Sunday, November 19, 2017 | Today's Vending Industry News
Industry Life Cycle

Posted On: 4/10/2005

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Recently, we've heard from a growing number of industry veterans that the vending business isn't as much fun as it used to be. The old camaraderie is gone, cold calculation has replaced human relationships, and consolidation is making it difficult for anybody to earn a living.

We know what they mean. On the other hand, we've heard it before - and so have they. The industry consolidated during the late 1950s and early '60s; it consolidated again a decade later, and once more in the 1980s. On each occasion, shellshocked survivors tended to reflect that the old entrepreneurial spirit was gone, the world had become dominated by guys with sharp pencils, and the business wasn't as much fun as it had been when everyone was younger and less experienced.

Our first task at VENDING TIMES, more than 35 years ago, was to travel around the country interviewing the first generation of independent full-line vendors. The modern vending/foodservice industry was about a decade old. A few of those full-line operations had started in the immediate postwar years, and had evolved from bulk vending or jukebox businesses. The majority of them had started in the mid to late 1950s with one or several of the "four Cs" (in those days, Candy, Coffee, Cold drinks and Cigarettes), and had expanded into food when reliable refrigerated equipment hit the market.

That generation's story might be summarized as, "I graduated from college with $500 in the bank and an old car. So I bought a couple of used cigarette machines and enough inventory to fill them, then drove up the street and found locations for them...." One thing led to another; demand was strong, market penetration was slight, equipment was cheap, you could find capable help, and customers were delighted with the novel service. "But," that story always concluded, "You can't do that any more," because all those favorable conditions had eroded as the industry matured.

This was pretty convincing, until we started running into people who were doing it. Even at the height of national concern over the withering away of the "smokestack" economy, inflation without growth and storm clouds gathering on the global horizon,  individuals with few resources but great determination were starting out with one or two machines, giving good service, reinvesting their profits and becoming vending operators.

New operating concepts were developed to meet the needs of locations that could not be served profitably by traditional vending. Some proved more widely applicable than others, but the net result was a transformation of the workplace service industry.

An odd thing about "golden ages" is that they seem to endure forever while one is in them. In retrospect, they are recognized as transitory. The decade of the '60s saw vending penetrate its core market at remarkable speed. That success naturally taught the industry important lessons. Some were worth learning, and have held true through the unsettled periods that followed. But others have decayed into obstructions: the belief that the world will not stand for vended coffee sold at market price, for example, or the view that vending machines necessarily are regarded by consumers as a last-resort product source.

Those things may have been true in 1965, but they are true no longer. And the people whose thinking has not been conditioned by them are those who never learned them in the first place: the young entrepreneurs who accept today's astonishing technology as the norm, who don't know that vending is a blue-collar service method that does best in high-traffic heavy industrial locations, who never were taught that "you can't make money on food." Most of these people are working too hard to consider that they are part of an industry, but as they grow, they will run into situations that demonstrate the value of trade association membership and the importance of keeping up to date by attending trade shows. As the established industry consolidates, it opens up more and more niches for these newcomers.

Vending always has welcomed hard-working, imaginative people, and it still does. If there is a Golden Age, it's right now.