Volume 2 | Issue 1 | Year 2006

Back in the 1960s, thanks to a ubiquitous jingle, brains of American consumers became imprinted with the notion that “Things go better with Coke.”

In 1967, George and Alfred “Jud” Schroeder founded Lancer Corporation in Texas. No doubt, the entrepreneurial brothers heard that cheerful slogan, too. However, it most likely took on deeper meaning for them. From a business standpoint, through the years, things have indeed gone better for Lancer with Coke. The San Antonio-headquartered company initially manufactured parts for beverage dispensing equipment, and the Schroeder’s first product was a beverage fitting that they sold to Coca-Cola. This marked the beginning of a long and successful partnership, one that drove Lancer forward in terms of growth and development.

From a small, local business, the company evolved into a leading manufacturer and marketer of beverage dispensing systems. Now a vertically integrated organization with sales and production facilities around the world, Lancer is involved in the design, engineering, manufacture, and marketing of the dispensing systems, as well as post-mix dispensing valves, beer dispensing systems, and related equipment.

Customers include soft drink companies, bottlers, beer breweries, beverage equipment distributors, and food service chains. However, its major customer is The Coca-Cola Company. Lancer Corporation is the company’s preferred supplier, and more than half of Lancer sales are derived from, or influenced by, its relationship with the soft drink giant.

Lancer Innovation: The Real Thing

The relationship has been the catalyst for the technological innovation that has put Lancer at the top of its business segment. Lancer’s master agreement with Coca-Cola governs development of various products sold only to Coca-Cola or its designated agents. The relationship is mutually beneficial, from both a technological and financial standpoint.

Essentially, in the post-mix product segment of the beverage market, Lancer managed to attach its cart to a very big horse. “Predominance in post-mix products has been Coke- and Pepsi-driven, because of the business models those companies use,” explains Lancer President and Chief Executive Officer Christopher D. Hughes. “Generally, those companies supply beverage dispensing equipment as part of the exclusive contract they make with their end-users, such as restaurants and other food and beverage operators. So, a lot of equipment that is developed by manufacturers is sold directly to either Coke or Pepsi and then distributed, in turn, to their customers. Coke has the predominant share of the business on the post-mix side, and we have been a predominant supplier (of equipment) to Coke.”

Expanded Product Range

Ongoing technological development has been a Lancer hallmark. At first, the output was modest. “The Schroeder brothers began by making quick disconnect fittings for the bottling market,” indicates Hughes.

Then the company blossomed at a dramatic rate, by coming up with new technology. In 1971, Lancer designed, engineered, manufactured and sold its first mechanically cooled soft drink dispensing system. Since that time, it has expanded its engineering and production facilities and developed a range of new products. “Lancer expanded from several inventions for the post-mix equipment business and into bag-in-the-box fittings and components, syrup pumps, and valves. We developed what became the predominant and preferred valve used in post-mix for the Coca-Cola system. From there, Lancer further expanded into a full line of post-mix equipment, from countertop electric to ice-cool products, both the drop-in and ice beverage dispensers.”

Today, as a vertically integrated manufacturer, Lancer has the tooling, production, assembly and testing capabilities that enable it to make most of the components that go into its own products. Moreover, it has harnessed its technological and personnel resources toward innovation

Lancer currently produces a complete range of beverage dispensing systems and related equipment. Products are divided in four categories: fountain soft drink, citrus and frozen beverage dispensing systems; post-mix dispensing valves; beer dispensing systems; and other products and services.

Lancer’s soft drink, citrus and frozen beverage dispensers are either mechanically cooled or ice-cooled systems. Equipment model and configuration varies according to intended use and customer needs. The mechanically cooled systems chill beverages as they run through stainless steel tubing inside a self-contained refrigeration unit. The ice-cooled systems chill the beverages as they run through stainless steel tubing encased in an aluminum cold plate, which serves as the heat transfer element when covered with ice. Several of the ice-cooled systems also dispense ice. Lancer manufactures both post-mix and pre-mix dispensing equipment for each of the mechanically cooled and ice-cooled fountain systems. The company also manufactures several models of mechanically cooled citrus dispensing systems for countertop use.

The Post-mix dispensing valves mix syrup and carbonated water at a preset ratio and are interchangeable with other post-mix valves used with Coca-Cola products. Lancer’s primary valve, the LEV, has been designated by Coca-Cola as the standard valve for the U.S. market. The valve is used in many of Lancer’s own dispensing systems and is also sold to competing equipment makers. Lancer also manufactures accessories for the valves, including push-button activation, water-only dispensing mechanisms, portion controls, and other automatically activated valve controls.

The company’s beer dispensing equipment and related accessories comprise chillers, taps, fonts, and dispensers. Lancer’s other products and services include syrup pumps, carbonators, stainless steel and brass fittings, carbon dioxide regulator components, and water filtering systems, among others.

Global Facilities

The Schroeder brothers started out in a 2,000-square-foot building in San Antonio. Today, the company has production facilities in the United States, Mexico and Australia. Innovation is supported by a large and highly skilled technical staff and state-of-the-art engineering facilities. Lancer’s Texas plant includes 400,000 square feet of production space under one roof. “That is where we do much of our manufacturing,” says Hughes. “The San Antonio operation is also our technical center for most of our engineering resources. Some of our more technical processes are done there.”

The corporation also includes a 350,000-square-foot operation in Piedras Negras, Mexico. “From a volume standpoint, that is our predominant factory for beverage equipment,” reports Hughes.

In addition, Lancer makes both post-mix and beer products at its facilities in Adelaide, Australia, which include two buildings with a combined 100,000 square feet. “We have a substantial part of the market in draft beer parts and componentry equipment at that location,” says Hughes.

In addition, it has sales offices spread around the world, and it operates warehouses in Australia, Belgium, Mexico, New Zealand and the United Kingdom.

Selectable Flavoring

The current jewel of Lancer’s technologically sophisticated product crown is its Flavor Select equipment, a post-mix dispensing system (with a remarkably space-efficient 30-inch footprint) that provides customers the opportunity to customize flavors to their individual tastes. Flavor Select offers 16 brand possibilities and up to 12 bonus flavors, resulting in more than 100 possible flavor combinations. Because it is field configurable, users can easily upgrade the number of brands and flavor options.

“Flavor Select allows consumers to add different flavors into a basic drink,” explains Hughes. “In other words, right at the fountain, they can create a lemon, lime, or cherry diet coke, for instance.”

Creation of new flavors in this fashion can be accomplished either through a blending or dosing process. With dosing, customers can add extra flavoring before or after the beverage is poured, and they can hit the dosing button, which is separate from the valve system, more than once. However, Lancer opted for the blending technique, in which extra flavors are added in a preset ratio at the same time the drink is dispensed. The customers fill their cup with ice, push a button for the extra flavor, then dispense the base drink. The blending is part of the internal valve system. Advantages it provides to the equipment owner include better-cost efficiencies. For the customer, the fixed ratio produces consistent results.

“In terms of blending, we are the first and only company, that can blend drinks in proportions that are the same as the can and bottle,” comments Hughes.Moreover, the process is also faster.

Hughes adds that the development of the innovation was driven by consumer demand. “Today, consumers expect a huge amount of variety, and that resulted in the proliferation of drinks offered,” he relates. “Obviously, you can’t get all of those flavor varieties on a fountain drink. So, as we focused attention on post-mix products, we were able to develop a proprietary technology where consumers can actually blend those flavors in a drink, as it is being dispensed. That has probably been the biggest innovation, and the biggest change, in our segment of the market in beverages.”

This focus on technological innovation, reports Hughes, has given Lancer the predominant position in its marketplaces. “Our reputation has been, and continues to be, that of an innovator.”

In this way, Lancer can help restaurant customers agree that things do go better with Coke, or Diet-Coke, or Vanilla Coke, or Vanilla Diet Coke, or Vanilla-Cherry-Diet Coke, or Lemon Coke, and Lemon-Lime Coke and Lemon-Lime Diet Coke or you get the picture.