Sunday, November 19, 2017 | Today's Vending Industry News
EDITORIAL: Knowing The Territory

Posted On: 4/10/2007

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Vending operators always have known that they must please two groups of customers. They must sell their services to one group, the location, before they can sell their products to the people who actually will consume them.

Operators also know that they have a relatively small aperture within which to create their own brands. Over the decades, around the country, imaginative full-line vendors have been very successful in establishing branded identity for their commissary-prepared food items, and coffee service operators have made similar uses of private labels. If customers are very fond of a product that is not available from anyone else, that product is very helpful in retaining accounts.

That said, nearly everything a vending operator sells is produced and marketed by someone else, and the producer attempts to create consumer awareness and demand through advertising and sales promotion. Alert operators often can tie into a particular promotional effort, and the majority of product suppliers are eager to assist in cooperative efforts that will boost sales.

It has been pointed out, perhaps not often enough, that product suppliers also have two groups of customers. They must induce retailers in the appropriate classes of trade to purchase their products to put them in front of the end-user consumers for whom they're intended.

That task is easier for large organizations with universally recognized brands. The flagship items under those brands will be sought out by most retailers because their customers ask for them, so the supplier need only establish delivery channels and a reasonable pricing structure. Even under these favorable conditions, however, the supplier will have to convince retailers to take on a new product for which demand does not yet exist.

Vending always has played an important role in new-product introductions. Knowledgeable suppliers are aware that the largest market for vending services is populated by adult consumers away from home, and that vending operators are fairly easy to reach. Since most vendors are always eager for new products to rotate around their core best-sellers to maintain customer interest, vending is a prime vehicle for gaining initial exposure and trial for a wide variety of snack and cold-beverage categories.

This method works best for a supplier experienced in vend marketing, or one willing to listen to its vending sales force. It involves devoting some resources to establishing and maintaining a presence in the vending industry, through support for its trade associations, participation in its trade shows and communication through its publications.

We are passing through a period of rapid change, during which the commercial landscape has undergone dramatic alteration. This is not without precedent; that landscape has been reshaped four or five times (at the most conservative count) between the last decades of the 19th Century and the present. Over a little more than a century, the food and beverage industries have been transformed from a very large number of local enterprises to concentrated global businesses.

This process always involves the acquisition of many suppliers serving local or specialized niches; the streamlining of the acquisitions to focus on the highest-volume products; and the emergence of new suppliers in the niches left vacant.

In the past, those niches were geographic, first local and then regional. At present, they are defined by the preferences of particular groups of consumers. The rapid proliferation of new categories of snacks and beverages tailored to groups with specific tastes and enthusiasms is a result of this shift.

The vending industry is in a very good position to benefit from this evolution. Good operators know the diverse tastes of their locations, and reflexively identify those tastes with particular demographic groupings. What seems to be missing is a common description of those groupings. Compiling information on the varied clienteles served by the vending industry, and quantifying that compilation, would offer a powerful incentive to imaginative new suppliers to team up with operators to reach their target customers.

Here, again, is an area in which we have great hopes for the National Automatic Merchandising Association's sustained program of forming and strengthening relationships with the academic world.