Break room and cleaning supplies offer growth

December 16, 2008

By working with a supplier that understands OCS, an operation can expand into janitorial and sanitation supplies, a lucrative ancillary market.
By Ralph Bianculli, Contributing Editor
www.paradigm-grp.com

In the very competitive OCS market, diversification can be critical to growth. But being diverse means much more than offering a wide range of coffee and beverage products and systems. Companies looking to gain a competitive edge need to take a broader approach to meeting the needs of their facilities and office manager customers.

    For many OCS companies, the answer just might be in the break room and the washroom. The break room category, which consists of products such as paper and plastic cups and plates, plastic cutlery, straws, lids and stirrers, is expected to reach $12 billion in 2007. The opportunity is even greater in the continually growing janitorial/sanitary category — which includes items ranging from hand sanitizers to cleaners to floor care products — where 2007 estimates place the market at $29 billion.

    Yet while corporate refreshment customers are also often involved in the specification and decision-making process for “jan/san” and break room products, many OCS operators are not willing to stray from their core competency and take a leap into these other categories.

    This point is even more puzzling when you consider that it is three times more cost effective to sell additional products to existing
customers than to seek out new customers. At the very least, adding break room and “jan/san” products provides another tool for
strengthening existing customer relationships.

    The bottom line, however, is that if your mix of business is not 25 percent to 30 percent jan/san and break room ancillaries, you are missing out on a profitable opportunity.

    As is the case with any new venture, entering these new categories will require an investment of time and monetary resources. However, the investment is minimal when you consider the rewards in terms of customer satisfaction and increased margins. So, the question then becomes, how can you minimize the risks associated with entering into new markets and move quickly to the rewards?

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