Insights

Industry News

Get the latest product and industry news, plus trends, insights and more, right here. Check back often for new updates.


State of the Industry Report: Operators Break Records For Revenue With New Locations, Services


By STAFF at VendingMarketWatch.com

Micro Market Grand OpeningTo catch a glimpse of what’s ahead in the convenience service industry, it’s often a good idea to take a look at preliminary data from the recent past.

As highlighted in Automatic Merchandiser’s annual State of the Industry report, revenues in the industry grew a record-breaking 7 percent on average. New business and services helped prompt those revenues, especially in micro markets and office coffee service/pantry, which was 25.1 percent of the $23.5 billion in revenue for the entire industry—$1 billion more than in 2017.

According to the survey, most operators—68.2 percent of survey respondents—added new accounts in 2018, which is the highest percentage in the past five years. Manufacturing and office accounts increased during what appears to have been a strong first quarter economically in 2018 with low unemployment, reasonable inflation and a positive gross domestic product. Businesses were able to be more profitable, and thus more likely to turn to increasing employee perks like offering convenience services on site.

Spotlight on micro markets

Here are four highlights of micro market data from the State of the Vending Industry report:

  1. 1. The industry added approximately 1,658 micro markets in 2018, according to operator responses. Most of those were in manufacturing accounts, which represented 47.1 percent of the micro market locations in 2018.

  2. 2. In 2018, the percentage of operators who reported that their smallest micro market locations had fewer than 50 people increased to 40 percent, up from 26.7 percent the year before. The popularity of tablet-based checkout systems or mobile checkout at markets makes smaller locations more fruitful.

  3. 3. The reduction in vending machines appeared to have slowed in 2018. While the estimated total number of vending machines decreased from 2,103,473 in 2017 to 2,084,500 in 2018, there had been an estimated 3,504,566 in 2016. Operators have grown in both their use of micro markets and vending machines at locations and stocking smaller locations with refurbished machines and prekitting near larger vending accounts. Operators are also using more machines at existing locations to reduce the number of service visits required per week.

  4. 4. For micro markets specifically, cold drinks was still the largest category by revenue, contributing 29.8 percent to micro markets revenues in 2018. Snacks and food products followed, representing 18.2 percent and 18.4 percent, respectively. Food, which is a strong category in micro markets, did drop in percentage of revenue in 2018 by 2 percentage points. Those were gained by the ice cream and frozen products category, which doubled from 2 percent in micro market revenues to 4.1 percent in 2018.

Technology

Operators were also able to rate whether various technology was a “great investment.” Cashless payment acceptance, LED lights, prekitting, vending management systems and remote monitoring received the most favorable scores.

Technology suppliers have made further advances in catering to the operators in smaller markets. This was seen at the 2019 NAMA Show with more low-cost checkout systems and payment systems on vending machines instead of kiosks that can act as a scanner for nearby snacks or food.

Overall signs of growth

Both businesses and consumers are buying from operators at a higher rate, which shows no signs of stopping. Operators have added additional locations and service options in 2018 that benefit their bottom line. Micro markets and pantry are going to be driving revenues especially as new technologies allow for more opportunity and a better user experience.

Interested in reading the entire report with graphs? Visit: https://www.vendingmarketwatch.com/reports/document/21085744/2019-state-of-the-industry-report-operators-beat-revenue-numbers-with-new-locations-and-services



Back to Industry News

We are using cookies in order to facilitate your navigation. By continuing to navigate on this website or clicking on the close button you accept our policy regarding the usage of cookies. Read our Privacy Policy to learn more.