the News monthly of Vending, Foodservice, Coffee Service and Coin-Operated Recreational Services

Vol. 46, No. 11 • November 2006

U-Select-It Parent Wittern Group Celebrates 75^th Year In Vending

DES MOINES, IA - A pioneer in the development and manufacture of advanced vending machines, The Wittern Group is celebrating its 75th anniversary this year. Among its many milestones in the progress of vending is the establishment of U-Se­lect-It Corp. three decades ago, which en­abled the company to build a mainstream industry presence.

The Wittern Group is the administrative and financial arm of several family-owned firms, including USI, vertically integrated in the vending industry. Its manufacturing oper­ations have turned out 2.1 million vending machines since it was founded in 1931.

As the company approaches its ninth decade, its leadership is passing to a third gen­eration determined to be more visible in the professional vending industry. Through the continued development of the USI brand, The Wittern Group is seeking to strengthen its po­sition among professional vending operators and the distributors who supply them.

Wittern Group chairman F.A. (Art) Wittern Jr. remains the visionary leader who is guid-

Machine pioneer readies transition of leadership to third generation.

presence in the professional vending sector by supplying The Wittern Group's national dis­tribution network. He also is spearheading a special project, exploring applications of In­ternet technologies in the vending industry.

Heidi Chico, Art Wittern's daughter, is vice ­chairwoman of The Wittern Group. She is re­sponsible for shaping the technology infra­structure that holds together the group of companies. Chico, who has served USI and The Wittern Group in numerous positions for 19 years, was been elected to the National Au­tomatic Merchandising Association's Board of Directors this year. She is the first woman on the board to represent a major machine manufacturer.

According to Bruntz, one of The Wittern Group's strongest assets is a stable manage­ment team and careful succession planning. The company has been owned and run by the same people since its founding, thus combin­ing continuity with longevity.

"When someone makes a decision to pur­chase a vending machine;' the chief executive said, "it's a 10- to l5-year investment. The buyer can be confident that we'll be around to support that product."

Bruntz, who joined the company in 1985 as general counsel, became president and chief executive officer in 1990. He now is the longest-serving chief executive in the thinning ranks of American vending ma­chine manufacturers. Over its eight-decade history, The Wittern Group has had only three chief executives; preceding Bruntz were Art Wittern, who held the post from 1959 to 1990, and the company's founder, F.A. Wittern Sr., who led the company be­fore appointing his 21-year-old son to the top post 47 years ago. (See sidebar for a brief history of the company.)

USI continues to gain ground in the main­stream vending sector, Bruntz told VT, be­cause it produces high-quality, long-lasting and adaptable merchandising equipment at prices that distributors can sell.

"We think it's important for the changing demographics of the workplace that USI machines have full features, but in a small

Footprint;' the Wittern chief said. "There

Remain situations in which large machines minimize fill frequencies. To that end, we developed the highest

ing product development strategy for the vending channel, noted John Bruntz, the or­ganization's president and chief executive.

      "We developed a professional management team to support him;' Bruntz said, "They are individuals with long tenure in the industry who have shown flexibility and operational excellence in the past. Art has a strategic vi­sion of where he wants to take USI, and there's a professional management structure in place to see that it happens."

      Two of Art Wittern's children are part of the group's senior-level management team. Chip Wittern is president of the USI division, a post he has held for more than 10 years. Before as­suming the division's top post, he served in various sales and marketing capacities. As president, he is charge with expanding USI's

FAMILY TRUST: The Wittern Group chairman Art Wittern, pictured here with wife Carolyn, is steer­ing transition of company's leadership to third generation, which includes son Chip Wittern (left), U-Select-It president, and daughter Heidi Chico, the group's vice-chairwoman. A professional man­agement team, which includes Jim Chico (right), vice-president and director of international sales and marketing, supports new leadership of vending machine manufacturing pioneer.

VENDING TIMES • U-SELECT-IT ... 2

capacity glass front merchandiser."

USI's SMS700 snack machine, with seven trays accommodating 47 selections, offers a capacity of723 items, the largest in the glass front vender category. A USI cold drink dis­penser can be installed alongside the large snack machine to create an aesthetically ap­pealing vending bank; the snack vender also can host an adjacent cold beverage dispenser. The company's 12-select beverage machines, compared to standard eight and 10, increase merchandising opportunities. This USI snack-and-beverage machine configuration has proven itself as an effective solution to re­ducing service cycles.

The company builds five sizes of snack machine and three sizes of cold drink vender.

New in USI's snack machine lineup is the Mercato, highlighted by new styling and elec­tronics and offered in three cabinet widths: 3­wide (297i6 ins.), 4-wide (3S%"z ins.) and S-­wide (41 ins.). The company's most compact snack machine is the 2-wide HRI2, with a width of only 21 ins.

USI snack machines are built with the company's iVend product delivery sensing technology and Flex shelf system, whose movable dividers and drop-in motors per­mit quick reconfiguration without the need for tools.

The machine maker offers cold and frozen food machines sized in optimal ra­tios to its snack and beverage venders. "We have smaller food machines that allow op­erators to program them with food only," Bruntz noted. The add-on FF2000 frozen food dispenser provides vending operators with scalability, allowing them to manage lower capacities while encouraging add-on sales through sharing a user interface with an adjacent host machine.

Also new in the USI lineup are the Geneva hot beverage merchandiser, incorporating a European brewing system into a small-foot­print cabinet, and the Alpine ST, a refrigerat­ed glass front combination cold drink and food machine, available in two widths, with foamed-in-place cabinet and door to maxi­mize energy efficiency.

"For equipment distributors, there's great value in associating with USI," Bruntz said. "Our financing department can help lever­age the growth of their equipment sales business. We also offer flexible inventory stocking, and methods for paying for that in­ventory. So there's a lot of flexibility in han­dling the USI line."

The Wittern Group chief believes that building local presence in defined market areas has proven to be the best way to reach the professional vending operator and sup­port the USI product over its I5-year dura­tion. "Our goal is to

establish local independent representation in every major met­ropolitan market in the U.S.," he said. "While USI is presently represented in most markets, we want to strengthen our position."

Working to serve the fast-changing US. business and industry sector, vending machine manufacturers play a key roll in the development and integration of new technolo-

Products, acquired by Crane Co., and Rowe International, which divested its vending machine business. The Wittern Group, in contrast, has not only survived, but it has managed to thrive in a highly competitive consolidating marketplace where many manufacturers have failed. Bruntz identifiesthree qualities possessed by the company that have contributed to its longevity and stability.

U-SELECT-IT GROWS BY APPLYING LONG DESIGN, MANUFACTURING HISTORY AND FINANCIAL POWER TO NEW NEEDS OF U.S. VENDING INDUSTRY

gies designed to improve route efficiency and profitability. Cashless payment systems and remote machine monitoring are prominent among these technologies.

USI is addressing the application of today's best data communications and wide-area net­work techniques to vending, serving as a sys­tems integrator to develop hardware plat­forms that can support a variety of vending machine peripherals, Bruntz observed.

"We do not want to mandate proprietary so­lutions," he said. "The vending operator should choose. Technology attached to equip­ment needs to be open, and operators need to know it will work. Our approach is to offer a flexible base product and allow operators to determine what they want to add."

Bruntz said that USI is optimistic about

the U.S. vending industry's future, and he

First, he said, The Wittern Group is able and willing to identify changes in the indus­try and respond to them. For example, to re­spond to the declining workplace location, USI saw a need to develop smaller, more economical machines that operators can run more profitability. As part of its response, USI developed full- featured glass front mer­chandisers that hosted satellite beverage and food machines.

Second, the vertical integration of The Wit­tern Group companies has created profit cen­ters outside the sale of new vending ma­chines. "If new-machine sales are down;' Bruntz explained, "we have a residual that en­ables us to invest in R&D to prepare for a market turnaround." The Wittern Group's fi­nancing division, for instance, provides a revenue stream that has held steady over a pe­riod of years.

Third, the company's diversification strat­egy - to build machines for all markets ­has enabled it to address shifting market re­quirements and individual operators' needs. "We are not highly concentrated in one as­pect of the business," Bruntz said. "This is reflected in USI's broad full-line product range and the availability of equipment in various sizes.

"USI recognizes that locations and their re­quirements vary depending on space and ac­cess - stairs, loading docks, door - as well as the size and type of employee population;' he added. "Not every location needs a huge vending machine with tons of capacity. US. businesses have been tending to downsize for years now, and foreign markets are constant­ly challenged by available space. USI is unique in that we have a vending solution to meet almost every size requirement."

U-Select-It regards its vending machine manufacturing capability and facilities as second to none. The company's main fabri­cation and assembly plant is located at the Wittern Group's center of operations in America's heartland. The 3S0,000-sq.ft. fa­cility in Des Moines also houses depart­ments for design and engineering, sales and

John Bruntz

predicted that ven-ding will continue to grow despite the country's declining overall manufactu-ring base, which represents a small part of the American economy, about 17% of GDP.

shrinking workforce as the US. population ages;' the chief executive observed. "We can keep pace with social changes and the evolv­ing workplace by building flexibility into our equipment."

Another opportunity for USI is the devel­opment of vending systems that dispense high-value products, and this effort is already underway. This past summer, TelePlus Group (Los Angeles), a pioneer in international com­munications, partnered with USI and vending software developer VendNovation to develop telecommunication products and services for the travel market that can be sold through vending machines and kiosks.

Over the past four decades, the number of US. vending machine manufacturers ac­quired or shut down has been considerable. Among the most recent were Automatic

VENDING TIMES • U-SELECT-IT ... 3

HOME BASE: U-Select-It's manufacturing plant is based at The Wittern Group's 350,000-sq.ft. center of operations in Des Moines. (Aerial photo, left, of facility was taken in 1997.) At right, USI machine fabrication begins with coils or sheets of cold-roll, galvannealed and stainless steel and alu­minum. Metal fabrication capabilities processes basic materials up to 0.25 ins. thick. About half of all USI machine components are fabricated on­site; the remainder is purchased commodities.

MANUFACTURING KNOW-HOW: At left, USI machine fabrication capabilities include numerically controlled turret and break presses, along with var­ious manual break presses and welding stations. State-of-the-art robotic welding technology (center) is employed for complicated door fabrication. Spe­cial processes and tooling include foe wrapper fabrication, bending equipment for forming door panels and dedicated foam insulation stations for re­frigerated and frozen machines. At right, machine components are transported through USl's modern painting facility. Powder coating - a completely dry finishing process in which finely ground particles of pigment and resin are applied electrostati­cally and then cured under heat to allow it to flow and form a "skin" - is one of the company's ar­eas of expertise and a part of its contract manufacturing business.

VENDING TIMES • U-SELECT-IT ... 4

RIGHT-SIZING SAMPLING: Pictured, from left, are U-Select-It's CB700 cold drink, FF2000 frozen food, Mercato 3000 snack, Alpine ST 3000 refrigerated food and package cold drink, Geneva hot drink and SM5700 snack merchandisers.

USI FOCUSES ON PROFESSIONAL VENDING INDUSTRY

U-Select-It Equipment Portfolio

Mercato 3000: 72" H. x 29;'{,' W x 34){" D.

Mercato 4000: 72" H. x 35;'{," W x 34){" D. Mercato 5000: 72" H. x 41" W x 34){,' D.

vends: Snacks, chips, pastries, candy, gum & mints, sundries and other nonfood items. Selections: Mercato 3000, 23 stan­dard. Mercato 4000, 32 standard. Mercato 5000, 40 standard. Capacity: Mercato 3000, 384 standard. Mercato 4000, 474 standard. Mercato 5000, 624 standard.

HR12 Snack: 68" H. x 21"W x 33W' D.

vends: Snacks, chips, pastries, candy, gum & mints, sun­dries and other nonfood items. Selections: 12 items stan­dard. Capacity: 152 items standard.

HR40 Snack: 72" H. x 41" W x 34){" D.

vends: Snacks, chips, pastries, candy, gum & mints; sun­dries and other nonfood items. Selections: 40 items stan­dard. Capacity: 630 items standard.

SM5700 Snack: 72" H. x 41" W x 36" D.

vends: Snacks, chips, pastries, candy, gum & mints, sun­dries and other nonfood items. Selections: 47 items stan­dard. Capacity: 723 items standard.

CB300 and CB300 Satellite: 72" H. x 21" W x 33)f' D. Vends: Cold drinks in cans and bottles. Selections: 6. Ca­pacity: 312 cans, 144 24-floz. PET bottles.

CB500 Cold Drink: 72" H. x 31)('W x 33)(' D.

Vends: Cold drinks in cans and bottles. Selections: 10. Ca­pacity: 520 12-floz. cans; 240 20-fl.oz. bottles.

CB700 Cold Drink: 72" H. x 42" W x 33)f' D.

Vends: Packaged cold drinks in cans & bottles. Selec­tions: 12. Capacity: 728 12-fl.oz. cans; 322 20-fl.oz. PET bottles.

CFIOOO Food Satellite: 72" H. x 22" W x 32" D. vends: Frozen food and ice cream. Selections: 25 items standard. Capacity: 203 items standard.

FF2000 Food Satellite: 72" H. x 22" W x 37" D.

vends: Frozen foods and ice cream. Selections: 25 items standard. Capacity: 203 items standard.

Geneva Hot Beverage: 72" H. x 28" W x 33W' D. Vends: Fresh-brew & freeze-dried caffeinated and decaf­feinated coffees, teas, chocolate and specialty coffee bever­ages. Selections: Up to 72 combinations. Capacity: 487 7-fl.oz. cups, configurable to 390 12-fl.oz. cups with maximum lip diameter on.55".

Combo II Snack/Beverage : 72" H. x 42" W x 34%" D. vends: Snacks, chips, pastries, candy, gum & mints, cold canned and bottled beverages. Selections: 27 candy/snack/pastry plus 6 can/bottle selections. Capacity: 282 snacks; 312 12-fl.oz. cans; 144 24-fl.oz. PET bottles.

Alpine ST 3000: 72" H. x 29,," W x 38" D.

Alpine ST 5000: 72" H. x 41" W x 38" D.

Vends: Cold beverages including dairy products and juice; chilled food. Selections: Apline ST 3000, up to 36. Apline ST 5000, 20 food items, 20 can/bottle beverages. Capacity:

Alpine ST 3000, varies with configuration. Alpine ST 5000, 245 food items, 120 beverages.

NOTE: SC1 00 satellite controller serves as a host for satellite venders. It is equipped with MOB coin and bill acceptors and can accommodate card readers. Pricing range: $0.00-$999.95. Selections: maximum 120. Finishes: black powder coat. Special features: multiple satellite capability. Dimensions: 72" H. x 12" W. x 33%" D.

marketing, financing services and customer support. A separate parts facility is located in nearby Waukee.

USI products start life as either coils or sheets of cold-roll, galvannealed and stainless steel and aluminum. The metal fabrication area can process raw materials up to 0.25 ins. thick. Both "hard" and "soft" tooling is em­ployed, and work cells are dedicated to such specific processes as cabinet and door fabri­cation and metal finishing.

Six numerically controlled turret presses feed the parts lines. One computer-con­trolled and 18 manual break presses form the intricate pieces. Welding is handled at 14 manual stations.

Among the vending machine maker's special processes and tooling are foe wrap­per fabrication, robotic welding for door fabrication and specialized bending equip­ment for forming door panels. Dedicated foam insulation stations that inject an A/B foam mix provide structure and insulation for two product lines.

The foam used by the manufacturer is environmentally safe, con­taining zero ozone-depleting gases.

The company's vending machines are painted by one of the largest powder coating systems in the Midwest. An eight-stage sys­tem (two washes, four rinses and two pre­treatments) can apply paint to parts, includ­ing galvanneal substrates, as large as 48 x 76 x 120 ins. The company has two standard color booths and one custom booth, along with 30 stocked colors, to satisfy demands for various finishes. USI manufactures 11 families of 72-in. high full-line products, in a wide variety of depths and widths. These include five snack machines, three cold beverage venders and two new fully refrigerated glass front mer­chandisers. It also produces two models of satellite cold and frozen food venders and a hot beverage merchandiser, along with a satellite control "tower" that converts an add-on food or frozen dispenser to a standalone operation.

STUPENDOUS: U-Select-It Corp. works closely with more than 80 distributors to introduce the lat­est vending equipment to operators, and in 2006 the manufacturer honored CME Inc. (Norfolk, VA) as its 2006 Distributor of the Year for distin­guished sales achievement. Here, USI vice-pres­ident Mike Frye (left) congratulates Mike Whalen, CME's principal, for a job well done. CME is an authorized USI distributor in Delaware, the Dis­trict of Columbia, Maryland and Virginia.

After cabinet fabrication, the machines are assembled on seven lines devoted to specific machine types: snack, packaged cold drink, refrigerated and frozen food, hot beverage and satellite systems. USI employs a rotating build schedule for flex­ible daily output, ranging from as few as two machines to as many as 60.

From start to finish, USI puts its equipment through a meticulous quality control process. Raw and purchased materials are inspected carefully before fabrication and assembly. An onsite chamber that simulates extreme cli­mate conditions checks machine performance in different environments. Before production, each new machine design is methodically tested for functionality and safety; the process involves more than 100,000 test vends. At the completion of each step, components and as­sembled machines are approved by the super­visor in charge of that process. The finished machines leave their assembly lines with an "American Made" product stamp.

NOTE:SC1 00 satellite controller serves as a host for satellite venders. It is equipped with MOB coin and bill acceptors and can accommodate card readers. Pricing range: $0.00-$999.95. Selections: maximum 120. Finishes: black powder coat. Special features: multiple satellite capability. Dimensions: 72" H. x 12" W. x 33%" D.

"Our manufacturing processes have met industry challenges for over 75 years, and have been able to cost-effectively adapt to our customers' demands for a large quantity of standard and specialized products," Bruntz observed.

Today, USI is reenergizing its manufactur­ing operations by improving processes and evaluating techniques to meet the market's on­going challenges. The vending machine mak­er has begun training on "lean" manufactur­ing principles and is implementing a "5S" program - sort, straighten, shine, standardize and sustain - to enhance work environments and workforce efficiency. It also is holding kaizen events, the Japanese methodology for promoting continuous improvement by re­ducing waste.

1931-2006: A History Of Innovation

VENDING TIMES • U-SELECT-IT ... 5

Born October 19, 1899, The Wittern Group founder Francis Arthur Wittern grew up on his family's farm in Cushing, IA. A student of engi­neering, he had a penchant for designing me­chanical devices and was granted more than 80 patents during his life. Before starting Hawkeye Novelty in 1931, he developed a practical patent for an underwater magnet mine at age 16 and lat­er worked as a contract engineer. The lowa­based company he created has manufactured more than 2.1 million pieces of equipment and evolved into one of the world's leading fully inte­grated vending services providers.

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machines for snack food producer Lance alone.

To collectively identify its vertically inte­grated businesses serving the vending in­dustry, the company began using "The Wit­tern Group" umbrella around 1988. Much of group's expansion from the 1960s to the present was spearheaded by EA. (Art) Wit­tern Jr., who in 1959, at age 21, became president and chief executive of Fawn. Now chairman of the company, Art Wittern, along with chief executive John Bruntz and a knowledgeable management team that in­cludes two of the chairman's children, Chip Wittern and Heidi Chico, are strengthening the company's efforts on selling to profes­sional vending operators.

Throughout its 75-year history, The Wittern Group has adapted to dramatic changes

in the vending industry by providing innova­tive but sensible machine designs and diver­sifying its product offerings and services. As the family-owned company begins the transi­tion to the third generation, it is positioned to thrive in a new era by applying and honing a knowledge base acquired over eight decades.

The Wittern Group was founded in 1931 by inventor Francis Arthur Wittern Sr. who start­ed Hawkeye Novelty Co., named after his home state, with an investment of $12.50 for used tools. His first machine was a penny peanut dispenser that rang a bell and delivered a free portion on every ninth vend, an innova­tion for its time. The peanut vender's coin mechanism was able to differentiate a coin from a slug, another unique feature of the pe­riod. Hawkeye Novelty also made matchbox dispensers and other small vending devices.

In 1947, Hawkeye Novelty became Fawn, the legendary trade name derived from Wittern's initials, EA.W., and the N from the last letter of his last name. Fawn fo­cused on the design and manufacture of cigarette venders, the starting point for the company's rapid growth and financial success. The Fawn cigarette machine, which stored and delivered product using drop-shelf technology, was considered to be a generation ahead of rival cigarette machines at the time.

The cigarette machines were sold directly to locations since, at the time, the modern con­tract or concession business model- and the equipment distribution segment needed to support it - was in its infancy. Over time, that direct sales approach did not foster good re­lations with the emerging operating sector, but it did provide the company with the revenue base it needed to diversify into other types of equipment and new industry segments. Fawn later expanded its lineup with machines that vended popcorn, snacks and hot and cold drinks, along with hot, cold and frozen foods and other merchandise.

In the early 1970s, The Wittern Group be­gan a series of acquisitions that helped pro­pel its full-line vending business.

It first brought the Selectivend cold can drink line from The Cornelius Co. The company then acquired the U-Se­lect-It brand from Coan Manufac­turing of Wisconsin in 1974. The Coan "U-Select-It" was a famous wall- and stand-mounted mechan­ical snack machine that has reached the end of its product life cycle, and the Wittern purchase preserved the name and strength­ened operator recognition. Finally, The Wittern Group aquired The Vendo Co.'s full-line vending ma­chine business in 1984, when Ven­do redefined itself as a leading specialized manufacturer of pack­aged cold drink equipment.

The USI line inspired The Wit­tern Group to conceive slimmer machine designs for small loca­tions. Vendo's assets included technology for fresh-brew coffee, a new vending market for Wittern.

In the 1980s, USI's 7/5-select soda and juice vender gained wide acceptance among the na­tion's leading equipment distribu­tors, bolstering The Wittern Group's credibility as a main­stream manufacturer of commer­cial-grade equipment. The vender dispensed 12-fl.oz. cans from a serpentine rack and 6-fl.oz. cans from a smaller ejector mecha­nism; it featured a delivery bucket

that accommodated milk cartons, apples, or­anges and other vendible items. Today, USI's feature-rich Mercato 3000 - a 29-in. wide snack merchandiser sold at a price point that effectively competes with used equipment, every manufacturer's biggest competitor ­is expected to achieve the same success through the vending distribution channel.

Successfully expanding into overseas mar­kets, Wittern attained international status by the mid-1980s. Its contract manufacturing business began to develop rapidly, too, and it built a substantial number of dispensers for the packaged goods industries at home and overseas. In the past 10 years, for example, it has turned out some 80,000 vending

Published NOVEMBER 2006 © Copyright 2006 Vending Times Inc.

VENDING TIMES is designed as the forum to report trends in the vending and amusement services industries. Its content is targeted to operators work­ing in automatic vending, foodservice, coffee service, coin-operated entertainment and music, and bulk vending. Editorial highlights include coverage of trade shows/events, new product reviews, relevant business news and analysis of new marketing/promotional techniques. VT is published monthly. VENDING TIMES is based at 1375 Broadway, 6th FI., New York, NY 10018; vendingtimes.com.