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Vending - US

Published by: Mintel International Group Ltd.

Published: Dec. 1, 2005 - 88 Pages


Table of Contents


Introduction and Abbreviations

Introduction

Other relevant reports

Definition

Abbreviations and terms

Abbreviations

Terms



Executive Summary

Sales of full-line vending industry fall to $14 billion

Pricing pressures eat into profits

Many wellness initiatives in a category most used for indulgence

For vending machine operators, the bigger the size, the better the outlook

Cold beverages and snacks the mainstays, milk grows

Although outnumbered, the largest suppliers dominate sales

Men are more frequent vending machine customers

Opportunity to create frequent shopper cards for vending machines

Vending could play significant role in “on the go” entertainment

More premium products in vending machines

Sales expected to decline to $12.5 billion by 2010



Market Drivers

Unemployment and loss of manufacturing jobs drive down vending sales

Figure 1: U.S. unemployment rates of civilian non-institutional population 16 years and over, annual average, 2000-04

Figure 2: U.S. manufacturing employees, annual average, 2000-04

Long commutes and short lunches fuel need for “quick-fix” food

Competition from fast food and fast-casual restaurants

School limits and bans reduce the presence of some vending products

Wellness programs on the rise

Cashless vending options provide more purchase opportunities



Market Size and Trends

Figure 3: U.S. sales via vending machines, full-line operators, at current and constant prices, 2000-05

Figure 4: Graph: U.S. sales via vending machines, full-line operators, at current and constant prices, 2000-05

Market trends

Figure 5: Cold beverage full-line vendng sales, by type of container, percent of sales by volume, 2001-04



Market Segmentation

Overview

Figure 6: U.S. vending sales, segmented by type of product, full-line operators, 2003 and 2005

Cold beverages

Figure 7: Sales of cold beverages via vending machines, full-line operators, at current and constant prices, 2000-05

Figure 8: Cold beverage machines among full-line operators, by type, 2002 and 2004

Candy/snacks/confections/pastry

Figure 9: Sales of candy/snacks/confections/pastry via vending machines, full-line operators, at current and constant prices, 2000-05

Figure 10: Full-line vending sales of candy/snack/confections, percent of sales, by type of product, 2000-04

Vend food

Figure 11: Sales of vend food, full-line operators, at current and constant prices, 2000-05

Figure 12: Number of vend food machines, by type, 2001-04

Hot beverages

Figure 13: Sales of hot beverages via vending machines, full-line operators, at current and constant prices, 2000-05

Figure 14: Full-line vending hot beverage sales, by type, percentage of sales, 2001-04

Milk

Figure 15: Sales of milk via vending machines, full-line operators, at current and constant prices, 2000-05

Figure 16: Full-line vending milk sales, by machine type, share of sales, 2001-04



Supply Structure

Introduction

Most popular brands in candy/snacks/confection

Figure 17: Top 20 candy/snacks/confection items sold through vending machines, by brand and size, dollar sales, 2004

Figure 18: Top 15 frozen food products sold through vending machines, by manufacturer and brand, dollar sales, 2004

Figure 19: Top 15 refrigerated food products sold through vending machines, by manufacturer and brand, dollar sales, 2004

Product supplier profiles: Beverages

The Coca-Cola Company

PepsiCo, Inc.

Cadbury Schweppes

Product supplier profiles: Candy/snacks/confections/pastries

Masterfoods USA (a division of Mars, Inc.)

Hershey Foods Corporation

Frito-Lay (a division of PepsiCo, Inc.)

Kellogg Company (includes Keebler Snacks division)

Lance, Inc.

Product supplier profiles: Vended foods

Kraft Foods, Inc.

Pierre Foods, Inc.

Jimmy Dean Foods (a division of Sara Lee Corporation)

ConAgra Foods, Inc.

General Mills, Inc.

Other product supplier profiles

Procter & Gamble, Inc.

McNeil Consumer & Specialty Pharmaceuticals

Wyeth Consumer Healthcare

Service operators overview

Figure 20: Operator sales of vending products in the U.S., by size of organization based on annual revenues, 2003 & 2004

Figure 21: Activities of the operator for vending products in the U.S.

National vending service organizations

Compass Group USA (a division of Compass Group North America)

Sodexho Inc. (a division of Sodexho Alliance, SA)

ARAMARK Corporation

Regional vending service organizations

All Seasons Services, Inc. (mainly in East Coast & Mid-Atlantic U.S.)

Five Star Food Service, Inc. (mainly in Southern U.S.)

CL Swanson Corporation (mainly in Midwestern U.S.)

Equipment manufacturers

Automatic Products International, Ltd. (APi)

Dixie-Narco (a division of Maytag Corporation)

SandenVendo America Inc. (formerly The Vendo Company)

Automated Merchandising Systems, Inc. (AMS)

Rowe International, Inc.

Crane Merchandising Systems (CMS)

Royal Vendors, Inc.

U-Select-It Corp. (USI, a Wittern Group company)

FASTCORP (Food Automation Systems Technologies, Inc.)



Distribution/Location

Introduction

Locations of vending machines

Figure 22: U.S. sales of vending products among full-line vending operators, by location, 2004

A regional review of vending operators

Figure 23: Distribution of vending service operators, by census region, 2004

Figure 24: Distribution of vending service operators, by the four major U.S. regions, 2004



The Consumer

Introduction

Use of vending machines

Figure 25: Use of vending machines, September 2005

Figure 26: Use of vending machines, by gender, September 2005

Figure 27: Use of vending machines, by age, September 2005

Figure 28: Use of vending machines, by presence of children, September 2005

Figure 29: Use of vending machines, by respondent’s region of residence, September 2005

Frequency of use of vending machines

Figure 30: Frequency of use of vending machines, September 2005

Figure 31: Frequency of use of vending machines, by gender, September 2005

Figure 32: Frequency of use of vending machines, by age, September 2005

Figure 33: Frequency of use of vending machines, by household income, September 2005

Attitudes toward vended products

Figure 34: Attitudes toward vended products, September 2005

Figure 35: Attitudes toward vended products, by gender, September 2005

Figure 36: Attitudes toward vended products, by age, September 2005

Figure 37: Attitudes toward vended products, by household income, September 2005

Figure 38: Attitudes toward vended products, by presence of children, September 2005

Figure 39: Attitudes toward vended products, by respondent’s region of residence, September 2005

Figure 40: Attitudes toward vended products, by metropolitan locality, September 2005

Interest in expanded product offerings

Figure 41: Interest in expanded product offerings, September 2005

Figure 42: Interest in expanded product offerings, by gender, September 2005

Figure 43: Interest in expanded product offerings, by age, September 2005

Figure 44: Interest in expanded product offerings, by household income, September 2005

Figure 45: Interest in expanded product offerings, by region of residence, September 2005

Summary



Future and Forecast

Future trends

The vending industry will continue to balance wellness trends and consumer desires

Vending operators will continue to address changing workplace trends

Appealing to white collar workers with premium and/or healthy products

Schools may stock only caffeine-free products for kids

The vending industry could own “a good cause”

Vending machines to offer more ethnic foods and imported brands

Vending industry to play role in “on the go” entertainment

Market forecast

Vending machines of full-line operators

Figure 46: Forecast of total U.S. sales via vending machines of full-line operators, at current and constant prices, 2005-10

Forecast Factors



Appendix: Trade Associations

National Automatic Merchandising Association (NAMA)

National Beverage & Products Association



Appendix: Research Methodology

Consumer Research

Datascension, Inc. and Harris Interactive Service Bureau

Greenfield Online

ICR Surveys EXCEL

Simmons National Consumer Surveys

Technometrica TechnoExpresssm

Trade Research

Informal trade research

Formal trade research

Desk & Internet Research

Sources

Definitions

Forecasts



Appendix: What is Mintel?

Mintel Group

Mintel Reports

Mintel Premier

Mintel GNPD

Mintel Menu Insights

Mintel Comperemedia

Mintel Custom Solutions

Abstract

This report investigates the distribution of goods in the U.S. by vending machines. The most common products sold in this manner are hot and cold drinks, cigarettes, candy, snacks and confectionery items, food and meal items, sanitary protection products, and condoms.

The approximately $45 billion vending industry is in the throes of an evolution. Once their most-important consumers, the number of industrial workers has declined significantly. Vending operators are finding it necessary to find new locations for machines. Offices offer hope, but product and machine types need to reflect the smaller number of employees on site and their changing preferences. Providing healthy yet popular products, satisfying school requirements, and improving technology and efficiency are creating challenges for the industry.

In this report, Mintel clearly identifies the principal external factors driving or curtailing growth in the vending market. Exclusive consumer research reveals the attitudes, needs and behavior of vending machine consumers, with analysis broken down both by demographic characteristics, and by product type.

Six years of specific sales data provide a factual and impartial presentation of the market as a whole. Mintel also evaluates the performance of individual sectors in the market, and provides information about the major companies and brands.

Excluded from this report are canteens, cafeteria-style services, office coffee service, and manual food service operations, machines for travel tickets, metro fare cards, postage stamps and other postal services, prepaid parking services, amusement and arcade games, video games, pool tables, gambling slots, coin change dispensers, gumball machines, bulk vending (such as jewelry and toys), and jukeboxes.

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