Plugged into profits

As the name implies, VendEdge is at the cutting edge of technology in vending. With 30 years in the vending industry, owners Dennis and Sandy Thornton believe in technology’s power to increase efficiencies. They use remote machine monitoring, coupon distribution and new cashless vending equipment to grow the Roswell, Ga.-based vending company. “At one point we were in 13 states,” said Dennis.

While the Thorntons have downsized with some strategic sales and mergers, VendEdge has never been more profitable. Technology is making all the difference.

 

Vending on the side

Dennis’s vending career started with his wife, Sandy. They both helped out in Sandy’s parents’ arcade servicing vending machines and pinball machines. In 1981, the family branched out servicing six arcades in the Chattanooga, Tenn. and Atlanta, Ga. area while Dennis finished college. When he graduated, he got a job with Peach State distributing, followed by Brady Distributing out of Charlotte, N.C. In 1986, he became the director of sales for vending and foodservice at Veryfine. It was a good job, but he was traveling often and found himself wanting to spend more time with his family. He and his wife made the decision to open a vending company in 1995. It started out of their Ringgold, Ga. garage and by 1997, they had a full warehouse.

In 2005, VendEdge was operating out of 13 states with 80 employees. When Hurricane Katrina hit that year, the Thorntons lost many locations, but did what all successful people do — they adapted. They sold branches in Louisiana and Mississippi to local competitors who were rebuilding after Katrina. In Florida, the Thorntons merged their routes with a former competitor in 2010, owned by Paul and Lynne Plant. Dennis is helping to roll out technology for that 20-route sister company, Florida Fresh Vending, and its operations in Tampa Bay, Plant City, Orlando and Melbourne.

Last year the Thorntons sold their Tennessee business to Five Star Food Service in Chattanooga, Tenn. Now Dennis and Sandy are focused solely on the Atlanta, Ga., market with a 25 employee, 10 route operation. “Bigger is not always better. We’re focused on doing what we’re doing better than anyone else,” Dennis said. The way the Thorntons make that happen is by bringing machines online.

 

100 Percent RMM

All of VendEdge’s machines are online. The company has used Cantaloupe’s remote machine monitoring (RMM) software since the spring of 2012. RMM allows VendEdge to dynamically schedule routes, analyze data and prekit.

“Dynamic scheduling is a big win for us,” said Dennis. It has allowed the company to take about 30 percent of the routes off the road. “I could have consolidated more, but we’re still growing too.”

One area the Thorntons give a lot of attention to is planograms. In both vending and micro markets, which the Thorntons added in 2010, the company closely examines what sells and what doesn’t. Adjustments to product mixes are often made on a per location basis. No two planograms look alike. The company believes in customizing each and every machine to cater to a particular customer.

“It’s imperative to be on top of trends happening in the marketplace,” explained Dennis. “We’ve got to do things better — bringing value, convenience and what the consumer wants.” He believes this is the only way to draw consumers back to machines and markets in this service job economy with more convenience store and quick service restaurant competition than ever. VendEdge has a dedicated employee, the Thorntons’ daughter, to do all the purchases, rebates and planograms for the company. Products in the bottom 5 percent of sales are replaced.

Technology is the only way to do this. “We have to identify trends and product categories that appeal to the consumer we’re providing for,” Dennis said. One example Thornton cites is a recent visit to a c-store. “There were 71 SKUs of various meat sticks,” explained Thornton. They were there for a reason — consumers want them.

 

Healthy vending in action

Dennis can’t mention product trends without talking about healthy vending items. Consumers are more health conscious than ever, with requests from the human resource departments for “better-for-you” snack choices drastically increasing. As manufacturers introduce better, healthier products, the customers are responding by buying them. “If we don’t have those offerings, we’re losing sales,” added Dennis.

Schools are another place healthy vending has really been a challenge. With U.S. Department of Agriculture nutrition rules defining what can be sold in any vending machine on school property going into effect this summer, VendEdge has done a complete planogram change. “What students normally buy just won’t be available,” Dennis said. While the Thorntons have seen a lot of products in the channel that meet the guidelines, when they asked students to taste test them, they found many would not inspire students to buy. “They are not a bit bashful about telling you what they think,” said Dennis about the student focus groups. He uses student government or student council members to taste test products.

 

Prekitting led to new vehicles

The ability to prepack product based on what was sold and only deliver that product has allowed VendEdge to make another profit building change — Sprinter vans.

Recently, VendEdge converted its entire fleet to the Sprinter van, reducing fuel consumption by more than a third. “The Sprinter van is under the 10,000 pound gross vehicles weight so no special license or health permits are required,” said Dennis. The vans also get 20 mph, a huge savings over the Thorntons’ old vehicles getting 12 to 13 mph. “It helps with sustainability, our carbon footprint and is a cost savings,” Dennis added. The switch was only possible due to prekitting. Sprinter vans are not able to be rolling product warehouses.

 

Two-tier pricing, EMV

While VendEdge has RMM on 100 percent of its machines, cashless presented a different challenge. Currently, cashless is on about 50 percent of its venders. As with all the company’s technological additions, the Thorntons continually assess the results. “We continue to do analysis on machines to make certain cashless is still viable,” said Dennis.

VendEdge gives a 10 cent cash discount, notifying customers with a cling that the price they see is the cash price. The Thorntons are also paying close attention to the upcoming deadline for EMV (Europay, MasterCard and Visa). On Oct. 15, 2015, credit card companies say they will refuse to be liable for fraud from non-EMV ready equipment. The Thorntons fear that leaves the operator liable. “My cashless readers are tap-n-go — so can take EMV,” said Dennis. “[However] Europe takes pin codes to make it more secure, but we can’t do that on a vending machine.”

While the Thorntons have seen vending’s glory days, they aren’t pessimistic about its future. With technology at their disposal, they can use data to increase sales while reducing costs and improving efficiencies. For them, it is about forging a new path through today’s industry obstacles.

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