April 16, 2011 in Business

Vending machine 2.0

Web-based systems help operators keep track of supplies, security
Joyce Smith McClatchy
 

KANSAS CITY, Mo. – Vending machines are getting a lot smarter – and tougher to shake down.

Machines equipped with wireless, Web-based monitoring systems are not only helping the $20 billion American vending industry sell more products, they’re also helping to stop thieves.

“It’s an old industry with more of a new start, so to say,” said Mark Brenner, a Kansas City-area franchisee for Fresh Healthy Vending.

The technology couldn’t come at a better time. The recession and the huge unemployment numbers in 2009 resulted in the biggest one-year drop in vending sales – to just under $20 billion from $22 billion in 2008, according to Automatic Merchandiser’s 2010 State of the Vending Industry Report.

Some operators have responded by increasing prices. But many have resorted to technology to keep a tighter control on inventory, saving unnecessary trips to stock machines and stopping theft from inside or outside sources.

One company that’s turned to technology is Treat America Food Services, a Merriam, Kan.-based vending and dining service management company with $52 million in annual vending sales. It is using a system designed by Cantaloupe Systems Inc. in many of its snack and beverage vending machines in businesses, colleges and hospitals.

Cantaloupe Systems was founded in California in 2002 by two engineers, one a second-generation vending professional. Its “Seed” technology lets off-site vending machine owners know exactly how much product and how much money – to the number of dimes, nickels, quarters and dollar bills – are in one of their machines, minute by minute.

As a result, owners know when to make a trip back to a machine to restock the Sprite or snack mix, when they should devote another row to Snickers, and when a ham sandwich is past its shelf life. The system also can text or email owners to alert them when a machine door is opened up after hours.

The tiny Seed device can be installed on top of a vending machine, sending signals back to the vending company via a cellular network. The average cost per machine is $150 annually.

“We got it for operational efficiencies,” said Jim Mitchell, president of the vending division for Treat America. “But it’s as if we have security in front of the machine 24 hours a day.”

The systems seem to be working. For example, a customer in Phoenix was alerted when one of its school vending machine doors was opened after hours. It notified police, who caught the two culprits in the act. The owner even told police how much money was in the machine right before the break-in.

Except for accepting dollar bills and credit cards, and a few new styles, vending machines haven’t changed much in the past few decades. But recently, along with new technology, vending machines also began selling everything from digital cameras to diapers, and offering healthier choices.

Brenner now has machines that carry such items as juice, yogurt, vitamin water and baked barbecue potato chips.


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