Thursday, November 23, 2017 | Today's Vending Industry News
Where Do We Go From Here?

Posted On: 9/8/2004

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Legends of a Golden Age and mournful reminiscences of the Good Old Days date back to the dawn of civilization, and they have proven extremely durable. Much unthinking nostalgia is rooted in remembering pleasant things that have vanished, and forgetting the unpleasant ones. The days of cheap gasoline and plentiful blue-collar factory jobs also were the days of candy machines whose upper shelves were dropped so infrequently that the product up there went stale, if those hard-working, dedicated route drivers of happy memory failed to rotate the unsold stock down (which was not uncommon).

This is not to say that all's right with the world and people should stop grumbling. It is likely that the vending industry is approaching a kind of crisis, a turning-point, that only will be apparent after it's over.

On the positive side, as we've often pointed out, public confidence in robotic retailing is at an all-time high. Anyone who remembers the hair-raising accounts of early attempts to introduce commercial microwave ovens, and of the extensive education that accompanied converting a cafeteria from manual to vended service, can only watch in wonder as today's consumers cheerfully entrust their financial transactions to automated teller machines, purchase $200 monthly railroad tickets from vending machines, and greet an unexpected bank of upmarket venders in an airport concourse with glad cries (we've seen that happen).

On the negative side, the full-line vending industry has been holding its own by improving its merchandising, sales analysis and inventory management practices to increase per-capita sales to client populations that (at best) are not getting any larger. Tighter controls and better route efficiency also are helping, but the prevailing model remains the large workplace requiring very fast refreshment service for a regimented population with no alternatives. That model, which accurately guided the development of full-line vending four decades ago, is increasingly less relevant to the modern world.

The simple version of the full-line vending creation story is that large factories, built well outside urban areas during World War II, found themselves increasingly burdened by the need to provide in-house cafeteria service to employees unable to go home for lunch. This led to an initial postwar boom in contract foodservice management companies, and a later, stronger boom in vending operations. The vendors often acquired the contract feeders along the way. Vending won out because it was faster, less labor intensive, and more flexible in delivering refreshments to groups of hourly employees throughout a very large work area. It also could manage the coffee breaks increasingly written into union contracts.

Vending still possesses all these strengths, and there still are  groups of employees distributed through large work areas, although those groups tend more and more to have different employers. What is different is that today's Americans on the job occupy an environment that has been modified extensively by dispersed workplaces, and that has adapted fully to them. This environment is hospitable to many competitors for away-from-home refreshment dollars.

That vending has met that competition as well as it has is a tribute to the industry's engineering and merchandising skills. And vending continues to offer unrivaled convenience. Increasingly, though, large vending locations are islands in a rising sea of food and beverage purveyors.

It is inevitable that vending technology will move out into that sea. Many kinds of retailer can apply the robotics developed for vending machines, whenever space and staffing constraints make robotics the more cost-effective choice. To date, this development has taken place more rapidly in Japan and much of the European Union than in North America. It has been hanging fire for decades here. It will not do so forever.

Today's vending industry has the skills needed to play a pioneering role in this evolution, and some operators surely will do that. But, as computer technology continues to make automation simpler and more modular, it is becoming easier for outsiders to reinvent the wheel. There always will be a vending industry; it is up to us to make sure that it will continue to be us.