Vending Operators View Industry Outlook As 'Strong'

Aug. 1, 2016

The second quarter Operator Confidence Index reflects a promising second half for 2016. Vending operators, micro market operators and office coffee service operators rated their current and future outlook for the industry at Strong giving the OCI score for this quarter a kick up to 132.2.

Micro markets saw the most gain this quarter reaching an individual OCI number of 4.05 representing a strong segment. Operators are gaining traction in this area with growth being reported for both conversions from vending as well as new installations. More operators are investing in the systems and they have an increased number of service providers to choose from. Plus, there has been steady growth in customers asking for micro market service. This has helped improve the segment’s outlook as well as proven the return on investment for the micro market systems, in many cases.

Vending and office coffee service both slipped in the second quarter by a few tenths of a point. OCS is relatively flat with a score of 3.59, but the summer months can slow sales down for hot beverages. Still, operators are reporting moderate growth although not as large as the micro market segment. Bean to cup systems remain the trendy new service inspiring the OCS segment’s sales, as well as other services operators are offering, such as pantry service.

The core business of vending has been described as a “protective play” by operators. Many are handling the business day to day, but are having difficulty growing the segment and are looking to other areas of their business to be the future in workplace refreshment services. The lack of new products in the vending segment could be one reason operators are struggling, especially with a heavy focus on MM products. 

But where vending is growing stronger is with credit and debit card readers, mobile payments and vending management systems. In fact, this technology enhances the vending segment as well as other segments, such as OCS. 

Overall, sales volume in all segments is reported to be relatively strong with steady, if in some cases low, revenue growth over last year. Low unemployment and high retention rates are helping, and the remainder of 2016 looks to be more of the same.

For VendingMarketWatch TV, I’m Emily Refermat.