In remote data collection, however, the larger operators were not the main buyers.
There is a key difference between cashless capability and remote data collection that explains why larger operators might be more inclined to invest in the former and not the latter.
An operator can realize immediate benefits from installing a cashless reader, whereas remote data collection will not yield significant savings unless the majority of machines on a route are equipped with remote data reporting devices.
Larger operators have more machines to equip and cannot accommodate remote data collection without a large upfront investment.
Smaller operators, on the other hand, can incorporate remote data collection fairly quickly and use it to distinguish themselves in the market place.
Health concerns increase
Health and nutrition continued to be a major consumer issue in 2005, much to the vending industry's dismay. The consumer media continued to attack the food industry as government officials called for more restrictive nutrition rules.
While schools did not account for a big percentage of vending sales, the public attention made consumers more aware of the nutritional content of vending products, bringing more requests for healthier products.
The National Automatic Merchandising Association took a proactive stance with its nationally publicized Balanced for Life initiative early in 2005. This helped counteract the negative publicity that some government officials and consumer advocates directed at the industry. It also gave vending operators a way to support nutrition education in their communities.
The survey did not indicate an increase in healthy product sales with the major exception of bottled water, and to a lesser extent, milk and some snacks.
Vending operators faced a unique challenge in responding to these requests due to the limited number of facings they can offer compared to other retail venues. However, operators noted that manufacturers offered more products designed to meet stricter nutrition standards, and more better tasting products.
About the survey
Survey participants were limited to full-line, candy/snack and self-operated vending businesses that sold candy, snacks, confections, cigarettes, hot beverages, cold beverages, refrigerated food, frozen food, ice cream and manually served food. The sampling did not include music and game operators whose main business was not consumable merchandise, soft drink bottlers whose main business was not vending, or ice cream distributors whose main business was not vending.
Aggregate revenue and equipment figures for the report were based on a total operator universe of 9,000 vending operations in the U.S., along with data from government, product suppliers and equipment suppliers.
For the third straight year, Pittsburgh, Pa.-based
Management Science Associates (MSA) Inc. provided input on vending sales for the State of the Vending Industry Report. MSA receives machine level data from Validata Computer & Research Corp. with the goal of analyzing machine activity.
VendScape® machine level sales measures are available through MSA and operational measures through Validata. MSA uses several data sources to report market-wide industry performance. The projected database, ProVen™, is now available through IRI.
The State of the Vending Industry Report's revenue and equipment figures include machines operated by business locations for their own use, known as in-house and self-operated machines. This portion is estimated to be about 5 percent of the total industry.
Following is a more detailed analysis of the major product segments.
Cold beverages grow
Cold beverages were among the better revenue producers in 2005, thanks to the dominance of PET bottles, which command a higher selling price, over cans in recent years. Some of the revenue gain for the segment was also due to higher pricing, although this did not necessarily reflect improved profitability.
The growth of bottles over cans began to subside in 2005. The growth leveled off in 2004 at 76 percent of total beverage sales.