Slideshow: Vending is trending

by Donna Berry
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Donna Berry

CHICAGO — Asian countries have been at the forefront of food and beverage vending technology development, with machines dispensing everything from a fresh-steeped green tea latte to a sushi bento box. For example, in Japan, a machine called the Chef’s Farm produces 60 heads of lettuce per day using 40 watt fluorescent lighting and nutri-culture beds. When the lettuce head is ready, it may be purchased with a few coins.

In China, there are vending machines that sell live crabs. The machine maintains an internal temperature of 41°F to keep the crabs in a hibernation state without killing them. In Singapore, there are mashed potato vending machines. With a touch of a few buttons you get a cup of hot mashed potatoes and your choice of topping.

 

In the past decade, Europeans have embraced such upscale vending, too. The Let’s Pizza machine vends made-to-order pizza. The machine kneads the dough, adding sauce and up to three toppings. It is then baked in an oven in less than three minutes and dispensed for immediate consumption.

There are even hot bread machines that heat partially baked bread in seconds. Others flash fry frozen potatoes, add seasonings and dispense a cup of french fries for on-the-go snacking.

The popularity of vending in both Asia and Europe, where you may find machines everywhere, including public transit stations, city streets and entertainment complexes, is likely in part due to the cash-only nature of the countries. This is because vending machines have historically only accepted coins, and only in the past 20 or so years, have been fitted to accept bills.

Americans prefer plastic. Cashless transactions are vital to the U.S. vending business. The good news is advancements in mobile payment technology have allowed for the development of the next generation of quick, convenient vending machines, many of which are also designed to dispense better-for-you fresh foods. This includes fruits, vegetables, salads and sandwiches, products that appeal to today’s time-pressed health and wellness consumer.

The vending machine market is forecast to grow 1.5% by 2015, according to “Food and beverage vending trends in the U.S.,” a report from Packaged Facts, Rockville, Md. The growth may not sound like much, but it comes after years of significant sales declines, according to Packaged Facts. The growth will come from vending machine innovations that promise higher food and beverage quality, increased consumer interaction, increased cashless payment acceptance and more aggressive competition with food service.

By product segment, the $11.7 billion food and beverage vending market in the United States draws 83% of sales from just two product categories: snacks and confections. As implied, snacking is the name of the game. By a wide margin, according to Packaged Facts survey data, consumers categorize their vending machine and mobile vending purchases as snacks, which account for about 57% of consumer vending machine and mobile vending spend.

Demographically, the Hispanic population ranks among the prime consumers for food and beverage vending. While Hispanic households comprise 12% of U.S. households and only 10% of U.S. household income, they are responsible for 20% of consumer vending machines and mobile vending spend.

The next phase of growth

Innovation holds the keys to future growth in the vending market, said David Sprinkle, research director for Packaged Facts. Social and interactive vending, touchscreens and wireless supply-side networking are a significant part of the equation, offering tremendous upside for consumer engagement. But virtually every macro driver in the vending market is influenced by changes in technology, from cashless payments to improvements in product quality.

And while the strength of vending lies in snacking convenience, growth will come from delivering health, freshness and quality. Sales of fresh food are growing, and natural vending solutions bring the promise of higher-quality, higher-status food and drink to the market.

For example, Farmer’s Fridge, Chicago, is breaking the mold on fast food by offering healthy meals that are made daily and sold in refrigerated automated kiosks, a fancy description for a chilled vending machine. Everything is made fresh each morning and delivered by 10 a.m. Packaged in recyclable plastic jars, customers may choose from several salad options, as well as breakfast and snack items.

Wrapped in reclaimed barn wood, Farmer’s Fridge kiosks aren’t a traditional vending machine. They combine best-in-class vending technology with a touch-screen design to create an innovative way to grab a healthy meal in seconds. Each machine contains an on-site recycling bin for empty plastic salad containers. Salads start at $7.99 with a weekly special “Jar du jour” for $6.99. All salads may be paired with proteins for $2 and salmon for $4. Snacks are $3.

“Finding fresh, healthy food shouldn’t be hard. Sure, you can find healthy offerings at a sit-down restaurant or a grocery store, but people don’t always have that kind of time,” said Luke Saunders, founder of Farmer’s Fridge. “I want to make it fast and easy for someone to choose a delicious, nutritious smart meal when they are on-the-go. What we’re doing is taking the vending machine concept and revolutionizing it.”

The kiosks complement the growing trend of micro markets, which are basically unattended retail, said Monique Terrazas, publisher of Automatic Merchandiser magazine. Micro markets are self-serve kiosks and one of the most innovative developments in the automatic merchandising channel. The kiosks typically feature a selection of fresh and packaged foods as well as non-consumables, including drug store items. The locations offer consumers the convenience of self-checkout and cashless readers.

There are more than 3,000 micro markets in operation in the United States today with 30,000 more expected by 2017. The micro markets often will have a microwave station for quick heating, as well as a condiment station for personalizing foods.

Players in this space include Boulder Brands, Boulder, Colo., with its EVOL brand of individual frozen burritos. White Castle Food Products L.L.C., Columbus, Ohio, makes its famous sliders available through such micro markets.

“Our frozen product is cooked and packaged in two White Castle-owned facilities that duplicate the patented steam grilling process that has been used in our restaurants for decades,” said Timothy Carroll, national food service sales manager. “Because of this unique cooking process, our hamburgers are well suited for reheating in a microwave. All of our meat patties are 100% beef. Two White Castle bakeries produce buns for both our restaurants and our frozen products.”

In addition to traditional hamburgers and cheeseburgers, jalapeño cheeseburgers, chicken breast sandwiches and sausage, egg and cheese sandwiches are also available. All varieties come in twin packs.

Performance Food Group, Richmond, Va., is growing its Rye Street line of refrigerated, ready-to-eat, packaged deli-style sandwiches. Made with artisan-style bread, the sandwiches include turkey and Swiss with sundried tomato aioli on flatbread, and ranch chicken salad on 12-grain bread.

There are a growing number of meals available for ambient vending. For example, Bumble Bee Foods L.L.C., San Diego, offers ready-to-eat chicken salad with crackers and tuna salad with crackers. Most recently, the company introduced classic hummus with crackers. These 3.5-oz boxed kits have an 18-month shelf life and are suitable for most standard machines.

Hormel Foods Corp., Austin, Minn., offers its growing line of Compleats shelf-stable meals to the vending industry. This spring, the company is rolling out four breakfast options: apple cinnamon oatmeal, bacon breakfast scramble, sausage breakfast scramble and sausage gravy and roasted potatoes.

Fresh, whole fruits are increasingly showing up in vending machines, as are the growing category of pre-packed fruit cups and pouches. For example, Del Monte Corp., Walnut Creek, Calif., offers 11 varieties of fruit cups for refrigerated vending. This includes products under the company’s Fruit Naturals and Superfruits lines. The company also offers its Fruit Burst Squeezers to the vending market. The shelf-stable pouches come in three Simply Fruit flavors (apple cinnamon, mixed berry and strawberry) and two Fruit + Veggie flavors (blueberry and peach-mango). The vegetables in the latter include carrot puree and pumpkin juice concentrate.

Vended coffee is not breaking news, but expectations have never been too great. That has changed in recent years with advancements in single-brew technology.

At the recent NAMA show in Chicago, Marley Coffee Automated Stores/AVT Inc., Corona, Calif., introduced its newest Android-based Marley Coffee Kiosk. The bean-to-cup brewer is described as the only machine that extracts all the coffee’s essence. The machine incorporates a pressurized valve, ensuring that the whole coffee brewing cycle is done with the perfect water pressure throughout the entire process.

Sweet and salty snacks are the most common food sold through vending machines. In recent years, the options have been getting healthier and more diverse.

For example, to appeal to the growing trend for hot and spicy, Snyder’s-Lance Inc., Hanover, Pa., is introducing Quitos Hot Chili Lime rolled tortilla snacks.

Just in time for summer-time family road trips, Snyder’s-Lance also is expanding its vendible Sweet and Salty Pretzel Pieces line with cinnamon sugar. The variety joins salted caramel that debuted last year.

At NAMA, Kellogg Co., Battle Creek, Mich., provided attendees with a sneak peak at its new better-for-you Rice Krispies Treat that meets the new kindergarten through grade 12 school meal requirements going into effect for the 2014-2015 school year. Made with brown rice, packaging for the crispy marshmallow squares tout the fact that they are now “made with whole grain.”

Vending is trending and for those considering the category — Think single-serve, better-for-you and satisfying.
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