Trends in Healthy Vending Selections

The American diet has been through many transformations over the years, its most recent shift driven by growing health concerns.

Over the past few years the beverage industry has seen some shifts in consumer preference trends. Within the past year healthy beverages have taken the spotlight, many of which are focused not only on low calories but also health benefits such as low sugar and sodium.

As you can imagine, the increase in health conscious individuals has introduced greater demand for less sugary drinks and sodas. Consumers are now showing patterns that indicate a higher demand for water and other low calorie and nutritious options. While soft drinks still hold a large chunk of the refreshment category, data shows that their hold may be slipping as their volume and market share go down. Vending Times reports that the “volume slipped by 1.5% from 12.8 billion gallons in 2014 to 12.6 billion gallon sin 2015, which lowered CSD market share to less than 40%.”

One of the biggest threats to carbonated soft drinks is bottled water. According to Vending Times, bottled water is projected to take over as America’s largest beverage category by volume by 2017 if not by the end of this year. They also note that bottled water sales increased by 8.9% in 2015 and now total $14.2 billion (wholesale).

Other drinks that are making splash in the market are sports drinks, many companies are taking not and have begum developing new healthy beverages to satisfy the evolving demands of consumers. Pepsi has even announced its launch of products like organic Gatorade, according to Business Insider. Additionally, niche categories including selections like energy drinks and ready-to-drink coffee are outperforming most traditional mass-market categories such as carbonated soft drinks and fruit beverages. Other changes being made to beverages include downsizing cans and bottles to offer consumers a more moderate serving size. Lucky for you, eVending machines are equipped to handle many shapes and sizes of products keeping you equipped and ready to handle the ever evolving beverage industry.

The state of vending machine operators industry in the United States and industry performance

A long trend of declining revenue has made for a slow decade for the Vending Machine Operator industry in the United States. Within the past five (5) years revenue has declined each year except for 2012. According to IBISWorld Inc. revenue has decreased at an annualized rate of 0.8% to about $7.3 billion within the past five years, and a 1.1% decrease so far in 2016. The status of the industry has been a result of changes in the eating index, new nutritional restrictions, and the rise of micro markets and convenience and grocery stores among other things.

Although the outlook may be somewhat discouraging, with downward revenue trends being expected to continue, there is a silver lining as these decreases are expected to occur at a slower rate. Over the next five year period, industry revenue is expected to decrease at a rate of 0.6% to an estimated $7.1 billion, according to IBISWorld. In the coming years, key external drivers will both positively and negatively affect the industry’s profit margin; these include an increase in per capita disposable income, a rising healthy eating index, and rising prices for corn and sugar.

Changing laws pose a big threat to industry operators. Since its implementation in 2014, the USDA’s Smart Snacks in School has introduced new challenges for operators who have machines in primary and secondary schools. The nutritional restrictions have created a limited selection that operators can supply, and unfortunately the approved items are not popular among the students. These restrictions have caused many operators with school locations to experience a 30-40% decrease in revenue. If more laws similar to these continue to be passed some vending operators will be forced to find healthy selections that will be profitable, or exit this industry segment.

In response to the decreasing sales from snack, food, and beverage machines the industry has turned some of its attention to using technology to generate sales, as well as continuing to pursue non-traditional machine markets. As it stands in 2016, of the $7.9bn in the industry, movies and games has 29.8%, food has 29.6%, beverage has 29.9%, and other products have 10.7% according to IBISWorld.

Technology such as touch screens, cashless / mobile payment, and remote monitoring systems will help companies are the future and will create a more enticing customer experience which will hopefully drive sales. Recent advances in technology will help to improve operators’ profit margins, as they will be able to monitor machines more closely and make decisions to eliminate underperforming machines.

Competition / Major Players
IBISWorld determined the market share concentration in the industry to be medium with the top four industry operators being estimated to represent 47.1% of total industry revenue, the remaining 52.9% being held by small to medium sized companies. Major players with the largest market share are Outerwall Inc. (21.2%), Compass Group PLC (12.5%), and Aramark Corporation (9.0%).

Over the five years leading up to 2016, market share concentration has been on the rise as costs continue to increase while revenue declines. IBISWorld determined the most important key success factors for businesses in the industry are:
• Having an exclusive sales contract
• Ability to pass on cost increases
• Economies of scale and scope
• Proximity to key markets
• Easy access for clients
Internal competition in the industry is high and the trend is steady, according to IBISWorld. More and more companies are beginning to diversify the products they offer, as well as changing the machines to cater to the rising healthy eating index. IBISWorld says that sleek, well-branded machines with easy customer interfaces and technology will help spur revenue growth for operators.
Overall, the industry outlook has been looking up as the continual decline in industry revenue is expected to slow. Improvements in technology will give operators tools to remain profitable. Industry companies need to continue to focus on meeting the demand of healthy vending and embracing technology to drive efficiencies and increased sales.

An Up Close Look at FDA’s Calorie Disclosure Rule

The FDA Calorie Disclosure Rule for vending machines is directed by Congress and stems from the Affordable Care Act (ACA) that was approved by President Barack Obama on March 23, 2010. The section 4205 amendment of the ACA was implemented to “help make calorie information for vending machine foods available to prospective purchasers in a direct, accessible, and consistent manner to enable them to make informed and healthful dietary choices,” according to the Federal Register.

It is important to note, the Rule applies to vending operators, rather than the food manufacturers and it applies to vending only, not micro markets or OCS. This rule requires that vending machine operators who own or operate 20+ machines, or who voluntarily elect to be covered, comply with the guidelines as defined in the FDA Calorie Disclosure Rule.
The FDA’s Final Rule, issued in December of 2014, will go into effect on December 1st this year. The rule requires that operators provide the calorie content of food products in one of several locations:
• On a sign in, on or adjacent to the vending machine so long as the sign is easily read and in close proximity to the article of food or its selection button
• On the front of the product label- the font must be in a type size at least 50 percent of the size of the largest printed matter
• On the product’s Nutrition Facts panel, if it is visible while the product is inside the vending machine- provided the calories displayed represent the total calories per package item
• On a digital display, if the vending machine has one
eVending’s snack and refrigerated / frozen vending machines are equipped with two line digital displays. Using a machine planogram approach, the products’ nutritional information is entered into a text file along with the selection number and product name. The product name (up to 20 characters) as well as calorie and fat calorie information (up to four digits each) can be included in the text file. The information can be programmed into the machines through a two-step process.
1. Create a text file with the information in DEX format
2. Upload the DEX text file to the machine’s control board by attaching a laptop to the vending machine with a GVC control board cable.
This feature will ease the transition in complying with the FDA’s new rules and regulations by providing you with a tool that can display the calorie content of the products in your machine.
In addition to the above described rules, the vending operator must disclose their telephone number and mailing address or email address by posting it on the vending machine. The information can be placed on the face of the machine or with the calorie declarations in, on, or adjacent to the machine.
The Final Rule will be enforced by the FDA starting December 1, 2016. The FDA can enforce the rules through its regulatory enforcement process. Failure to comply with the rule will render the covered vending machine food misbranded under the Food, Drug & Cosmetic Act (FD&C). Learn more about the FDA Calorie Disclosure Rule by visiting NAMA’s FDA Calorie Disclosure Online Resource Center.

When you are considering a vending business the first step to success is finding the right location to place your vending machine.
Choose a location that provides:
1. A lot of foot traffic
2. High visibility
3. A chance to work with an existing business
4. Work with a new business
When the area is a public place, it is great for potential customers to have the ability to vend snacks and drinks from a combo vending machine that provides a wide variety of options. The more people using the location the more potential profits rise. Your customer satisfaction will bring them back simply because it is a place used by many and they will have the convenience of the snack or drink combo vending machine.
The machine needs to be located somewhere easy for customers to see. If they can see it from a distance, the suggestion alone may draw attention to the combo vending machine to buy from you instead of waiting until they go to the store or get home. With the glass front of the Futura Combo Vending Machine, it makes popular products like snack, candy, food, cans, and bottled products grab their attention.
It is always a great idea to place a machine in front of a business that has at least 50 or more employees. That guarantees a potential steady clientele. Business in the service industry are a great choice as they will draw customers that may be waiting for a car to be fixed, a haircut, or even getting your dog groomed. Look for businesses with services everyone needs and visit frequently.
The choices are limitless when you look for the right combination of factors. Record all of your research and you are sure to come up with the right solution for making your combo vending machine business a success. Don’t wait for opportunity. Create it.
Call today to change your future

1-888-982-8128

Did you know that over 68% of consumers purchase soda from vending machines at least once a year? And over 62% of consumers purchase cheesy snacks or chips from a vending machine once a year? In fact, the vast majority of consumers have used a vending machine at least once to purchase a drink or snack in the past year. Like peanut butter and jelly or cookies and milk, snacks and beverages are a natural fit. Why not give customers the convenience of a combo vending machine that provides popular snack and drink choices in one machine?

eVending’s Futura Combo Vending Machine vends not only snacks, chips, candy, and gum, but also vends both canned and bottled for drink options. This glass front vendor allows customers to see the actual products they are choosing with its back-lit LED lighting and vast live product display window. Premium currency acceptors help take advantage of the credit / debit card reader options in addition to the standard electronic coin acceptor and $1 and $5 bill acceptor.

eVendings combo vending machines are designed to offer a wide variety of different treats with a relatively small footprint to conserve space and energy. Cutting edge technology and modern payment features will satisfy both you and your customers. eVending’s combo vending machines feature guaranteed vend technology that will ensure that sales do not go through until the item has been dispensed. This technology eliminates frustration from incomplete sales and jammed items.

Combination vending machines are the most versatile and profitable type of machines available. eVending’s Futura Combo machine is the best-selling combo machine on the market and is back by eVending’s 60 months Limited Parts Warranty. Plus, eVending offers complimentary, lifetime phone support through Vendnet for assistance on machine servicing and parts during normal business hour. We also offer a secure online credit application with affordable financing programs.

Affordable, high quality combo vending machines from eVending are a great choice for almost any location big or small. Call 1-888-982-8128 today. We are looking forward to helping you with all of your vending needs.