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Ohio Vending Pioneer Boosts Sales By Expanding $1 Snack Categories

Posted On: 6/2/2008

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TIFFIN, OH -- Full-line vending pioneer Arnold Vending Co. has added a new category: premium snack items priced at $1 and higher. The result, say company officials, has been more satisfied customers, higher overall volume and a boost to the bottom line

Celebrating its 60th anniversary this year, the company has shown by its longevity that a constant rethinking of product mix and pricing structure is a crucial element in to bringing customers what they desire, and maintaining profitably in challenging economic times.

Vince Arnold, who represents the company's third generation, told VT that demand continues to build for items of high perceived value, priced at $1 and above, in its snack machines. Arnold Vending has responded by continuing to expand their availability.

Serving northwest and north central Ohio, Arnold Vending added larger-size $1 candy to the mix a few years ago, and discovered a sizable base of consumers who recognize the value of the bigger package. The higher margins have helped the vending operation keep its profits in line, as rising product and operating costs impact the industry nationwide.

Following the success of dollar candy, the vending company extended the price range upward  by adding king-size confections, which also continue to generate healthy turns. "We offer traditional size, $1 candy and king size in each machine and find there's a market for each," Arnold commented.

PHOTO: Arnold Vending warehouse manager Andy Fleck takes stock of Oreo Cakesters to ensure ample supply to meet strong demand for new premium pastry offering. Introduced to machines in March at a $1 vend, the snack cake's proven popularity is likely to earn it a spiral as a planogram staple.

This year, the company took the same approach with the pastry category by adding Kraft's Oreo Cakesters in March. Arnold reported that sales have been strong and are holding steady.

"The power of the brand helps tremendously," the vending manager told VT. "Everyone knows Oreo and they were excited about trying it in a big, soft pastry version. When they try it, they like it.  It seems that Cakesters has longevity; there's a good chance it will be a permanent facing on a long-term basis."

In addition to enjoying the higher penny profit per unit, the Ohio operator said his company is reaping rewards because the addition of Cakesters has established a new premium pastry category that is drawing incremental business; there are no comparable items on the company's planogram, so the impressive sales volume of Oreo snack cakes thus far has not impaired sales of its traditionally priced pastry items.

In view of Cakesters' performance, Arnold said he is eagerly awaiting the upcoming launch of a companion product, Nilla Cakesters. The vanilla version of the popular Oreo pastry, aided by customer recognition of the nostalgic Nabisco Nilla Wafer brand, will feature two soft vanilla snack cakes with vanilla creme sandwiched in between.

The Ohio vending company also has experienced swift acceptance and strong sales of Kraft's larger-size cookie snack bags -- including peanut-shaped Nutter Butter sandwich cookies -- at a $1 price point. Taking advantage of its full commissary, Arnold Vending recently established its own fresh-baked cookies as a premium offering by raising the price to $1, and sales have been strong.

"We continue to search out new products that we think will deliver the value to our customers; items that we think they will regard as worth the higher price," Arnold told VT.

Arnold Vending was founded by Vince's grandparents, Vincent and Eleanor Arnold in 1948. His uncle, company president John Arnold, is at the helm today.