Israeli Firm Hits Ground Running With US Debut Of Quinzee Frozen Beverage vending Machine

TEL AVIV, Israel -- Nicevend Ltd. says it has invested heavily in building an infrastructure to support a large-scale U.S. rollout of its Quinzee smoothie and slushie vending machine, as the warm weather approaches. Over the past year, the Tel Aviv-based company has opened a Miami office and signed a manufacturing deal with Flextronics. Additionally, several distributors have ordered machines, including Betson Enterprises, which now has them on display in its new showroom in Charlotte, NC. Nicevend also has several tests under way with some of the largest U.S. beverage companies and operators.

The machine manufacturer has piloted the novel vender in several locations in Israel since 2012 and now reports hundreds in the field. Nicevend chief executive Udi Klier said the company's goal has always been for worldwide expansion, and the U.S. is where it is first focusing its attention and resources.

"We are investing millions of dollars in the development of our on-demand preparation method for frozen beverages," Klier said. So far, Nicevend has invested $11 million in its vending concept that has been developed from the ground up; and it holds a worldwide patent protecting its intellectual property. Klier added that his company will be expanding the application of its technology to new markets, like foodservice.

The U.S. vending industry got its first glimpse of the fully automated Quinzee machine, which produces frozen drinks on demand, at the National Automatic Merchandising Association's OneShow in Las Vegas last spring. Following the OneShow, Nicevend put the machines on test in some U.S. amusement parks, universities and hospitals in New York, New Jersey and Florida. It has since sold dozens of venders to operators in Puerto Rico and the Caribbean.

To support a larger U.S. rollout this spring, the Israeli manufacturer has established an American subsidiary, Nicevend Inc., with office and warehouse space in Hollywood, FL.

Instrumental to the U.S. launch is North American director of sales Dusty Porter. He was previously southeastern regional manager for Dr. Smoothie Brands, a maker of shelf-stable fruit smoothie concentrate based in Fullerton, CA. Prior to that, he was a senior account executive with New Orleans-based Standard Coffee Co.

The company has also hired Roy Tamir, a former Israeli Air Force F-16 pilot and aircraft accident investigator, as its U.S. director of operations and technical support. Tamir is known for parlaying his aircraft technical and safety expertise in training and support positions with companies in various industries in the U.S. and abroad. At Nicevend, he will train and assist operators.

Nicevend has also partnered with Flextronics, which builds TouchTunes jukeboxes and Redbox video-rental machines, among other kiosk and vending systems, to produce a 110V., UL-listed version of its machine for the U.S. market. A 220V. model will be produced for Europe.

"We can take advantage of Flextronics' global presence and manufacture directly in the countries in which the Quinzee machine is distributed, as well as enjoy mass production at a larger scale, thereby facilitating our continued supply of machines to the U.S.," said Klier.

The frozen beverages, which vend for $2 to $3 a cup, are prepared on demand using Nicevend's "Flakes"-brand instant powders, yogurts and bag-in-box syrups with high fruit content, developed specially for the machine. The Quinzee offers a choice of up to eight frozen drinks, ranging from iced tea, fruit juice and energy drink slushies to yogurt, ice cream and coffee-based smoothies.

It accommodates four 1-gal. bag-in-box syrup packs and four powder canisters that hold up to 9 lbs. of product. The machine has a production capacity of more than 250 9-fl.oz. cups a day. An automatic cleaning cycle is integrated into the machine, which is equipped with a DEX protocol for remote-monitoring technology. Quinzee uses an MDB protocol and accepts coins, bills and cashless payments. It automatically dispenses a cup and a straw, and then fills the cup with the patron's selected drink in under a minute.

The beverage mixes are produced in Israel and Italy and shipped to the U.S. All U.S. Food and Drug Administration approvals are in place, according to Klier, and plans call for co-branding the machines with local brands and producing the drink mixes in the U.S. as the business expands.

Nicevend has added flavors tailored to U.S. preferences. This summer, it will debut one-calorie frozen drinks, as well as iced tea, protein, piña colada, double coffee and energy drinks, along with a formulation that meets the USDA's school nutrition guidelines.

Klier said the company is also in discussions with the maker of a brand of protein and energy shakes to produce the drinks in smoothie form through its Quinzee machines and place them in a chain of gyms. He added that Nicevend is in joint venture talks with some major brands in the beverage industry whereby the Quinzee machines would supply their big-name beverages in frozen drink/smoothie form.

"Smoothies are a hot product category at Starbucks and at 7-Eleven and McDonald's, for as much as $5 a cup, and operators can now sell their own tasty, healthy frozen drinks for $2.50 with great return on investment," Klier said. Quinzee drink margins are high compared with packaged drinks because the product is finished by the machine, eliminating costs associated with canned and bottled products, including transportation.

Klier said the younger generation seeks and consumes frozen drinks in all climates and markets, especially at indoor sports venues, malls and bowling centers, among other amusement facilities.

In Israel, Nicevend has hundreds more machines rolling out to the military. It secured a contract as the sole provider of vending machines at the Israeli Defense Force's largest training base, known as the City of Training Bases, and placed the first of its machines there last June. Roughly 90,000 soldiers train at the 618-acre base annually.

Klier said Nicevend competed against Coca-Cola and PepsiCo's Israeli vending operating companies and won the bid because of its unique ability to offer frozen drinks; Quinzee machines are especially valued since the base is located in a hot desert. The military also approves of the machine's "health"-focused selection as an alternative to soda.

"We are operating all of the snack and drink machines because they demanded it since they wanted the Quinzee machine and asked us to provide it all," Klier said. Resulting from its success at the City of Training Bases, Nicevend recently signed a deal with the IDF for rights to install its frozen drink machines on all Israeli army bases, where its now deploying them.

"We're operating our machines through the IDF business, which continues to help us better understand locations, flavors, pricing and any technical issues. And we, of course, enjoy the profitability," said Klier. "Operating our own machines from the beginning was the best way to prove their efficiency and profitability, and the pilots in the U.S. indicate that there's big potential for operators."

FORWARD MARCH:Soldiers at military base in Israel's Negev desert (l.) and students at University of Florida (r.) line up to quench their thirst with frozen drinks from Quinzee machine. Successful pilot of the vender at colleges, amusement parks and hospitals in New York, New Jersey and Florida paved way for Quinzee's official U.S. launch this spring.

READY TO ROLL:Nicevend is now shipping its Quinzee machine to U.S. operators through new manufacturing partnership with Flextronics and distribution agreement with Betson Enterprises. The frozen drink vender accommodates four 1-gal. bag-in-box syrup packs and four powder canisters with a production capacity of more than 250 9-fl.oz. cups a day.