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Vending - US - October 2009

Vending machines are so much a part of everyday life, they may be overlooked or forgotten by many consumers. However, they offer convenient 24-7 access to beverages, food and a growing number of non-food products, and form a significant $14.4 billion industry – which is currently adjusting to a brutal economy and significant changes in its customer base. In this report, Mintel provides an overview of market trends and recommended strategies for future success in the full-line vending sector, including:

  • Sales trends among key product categories including hot and cold beverages, snacks, food and more
  • Competing retailers and products, such as fast-food restaurants, convenience stores and individual-sized snack packages sold at retail, along with opportunities for differentiation
  • Current leading players in the vending sector, along with emerging players and trends that have introduced new innovations into the market
  • Key factors impacting the full-line vending, including the role that spiking unemployment rates and a severe recession are having on vending purchases as well as health and environmental concerns

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer survey data
              • Abbreviations and terms
                • Abbreviations
                  • Terms
                  • Executive Summary

                    • Mature sector seeks new opportunities for growth
                      • Food and beverage sales face strong competition
                        • Cold beverages, packaged snacks dominate vending
                          • Economy, health and environment limit sales growth
                            • Vending usage is on the decline
                              • Thinking healthy, buying differently
                                • Demand for electronics accessories at vending
                                  • Fighting negative perceptions
                                  • Insights and Opportunities

                                    • Introduction
                                      • Exclusive products
                                        • Foods prepared fresh
                                          • Beyond food
                                            • Smart machines
                                            • Inspire Insights

                                              • Cool vending: utilizing the large screen on the machine
                                                • Expanding product horizons
                                                  • Fashion accessories retailing
                                                    • Farmers' market in a vending machine
                                                      • ecoATM
                                                        • Glove love
                                                          • Cotton candy to go
                                                          • Market Size and Forecast

                                                            • Key points
                                                              • A mature sector in transition
                                                                • Rising costs hit vendors where it hurts
                                                                  • Little benefit seen from trading down
                                                                    • Transforming location, product mix will be essential to future growth
                                                                      • Figure 1: Total U.S. sales and forecast for full-line vending, at current prices, 2004-14
                                                                      • Figure 2: Total U.S. sales and forecast for full-line vending, at inflation-adjusted prices, 2004-14
                                                                  • Competitive Context

                                                                    • C-stores take charge
                                                                      • Figure 3: Sales of select products through convenience stores, at current prices, 2006 and 2008
                                                                    • Many additional options for a fast feed
                                                                      • Plan-ahead purchasing
                                                                        • Free snacks at the office
                                                                          • Figure 4: Availability of free beverages and food in the workplace, by gender, age and household income, August 2009
                                                                      • Segment Performance

                                                                        • Key points
                                                                          • Cold beverages, snacks are the staples
                                                                            • Hot beverages, food appeal to lower-income consumers
                                                                              • Non-food products: the wild card
                                                                                • Figure 5: Full-line vending sales at current prices, by segment, 2004-14
                                                                                • Figure 6: Full-line vending market share, by segment, 2007 and 2009
                                                                            • Segment Performance—Cold Beverages

                                                                              • Key points
                                                                                • Environmental issues create risk
                                                                                  • Sector likely to rebound slightly with the economy
                                                                                    • Renewed importance of the schools sector
                                                                                      • New formats could address environmental concerns and add excitement
                                                                                        • Sales and forecast—cold beverages
                                                                                          • Figure 7: Sales of cold beverages through vending, at current prices, 2004-14
                                                                                      • Segment Performance—Candy and Snacks

                                                                                        • Key points
                                                                                          • Recession hits the snack market
                                                                                            • Consider adjusting product mix
                                                                                              • Sales and forecast—candy, snacks and confections
                                                                                                • Figure 8: Sales of candy, snacks and confections through vending, at current prices, 2004-14
                                                                                            • Segment Performance—Hot Beverages

                                                                                              • Key points
                                                                                                • Declining sales as vending transitions to white-collar settings
                                                                                                  • Opportunities in premium coffees
                                                                                                    • Sales and forecast—hot beverages
                                                                                                      • Figure 9: Sales of hot beverages through vending, at current prices, 2004-14
                                                                                                  • Segment Performance—Refrigerated and Frozen Food

                                                                                                    • Key points
                                                                                                      • Food declines with manufacturing base
                                                                                                        • Long-term potential for ice cream
                                                                                                          • Sales and forecast—refrigerated and frozen food
                                                                                                            • Figure 10: Sales of refrigerated and frozen food through vending, at current prices, 2004-14
                                                                                                        • Segment Performance—Non-food

                                                                                                          • Key points
                                                                                                            • Small sector could be poised for growth
                                                                                                              • New needs equal new opportunities
                                                                                                                • Sales and forecast—non-food products
                                                                                                                  • Figure 11: Sales of non-food products through vending, at current prices, 2004-14
                                                                                                              • Distribution/Location

                                                                                                                • Heavy reliance on the workplace continues
                                                                                                                  • New settings will require new types of vending
                                                                                                                    • Figure 12: Number of vending machines, by type of location, 2007 and 2008
                                                                                                                • Market Drivers

                                                                                                                  • The recession changes eating habits
                                                                                                                    • Figure 13: Disposable personal income and personal consumption, 2006-09
                                                                                                                    • Figure 14: Change in eating and cooking habits as a result of the current economic climate, May 2009
                                                                                                                  • High rates of unemployment
                                                                                                                    • Figure 15: U.S. unemployment, January-September 2009
                                                                                                                  • Seeing green
                                                                                                                    • Figure 16: U.S. beverage sales, at inflation-adjusted prices, 2005-09
                                                                                                                  • New levels of comfort with cashless payment
                                                                                                                    • Health concerns could drive change in product mix
                                                                                                                    • Leading Companies

                                                                                                                      • Overview
                                                                                                                        • Aramark
                                                                                                                          • Canteen/Compass Group
                                                                                                                            • Crane Merchandising
                                                                                                                              • Treat America
                                                                                                                              • Innovation and Innovators

                                                                                                                                  • Redbox
                                                                                                                                    • Redbox television advertising
                                                                                                                                      • Figure 17: Redbox television ad, 2009
                                                                                                                                    • Yo-Naturals
                                                                                                                                      • Zoom Systems
                                                                                                                                      • Usage of Vending Machines

                                                                                                                                        • Frequency of use is declining
                                                                                                                                          • Figure 18: Incidence of using vending machines, 2003-09
                                                                                                                                        • Vast majority of all groups use vending at least occasionally
                                                                                                                                          • Figure 19: Incidence of using vending machines, by gender and age, August 2009
                                                                                                                                        • Frequency of usage: Men, 18-34 year olds, lowest income group most important
                                                                                                                                          • Figure 20: Frequency of vending machine purchases, by gender, age and household income, August 2009
                                                                                                                                        • Few respondents increasing vending usage during the recession
                                                                                                                                          • Figure 21: Frequency of vending machine usage compared to the previous year, by gender, age and household income, August 2009
                                                                                                                                      • Beverages Bought at Vending Machines

                                                                                                                                        • Soda dominates beverage choices
                                                                                                                                          • Women more likely to prefer water
                                                                                                                                            • Figure 22: Types of beverages purchased at vending machines, by gender, August 2009
                                                                                                                                          • 18-24-year-olds buy a broad variety of beverages
                                                                                                                                            • Figure 23: Types of beverages purchased at vending machines, by age, August 2009
                                                                                                                                          • High-income respondents lag in beverage purchase
                                                                                                                                            • Figure 24: Types of beverages purchased at vending machines, by household income, August 2009
                                                                                                                                          • Consumers aspire to coffeehouse choices from vending
                                                                                                                                            • Figure 25: Interest in beverages not available at vending near to respondent, by gender, August 2009
                                                                                                                                          • Younger respondents like it hot
                                                                                                                                            • Figure 26: Interest in beverages not available at vending near to respondent, by age, August 2009
                                                                                                                                        • Food Purchased at Vending

                                                                                                                                          • Salty snacks and candy bars remain the vending machine staple
                                                                                                                                            • Figure 27: Types of food purchased at vending machines, by gender, August 2009
                                                                                                                                          • 18-24s want variety
                                                                                                                                            • Figure 28: Types of food purchased at vending machines, by age, August 2009
                                                                                                                                          • Lower-income respondents purchase heartier foods
                                                                                                                                            • Figure 29: Types of food purchased at vending machines, by household income, August 2009
                                                                                                                                          • Bad behavior meets healthy desires
                                                                                                                                            • Figure 30: Interest in food not available at vending near to respondent, by gender, August 2009
                                                                                                                                          • Health drives younger respondents
                                                                                                                                            • Figure 31: Interest in foods not available at vending near to respondent, by age, August 2009
                                                                                                                                          • Lower-income respondents interested in frozen treats
                                                                                                                                            • Figure 32: Interest in foods not available at vending near to respondent, by household income, August 2009
                                                                                                                                        • Other Products Bought at Vending

                                                                                                                                          • Non-food items significantly less popular
                                                                                                                                            • Figure 33: Types of non-food items purchased at vending machines, by gender, August 2009
                                                                                                                                          • Entertainment, tech vending appeals to the young
                                                                                                                                            • Figure 34: Types of non-food items purchased at vending machines, by age, August 2009
                                                                                                                                          • “Emergency” products appear most valued
                                                                                                                                            • Figure 35: Interest in non-food items not available at vending near to respondent, by gender, August 2009
                                                                                                                                          • Exercise caution when targeting entertainment to younger consumers
                                                                                                                                            • Figure 36: Interest in non-food items not available at vending near to respondent, by age, August 2009
                                                                                                                                          • Higher-income respondents still a tough sell
                                                                                                                                            • Figure 37: Interest in non-food items not available at vending near to respondent, by household income, August 2009
                                                                                                                                          • Moderate interest in feminine hygiene purchases
                                                                                                                                            • Figure 38: Purchase/interest in feminine hygiene items at vending machines, by age, August 2009
                                                                                                                                        • Access to Vending

                                                                                                                                          • Majority of respondents have vending at work
                                                                                                                                            • Figure 39: Availability of vending machines at the workplace, by gender, age, and household income, August 2009
                                                                                                                                        • Attitudes toward Vending

                                                                                                                                          • Negative perceptions persist
                                                                                                                                            • Figure 40: Perceptions of vending machines, by gender, August 2009
                                                                                                                                            • Figure 41: Perceptions of vending machines, by age, August 2009
                                                                                                                                            • Figure 42: Perceptions of vending machines, by household income, August 2009
                                                                                                                                          • Food choice key to driving usage
                                                                                                                                            • Figure 43: Features and options driving vending machine usage/interest, by gender, August 2009
                                                                                                                                            • Figure 44: Features and options driving vending machine usage/interest, by age, August 2009
                                                                                                                                        • Products Available at Elementary Schools

                                                                                                                                          • Soda fades out of schools
                                                                                                                                            • Figure 45: Beverages sold in school vending machines, 2001/02-2007/08
                                                                                                                                            • Figure 46: Food sold in school vending machines, 2001/02-2007/08
                                                                                                                                            • Figure 47: Beverages sold in school vending machines, by kids, gender and age, October 2007-November 2008
                                                                                                                                            • Figure 48: Food sold in school vending machines, by kids, gender and age, October 2007-November 2008
                                                                                                                                        • Impact of Race/Hispanic Origin

                                                                                                                                          • Black, Hispanic consumers most frequent vending users
                                                                                                                                            • Figure 49: Incidence of using vending machines, by race/Hispanic origin, August 2009
                                                                                                                                          • Black respondents less interested in soda, Hispanics like to snack
                                                                                                                                            • Figure 50: Types of beverages purchased at vending machines, by race/Hispanic origin, August 2009
                                                                                                                                            • Figure 51: Types of food purchased at vending machines, by race/Hispanic origin, August 2009
                                                                                                                                            • Figure 52: Types of non-food items purchased at vending machines, by race/Hispanic origin, August 2009
                                                                                                                                          • Design encourages purchase among Hispanics
                                                                                                                                            • Figure 53: Features and options driving vending machine usage/interest, by race/Hispanic origin, August 2009
                                                                                                                                        • Cluster Analysis

                                                                                                                                            • Healthers
                                                                                                                                              • Major Vendors
                                                                                                                                                • Incidentals
                                                                                                                                                  • Cluster characteristics
                                                                                                                                                    • Figure 54: Vending clusters, August 2009
                                                                                                                                                    • Figure 55: Attitudes toward vending, by clusters, August 2009
                                                                                                                                                    • Figure 56: Frequency of usage, by clusters, August 2009
                                                                                                                                                  • Cluster demographics
                                                                                                                                                    • Figure 57: Vending clusters, by gender, August 2009
                                                                                                                                                    • Figure 58: Vending clusters, by age, August 2009
                                                                                                                                                    • Figure 59: Vending clusters, by household income, August 2009
                                                                                                                                                    • Figure 60: Vending clusters, by race, August 2009
                                                                                                                                                    • Figure 61: Vending clusters, by Hispanic origin, August 2009
                                                                                                                                                  • Cluster methodology
                                                                                                                                                  • Custom Consumer Groups

                                                                                                                                                    • Young men core audience for vending
                                                                                                                                                        • Figure 62: Incidence of using vending machines, by custom consumer groups, August 2009
                                                                                                                                                      • Young men open to trying a variety of products through vending
                                                                                                                                                        • Figure 63: Types of beverages purchased at vending machines, by gender/age, August 2009
                                                                                                                                                      • Young women lead in snack purchases
                                                                                                                                                        • Figure 64: Types of food purchased at vending machines, by gender/age, August 2009
                                                                                                                                                      • Variety drives younger consumers
                                                                                                                                                        • Figure 65: Features and options driving vending machine usage/interest, by gender/age, August 2009
                                                                                                                                                        • Figure 66: Features and options driving vending machine usage/interest, by gender/household income, August 2009
                                                                                                                                                    • Appendix: Other Useful Consumer Tables

                                                                                                                                                      • Income not a significant driver for beverage, non-food products
                                                                                                                                                        • Figure 67: Interest in beverages not available at vending near to respondent, by household income, August 2009
                                                                                                                                                        • Figure 68: Types of non-food items purchased at vending machines, by household income, August 2009
                                                                                                                                                    • Appendix: Trade Associations

                                                                                                                                                      Companies Covered

                                                                                                                                                      • Bureau of Economic Analysis
                                                                                                                                                      • Green Mountain Coffee Roasters, Inc.
                                                                                                                                                      • Greenfield Online
                                                                                                                                                      • International Bottled Water Association
                                                                                                                                                      • Kellogg Company
                                                                                                                                                      • Kraft Foods Inc. (U.S.A.)
                                                                                                                                                      • Macy's, Inc.
                                                                                                                                                      • National Automatic Merchandising Association (NAMA)
                                                                                                                                                      • National Restaurant Association (NRA)
                                                                                                                                                      • Nebraska Furniture Mart, Inc.
                                                                                                                                                      • Netflix, Inc.
                                                                                                                                                      • PayPal Inc.
                                                                                                                                                      • Starbucks Corporation
                                                                                                                                                      • Trader Joe's Company Inc
                                                                                                                                                      • U.S. Bureau of Labor Statistics
                                                                                                                                                      • U.S. Department of Agriculture
                                                                                                                                                      • US Department of Labor
                                                                                                                                                      • Walmart Stores (USA)

                                                                                                                                                      Vending - US - October 2009

                                                                                                                                                      £3,277.28 (Excl.Tax)