VENDING MACHINE INDUSTRY TREND UPDATE
This update is a summary of the 2005 Automatic Merchandiser State of the Vending Industry Report. The survey of vending machine sales included candy snack vending machine and coffee vending machine product sales.
2004 VENDING OPERATOR SALES
According to the 2005 Automatic Merchandiser State of the Vending Industry Report, the vending machine industry reported its first sales gain since the recession in 2001. The total vending machine industry's sales rose a full percentage point in 2004. Much of the gain was driven by higher vending machine product prices. However, vending machine operators also faced an increase in operating costs.
Coffee vending machines may prove profitable in the future. The percentage of Americans who drink coffee daily increased to 52 percent from 49 percent in 2004. The largest increase in out-of-home consumption was among those who consumed their coffee at work. This opens a huge market for coffee vending machine operators to capitalize on business within the workplace by installing coffee vending machines.
The manufacturing/warehouse/fabrication vending machine accounts that have traditionally been the vending machine industry's largest customer base fell below thirty percent of the total vending machine customers in the vending machine industry in 2004. These shifts in the vending machine industry customer base are reflective of the changes witnessed in the nation's workforce. Automatic Merchandiser reported that vending machine operators were able to regain many office accounts as the technology sector recovered from setbacks.
In 2004, it was reported that many vending machine operators downscaled accounts in schools and correctional facilities. School vending machine accounts were challenging for vending machine operators in 2004 since many school officials were reluctant to outsource candy snack vending machine services to professional vending machine operators. These officials viewed candy snack vending machine operators as direct competition. Additionally, school candy snack vending machine accounts were greatly compromised by growing nutrition restrictions and programs.
Automatic Merchandiser also reported that extra-large vending machine operators (those with $10 million or more in annual sales) increased their share of the vending machine industry. These vending machine operators were able to expand into smaller work sites more aggressively when the three-year recession began to compensate for downsizing in larger vending machine accounts. Despite not being able to increase their share of the vending machine industry, large vending machine operators (those who report $5 to $9.9 million in annual sales) also reported some gain. Large vending machine operators reported being able to invest more resources in new equipment, training, marketing, and technology. Investing in vending machine technology has proven to be an important advantage since it allows vending machine operators to increase efficiency and provide great customer service at less cost. With greater financial resources in 2004, large vending machine operators were also able to invest and capitalize on more product categories, enabling them to maximize their return on overhead. In fact, in 2004, large vending machine operators sold more product than their smaller competitors.
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*Vencoa is an authorized distributor of USI vending machines and is not an authorized distributor of Selectivend products.