Observations Of Today's Industry Challenges

May 18, 2017

The journey to uncover what has been happing in the vending industry is about to begin. The State of the Vending Industry surveys are in, the data is being tabulated and we will soon publish the annual report in our June issue of Automatic Merchandiser magazine as well as online. Before we have concrete numbers however, I want to talk about some of the challenges I've been hearing about. Various operators talk about them, but depending on the operator, it is either a hurdle or an opportunity.  


Consolidation happens in a mature industry. Period. There really isn't anything that can be done about it.  It can be beneficial in creating larger companies with critical mass which can offer the selections of services today's workplaces expect. On the flip side, it makes it even more difficult for independents and start-ups to compete. I expect there to be fewer small and medium-sized companies this year, but depending upon which side of the fence you are on, this is an opportunity or a challenge.  

Stagnant vending  

I can't help but feel a bit melancholy for the vending machine. It was the innovative technology that started our industry and kept it going as the foundation of revenue that can be used for other service lines.  However, vending machines have really fallen in terms of the icon they once were – a sophisticated machine that offered convenient refreshment when and where you wanted it.  

That is likely our fault, for failing to upgrade machines or evolve them to go along with how the consumer shops. Luckily, vending machine manufactures aren't wallowing these days. Instead, they are making it more affordable to integrate screens and media that enhance the customer experience and make the vending machine exciting again. With the addition of cashless payment acceptance, vending machines will finally catch up to other foodservice formats.   

Micro markets 

Micro markets have been described as a solution that has revitalized and reinvigorated our industry, as well as a shiny new penny – exciting, but not necessarily better. I would argue that micro markets have elevated the reputation of our entire industry, including the original vending machine. The micro market solution is what customers always wanted – self-checkout, more choice, the ability to look at and touch items, a more high-end breakroom experience. 

Yet, there are still plenty of operators who don't offer micro markets. Some never will for various reasons --  from it's too much work to control spoilage to limited space in the warehouse to hesitation to invest in technology. I'm unsure just how this will go in the long run. Will vending-only operators specialize and elevate the equipment experience without the help of micro markets? Or will there be an even larger gap between operators who grow to include multiple segments (such as micro markets) and those who focus only on one or two segments.  

Each of these is a double sided coin - good and not so good, depending on your perspective. It will be interesting to see what the 2017 report tells us about the trends and where the industry will go in the future.