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C A N D Y AND SN ACK ST R A TE G I E S
large size snacks?
micro markets allow operators to show the comparative values of reg- ular size servings (RSS) versus LSS products, similar to convenience stores, where the LSS product cat- egory is growing.
LSS falls in vending Data shows LSS candy and snacks have been steadily declining after a brief surge. According to Manage- ment Science Associates (MSA), an information management company, from 2009 to 2011, the LSS candy offered in vending machines nation- wide has dropped 8 percent, and LSS snacks have dropped 4 percent. "(Product) prices continue to
increase," said Matt Groff, account director at MSA. "Now (RSS) prices commonly break a $1 and (LSS) prices are closer to $1.50. This has curtailed the growth of (LSS) in vend." Groff noted that in many instances large size products turn less frequently in vending, so they don't warrant the machine space. "Vending operators prefer lower margin products that turn at higher rates," explained Groff. "It leaves them less exposed to expensive inventory costs, such as stales." The downward trend in LSS
vends runs contrary to the con- venience store data from MSA, which shows an increase in LSS in both unit and dollar sales for the past several years. While the rate in 2011 slowed, it was still a gain. Groff believes value is playing a role in c-stores, where consum- ers can see the large size next to the standard size. They choose the larger size for its value.
Dollar no longer a hurdle in vending It used to be that any vending product priced at a $1 wouldn't sell. MSA vending data shows the threshold has risen to $1-plus, especially for candy products. Hence, more operators are charging $1 for even standard size candy, according to Groff. "(RSS choco- late) is more than a $1 in more than half of the vending machines we sampled," he said. Groff views these higher prices as necessary so operators can cover manufacturer price increases
He tried upselling, with pre-
mium protein bars, but the $1.75 price point never took off. He has had more success with premium items that sell for the same price as the other products in his machine. The winning strategy for Faber in these economic times is fl exibil- ity. "We're more open to suggestions than we've ever been before," he said. He thinks a lot about the type of account, putting fi ber bars in accounts with lots of females, but changing to something else in heav- ily Spanish accounts. "If a vendor's
Vend sales data indicates decline of LSS products in vending Candy
Quarter % machines carrying at least 1 large size
Q4 2009 Q4 2010 Q4 2011
Snacks
Quarter % machines carrying at least 1 large size
Q4 2009 Q4 2010 Q4 2011
78% 75% 74%
Source: Management Science Associates (MSA)
over the last few years. "It (the higher price point) isn't translat- ing to higher margins for opera- tors," he said. Eliot Faber, owner of M&C;
Vending in the highly competitive market of Hackensack, N.J., has eliminated most of his LSS prod- ucts because anything over a dollar doesn't sell. "Money is tight for everyone,"
he said, "and vending is discretion- ary spending."
using the same planogram, they're missing out," Faber said. Faber doesn't think he'll ever go
back to larger sized products. "If I raise my prices even a nickel, the locations are on the phone with other vendors," he said.
LSS candy too expensive "We just eliminated our LSS candy," said Devin Smith, purchasing manager at All Star Services in Port
C ONT INUED ▶ April 2012 VendingMarketWatch.com Automatic Merchandiser 17
# large items per machine
3.0 2.7 2.9
Average price
$0.82 $0.83 $0.88
Average price for large item
$0.92 $0.95 $0.99
22% 19% 14%
# large items per machine
1.1 1.0 1.0
Average price
$0.90 $0.92 $0.96
Average price for large item
$1.15 $1.23 $1.31
