In 2009, a new glassfront snack machine, the Merchant 6 from Crane Merchandising Systems, offered a new row for gum and mint products. In addition, aftermarket specialist Vendors Exchange International Inc. offered a retrofit kit for these items.
Recession trumps health and wellness
Health and wellness continued to be a public issue in 2009, but the impact on the candy/snack/confection segment was not significant. Vending operators claimed consumers were more interested in getting the best value for their money than in wellness during a recession.
Operators noticed manufacturers offered more products with health association, including more that are not too expensive. However, many operators remained dissatisfied with the variety available and the pricing.
Nutrition snacks — which include breakfast bars, cereal, fruit snacks, functional bars, nutritional pretzels, granola bars, rice cakes, trail mix — gained market share slightly in 2009.
Nuts and seeds, which are not categorized by MSA as nutrition snacks but are believed to be associated with wellness, lost market share in 2009, even though the number of nuts and seeds stocked in machines increased. One contributing factor was a nationwide peanut recall early in 2009 that caused operators to remove products containing peanuts for a few weeks.
Food snacks, including meat sticks and meat and cheese sticks, posted strong gains in 2009.
Also noteworthy was the sheer number of products introduced to the candy/snack/confection segment in 2009: 245 products were introduced, more than double the previous year.
Hot beverage vending falls
The hot beverage segment continued its decline in 2009 as operators found more locations were unable to justify the expense of having a hot drink machine. The loss in hot beverage vending sales has been more than matched by the growth of OCS in recent years. Since 2007, vending operators have generated more revenue from OCS than from hot beverage vending, as indicated in chart 10 on page 36.
Hot beverages sales fell more than any product segment besides vend food and manual feeding in 2009.
Even in locations that were large enough to justify hot beverage machines, vending operators found that sales declined. This was largely due to the consumer’s greater access to high-quality, freshly-brewed coffee at coffee shops, fast food restaurants, convenience stores and coffee kiosks.
Those operators who did report success with hot beverage vending noticed that profit margins were lower than they used to be due to the higher cost of product, equipment and maintenance.
Vending operators who wanted to succeed in hot beverage vending found machines capable of offering more variety and better quality product.
But even with better coffee, vending operators found it necessary to go out of their way to make consumers aware of this due to widespread negative attitudes about vended coffee.
Some operators accomplished this by offering free coffee periodically from their machines.
Vend food keeps struggling
The vend food segment, which has been declining for years due to worksite downsizing, took its biggest hit ever and the biggest hit of all product segments outside of manual feeding in 2009.
For the second consecutive year, frozen food machines, which grew steadily since their introduction in the early 1990s, declined. The fallout in frozen machines, which allow operators to offer food without incurring the waste involved with refrigerated machines, underscored the sorry state of food vending in 2009.
Ever since the introduction of frozen machines, the expansion of this segment more than offset the decline in refrigerated machines, which has been continuous for the past decade.
Frozen machines, for their part, are not fully used for food; most are used for ice cream.
Operators were more aggressive raising food prices in 2009 than any segment besides cold drinks and snacks. But the price hikes did little to offset the decline in machine placements and the consumer’s unwillingness to patronize the food machine.
While vend food offered some of the best single-serve food values available to consumers, negative perception of vend food remained a major obstacle. Even at a time when consumers were more value conscious, negative perception of vend food prevented them from choosing the vending machine over the fast food restaurant or the convenience store.