A New Day Dawns For Vending

The vending industry often has been accused of a lack of imagination, especially by innovators who need to get a new technology adopted quickly in order to cover its costs of development. The usual complaint was that "vending operators won't buy anything that doesn't have a coin slot in it." Some (like us) replied that a small business without a research-and-development budget partially funded by Defense Department contracts showed good sense by reserving its major capital investments for assets that generate revenues immediately.

In any case, we haven't heard that complaint over the past eight or nine years. The industry is showing that it recognizes technology that can improve profitability, whether or not the new thing has a coin (or card) slot in it.

An older and more diffuse accusation made against vendors is that they tend to be blinkered by their experience when evaluating the potential of new kinds of equipment, even those with payment systems in them. For example, we recall street operators who considered a vending machine that bolted onto the side of a cigarette machine and sold disposable lighters as an ingenious idea, interesting to think about -- but "not the business we're in." They may have been right, but it hardly was tried.

While this tunnel vision also has dissipated in recent years, as operators have embraced innovations for which they see real customer demand, like micromarkets, it may be that the market for self-service equipment is changing in ways for which a background in traditional workplace service has not prepared us.

Back in the boom years of full-line vending, operators serving large corporate clients were understandably wary about anything that might add fun to the vending area. "The client doesn't want us to turn the breakroom into a circus," they said. In an era when many employers expected "business attire" and a reverent attitude from their employees, that probably was true.

At present, though, there are many things going on that might be profitable to explore. For nearly two decades, some high-end employers in major cities have contracted for foodservice with caterers willing also to install amenities like recreational equipment in the lunchroom. This was a straw in the wind. As more attention is paid to the entry of the "millennial" generation into the workforce, there is increasing interest in changing the workplace environment in ways that encourage frequent casual interaction with other team members, part of a management approach that favors the formation of task groups rather than staffing specialist departments to deal with sudden opportunities and challenges in today's fast-moving world. Large technology firms have popularized the idea of an inviting workplace for well-compensated employees who are expected to put in long hours, and their example is being followed by other types of employer.

Among the consequences of this are a demand by employees for new products and services, and a growing willingness on the part of these New Age employers to pay for refreshment programs that surpass traditional free office coffee and partially subsidized fresh food vending.

A few that have caught our eye over the past year are the provision of employer-paid premium hot and cold beverages, snacks and even food items in some prestige accounts. Also eye-catching is the appearance of novelty items like chilled coffee dispensed by gas pressure.

This one intrigues us, since it is very similar in concept to the old "pre-brew" approach to vending and office coffee service, in which large insulated tanks were filled with freshly brewed coffee early in the morning for delivery to clients supplied with equipment to control dispensing. It is not a low-cost service method, but if customers are eager to pay a fair price for it, why not let them?

The possibility of adding novel kinds of equipment to a full-line vending bank also might warrant another look, in today's youth-centered climate of opinion. It will be remembered that the modern glassfront cold drink vender really got its start with the Snapple "bottle-drop" machine, which explicitly titillated patrons with the possibility that the bottle would shatter on impact with the delivery bin (it never did, of course). And many operators have long believed that patrons actually enjoy watching a snack machine's spiral pushing the desired product off the shelf.

The increasing diversity of public locations also is attracting operator attention, and some of the vending areas at highway rest stops show how visually exciting today's equipment can be. There are similarities between that kind of "street" location and, on the one hand, malls and transportation facilities and family entertainment complexes; or, on the other, those "millennial"-friendly contemporary workplaces. There's a lot of scope for innovative marketing and experimentation.

We also think that an old favorite may find new favor in this fun-oriented ambiance: the photobooth. Today's networked digital models hold great appeal for the current "selfie"-making, photo-sharing age cohort, and might be a good fit in many modern workplaces.