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State of the Vending Industry Spotlight: Micro Markets Boost Vending Revenues



It’s that time of year again—the release of the annual State of the Vending Industry report published by Automatic Merchandiser magazine that analyzes vending revenues and industry changes on a year-by-year basis.

This year more than 400 full-service, small-snack and soda operators went online to share the progress their companies made in 2015 to the tune of $20.9 billion.

Throughout the year vending operations continued to recover from the Great Recession and have invested in systems that allow them to become more efficient, such as vending management systems (VMS), which can help eliminate unprofitable accounts, rearrange routes and reduce service frequency. Cashless payment acceptance also continues to be adopted at a steady rate and as many operators commented, it has helped increase sales at locations.

In 2015, however, micro markets proved to be a large reason for the bump in industry revenue.

Micro markets invigorate revenues

In 2015 the percentage of revenue associated with micro markets rose to 10.2 percent, up from just 1.8 percent in 2012, making it the highest revenue-providing service segment after vending machines.

Consumers like micro markets for the open concept shopping experience, the ease of use and fresh food options, to name a few. Operators enjoy providing micro markets as there is more product variety, a bigger opportunity to offer promotions and loyalty rewards and better consumer engagement.

Here are six micro market spotlights from the State of the Vending Industry report:

  • ·87.6 percent of readers agree that the micro market segment is growing
  • ·21.1 percent of operators who have placed micro markets have between 1 and 10
  • ·Just 1.5 percent of operators who have placed micro markets operate more than 500
  • ·The average number of micro markets per operator is 13
  • ·7.2 percent of micro market locations have less than 50 employees
  • ·Micro markets were the primary driver for many operators’ bottom lines; despite this, the number of vending companies offering micro markets is less than 50 percent.

Micro markets still have challenges

Continued growth is predicted in the micro market segment, but despite all of the benefits there are still challenges that operators face. There is a learning curve that comes with managing an increased number of SKUs in the warehouse. Likewise, some operators face the challenge of deciding whether or not to separate vending and micro market routes and hire route-specific drivers. As many operators increase the number of micro market locations they operate, they are finding they need to grow their staff as well to analyze reports, make changes in the market and manage inventory.

Within the report, 19.5 percent of operators who offer micro markets noted that theft management is one of their top three concerns, from getting and installing cameras to spending time watching video.

Interested in reading the entire report with graphs? Visit: www.vendingmarketwatch.com/document/12222476/2016-state-of-the-vending-industry-report

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