One Year In: The NAMA Public Health Commitment

March 26, 2021

Just over a year ago, NAMA, the association representing the $31 billion US convenience services industry, launched a major public health commitment in conjunction with Partnership for a Healthier America to substantially increase the percentage of ‘better for you’ offerings in our nation’s vending machines to 33% of all available offerings – a nearly 40% increase from existing levels.

Within months, the nation and world were thrown into chaos, grappling with the challenges of the COVID-19 pandemic. Like many industries, convenience services—which NAMA represents—was significantly impacted. Yet, in spite of economic and health challenges that have become well documented across all industries, NAMA and its members remain steadfast in their dedication to advancement of the public health commitment.

We recently spoke with NAMA’s President and CEO and two of their industry commitment partners to hear about the challenges witnessed during the first year of the public health commitment and the opportunities that remain ahead. Answers have been edited for length and clarity.

Reflecting on the challenges of the last year, what does the public health commitment mean to NAMA and its members?

Carla Balakgie, President and CEO, NAMA: In the hearts of our members the public health commitment means a great deal. Their spirit and commitment to it haven’t changed, but we recognize that pre- and post-COVID are two different worlds. Before the pandemic, we had everything lined up – our systems and databases built, product lists ready, and compliance plans in place. We were ready to go full speed ahead.

At the end of Q1 2020, everything changed and our plans necessarily shifted. But the commitment to ‘better for you’ has not altered and our members have continued to make the best of it in the midst of all the uncertainty and disruption to their routine business operations. We just don’t yet know what that means going forward, particularly in terms of measurement, as we are still grappling with the economic and health ramifications of COVID-19. We still see the critical need for the public health commitment.

Devin Smith, President and Owner, Diamond Vending: From a personal and organizational perspective, we’ve felt that healthier options for our customers have been important for a long time. Many of the customers we serve operate in health care or adjacent industries, and so providing access to healthy, nourishing food is important. We’ve proactively worked with customers for years, working with dietitians and others to provide clarity around what constitutes “healthy,” so we’ve been enthused about the new standard and clarity that the NAMA public health commitment provides.

The new platform that products are being scrutinized for, where they have to meet two of five public health standards (American Heart Association, Centers for Disease Control, Center for Science in the Public Interest, Partnership for a Healthier America, or USDA) gives us confidence that our customers will support that. It’s great to be part of an initiative that is pushing the envelope for ‘better for you’ products.

We’ve always had the intention to offer products that customers want—we don’t want products to hit their sell-by date. Through the pandemic and beyond, the fact that we have identified products that meet the healthy criteria of the public health commitment helps us work with suppliers to find the right mix of products. The goal is to find products that customers want and that are healthy.

Lance Whorton, President, Imperial Inc.: We’re an operator in multiple states and uses a lot of data to qualify and quantify the right products to put into our vending machines or micro-markets. Going into the public health commitment, Imperial was fully on-board and really saw the value from a public health perspective.

We’re trying to meet consumers where they are. There was a fear from some in our industry that the public health commitment would be hard to establish. But as we began implementing and measuring progress, we see that this is ultimately a matter of choice and being intentional about how we set our equipment and product options. Its time-consuming but worth it. We are on board and looking forward to a more normal year where we can measure results. Five to ten years ago, we had clients asking for healthier options, but we ended up throwing a lot of product away. In the last few years, selections from manufacturers have improved and we see an uptick in consumer demand as a result. The partnership between NAMA,PHA and the public health commitment is helping to streamline our work.

How has COVID-19 impacted the industry and the public health commitment?

Carla Balakgie, President and CEO, NAMA: Our members serve the workplace. As businesses, schools, and government offices shuttered nationwide in the early days of the pandemic, up to 90% of the business of NAMA members was on pause. In many instances, that meant that NAMA members could not even access their vending machines to service or change their product. Some operators went months without being able to operate, even at minimal capacity. As an industry, we lost an estimated $3.5 billion in revenue and 18,000 jobs.

Still, we’ve seen amazing adaptability and resiliency in our industry. Packaged foods being delivered via micro-markets and commissaries became wildly popular, especially in health care settings, as they were perceived as safe and sanitary options. NAMA operators began serving frontline workers, even providing PPE, and delivering meal kits to schools. The operators in our industry are survivors and will find a way to keep going. They don’t wait around for someone to solve it for them but innovate to thrive.

Devin Smith, President and Owner, Diamond Vending: We got started on our work with the commitment shortly after the announcement in 2019. We have been able to do some things, both pre- and during COVID-19. Transitioning some machines has been easier than others, but we continue to make transitions to healthier items where we can. We’ve spent a lot of time this past year on setting up our data and systems to be able to track progress against the commitment and finding new products that meet the public health commitment standards to put into our planograms for the future.

Lance Whorton, President, Imperial Inc.: For Imperial Vending, the reality is this: our company went from 800 employees to 475 in just one week. Through the early days of the pandemic as we furloughed employees, we were operating with a bare-bones staff. At their worst, our revenues were down 45%. COVID-19 impacted every aspect of our business, including the public health commitment. With limited staff we lacked the extra hands to get around to retrofitting equipment and re-merchandising to ramp up the supply of ‘better for you’ options as planned.

Early on, much of our time was spent figuring out what customers were or weren’t open. On top of that, manufacturers have had a change in their normal business model. We’ve had huge supply chain challenges, and still do. The business that’s come back for us is really the manufacturing sector. A lot of our large clients are call centers—and they, along with offices, have been most hampered by the pandemic.

COVID-19 has fostered a lot of innovation. What are some of the trends you’ve seen over the last year?

Carla Balakgie, President and CEO, NAMA: Vending is durable. The pandemic has transformed the workplace, which transforms our members’ responses. The idea of convenient, consumer-focused, more stuff available throughout the day. These are not new trends, but they are accelerated and are now here to stay.

Our members have brought new technology to market in the wake of COVID-19. Touchless machines are already in use, and ramping up, including coffee machines you can hover in front of and not have to touch, order-ahead apps, and even foot-operated machines so you don’t have to touch a display or keypad with your hands.

Devin Smith, President and Owner, Diamond Vending: On the consumer side, we’ve seen changes in customer demands during the pandemic. Non-carbonated beverages, for instance, have increased significantly—including waters and healthy juices really flying off the shelves. Whole grain, baked, and lower sugar items have likewise increased. We’ve had the opportunity to support front-line workers who need a healthy snack or lunch. And at Diamond, we’ve brought in a new healthy entree provider—not in a vending machine—but part of our overall solution to our customers.

Lance Whorton, President, Imperial Inc.: We’ve seen more emphasis and awareness on food safety over the last year. Grab-and-go has been a trusted channel. We’ve been keeping an eye on increased consumer demand for outdoor dining and curbside pickup, as we think about our future. Our industry tends to be one of the last channels to get new products, and COVID has impacted that, but we keep an eye on C-Store and supermarket trends as we plan. Manufacturers play a critical role in shaping product availability. With the public health commitment, we see more collaboration between our industry and manufacturers. The commitment is creating more product availability in our channel.

What does the future hold for the industry and the public health commitment?

Carla Balakgie, President and CEO, NAMA: With the technology shifts we’ve seen in the last year because of COVID, we hope the future means greater transparency around nutrition information, and the ability to inform consumers around health and nutrition. Down the road, I see more availability of ‘better-for-you’ options due to the public health commitment and a good story to tell.

Devin Smith, President and Owner, Diamond Vending: It’s nice to have this partnership because taking a proactive approach and looking out for the best interests of our customers is critical. They are our families and we’re trying to do the right thing. The partnership that was presented by this public commitment is a great opportunity to drive ‘better-for-you’ forward in an organized fashion, with respectable organizations and standards.

Lance Whorton, President, Imperial Inc.: I look forward to our day when our focus can be back on the commitment itself. And not as concerned about whether we can source our products just to stay viable. I can’t wait to see the measurements of how the commitment comes to fruition.