The Case For Vending, Part 3: Product Manufacturers Value Vending, but Face Challenges

Vending is also a more stable business than other retail channels, which is both positive and negative. In other channels, retailers more frequently change product offerings, locations, execution strategies and marketing models. “We don’t do that in vending. We don’t have the capability to do it,” said Bachtelle. This makes for a more stable channel.

On the minus side, a product supplier can do little to drive volume because the vending operator does not drive it. “In vending, you can’t do 2 for $2,” explained Bachtelle. In other channels there are opportunities to do this.

The fact that the vending operator base is more fragmented also has both pros and cons for manufacturers. On the pro side, it is fairly easy for a new manufacturer to get into the channel and, because there are a lot of small customers, the supplier has more leverage in the negotiating process.

At the same time, it’s hard for a manufacturer to get a significant presence in the channel quickly; the operators have to be sold one at a time.

The vending channel needs to become more professional in its operating practices and in the type of sales information it provides. When this happens, all parties stand to benefit.

For more information, contact:

Bachtelle & Associates, (714) 731-5830, www.bachtelle.com
Buddy’s Kitchen, (952)-894-2540, www.buddyskitchen.com
D/FW Consulting, (972) 877-2972, www.dfwconsulting.com
Deli Express, 800-328-8184, www.deliexpress.com
General Mills Inc., 800-248-7310, www.generalmills.com
Kar’s Nuts, 800-527-6887, www.karsnuts.com
PepsiCo Foodservice, 800-352-4477, www.fritolay.com
Sprout, (908) 927-1001 www.sproutretail.com
Van Wyk Confections LLC, 888-465-5141, www.onedollarbar.com
White Castle Food Products LLC, 800-843-2728, www.whitecastle.com