Vend food sales in 2011 continued the declining trend that precedes the recession, but as with other segments, the decline decelerated in 2011. Vend food, like hot beverage vending, has been disproportionately hurt by the loss of blue collar manufacturing work sites.
Operators once again raised food prices in 2011, driven by rising wholesale food costs. Vend food price increases did not keep pace with wholesale food prices in 2011, which according to the National Restaurant Association, jumped 8 percent in 2011, the biggest 1-year gain in more than three decades.
Looking at product mix in food machines, the most notable change was the decline in non-food items sold in food machines. Most non-food items in food machines refers to beverages, such as milk, juices, ready-to-drink tea and sports drinks.
The decline in non-food offerings indicates food products sold slightly better in 2011 than in 2010, when operators increased non-food offerings. Operators typically use non-food items to reduce the amount of food waste since non-food products have longer shelf lives.
Operators also added more freshly prepared food in 2011 than frozen or shelf stable food, indicated in chart 16b. This reversed a trend from 2010, when operators used more shelf stable food and reduced the amount of both frozen and freshly prepared food.
The State of the Vending Industry Report noted a big gain in ambient machines being used to offer food in 2009, which it attributed to the removal of frozen and refrigerated machines.
Frozen food machine placements resumed their upward trend in 2010 following a 1-year decline in 2009, and this upward movement continued in 2011. Operators had consistently added more frozen food machines since their introduction in the mid 1990s.
The gain in frozen food machines in both 2010 and 2011, however, did not compensate for the decline in refrigerated machines, which has been occurring since the 1990s.
Integrated food systems, which heat and serve pre-cooked meals, suffered a hefty loss in 2010 due to the liquidation of a major operator of these systems.
Self checkout micro markets, still in their infancy, benefited food sales more than any other product segment in 2011. Where food sales accounted for 4.3 percent of total vending sales in 2011, in micro markets, food accounted for as much as 35 percent of total sales.
Micro markets, by offering so much food, make the break room more of a meal destination than a vending bank.
Milk sales fall again
Milk sales fell for the fourth consecutive year in 2011, reflecting an overall decline in milk consumption. The 14.5-point sales decline in 2011 was the steepest since the start of the recession for milk.
The decline in milk vending was driven by a loss in both dedicated milk machines and refrigerated food machines, the latter of which carried most vend milk. Refrigerated food machines and dedicated milk machines were historically placed in industrial accounts which have declined steadily in recent years.
As noted in the discussion on the food segment, vending operators used less “non-food” items in their refrigerated food machines in 2011 in an effort to improve sales of their higher priced food items. Operators traditionally use non-food items, which include milk and other beverages, to reduce food waste since the non-food items have longer shelf life.
Milk sales were also challenged by a softening of demand for milk in all retail segments. A decline began in 2010 and continued in 2011. MilkPEP, a Washington, D.C.-based organization that tracks milk sales, reported total U.S. fluid milk sales declined by 1.7 percent in 2011. The MilkPEP All Channel Tracking study confirmed that vending sales declined more than total milk sales.
A public debate among nutritionists about the health benefits of flavored milk became more vocal in 2011. Nutritionists, educators and public officials began paying more attention to the debate out of concern for rising childhood obesity. Some school districts removed flavored milk in 2011, while others chose to keep it.
The milk industry recently began positioning milk as a rehydration drink for athletes.