A Healthy Economy, Business Diversification Lead To Positive Outlook

Dec. 21, 2017

The economy has improved for operators in many regions of the U.S., resulting in cautious optimism in reports of the third quarter of 2017. Sales have been steadily increasing for full-line vending operators, with micro markets and office coffee service leading the charge. “While sales are far from robust, our [micro market] and OCS segments are growing nicely,” commented a Wisconsin operator.

Micro markets continue to be of interest to customers and an opportunity for operators. Micro markets are even acting as the main driver of business for some. “Thank goodness for micro markets,” the Wisconsin operator, who wished to remain anonymous, continued. “Our vending sales are soft as can be. Without [micro markets], we'd be in a tough spot.”

In the second quarter, the percentage of revenue from micro markets increased for Jeff Snyder, CEO of Snyder Food Services, who commented that as the economy has continued to grow, so too has business. This is true for many U.S. operators offering micro markets, as they discover the uptick in sales the segment can have for their company. “Food sales, as a percentage of the total on site, increase threefold from vending only,” commented a Michigan operator. “Overall, sales increase from +10 percent due to the installation of a micro market, compared to vend.”

Though the micro market concept has been around for several years, vending operators are still slowly introducing them and finding challenges along the way. “Micro markets must be a partnership between the operator and the location,” said one Alabama operator who reported that his/her percentage of revenue from micro markets last quarter remained ‘flat’. “It is no win when it comes to things like theft if the location hasn't bought in.” Despite this, the operator’s future micro market outlook for the next three months remained ‘good’. This operator isn’t alone.

Another operator based in New York noted that his/her percentage of revenue from micro markets last quarter remained flat; despite this, the company's sales outlook for the future of micro markets remained ‘good’, showing that although micro markets may not give stellar results each and every quarter, they provide an overall positive outlook.

Although there continues to be considerable increase in new markets throughout every region, some markets are already becoming saturated for larger employers, so operators have to find ways to make micro markets work in smaller-employee environments. This is a challenge that operators across the country will continue to face in the coming years.

Future growth leading into a new year

For the final months of 2017, and beginning of 2018, operators generally report a positive outlook in all aspects of business. Beyond micro markets, full-line vending operators are looking to grow in gourmet beverages including cold brew coffee and other craft beverages, in addition to capitalizing on technology and brand selection.

“We remain positive about the future,” said an Idaho-based operator. “In order to grow, we will need to look beyond our initial approach to micro markets. We will also need to expand our OCS business.”

As long as the economy continues to improve and customers have more spending money, vending operators say they see growth in the coming months. “Although business is soft right now we do see improvement in the near future,” an Alabama operator noted.

Of all of the vending operators surveyed, the majority responded that their future outlook for the micro market segment and overall business was either ‘good’ or ‘excellent’ – a positive sign for our industry as a whole.

About the Author

Adrienne Klein | Contributing Editor

Adrienne Zimmer Klein is a freelance writer with a background in the vending, micro market and office coffee service industry. She worked at Automatic Merchandiser and VendingMarketWatch.com from 2013 until February of 2017.

Related

Mondelez 117x70
Snacks, salted snacks, bars

Mondelēz International Vending

Dec. 17, 2012
As a global snacking powerhouse, Mondelēz International offers an unparalleled portfolio of iconic snack brands including OREO Cookies, CHIPS AHOY! Cookies, belVita Breakfast ...