Home City Ice, CIO: Recurring Revenue Models are Great for Providers

Home City Ice, CIO: Recurring Revenue Models are Great for Providers

Chris Hickock, CIO, Home City Ice, speaks with David Hammond, Senior Account Executive, Parallel Technologies, about the trend of vendors providing services at a monthly cost, M&A in the ice industry, and lessons learned from COVID.

According to Hickock, while the trend of vendors providing service at a recurring monthly cost is real, it is not limited to software. It’s happening with hardware providers, too. He notes, however, that his company evaluates the cost and value drive, and then chooses to continue or discontinue a service. “Recurring revenue models are great from a provider standpoint; I don’t have to worry about what’s going to happen as much,” he says. “But think through that use case for your customers — are they getting value for what you’re putting out there and is it enough to keep them with your product versus a competitor’s? 

Regarding mergers and acquisitions, Hickock describes the last 10 to 15 years in the ice industry as consolidation activity. “It's a very capital-intensive industry to get into, and frankly, delivering packaged ice for some people isn't the sexiest thing that they've ever seen,” he says.  

“It's rare that we're seeing these businesses be handed down generation to generation. I don't want to force anybody out of the business if they don't want to be out of the business, but I'm also happy to be their retirement package when they want to get out,” he adds. “I've purchased a couple of these companies and worked through it with the previous owners. By and large, that trend has been playing out for the last 10 or 15 years to the point where there are fewer competitors in the space today than there ever have been.”

Hickock maintains that Covid didn’t have an overall significant impact on how the business operated, apart from a few teams going remote and some COVID safety measures — like social distancing and increased handwashing —  being included in regular operations.

“Supplying grocery products to grocery stores was considered essential throughout the bulk of the pandemic, so we didn't see a huge backlash,” he recalls. “There were some changes, no doubt. But we continued to operate, supplying product throughout all of it. I didn't quite see the reeling that others did. Our corporate support and others in roles that weren't necessarily deemed essential to be in the office through the pandemic — they’ve been able to work from wherever they needed to to stay safe.”

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