Beyond the education sessions, the collaboration and the networking, there is a added benefit to industry trade shows like the upcoming Coffee, Tea and Water Show (CTW) in Indianapolis, November 6th and 7th. For any company that has an exit strategy in place, short term or long term, visibility at both regional and national shows is a good idea. CTW is where the buyers are, so it makes sense to attend next month.
Surprisingly positive implications
Automatic Merchandiser’s recently published State of the OCS Industry Report shows that 2022 OCS sales were down a stunning 50% from 2019 numbers. That is right on target, because office “swipe card” data shows that in major markets, the office population is 50% of what it was in 2019. While these numbers were of no surprise to OCS operators, the sales data does have surprisingly positive implications for any OCS operator who is considering selling their business.
Why? Because the active buyers in the industry, who will all be attending the CTW in Indianapolis, are particularly hungry to buy OCS business. The big players are keenly motivated to buy quality OCS accounts because it is truly the only way to rebuild those depleted OCS sales numbers. As a result, the price of OCS business is skyrocketing amid the demand.
Growth is coming from elsewhere
While the State of the OCS Industry Report does show a $500 million jump in 2022 sales, as Bob Tullio pointed out while moderating a recent webinar of the subject, the real growth in OCS sales is coming from OCS operators who are reaching out beyond traditional coffee sales, adding revenue by focusing on premium water systems, ice machines, cold brew, micro markets and even janitorial products. All of those categories experienced notable gains, as OCS operators pivoted, finding revenue sources to strengthen their businesses.
Does that sound like your approach as an OCS operator? Whether your exit plan calls for selling your business in a year, or five years from now, this move to expand your offerings as an OCS operator is a smart move, for both survival and to position your company for sale, making it even more attractive. Clearly, operators cannot afford to just wait around for offices to repopulate. It is going to take some time for traditional OCS sales - coffee, tea and office pantry products, to rebound on their own.
Silver lining
Fortunately, the slow recovery has a definite silver lining. Your OCS business is worth more than ever and your move into new areas is also enhancing the value of your business. Go to CTW, rub elbows with the big guys and meet the obvious players in the industry. Your visibility will pay dividends when you are ready to sell your business. If you are a buyer, make it known and feel free to reach out to me, because I am in the process of representing some very motivated sellers.
A tip - Focus on sustainable
One other thing to focus on at the CTW gathering – sustainable products. The demand and momentum for sustainable products, especially in the office kitchen space continues to accelerate and from all indications, there is no end in sight. These items will boost an operator’s sales and solidity relationships with customers who have been tasked with the job of checking off sustainability objectives.
Take that first step – before or after CTW
Buyers come to me because they know that I serve sellers who have thoroughly and thoughtfully considered their exit strategy with my help. That is the type of seller that you want to be – a seller who has their ducks in order, has taken steps to make their business as attractive as possible and a seller who values their employees enough to make a deal that everyone will feel good about.
Take that critical first step. That is often the toughest one to take.
Order my free 2023 Exit Strategy Planner. At the very least, it will provoke some thought, and this is a good time to think about your future.
Whatever your reasons are to sell your company - the timing, a sense of frustration, the desire to enjoy life or an interest in rewarding yourself for years of hard work – VBB Advisors can help you realize your goals.
I am Mike Kelner, the leading sell side intermediary in the convenience services industry. Let’s sit down and have a conversation. Use this appointment scheduler to set up a meeting with me.
Or – give me a call at 704-942-4621.
