Fresh Snacks Fast: Insights into Food and Beverage VendingApril 1, 2011 No Comments
Vending machines are a welcome sight for those who crave a snack or beverage. Operators must not only keep track of customer tastes but product freshness as well if their machines are to remain popular at commercial and industrial locations.
As controller of City Vending Company in Fort Worth, Texas, Tom Elich monitors more than 700 vending machines located throughout the Dallas – Fort Worth region. City Vending provides snack and beverage machines to military installations, manufacturing and distribution centers, hospitals and office complexes.
“We offer a wide variety of food and drink to our customers,” Elich noted. “Typically, our machines have 40 selections of candy and pastry and our beverage machines contain 10 selections.”
City Vending has glass front beverage machines that distribute plastic bottles of soda, water, energy drinks and juice.
“Although we have a wide beverage selection, our most popular beverages are Coke and Dr. Pepper. As for food, our most popular item hands down is the Snickers® candy bar. People love Snickers.”
Elich admitted that the vending machine business has its advantages and disadvantages, but City Vending has done a lot to eliminate the disadvantages. Two years ago, the company installed remote monitoring on their machines. The monitors, which are wireless data cards, work similarly to a cell phone and call the office and “tell” the staff if the machine is getting low on merchandise or what merchandise is selling fastest.
“It is a great new technological tool for us to use,” Elich explained. “It saves us time on the road and we know before our drivers get there, what they have to stock up on or replace. Also, the remote monitoring system informs us if a machine is in need of repair. We have a technician on the scene before the customer even knows a problem existed.”
While the remote monitoring system can cost between $30,000 and $50,000, Elich believes it is well worth the investment.
“This technology helps us reduce transportation and labor costs so the investment pays for itself, and in today’s economic environment, that is very important.”
While Elich sees a lot of improvements in the vending machine industry, he wishes that there was a way to offer more selections to certain clients.
“Some merchandise cannot be placed in the machines. For instance, we can’t put chocolate in a machine if that machine is being placed in a non-air-conditioned area. The chocolate would melt, but I am sure that customers wish we could put chocolate in those machines for them.”
Other issues that affect merchandise are the state regulations and taxes and the shelf life of the foods and beverages.
“Taxes have to come out of the vending machine prices. Most people do not realize that,” Elich said. “But freshness is our biggest concern. City Vending route drivers check expiration dates on each product every time they service a location.”
According to Elich, pastries have the shortest shelf life, but all merchandise must be checked for freshness, including beverages.
“Most people are unaware that beverages have a shelf life just as food does. Regular soft drinks have an average shelf life of 180 days and diet drinks 120 days, so we are keeping track of drinks and food all the time.”
As president of Mustang Music & Vending Inc. of Riverton, Wy., Bruce Mitchell has 22 snack vending machines in 70 locations that include laundry mats, hotels, offices, apartment complexes and car dealers.
“We have machines, pool tables and juke boxes in about a 40-mile radius,” he observed. “We are in Wyoming, so everything is at a distance, but we service our snack and vending machines weekly.”
Because some of his locations are in rural areas, he concentrates on food that has a longer shelf life such as popcorn, jerky, candy bars, chips and licorice.
“We go into sparsely populated areas, so we must find the right mix of snacks that people will buy,” he explained. “We carry healthy snacks, but they are not as popular as candy bars.”
Another concern for Mitchell is transportation costs. With his locations so spread out, he has to monitor gas prices. He has one employee that services the routes, and it usually takes only four hours per day.
“This is a simple business and with us in such a rural area, we don’t need to service the machines as those operators in more populated regions.”
Founded in 1938, Acme Music and Vending of St. Joseph, Mo., is a family-owned enterprise which operates 1,500 amusement and vending machines in bars, restaurants, commercial and industrial parks and penal institutions.
“We carry snacks and beverages and we keep close tabs on what people buy,” said company President Thomas Cobb. “We don’t want our customers to get bored with our merchandise so we add and change our selections.”
Acme Music and Vending has both snack and beverage machines. In the snack machines, Acme carries candy, chips, pastries and a full line of low-carb, low-fat and fat-free snacks. Snickers remains the most popular item in the snack machines.
“People ask for the healthy snacks, but when they make a purchase, they go right to the Snickers bars. Hard to turn down Snickers,” Cobb joked. “But along with our snacks we carry a wide variety of beverages too, including health drinks and water. We also have bottles, cans of soft drinks and juice. Again, it is the carbonated soft drinks that are the most popular, but water is gaining in market share.”
Cobb’s route drivers maintain a schedule for re-stocking machines and also for inspecting expiration dates. All merchandise in the machines is code-dated so drivers know which products are close to their expiration dates.
Although Acme Music and Vending has enjoyed a long reign in vending in the St. Joseph region, Cobb admits that the economy has hit home.
“There were lots of jobs lost in this recession, and so our numbers go down with that too,” he explained. “If there are fewer people to buy vending machine snacks at the office and industrial parks, then we sell fewer items. It has been tough for everyone in our part of the country.”
Cobb is starting to see a bit of a turnaround and he is hopeful it will continue. He has more than 25 trucks on the road each day servicing the routes, and with gas prices, he is making sure that drivers stick exclusively to their routes, plus the company now has a computer program that assists drivers in maximizing their time on the road.
As co-owner of Alaska Music Company in Fairbanks, Alaska, Dan Thompson has a lot of ground to cover in servicing his 2,500 machines throughout Alaska.
“Seventy percent of our machines are vending and 80 percent of those are snacks and beverages. With such a wide distance between each location, we have to really keep track of what sells and what doesn’t.”
Alaska Music Company has vending machines in convenience stores, bars, taverns, schools, such as the University of Alaska, and service stations. “We follow the highway and that is where we put our machines,” Thompson said.
Because of the vast amount of highway Alaska Music Company has to cover, Thompson keeps to strict service routes and strict merchandise dates. If products do not sell by a certain date, he pulls them from the machine and replaces them.
“I don’t go to a location every day, so I have to make sure my products are always fresh and appealing,” he explained. “No one wants to get a stale snack from a machine.”
Thompson stocks a variety of snacks including chips, candy, pastries and sandwiches, and healthy choice snacks. In his beverage machines, he has coffee, soft drinks, energy drinks and water.
“In snacks, Snickers is our most popular item and Pepsi and Coke are at the top in our beverages.”
Alaska Music Company is family owned and has been in existence since 1967. Thompson has seen the competition grow in recent years, especially where soft drinks are concerned.
“Now the soft drink companies are putting in their own machines, so it does get difficult at times. But our customers know us and we stay on top of what people want in vending machines, so we keep going. It’s a great business to have.”
As owner of Nevulis Amusements in Amsterdam, N.Y., for 35 years, Edward Nevulis has watched as his company has grown to 400-plus machines in more than 100 locations. Nevulis’ route drivers travel within a 100-mile radius of his location to service the machines.
“We have three route drivers, and we service our machines on a set schedule,” he noted. “We have machines in laundry mats, factories, schools, restaurants, bowling centers, theaters and campgrounds. Depending where they are and how much traffic they get, determines our service schedule.”
Nevulis offers chips, cookies and candy in his food vending machines. The most popular item is Peanut M&Ms®. His beverage machines carry Pepsi, Gatorade®, a full Snapple line as well as Arizona teas.
“I have had this business for a long time and there are upsides and downsides,” he observed. “The economy was hard the past few years, but I am starting to see some light at the end of the tunnel. You have to know how to weather these storms. The best upside I see now is less competition than there was 25 years ago. For me, that may mean more work, but it also means more clients, and that is very good.” –