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TECHNOLOGY EMPOWERS OPERATORS IN 2013 By Emily Refermat, Editor While competitive pressures and commodity prices continued to challenge vending, micro market and coffee service operators in 2013, more business owners reported adding technology and effectively addressing sales data and logistics to increase profts as the economy, in most areas, continued to improve. ur industry has seen another year of modest growth. Vending opera- tors were able to use hard- ware and software, like micro markets and vend- ing management systems (VMS), to improve profts. In many areas the economy was improving at the same time, which contributed to the lift in revenues operators reported for 2013. The aggregate industry rev- enue rose to $19.7 billion in 2013, a 2 percent increase from last year's Automatic Merchandiser State of the Vending Industry Report number of $19.31 billion. Micro markets were the fastest growing addition made by operators in 2013, but investments made in other technology offerings — most notably cashless payment devices — were also signifcant. More operators also reported using software to adjust product mixes to increase profts and increase the time between service vis- its more than in previous years. Consumer sensitivity to price point remains a struggle for many operators, especially as product costs are increasing, most notably in the candy category. Many reported reduc- ing SKUs of more expensive candy in favor of bagged snacks in order to keep prices the same at the point of sale. In some areas of the country, the economy remains lethargic and the operators are still struggling with layoffs and declining same store sales. Revenues in the Northeast and Mid- west are the most sluggish compared to the previous year. Growth in overall foodservice sales slowed in 2013, while vending increased, shrinking the gap that has existed for the last several years. Technomic, a food research frm, reported the total growth for restaurants and bars for 2013 to be O 26 Automatic Merchandiser VendingMarketWatch.com June 2014 STATE OF THE INDUSTRY CHART 2: OPERATOR SALES SIZE REVENUE RANGE % OF 2013 OPERATORS PROJECTED 2013 SALES % OF 2013 SALES Small under $1M 55.7% $2.07B 11% Medium $1M - $4.9M 23.9% 4.39B 23.5% Large $5M - $9.9M 9.6% 4.9B 26.2% Extra large $10M + 10.8% 7.36B 39.3% TOTAL $18.72 BILLION* * Does not include the estimated 5 percent of total industry revenue for machines owned and operated by locations. Editor's Note: Revenue totals for individual groups were rounded off, therefore the sums will not completely reflect the totals. B I L L I O N S O F D O L L A R S 23.21 19.31 19.69 21.26 21.89 22.54 22.05 19.85 19.25 18.96 0 5 10 15 20 25 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 CHART 1: INDUSTRY REVENUE IN BILLIONS, 10-YEAR REVIEW autm_26-39_0614SOVI.indd 26 6/11/14 10:05 AM