Thursday, November 23, 2017 | Today's Vending Industry News
EDITORIAL: Evolution In Action

Posted On: 4/12/2008

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As the workplace services industry confronts a situation in which energy prices are high, the value of the U.S. dollar is low, commodity prices are increasing and seem likely to continue doing so, and consumer confidence is down, longtime industry observers will be haunted by the sense of having been here before.

The full-line vending industry emerged in the years bracketing 1960. It may not be a coincidence that the first pronounced recession to follow World War II took place from 1957 through 1958. In retrospect, it can be seen to have marked the end of the postwar boom in the United States.

In the late 1960s, the cumulative effect of steadily rising commodity costs and the decline in traditional ferrous-metal-based heavy industry effectively ended what was seen then as the golden age of vending. We recall the intense anxiety with which operators confronted the need to raise their fresh-brew coffee prices from a dime to 15¢ at the turn of the decade, and their successful efforts to cushion the blow by increasing cup size and enhancing product quality. At the same time, the industry recognized the parasitic effect of internal theft on profitability, touching off wide-ranging standardization of locks and the adoption of modern accountability and settlement systems.

By the end of the '70s, persistent inflation had effected a dramatic alteration in Americans' perceptions of value, training consumers to pay a fair price for perceived value. Along the way, the spike in petroleum prices occasioned by the Arab oil embargo of 1973-1974 caused distribution businesses to take a closer look at their vehicle costs. Industry seminars at the time dealt extensively with the use of liquefied petroleum or natural gas, sometimes with engines adapted to permit adjusting the carburetion for either gasoline or a hydrocarbon gas. There also was a good deal of discussion about vehicle body aerodynamics, leading to the attachment of streamlined fairing to the flat fronts of box bodies, to reduce parasite drag, and the replacement of solid with perforated pickup-truck tailgates.

The turbulent 1970s ended with the Iranian revolution and another energy price spike that endured through the early '80s. Again, it may not be a coincidence that this period saw the industry begin to adopt electronic data processing technology, seeing it as a potentially critical tool for further tightening management controls, reducing time and labor and speeding response to changes in a location or the market.

Throughout those decades, many operators looked back wistfully on the 1960s with their high-volume accounts and high-margin "wet mix" of hot and cold cup beverages. Of course, that period also was characterized by widespread low-level hostility to vending on the part of blue-collar workers, who often regarded it as another imposition by "the bosses," and by state and local governments, which observed a good deal of money being collected from the machines, but did not see the high costs involved in running them. Both of these benighted attitudes were reflected in the lack of respect (to put it mildly) shown to vending by the press and the entertainment industry.

And, during each price and cost crunch, weaker operations merged or folded, while stronger (or more agile) ones weathered the storm, made their plans for future growth, and began to execute those plans when the skies cleared. The last Golden Age was the 1990s, although it was not always recognized as such while it was going strong. Among many other things, that period witnessed the advent of practical automated data storage and retrieval systems, versatile cashless payment systems, breakthroughs in vehicle design and materials handling equipment, and the emergence of category management as a serious topic of discussion.

We see no reason to believe that the current period of adversity will be different. Vending is in great demand, is regarded without bias as a mainstream retailing channel, and is positioned to take advantage of converging communications and computer technologies offering flexibility, interactivity and reliability that would have been regarded as a fantasy in 1970 (or even 1980). Well-managed companies can emerge in a stronger competitive posture, ready to meet the demands of the next upturn. For whatever reason, this industry is inclined to make the most progress during troubled times.