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Issue Date: Vol. 51, No. 11, November 2011, Posted On: 11/27/2011


Expanding Vending Machine Menu: As Fresh Food Gains In Popularity, Frozen Options Still Meet Workplace Needs


Emily Jed
Emily@vendingtimes.net
vending, vending machine, automated retailing, frozen food, frozen food vending, fresh food food vending, Rick Austin, Fastcorp, frozen food vending machine, Jack Yuppa, Pierre Big Az, Advance Pierre Foods, John Diodata, Morning Start Services, White Castle hamburgers, Michelina's entrees, Gaye Tankersley, Food Service Inc., Chill Zone robotic frozen food vender, Fruit Pearls, healthy vending foods, flash frozen food, all-natural frozen snacks

Frozen convenience foods have become a staple for today's busy, on-the-go consumers, who often lack the time to prepare meals from scratch. As more people turn to the supermarket frozen food aisle for convenient mealtime solutions, many operators say their customers' confidence in their favorite microwaveable meals is carrying over to frozen food machines.

Rick Austin

Research suggests that frozen food vending is attractive to today's youngest workplace consumers, whom the National Automatic Merchandising Association has identified as vending's biggest users and its prime drivers of future growth. Chicago-based research firm NPD found in its 2010 Eating Trends study that "twenty-somethings" -- also known as Generation Y -- are much more likely than consumers in other age groups to consume portable frozen foods that require little preparation. In addition to convenience, NPD's study found that cost control is a major motivation for Gen Y, noting that frozen convenience foods often provide relatively inexpensive meal solutions.

When broad-spectrum frozen food vending became practical in the early 1990s, there was a good deal of discussion about the role it might play in expanding the range of locations that could support food, and the best mix of food and ice cream to maximize turns in business-and-industry accounts. A decade and a half later, operators have come to some conclusions that might have been surprising to the pioneers.


PHOTO: Rick Austin shows off one of his branded frozen food venders made by Fastcorp.

Georgia Vending Services is one of many operating companies that finds frozen food a more versatile solution than the refrigerated machines it once operated, because frozen machines offer patrons the microwavable meals that they increasingly associate with convenience, value and quality. A notable change that company president Rick Austin has seen in recent years is that patrons view frozen foods from the vending machine less as a last-resort option and more as a convenient, economical and desirable meal.

GVS relies exclusively on frozen machines to bring an appealing mix of foods to customers on its four vending routes in the greater Atlanta area. "I pushed away from fresh food long ago, due to the tremendous spoilage," Austin told VT. "Like many operators, I found it hard to make it work profitably. Frozen food has proven to be ideal for my company, and is very well received by my customers."

The Georgia operator is enthusiastic about Fastcorp's Schwan's-branded frozen food vending program, which he regards as the ultimate model for pleasing patrons with minimal labor and waste. Through the program, Schwan's delivers convenience foods and ice cream to a locked freezer that it supplies for each vending site where a GVS robotic Fastcorp machine is located. "Every operator's biggest complaint with frozen food is storing and delivering it," observed Austin. "With the Schwan's program, I don't have to do either. They restock the freezer and the product is in stock, onsite; all I have to do is fill the machine."

Morning Start at Devry

The Schwan's frozen vending program is an especially effective solution at sites in Gainesville and south Atlanta, which are 40 to 60 miles away from GVS's headquarters. "It eliminates the concern that ice cream will melt in transport, especially in the hot months," Austin noted.


PHOTO: John Diodata (center) of Morning Start Services checks in at DeVry University's Ft. Washington, PA, campus, where Halloween revelers enjoy an after-hours meal from frozen vending machine. Morning Start runs the university's cafeteria, which closes daily at 6:30 p.m. Adjacent fresh and frozen food venders deliver convenient meals around the clock.

He reported that Schwan's brand, known for its product quality by home-delivery customers and supermarket patrons, helps him sell the program with little effort. The menu includes pot pies, pizza, flatbread sandwiches, Angus burgers and Stromboli. Another draw is Schwans' lineup of premium ice cream and other frozen novelties, including several better-for-you items like fruit bars and 50-calorie chocolate bars. Vend prices range from $1 to $4. Austin's only complaint is that he wishes there was more variety.

WHAT THEY WANT
"I use the program as an important tool in my arsenal," the operator told VT. "The customers are thrilled; when I tell them to go to the website and see what they can have in their machines, they get jazzed. They have no question what the quality will be, because they get it delivered to their own homes, and even if they don't, it's a brand they see and trust."

Austin said his net investment to buy a Schwan's Fastcorp machine, which includes a product rebate on his initial order, is little more than the cost of a snack vender. "There's really no downside, because I don't have to worry about spoilage and the investment is not breaking the bank," said the vendor. "There are so many fresh food machines out there sitting in warehouses, because they've been pulled from the field with the downsizing in corporate America. I'd still rather buy a new Fastcorp machine with the Schwan's rebate, which is cheaper than a used food machine."

The vending company also operates a number of glassfront frozen food machines, stocked with a wide range of customer favorites like Hot Pockets, White Castle hamburgers, Michelina's entrees and ice cream to the workplace. They vend for $1.25 to $2.50 -- a lower range than products in the Schwan's machines, which Austin said command a premium.

"The glassfront frozen machines fill a niche, because a lot of people want frozen Michelina's entrees and ice cream, which you simply can't sell thawed in a refrigerated machine," said Austin. "I use that as a selling-point."

Most of GVS's three dozen frozen machines feature a nearly even mix of food and ice cream; a handful are dedicated to food.

When it comes to categorizing the size and type of location that can support a frozen food machine, Austin said he has no hard and fast rule. "I can't say there's a specific criterion; it's more intuitive," said Austin. "One account may have 120 people and be a good fit; another may have fewer, but if they're willing to include my coffee in the mix, then I'm willing to step up with a frozen machine."

ONE OR BOTH
Another vending operation benefiting from its customers' affinity for frozen foods is Culinary Ventures Vending in Union, NJ. The company's 20 routes provide full-line vending throughout the greater tri-state New York metropolitan area, servicing some 25 frozen food machines in colleges and universities, business and industry accounts and hospitals.

In contrast to Atlanta's GVS, the New Jersey vending company typically does not use the Fastcorp robotic frozen machine as a standalone solution, but most often places one alongside an Automatic Products carousel refrigerated food vender.

"Customers want fresh foods like salads, sandwiches, milk and yogurt," said CVV president Jack Yuppa. "The great thing about frozen food is it adds another whole range of grab-and-go items that they can heat up, along with ice cream." Nathan's hot dogs, Pierre's Big Az sandwiches and Blue Bunny and Good Humor ice cream are among the top-selling frozen items, he reported.

In colleges, CVV's frozen venders, stocked with a mix of food and ice cream, are located in dormitory kitchenettes and near cafeterias. In hospitals, the machines satisfy 24-hour food demand by visitors and staff, which peaks when the cafeteria closes. "If food is fresh and refrigerated, shelf-life is a big concern. If it's frozen, it's there until they buy it," said Yuppa. "That's a big benefit to frozen."

The company also operates a few dedicated ice cream venders at seasonal facilities like swim clubs and marinas.

CVV's frozen food pricing ranges from $1.50 for a burrito to $3.50 for a hamburger; its ice cream vends for $1.25 to $3.

"Frozen food has come a long way. Even the airlines are serving Pierre wings and Big Az burgers," said Yuppa. "That brand recognition helps when the customer sees the same product in the machines. It's becoming more popular than it was years ago, when most people wouldn't touch food in a vending machine. There's also more confidence sometimes in buying food frozen than refrigerated, because people don't question how long it's been sitting there."

One constraint to vending food in its frozen state that can be significant in workplaces is the longer time it takes to reheat the product. CVV addresses this by adding two or three more microwave ovens in breakrooms where it places a frozen food vender.

"A location has to have at least a couple of hundred employees or students to justify the cost of food equipment and the manpower to maintain it," Yuppa told VT. "Our food route is limited; it can only make so many stops per day, so we choose the locations that can support it very carefully."

John Diodata of Langhorne, PA's Morning Start Services says the fresh-made appeal of foods prepared in the company's commissary make refrigerated carousel venders a draw on the company's seven routes in the greater Philadelphia market. Some 20 frozen food machines situated alongside them in select accounts round out the menu with ice cream and brand-name convenience foods.

"We're selling a lot of fresh food, and the economy is helping, believe it or not," he told VT. "People would rather stay in, have a nice sandwich from the vending machine and pay far less than going out and spending $7 or $8, when they buy a drink with their meal."

Morning Start keeps waste to a minimum by stocking three to four shelves of fast-moving freshly-prepared sandwiches, salads, entrees and desserts, supplemented by items with a longer shelf-life like Dole fruit cups, yogurts and ConAgra's microwaveable Chef Boyardee pasta meals. The company also sells branded prewrapped sandwiches like White Castle burgers and Wow Foods! Dale Jr. -branded sandwiches in its refrigerated machines.

ONE-TWO PUNCH
"Frozen vending works well is in conjunction with fresh food," Diodata stated. Entrees like Lean Cuisine, Boston Market and Smart Ones that are favorites in the frozen food aisle at the grocery store are swift sellers in vending, and the company dedicates two rows in its frozen machines to them.

"Hot Pockets and burritos, and other quick frozen meals that you hold in your hand and eat on the go are also a good complement to the fresh sandwiches we sell in our refrigerated machines," said the operator. "There's nothing like Crane National Vendors glassfront machines in terms of attractiveness when it comes to merchandising frozen foods."

Ice cream is also a proven patron-pleaser featured in Morning Start's machines. In the summer months, the vending company takes advantage of higher seasonal demand by replacing a column of food with ice cream.

"There's less waste in frozen food, but the machines still have to be in a good-moving location," emphasized Diodata. "You don't want 'freezer burn' if products sit too long, and you want the movement to make the most of your investment in the machine. And when you sell frozen food, there's more to it; you have to have dry ice and coolers. You have to be very selective where you do it."

Like Morning Start, Food Service Inc., based in Lexington, SC, has built its reputation on its excellent foodservice. Its freshly-prepared foods are widely distributed in vending machines throughout the greater Columbia, PeeDee and Charleston regions, where the company also manages manual foodservice at many high-profile locations.

Gaye Tankersley, the company's president, said that while fresh food is always the big draw, the addition of frozen food machines rounds out the menu at select industrial sites across the company's 20 routes. "In all cases where we have a frozen food machine, we also provide fresh food, and in all cases it's in higher-volume locations," she told VT.

Tinkersley, like Morning Start's Diodata, said variety is the main reason impelling her company to complement a refrigerated food vender with a frozen machine. "It allows us to offer fresh sandwiches, milk, salads, etc. in the refrigerated machines, and the frozen food can extend the menu with ice cream and branded foods like Lean Pockets, White Castle sandwiches and Michelina's entrees," Tankersley said. "In the summer months, we focus more heavily on the frozen novelties, and in cold weather, we focus on a higher ratio of comfort food."

At many sites, the vending company merchandises nationally branded pre­wrap­ped sandwiches in its cold food machines as a complement to its fresh offerings, and it duplicates some of the top sellers in an adjacent frozen vender. "It's quicker to heat an item when it's thawed, which matters when you have a 10-minute break," Tankersley pointed out. "But there are also those employees who can take the time to heat it from frozen and prefer to purchase it frozen, because that's what they're accustomed to at home. As a vending company, frozen foods obviously benefit us with a longer shelf-life."

It's worth remembering that the profusion of single-serve frozen food items in supermarket display freezers was made possible by consumer acceptance of microwave ovens as common kitchen appliances, and that took quite a while to achieve. The microwave oven was invented in 1959, but did not really find favor with the general public until the mid-1970s. Catalyzing consumer demand for the technology was the vending industry, which spent the 1960s waging a tenacious struggle to teach people how to use the new appliance, and to persuade them of its value. We are now reaping the rewards of that educational effort.

Fastcorp_Chill Zone & Fruit Pearls


PLAYING IT COLD: Fastcorp's forthcoming Chill Zone robotic frozen food vender will be merchandised with better-for-you novelties and leverage hip graphics to draw young patrons. Machine fronts spotlight "active lifestyles" rather than "healthy products," which kids often associate with sacrificing taste. New in Fastcorp's branded lineup is Fruit Pearls Evolution. Similar-looking to Dippin' Dots, Fruit Pearls are made with flash-frozen pieces of citrus, fruit juices and yogurt balls. The all-natural frozen snack is said to possess the sweetness and creaminess of ice cream without added fat and sugar.

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