Retailers in all classes of trade reported higher ice cream sales in 2010 due to a hot summer.
Vended ice cream has long been volatile, due to the category’s dominance by dedicated ice cream specialists.
Most vend ice cream was sold in combination frozen food/ice cream machines, indicated in chart 18c.
The increase in frozen food machines, indicated in chart 16a, should have boosted ice cream sales in 2011 since most frozen food machines carry ice cream. However, the slight gain in frozen-prepared food sold in 2011, indicated in chart 16b, may have resulted in more food sales in frozen machines. The survey does not break out food sales from ice cream in frozen machines.
Machines that prepare ice cream from a “flash frozen” state, which were introduced in 2006, did not gain significant traction.
Consumer demand for ice cream was stable but not exceptional in 2011. Retail sales of ice cream and frozen desserts rose 2.4 percentage points in 2011, according to Packaged Facts, a research firm.
2012: Challenges remain
Vending operators were not preparing for any significant change in the business climate in 2012. The nation’s unemployment rate dipped to 8.1 percent in April, marking the best showing since the start of the recession, but the improvement was minor compared to the recession’s fallout. In addition, while the private sector added jobs in 2011, the public sector lost jobs as government at all levels faced budget shortfalls.
Vending operators agreed that uncertainty about the economy continues to dampen consumer willingness to spend money.
The National Restaurant Association expects the foodservice industry to post a 3.5 percentage point increase in 2012, translating into a 0.8-point inflation adjusted gain. This marks a slower rate of growth than 2011, which posted a 1.3-point gain.
The vending industry typically underperforms the foodservice industry during slow growth periods.
Fuel prices increased in the first quarter of 2012, but have since stabilized. The long-term outlook for fuel prices was reasonably positive, according to the Energy Information Administration (EIA). EIA expected gasoline prices to average $3.45 in 2012. That represents a slight drop from the record high of $3.53 in 2011, but still will be well above the averages of $2.35 in 2009 and $2.78 in 2010.
Health insurance costs continued to increase in 2012, a drag on the bottom lines of vending operators and all businesses.
On the upside, vending technology providers noted that vending operators continue to invest more in technology solutions that improve efficiencies and make vending machines more attractive to the younger generation.
The vending industry continues to face a challenging balancing act: making the long-term investments needed to improve sales and profits in an environment that lengthens their return on investment.