Monday, November 20, 2017 | Today's Vending Industry News
EDITORIAL: Once Again: What Business Are We In?

Posted On: 10/10/2006

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The National Automatic Merchandising Association National Expo always offers the opportunity to consider vending in its strategic dimension. The Expos, National and Spring, are episodes in an ongoing professional conversation. If a time-traveler were able to visit and record each one in quick succession, the result would be a "time-lapse" or stop-action movie of the industry's growth and (sometimes surprising) development.

One thing worth thinking about is the structure of the industry. We find the "three-tiered" model, under which a machine manufacturer builds the equipment, a locally based sales organization sells and supports it, and an operator buys it, contracts to place it, and fills and collects -- so natural and reasonable that we seldom think more about it. However, the industry might have developed in different ways altogether. In some countries, it did. In the U.S. and Canada, there always have been niches in which that model has not applied. And even in the mainstream, things could change.

During the sometimes painful transition from the postwar heavy-industrial structure to the modern information and light manufacturing economy, the vending industry (and many others) engaged in self-examination: What business are we really in? The answer usually came out "food and beverage service, with the emphasis on 'service.'" The answer you weren't supposed to get was, "running vending machines."

That reexamination was valuable and timely, but taking the contrary view can be interesting too. If one starts from the idea that the operator is, first and foremost, an expert in keeping self-service dispensing apparatus "clean, filled and working" under a wide range of conditions, and of matching the menu stocked by that apparatus with the clientele that will use it, one perceives some possibilities.

First, that expert need not own the apparatus. We frequently pass through a railroad station that has a town-owned parking lot and also serves as a hub for a number of suburban bus lines. Someone has installed a bill changer for the convenience of people using those facilities, and it seldom works. People stick neatly lettered signs on it, asking why no one can figure out how to keep it working. And we have wondered why the town does not simply find a local vending operator, who knows all about equipment like that, and contract with him or her for service and maintenance.

Similarly, a colleague reports that her young children are enrolled in a gym run by a pleasant fellow who has installed his own vending machine. It, too, does not often work. We suspect the location's hours of operation, and traffic, would make it unattractive to a vending operator for full route service. But we think some arrangement could be made for a vending operator to contract with the location for periodic service and maintenance.

As "retail automation" gathers steam, more and more "unattended points of sale" or "labor storage devices" are turning up in an ever-wider variety of roles. Some of them do work well; many of them don't. The ones that don't, in our experience, could be made to work much better if a vending operation were involved, not necessarily on an ownership basis. In much of Western Europe, large manufacturing locations traditionally have purchased their own equipment and contracted with an operator, or "caterer," to fill it.

In this country, we've known alert operators who received a call from the foodservice director of a hospital, a long-time client and friend, who has been given orders to bring the vending in-house. They've responded by reminding their contact that the hospital knows nothing about sourcing and running vending equipment, and offering a service package that will meet the administration's desire for full control over menu and pricing, while not losing sight of the patrons' desire for well-run equipment.

We sometimes suspect that this sort of arrangement is not more widespread because many operators regard "location-owned equipment" as somehow immoral. They react angrily to the news that an establishment has bought its own vending machine, while at the same time recognizing that the establishment cannot support full route service. What would they have the establishment do?

Today's mobile, dispersed society offers tremendous scope for vending, properly considered. Someone is going to provide it. There is an important role for vending operators in doing this, if they choose to redefine the business they're really in.