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Exorcising The Ghost Of Industrial Feeding

One of the often-unrecognized achievements of the young vending industry was its popularization of “single serving” packages. As the full-line revolution accelerated in the 1960s, swift improvements to machine design gave product suppliers an incentive to offer a larger variety of their popular items in grab-and-go packaging. During the first half of the 20th century, candy (and peanuts) had been the only category in which a number of flagship confection brands were widely sold for individual consumptio...

January 5, 2020 by Tim Sanford

One of the often-unrecognized achievements of the young vending industry was its popularization of "single serving" packages. As the full-line revolution accelerated in the 1960s, swift improvements to machine design gave product suppliers an incentive to offer a larger variety of their popular items in grab-and-go packaging. During the first half of the 20th century, candy (and peanuts) had been the only category in which a number of flagship confection brands were widely sold for individual consumption. Many already were marketed as sources of energy as the workday wore on, so they fit right into the convenient and efficient new way to provide refreshment to Americans at work.

Alert producers of cookies and crackers took note, and boosted their sales by packaging those baked goods in cardboard trays with cellophane overwrap, designed to fit into the existing drop-shelf candy machines. A few pioneers packaged their snack cakes the same way. At the same time, the vending industry recognized the value of the microwave oven in solving the problem of selling both hot and cold prepared-food items from a single refrigerated machine. The Atherton Division of Litton Industries was the pioneer in this, and that company's sales manager observed (around 1971) that the vending industry was educating the public about the microwave oven; and, as soon as 1% of them started wanting one in the kitchen at home, a whole new category of prepackaged single-serve frozen food items would appear. He was right.

These developments in vending, however, gave rise to a couple of unexpected difficulties. One was that the postwar era that was ending as the '70s began, had conditioned the public to believe that the prices of consumer goods were extremely stable – and that the grocery business was the marketplace in which those prices were determined.

That second belief created problems because the few grocery items that were sold in single-serve packages typically were offered in sleeves of six or eight. A vending patron accustomed to buying ready-to-eat pudding in eight-packs of easy-open cans for $1.49 could figure out that the unit cost was a little over 18¢. When that can appeared in a vending machine, it was priced at a quarter – and widely perceived as a ripoff..

The ill effects of that perception were made worse by the widespread identification of vending as an industrial foodservice method. A delivery channel that brought refreshments to consumers 24 hours a day, seven days a week was obviously a good thing, but at the same time, it was seen as a last resort. If one simply did not have the time to run out to a restaurant, one could fall back on the vending machines. This did not create an image of luxury shopping. And worse yet was the need to make vending purchases with coins, a limitation that was not overcome until the early '80s,

Operators knew this, and in fact, they may have learned the lesson too well. In one of the many conferences held to look for solutions, an ARA executive summed up the challenge: to convince the public that there is nothing about a vending machine that allows us to sell things for a nickel less. That 24/7 service requires well-trained delivery and maintenance personnel plus a fleet of vehicles. But those costs and requirements are not evident to the consumer.

Interestingly, a major beneficiary of the strong upswing in individually wrapped products designed for immediate consumption was the convenience store industry. Everyone could see that a store that was open at 2 a.m. on Sunday, and that sold single-serve items one at a time, had higher costs than a supermarket did, and so there was little overt price resistance. Obviously, one would buy a gallon of milk at the supermarket if one could, but the comfort of knowing that the c-store was there if one couldn't cushioned the blow of the higher unit price.

But all that was then, and this is now. Consumers' confidence in price stability did not survive the "stagflation" that dogged the American economy until the early '80s, and marketers observed that consumers emerged with a new appreciation of "value" as opposed to price. Vending operators recognized that too, but even the advent of practical bill validators did not do away with the "dollar price ceiling." There were several reasons for that; but the proliferation of practical and popular cashless payment systems that followed the financial convulsion of 2007-2008 has put an end to it. And those systems enabled the development of the micromarket, which also widened operators' price spectrum. They also have stimulated a great deal of interest in vending as a marketing tool for pricey niche products.

We suspect that a new golden age of vending is upon us, and that the most important obstacle to its advent is that operators don't quite believe that consumers today no longer associate vending machines with factory cafeterias, but rather think they're  fun and convenient places to shop.

We have nothing to fear but fear itself.

About Tim Sanford

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Tim Sanford is the retired, long-time editor of Vending Times.

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