The House that Vince Continues to Build
Second Generation’s Vince Gumma Adds to the AVS Legacy
Even though Frank Sr. has retired and sold ownership of the company to his son Vince, as well as daughters Patti and Annette, he continues to have a major impact. AVS rests firmly on the solid foundation he set, not only with regard to the physical building they call home today, but also to the “human infrastructure” in relationships forged and respect shown to employees and customers alike. Simply put: With strong underpinnings, just think how tall you can grow.
From the outset, Vince had never intended to work in the family business. Instead, he worked in the printing ink industry for a company owned by the father of high school friend Jeff Yoder (read more about him later on in this special). Vince worked in the quality-control laboratory where they would test batches of ink in a job he described as “dirty.”
He enjoyed that work, but in 1986, the then-26-year-old Vince joined his pop at AVS. The company was headquartered in Wood Dale, Ill., at that time and had just bought Bally Distributing’s Chicago office as that company was selling off their network of distributorships around the country. “That about doubled the size of our company overnight,” Vince said.
Later, in the mid-2000s, they bought World Wide Distributing from friend Fred Skor and then, closer to the time of his father’s retirement, they dove into gaming. (Illinois legalized it in 2009 but it wasn’t until late 2012 that the first VLTs started being set in route stops throughout the state.)
Vince, as the second-generation leader, has recognized –– and is grateful for –– all he’s been given to work with and has already made his mark with further expansion. They grew rapidly in 2016 when they bought Midwest Equipment Supply, Lieberman Distributing and H.A. Franz, going from one office in Illinois to five in several states. In 2017, American Vending Sales, Inc. became “AVS Companies” to better reflect the expanded services and products the company now represented.
The company also grew by adding subsidiaries from allied industries. In 2016, Northern LED Lights, a supplier of tube and strip LED lights, came aboard and in 2017, SlotDawg, an app to help users “sniff out” video slot machines near them was acquired. 2019 saw the addition of Premium Product Group, a supplier of equipment and products for the vending, micro-market, and convenience store industries and in 2021, US Products, a full-service distributor offering a unique variety of consumable products.
Vince said, “We continue to look for new growth opportunities that are in line with our core businesses. We keep an open mind, and if a new venture is in sync with our vision for the company, we will explore it.” Sales VP Tony Shamma echoed that sentiment, “There’s no opportunity that we won’t look at.”
Looking back, Vince explained, “We were strictly vending for some time. We didn’t do any amusement equipment until the early ‘80s when we started selling jukeboxes, pinball machines and other amusement devices.”
They were also known for their integrity and the respect with which they treated people. They remained friendly with a lot of their “competitors,” which certainly played a role when they ended up buying some of those outlets. Said Vince, “My dad was good friends with World Wide’s Fred Skor and I’m friends with his son Doug today. We were always friendly with the Liebermans and the Franzes, both professionally and personally.”
Bullish on Distribution
If you put the timeline of the company’s growth on a chart along with some of the downturns or more challenging periods for distribution, you’d see a lot of overlap. The company has made bold moves at a time when their part of the industry was facing strong headwinds.
“2015-2017 was a time of consolidation. There were fewer distributors, especially single-office distributors in medium to small markets. Distributors were having a real hard time surviving because equipment was being offered from every direction, and the market kept shrinking. It was tough to compete,” he said. “Still, we had the confidence to push ahead.”
“I wish I could give you some intelligent-sounding answer about what drove me. I can’t other than I just felt, along with our management team, that we needed to expand our geographical presence to remain relevant. With the acquisition of Lieberman and Franz, the leadership of both companies were instrumental in making the transitions very smooth. They also aided in the continuity of relationships with their existing customer base.
“Over the years, I think distributors have tried to penetrate other markets by going in and starting from scratch. Doing so is very difficult because many distributors have longstanding relationships with their customers and I believe this is still a major component of the success of a business. Relationships remain integral to everything we do at AVS,” Vince declared.
“With Franz and Lieberman, we were able to keep Joe Franz and Linda Winstead, people with those relationships and longevity along with a like mindset of business philosophies. Similarly, when we bought Midwest from Tom Vogt, he also came to work for us. He’s a vending person from way back. At one point he worked for Mars Electronics and has great relationships with vending operators all over the country from those days, as well as with the soft drink bottling community.”
AVS handles some 50 different product lines today. Vending and amusements combined make up about 60% of the company’s business, pretty evenly split, Vince said. Gaming brings in about 40% of revenue. Interestingly, Vince said that the growth in gaming was a key motivator to expand the amusement and vending sides.
“Before the acquisitions of Lieberman and Franz, gaming became such a large part of our business that it became another reason for the geographical expansion. As a company, we felt it was good to spread some of our efforts outside of gaming and maintain the core of our amusement and vending categories.
Even with the expanded product lineup, they have also held tightly onto their vending industry roots.
“The vending market is good today,” Vince continued. “It looks a lot different than it did 20 years ago, but it’s good. There are fewer machine manufacturers, as well as fewer vending operators. Also, the style of delivering food service to medium and large companies has been rapidly changing from vending machines to micro markets.
“The proliferation of micro markets has led us into some product categories on the equipment side that we would’ve never handled 15 years ago,” he continued. “Glass-door coolers and freezers, payment kiosks and several related products that go with them.
“I believe vending is still evolving into a completely different type of retail sale than traditional vending machines. Countries in Asia are way ahead of us to some degree; even the Canadian market for coffee has morphed into a European-style delivery system with more countertop single-cup coffee machines versus the big vending machines that we were used to here. I think the U.S. is evolving into that type of market,” he said.
On fun centers, he said, “I believe the proliferation of the FEC is going to continue for at least another three to five years. I’m taking Covid out of the equation at this point, assuming that we’re going to be out of this in the next year or two without any major shutdowns again.
“I think the successful FECs constantly reinvent themselves. They may have started their facility with laser tag or soft play for kids, and now they’re trying VR games and other new forms of on-site entertainment.,” he said.
“Every market has its nuances so it’s not one-size-fits-all. If you look at the amusement operators in Minnesota, the Dakotas and other territories with more rural locations, Rick La Fleur, Chip O’Hara and Scott Dougherty, to name a few, they’re probably among the most innovative when talking about street operators. They’re dealing with a more captive audience in the rural areas of their territories. They have the luxury of trying new things and seeing immediate results, whether good or bad. They spend the money, they do the research and new try things. If it works, they expand it, if not, they cut it. It’s the ‘fail-fast’ mentality.”
The elephant in the room today is clearly the supply chain and all its related challenges as it hampers the return to “normal” for AVS, its customers and suppliers. While he wishes otherwise, Vince said, “I don’t think we’re anywhere near the end of supply chain issues. I think those are going to continue well into 2022 and perhaps beyond. I’m concerned about the viability or the continued existence of some of the manufacturers of the equipment. We may see more consolidation and at that level,” he stated.
Despite the challenges, Vince is upbeat and positive for the future of the industry and AVS Companies’ place within it. Also, there’s third-generation Gumma in the mix these days: his son Joe who is now working in sales. (By the way, Joe’s first child is due in early March so here comes a fourth generation!)
Vince said he’s told his wife Ralene many times that he didn’t want to ask either of his sons to come to work for the company. “I didn’t want them to look at me in 10 years and swear me up one side and down the other that I’ve ruined their lives and they hate what they’re doing,” he laughed.
“But, if they did have interest, I wanted them to initiate it and ask about coming aboard, and the oldest one did,” he said. My other son, Lou, is a commercial pilot and seems to love what he’s doing.
And then, of course, there is the extended AVS family which Vince could not speak more highly of, including sales VP Tony Shamma, vending division VP Tom Vogt and CFO Michelle Lopez. “She has done an out outstanding job,” he said. “Jim McAllister recruited Michelle before he retired and she’s worked out great. She’s energetic, innovative and hardworking. And Tom and Tony are the same way. I admire their drive, their ambition. They’re a great team.
“There is a long list of folks,” he continued. “Tony Costa, who runs the Texas offices, is a Franz employee that came with the deal. Tony has stepped up and done a fantastic job for us and there’s Linda Winstead in Minnesota…she’s incredible.”
He added, “It would be a long list of people who have helped in our success including current and former employees but you can’t mention everybody. I have to say though that we have some really dedicated employees, so much so that it amazes me sometimes. No organization is perfect, but there are times when I look at our sales staff –– and the quality and the type of people that we have with us. Not only are they diligent, hardworking and ambitious, but they’re good family people, and they’re honest. I can’t say enough good things about them.
“That’s kind of the culture my father built and it seems to attract that type of person. To keep those people interested, we try to create opportunities within the company for advancement and I think we’ve done a pretty good job at that. I honestly believe that that has a lot to do with the success of the company.”
And so much of all of this company culture goes back to the man who started it all, a humble man from Italian immigrant parents, Frank Gumma Sr.
“The last thing I want to do is try to compare myself to my father because he’s a very unique individual. I mean that with the highest regards,” Vince said.
“I never tried to be him, but I tried to expound upon the culture and the qualities he looked for in people who work here. I think that’s the magic in growing a company through the multiple generations: recognizing and respecting that foundation and building upon it rather than chipping away at it,” Vince concluded.