All About Vending

MSA Gauges Relationship Of Location Type On Snack Category Preferences In Vending

Vending machines behave differently at different kinds of location. Operators have always known this, but have found it difficult to quantify
the differences.

Management Science Associates has studied this question, using its "Vend- Scape" database. "VendScape" information is captured at the machine level, with line item detail.

Based on observed sales performance, consumer preferences vary with demographic factors, including age group and socioeconomic background, MSA reported. In studying full-year sales histories for Schools, Offices, Plants/Factories and

NO ARGUING WITH TASTE: "VendScape" line-item vending sales data shows differences in purchasing patterns between plants/factories (top) and offices (below) as these differences affect salty snacks, chocolate candy, baked goods, gum/mint/hard roll candy, and other nonchocolate candy NC). Notice "weeks" axis is divided into 28-day reporting periods.

Public Locations over the past three years, MSA identified the similarities and differences among these four location types.

In each of the four, the Salty Snack category is the largest, with about 35% of all units sold belonging to this category. Next in prominence are Chocolate and Baked Goods, respectively.

White-collar and blue-collar locations exhibit some similarities in category preference. Chocolate candies and Baked Goods enjoy nearly equal shares of total volume, varying in the 20% to 25% range over time. Non-chocolate candy and the Gum/Mint/Hard Roll Candy (HRC) category lag, with each contributing 5% or less to total volume, "VendScape" reveals.

In schools and public locations, chocolate has outpaced baked goods consistently, over the past three years. MSA reports that the difference in performance level of the two categories was greater in public locations.

Compared with white- and blue-collar locations, non-chocolate candy performed more strongly in public locations, accounting for about 8% of volume. Schools reported even better performance for this category, which comprised 12% or more of school vending sales over the past three years.

MSA emphasized that, as suppliers increase the number and variety of products in their vending lines and new suppliers enter the field, operators confront ever more challenging planogramming issues. Compared with most other retailing media,

vending machines offer very limited shelf space. Therefore, operators must make the right choice for each selection, in order to provide an assortment that will please the greatest number of patrons in the location and maximize machine revenue.

"Insight into consumer choice of category is definitely very helpful, but this is only the first step," the veteran market research organization pointed out. "Once they have realized the magnitude of the Salty Snack category compared to other categories like Chocolate and Baked Goods, they have to do more complex analyses – space-to-sales ratios, profit margin comparisons and customer satisfaction determination – before they can design that winning planogram that will translate into maximum revenue for them."

The "VendScape" analysis disclosed that "double-spiral" items experience faster turns than "single-spiral" ones, so operators often have favored bagged snacks in menuing their machines. "Making the right choice can be tricky," MSA warned, pointing out that an unanalyzed preference for the wider, higher-velocity items may be causing an imbalance in the space and sales ratio for single- and double- spiral selections. While the wider products occupy about 78% of the available "real estate" in glassfront machines, they contribute only about 63% of total revenue.

"This means there’s room for more profit," MSA emphasized, and that profit can be made by identifying the wide items that are not pulling their weight, and replacing them with two fast-moving narrow selections. "But this is a very delicate task of balancing that requires detailed insight into consumer preference by location," the "VendScape" analysts noted.

Information on "VendScape" data, and on Efficient Assortment for Vending, may be had from Hena Akhtar at Management Science Associates by calling (412) 362- 2000.

NO ARGUING WITH TASTE: MSA historical analysis shows difference in snack purchasing behavior of populations in schools (above) and public locations (below).