A Quick Bite:
April 5, 2012
Classic Snacks and Beverages Dominate the Vending Market
Snacks remain an important part of the American diet, and operators of snack and beverage vending machines continue to capitalize on this trend. Here is a peek at the businesses of, and success practices employed by, four different operators in various parts of the United States. Serving Orlando, Orange, Seminole and surrounding counties, Gator Vending, in Orlando, Fla., touts itself as “central Florida’s premiere vending company” and as offering “a snack for everyone.” Its array of options includes national brand beverages, such as Pepsi, Coke, Zephyrhills, Arizona Tea, Snapple, Red Bull and Monster, candy brands like Hershey’s and M&M Mars. Lay’s brand chips, Frito’s, Doritos and assorted cookies and Danish are available as well.
To keep things fresh and ensure that the items in its machines appeal to the widest possible swath of consumers and cultivate return customers, Gator Vending periodically exchanges one or two options for different ones. “You just have to take something out that’s been there awhile, and put in something new to attract people to the machine to check it out,” said Gary Arwin, president.
However, the executive noted that the fastest-moving snacks and beverages are traditional favorites, “like Lay’s potato chips and M&Ms, because people know and love them.” Some products, he has discovered, sell well in the beginning, but subsequently lose steam. He cited a taco-flavored chip, which sold nicely when it was first introduced, yet is now garnering less attention, as an example.
Arwin believes the biggest area of growth in snack and beverage vending is not the products, but rather, the machines themselves. Units with the ability to accept credit cards and/or payments made using cell phone apps will consistently gain ground as more and more consumers demand the convenience of paying for small purchases with something other than coins, he asserted.
Across the country in Phoenix, Ariz., Paul Malley, owner of Paul’s Vending, also identified snack and beverage vending machines that accept “alternative payments” as growing more rapidly than any particular item or category. “The biggest change is that now, more and more of us are putting out vending machines that take debit cards to accommodate the increasing number of people who don’t carry cash,” Malley stated. “It forces you to raise prices because of the equipment you have to put on the machine, and the debit card companies get a piece. My personal opinion is that I like to keep prices down, but I have to do it” in order to remain competitive.
In salty snacks, Malley deemed potato chips of all types king; in sweet snacks, Snickers and M&Ms; in beverages, soda and in pastries, chocolate donuts. “What’s popular in America is what’s popular in the machines; wherever you are in the country, those lists will hold true,” he asserted. Although he is not sure why, the operator stated that diet soda trumps non-diet soda in machines frequented by an almost entirely white-collar clientele; the opposite is true in areas where blue-collar consumers predominate.
Like Malley, Alan Gabriel, owner of GMF Vending in Colorado Springs, Colo., is experiencing some variation in demand for certain snacks and beverages in line with different clientele pockets. On the salty snack side, potato chips and corn chips are in demand because they are classics, but older customers, many of whom are among Colorado Springs’ large population of retired military personnel, gravitate just as much or more frequently to peanuts and cashews. The former outstrip the latter in sales, as value-seeking older users like the fact that they can buy 1.5 ounces of peanuts at the same price they would pay for only one-half ounce of cashews, Gabriel stated.
As for sweet treats, he added, traditional favorites reign supreme among adults; Snickers rank number one in terms of candy sales, followed by Hershey’s and then M&Ms, with the peanut M&M variety edging out its plain counterpart. In markets with younger children, hard candies, like Skittles, are a favorite. Twelve-ounce cans of soda, colas and otherwise, sell better than bottles, a trend attributed to a perception among many vending machine users that “the plastic bottle has a different taste,” as well as to the lower cost of canned beverages.
No matter what the product, GMF Vending uses a “first in, first out” system to keep inventory fresh and to ensure that consumers do not inadvertently purchase stale snacks. Dates are tracked using date cards and inventory sheets, from the time product reaches the company’s warehouse to the time it is placed in a machine.
Sun Vending in Santa Ana and City of Industry, Calif., employs a similar system, according to Victor Silver, president. Drivers for the company, which serves a variety of venues in the Orange county area, are trained to carefully review and monitor product expiration dates, and to fill individual machines in keeping with the amount of traffic they generate. “An account with 500 people has enough business to keep the product moving quickly, but snacks and beverages in machines at a smaller account in a quieter area may not sell as fast,” Silver stated. “The driver has to know to check those expiration dates, and to know, ‘will it sell before I get here next time?’ ”
Like Arwin and Malley, Silver considers snack and beverage vending machines, as opposed to product categories, most ripe for growth at the present time. He also concurred with other operators contacted by Tourist Attractions & Parks that contrary to popular belief and despite the current “health craze” in the United States, healthy snacks do not represent a true business enhancement opportunity for vending machine operators. “People don’t go to vending machines to buy healthy foods,” he said. “So you put in healthy foods to get the account, and after a while you put in the junk foods people really want, and everything’s fine.”
Silver adds that his best-selling products are the “true junk foods” people associate with vending machines, specifically, Snickers bars, Coca-Cola and nacho chips. Coca-Cola outranks all other beverages, especially in Hispanic markets served by the company. –
Four Tips for Clean Machines
“You’ve got to wipe them down every time you visit the machine, with just paper towels and glass cleaner. People don’t want to buy snacks and beverages from a machine that doesn’t look sanitary.”
– Gary Arwin, Gator Vending
“Make procedures a part of driver training. If the driver cleans the machine every time he goes” to a location, “you’ve got a nice, clean machine. If he doesn’t, then you’ve got a nasty machine. It’s all in the training of the driver.”
– Victor Silver, Sun Vending
“Even if it doesn’t need a big cleaning, if you wipe them down thoroughly, you can avoid an hour-long cleaning job,” especially if machines are outdoors in the hot weather.
– Paul Malley, Paul’s Vending
“We use a regular maintenance program; for example, every 30 days, we clean every validator. We have scheduled maintenance for everything. We have a task sheet that every servicer goes through: wipe where people touch the machine, wipe the glass and so on.”
– Alan Gabriel, GMF Vending