Traditional or healthy: the vending machine business owners’ dilemma

Obesity is a growing concern in the United States. According to The U.S. Department of Health & Human Services and the Centers for Disease Control and Prevention:

• Some 14 million children in the United States are obese.
• The prevalence of obesity in 2016 was 18.5%, and nearly 10 percent of adults had diabetes.
• Obesity prevalence among two to five years old is 13.9 percent, six to 11 years old is 18.4 percent, and 12 to 19 years old is 20.6 percent.

The most common factors for child obesity can be ranked as follows: genetic factors, nutrition and eating habits, and lack of physical activity. Unlike the first one, the second and the third could be addressed by parents. Unfortunately, many parents don’t pay enough attention to what their children eat, while their kids are away from home (and not only), and they underestimate the impact of the easy-to-grab fast food, unhealthy snacks and sugar-rich carbonated drinks on their kid’s health. The effects can be disastrous not only to children’s health but to the whole society in general, as excess weight is directly responsible for high blood pressure and high cholesterol, both leading to cardiovascular disease and a long list of other diseases such as metabolic syndrome, fatty liver disease, insulin resistance and type II diabetes, hormonal imbalances, etc. Obesity can even cause psychological issues like depression and low self-esteem, and these disorders altogether eventually lead to lower quality of life for the individuals.

Obviously, the federal law for food and calorie labeling in vending machines did not manage to achieve results in preventing all the above. To counteract this worrying trend and to ensure healthier food on school and university premises, some states have started to pass laws that restrict the offering of sugary snacks in vending machines in the campuses. A New York Times study reports that there is a link between junk food sales restricting laws at school vending machines and obesity rates for a particular student population. The study encompassed 40 states nationwide and tracked more than 6,300 students over a three-year period. Study results show that students living in states that have laws against junk food and sugary beverages in school vending machines, gained less weight than those living in states with no such laws. The study also concluded that states with stronger laws tend to deliver a better outcome, although a direct correlation cannot be made due to the presence of a number of other factors that would have influenced the outcome. Still, many states have no laws at all regulating the sale of junk food and sugary drinks which makes the case for a strong national standard for such type of food in schools.

It’s to say that healthy vending is more than just a buzzword but a real alternative and a life-changing necessity for many. In recent years UK hospitals have been under increasing pressure to cut back on the amount of sugary and caloric food they offer in their shops and vending machines. A study showed that hospital vending machines offering healthier snacks lead to medical staff and patients consuming more water and dried fruit and fewer crisps and sugary drinks. (Source: The Guardian)

The main results from a trial undertaken at one of the biggest hospitals in England found that:

• Sales of bottled water rose by 54%, while 38% fewer sugary drinks were purchased.
• Sales of crisps dropped.
• While overall the sales of drinks and snacks went up, the products sold contained 25% less sugar and 26% fewer calories.

Some 10 years ago, it was difficult for people to get access to healthy products. In the last few years, when vending machine owners started noticing the rise of the healthy eating trend in the country, the vending machine business gradually started shifting towards healthy vending. At that time, Michelle Obama pushed on nutrition in schools, and the country really took a turn to focus on a healthier lifestyle. (Source: Let’s Move) Despite the growing population of health-conscious consumers, however, the shift toward healthy products faced some resistance, as most vending machine business owners were concerned that the new healthy snacking habits might decrease their sales turnover, despite all reports showing the positive impact on consumer’s health. Many vending machine businesses kept providing only traditional sugary drinks and snacks.

Were those fears based on data, or were they just prejudices?

Some quite interesting vending machine sales statistics show that:

• In 2017 healthier snacks sales outpaced traditional ones by three times
• Nearly 80% of people are conscious about their weight
• 65% of Americans are actively trying to get on a diet one way or another (Source: BrandonGaille)
• 30% of total vending machine sales come from schools, and most schools are obliged by regulations to restrict traditional junk food from vending to students during school hours.

The bottom line is: the vending operators who only stock their vending machines with junk food and sugary drinks are dramatically limiting their market size and sales turnover.

It’s important to understand that the vending machine industry is about to change for good and vending machine business owners should adapt to the change rather than fight it.

At the 2017 AVEX conference in the UK, Cyril Lavenant of NPD, the largest market research company in the foodservice industry, highlighted that the change in the global vending industry had been driven by six important consumer trends:

• Perception of freshness: consumers want convenient access to fresh food and the ability to check the expiry dates
• Quality of the product: consumers want access to healthier options
• Experience: consumers want a more interactive experience
• Mega convenience: consumers want cashless options and the ability to pre-pay
• Transparency of sourcing: consumers want to buy locally sourced products
• Experiment & customize: consumers want a variety and products more suitable for their daily work and eating habits

There’s always a certain level of risk when changing your business model. The risks are even higher if you blindly decide to follow a certain direction, just because you’ve heard a fancy buzzword or you count on what other fellow vending machine business owners told you, and especially if you haven’t done your homework by crunching the numbers.

Once you’ve decided to give your vending machines a healthy touch, you shouldn’t just substitute your products all at once. Instead, you can simply add one or two new healthy offers to your product mix at the locations from where you have the greatest insights into your customers’ tastes and preferences. How can you possibly understand whether it will be a good move to change your product mix?

When it comes to business decisions, it is all about data and statistics, not feelings! Every savvy vending machine operator knows that your vending management software (VMS) is your best friend in such a situation, allowing you to see consumer behavior and buying patterns, on one side, and pinpoint the products that bring in maximum revenue and especially on how your new healthy products are performing vs your traditional offerings, on the other. Once you’ve added a couple of healthy snacks to your mix, in less than two weeks’ time you will have gathered solid data to base your decisions on. If the numbers look promising, continue to gradually replace your old school snacks and sugary soda drinks with new healthy snacks. With exciting new products being introduced every week you will keep your customers nicely surprised and satisfied. The new product mix will work for some locations, certainly not for all. Remember, you should follow one key rule – your product offering should be diverse and the healthy vending snacks may be exactly what your vending machine product mix was missing! It is even better if you have local products too as such kind of niche products can be a good source for an additional margin.

Some vendors have gone an extra mile in their effort to convince customers to buy healthy snacks by delaying the dispensing of an unhealthy snack for 25 extra seconds (Source: abcNEWS)… Our advice, however, is to not be too extreme, but rather be practical and realistic. Use your vending management software as much as you can to analyze the performance of your product mix and do the numbers first!

Offering better choices to consumers equates to premiums. Best business practices show that when presented with the opportunity to make better choices, customers will often select better quality, even if the premium and healthy snack goes with a higher price point. When a vending machine operator offers premium snacks, consumers appreciate it. The latter results in steadily increasing sales and growing business.

Last but not least, providing exceptional customer service to your location managers may include helping them build up their employees’ engagement and happiness. It is scientifically proven, that food makes people happy, and a happy employee is a loyal employee. In November 2017, The Huffington Post featured an article called Fuel: The Science of Food and Productivity. The article emphasizes that food affects not just how we feel and how much we weigh - it changes the way we work, and eating regularly matters just as much as eating well. The article shared how critical access to healthy food is to the typical workday, and how stress affects eating habits. In short, you might be able to boost your vending machine business by giving your customers access to healthier food, let them eat regularly to reduce stress and to improve their diet.

If you are interested in getting a better understanding of how vending machine software can help you stay ahead of your competitors, read our post: Can software make your vending machine business more successful?

If you want to stay competitive, waste no time. Start your free trial of VendSoft VMS today.