Pelletier sees coffee and tea and related condiments as key growth areas at present, while Whiting names "speciality coffees, green tea and flavoured condiments" as big sellers, along with "juices, energy drinks, candy, snacks, breakfast and lunch items".
NIB’s Zimmer has a different view on popular products being sold through the dealer channel, with new trends emerging.
She explains: "Of late, we have experienced high sales in hand sanitisers and exam gloves, primarily due to various government agencies stocking up for health and disaster preparation and homeland security reasons."
Another major issue impacting on this product category is the environment.
According to Paradigm’s Bianculli, environmental issues, fuelled by intense media interest, are filtering through to the corporate scene, and in turn influencing the types of products being sold.
"There is an awful lot of talk about the environment and environmentally-sensitive products," he says. "Fifteen years ago, there were some of these type of products on the market, but now we are seeing a real change in consumers’ interest in this area. These products still only represent about 3.5 percent of sales, but within five years, sales have almost tripled."
He adds: "Environmentally-sensitive and sanitary products appear to be the big sellers. Sales of packs of paper cups have doubled in the last two years."
Zimmer has also seen a major shift towards products with an environmentally-friendly edge."There is a substantial opportunity to move into environmentally-friendly products," she remarks. "The federal market is taking the lead in establishing specific requirements to purchase and use products that meet rigid performance standards and are less harmful to the environment."
Recognising this to be a major growth area in the next 12 months, NIB is now developing several bio-based product lines. Bio-based products are made from renewable resources such as soybeans, coconut oil, corn, sugar, sunflower and other plant, animal, forestry or even marine products.
Zimmer explains: "As opposed to petroleum-based products, these materials are readily bio-degradable, reduce our dependence on foreign oil and support the American farmer."
With all this interest in environmental matters, it’s not surprising that organisations like the Ethical Tea Partnership (ETP) are making headlines.
In the UK, Unilever recognised that consumers need to know where and how their tea has been produced, and makes its position as a founder member of the ETP clear to all.
Unilever’s channel development manager, Keri-Anne Hughes, explains: "We have recently committed to sourcing all our tea from sustainable ethical sources in an exciting move with the Rainforest Alliance.
"Over the past five years we have seen explosive growth in the office supplies market. In every workplace in the UK, tea is purchased and consumed. In the UK alone, 150 million cups of tea are drunk per day and around 35 million of those are our PG Tips. Tea remains the most consumed beverage in the country, with 34 percent of consumers choosing tea over any other drink."
She continues: "The wide variety of breakroom products now available allows consumers to take advantage of a one-stop-shop solution from their stationery supplier."
But it’s not just tea that is a big seller. Coffee products also continue to thrive in the breakroom arena.
Whiting sees speciality coffees and single-serve coffee as key growth areas. He adds: "Bold coffee with flavoured condiments and good cup packaging, like the Dixie PerfecTouch cup or similar paper cups with Java Jacket, will make sure that workers on the premises are happy as well as productive."
He says: "The single-serve coffee trend is gaining ground. The brewers that use pods or K-Kups have had a major impact. These units give lots of choice to the consumer and ensure a fresh cup every time."
The company encourages dealers to offer samples, with dealer representatives offered ‘coffee breaks’ and the chance to introduce new exciting coffee flavours such as "Emeril’s Happy Hazelnut or Vanilla Bean Barn served along with Crème De Pirouline or shortbread cookies".
The continuing influence of coffee products in the staff room is also recognised by United Stationers’ Mark Pelletier.
"We are certainly seeing products that are easy to use and single-serving items, especially with coffee machines and coffee products," he says.
Vending machines, on the other hand, are not the answer for the trade channel, according to Whiting. He explains: "The trend is for emerging companies to offer a ‘stocked pantry’ filled with convenience foods to make the office more productive. It’s also an employee retention strategy to keep valuable workers in a tight job market. Vending is not on our radar at the moment."
Pelletier agrees. "We don’t sell vending machines, nor do I see our entrance into those products any time soon," he says. "The challenge would be the inventory management of items that have a very limited shelf life."
So, just what is around the corner? According to Whiting, healthy snacks are a good way of increasing margin now and in the future.
He says: "You can now get healthy items like tuna, Nutrigrain bars and granola bars, V-8 juice, Gatorade, green tea and Perrier mineral water. Lots of progress has been made for a healthy office."
With so many products on offer, dealers can often feel swamped in this category, but Bianculli from Paradigm believes good trade partnerships and communication can help overcome this.
He explains: "We work really hard to ensure dealers understand the value of these products. There are certainly some good margins to be had – maybe 12 to 15 points higher than on a traditional office product."
Zimmer is also upbeat about the category’s opportunities for dealers and the long-term business it may secure them. His words of advice are: "Help your customers save money through efficiencies, appropriate product selection and new technology, and you will have the opportunity to become their long-term partner."