Automatic Merchandise Machine Operators

SIC 5962

Companies in this industry

Industry report:

This industry consists of establishments primarily engaged in the retail sale of products by means of automatic merchandising units, also referred to as vending machines. This industry does not include the operation of coin-operated service machines, such as music machines, amusement and game machines, and lockers and scales. Insurance policies sold through vending machines are classified in SIC 6300: Insurance Carriers or SIC 6400: Insurance Agents, Brokers, and Service. Establishments primarily engaged in operating music machines, amusement and game machines, lockers and scales, and most other coin-operated service machines, are classified in services, Division I.

The U.S. government issued the first vending machine patent in 1886, and in 1888 the Thomas Adams Company installed similar machines on the train platforms in New York City to sell gum. Less than 100 years later, the vending machine phenomenon had permeated American culture, becoming more commonplace than the corner mailbox. The number of vending machine operators declined during the 1980s, as larger companies, including food service and beverage suppliers, bought out smaller companies. Yet, in the late 1990s, more than 8,000 vending machine operators maintained services in the United States, and the industry dispensed $30 billion worth of products. Sales in this industry grew by 428 percent between 1995 and 1999.

In the mid-2000s, nearly two-thirds of the machines in the U.S. were in operation in business locations. Schools (controversially) allowed machines in to serve students, with part of the total sales revenue remaining with the school. Ingenious entrepreneurs had transformed the machines into veritable mini-malls, vending everything from video games to underwear to famous restaurant products. In the late 2000s, a new product took the vending industry by storm--DVD movie rentals.

Establishments in this retail industry typically rent space for their coin-operated machines in office buildings, large stores, subway and train stations, airports, and places of entertainment. At the turn of the twenty-first century, vending machines were located in every mainstream location, from office buildings to grade schools to fast food restaurants. An estimated 85 percent of vending machine sales involved food or beverage. Other common merchandise sold in vending machines includes toiletries and other personal items. Automatic merchandising machine retailers fill and service the machines regularly with products from a range of manufacturers and food packagers. Movie rentals also became popular.

Important factors in the operation of these types of non-store retail businesses are vending machine locations, turnover of products at each location, and the quality of service personnel who fill and repair machines. Computerized systems monitor vending machine sales and usage and facilitate maintenance for the operator as well. Technology in the late 2000s allowed machine owners to count money and take inventory remotely of machines equipped with radio transmitters and small antennas. Remote control systems could also alert operators to malfunctions such as coin jams and other mechanical problems. Larger companies in the industry used highly sophisticated inventory control systems and studied market research data in order to optimize product inventory and machine placement. Additionally, the National Automatic Merchandising Association (NAMA), headquartered in Chicago, Illinois, assists vending machine operators by providing access to educational services, information, and technical support.

Innovations in vending machine technology and design developments improved the quality and scope of vending machine services during the 1900s, enabling a wider selection of products to be sold via the machines. Snack food machines were adapted to handle a greater variety of package shapes and sizes, and to support hot and cold food and beverage, including ice cream and freshly brewed cappuccino. Electronic improvements contributed to the ability of modern machines to provide digital readings and push-button functionality and to accept credit cards, thus enhancing the convenience for consumers. And, by the late 2000s, the face of the vending machine industry is changing as consumers become more comfortable using automated retailing self-serve kiosks. While the self-serve kiosk channel represents competition for the traditional vending machine, it also offers opportunities because of the need for experienced service providers.

In the late 2000s and early 2010s, vending machines had shed its imagine as simple candy and beverage dispensers, although the major of machines still targeted those markets. Vending machines distributed hair care and facial products in malls and $1 DVD movie rentals in a network of vending machines. Machines also continue to push the limits of technology. For example, at the Consumer Electronics Show in Las Vegas in January 2011, Kraft showed off a prototype of a machine that uses "anonymous video analytics" to scan a consumer's face to determine such factors as age and gender and then uses that information to suggest a particular product."

According to industry statistics, there were 13,383 merchandising machine operator business establishments, with nearly 59,750employees in 2009. The vending machine industry was negatively affected by the recession that impacted the U.S. economy during the late 2000s. Consumers decreased their discretionary spending, which meant fewer stops at the vending machine. However, as the economy began to stabilize in 2010 and beyond, the vending machine industry saw interest return, in part due to a new offering of healthy choices. "The vending industry has really responded to the demand consumers have for 'better for you' products" Jackie Clark, of the National Automatic Merchandising Association told Beverage Industry. "There has been a huge influx of these products over the past several years."

However, according to a 2010 Market Research report, the industry overall was struggling as consumers began to increasingly choose value over convenience. Although, according to the report, the industry grew at 2 percent per annum to an estimated $11.3 billion of total sales over the five years ending in 2010, the growth is misleading. The increase, says the report, is based on higher prices, but volumes have decreased. The number of locations declined by 2 percent during 2010 to 33,997.

Soda and candy vending machines in schools remained a highly controversial topic during the early 2010s With childhood obesity in the United States at one-third of the population, advocates--including President Barak Obama and U.S. Secretary of Agriculture Tom Vilsack--wanted the vending machines out. "By setting standards for the food that is served and sold in school cafeterias, we can make sure our children have the chance for a healthy start in life," Vilsack told Junior Scholastic. On the other side of the argument, industry and freedom of choice advocates argue that vending machines are unfairly vilified. J. Justin Wilson from the Center For Consumer Freedom makes the argument: "Why ... should soda and candy be singled out from the hundreds of high-calorie and high-fat foods, and banned from schools?"

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News and information about Automatic Merchandise Machine Operators

Business licenses
The Spokesman-Review (Spokane, WA); January 29, 1995; 700+ words
...Express, E4018 12th, automatic merchandise, machine operators. Rusch Enterprise...Lane Park Road, automatic merchandise, machine operators. The Speedy Type...S1519 Berrman, automatic merchandise, machine operators. TPM Services Inc...
BUSINESS LICENSES
The Spokesman-Review (Spokane, WA); October 8, 1995; 700+ words
...4215 E. 26th, automatic merchandise machine operators. Greater Spokane...Waverly, Wash., automatic merchandise machine operators. Scott's Construction...Second Ave., automatic merchandise machine operators. Swell City Advertising...
BUSINESS LICENSES
The Spokesman-Review (Spokane, WA); June 18, 1994; 700+ words
...Vending, E9116 Sprague, automatic merchandise, machine operator. Shae's Friends Preschool...Denver Ct., automatic merchandise, machine operators. Softwise Software...N1724 Glen, automatic merchandise machine operators. All...
Business licenses
The Spokesman-Review (Spokane, WA); February 20, 1995; 700+ words
...Compact Snack, E3224 21st, automatic merchandise, machine operators. Competition Sounds, E1723...Wildrose Court, automatic merchandise, machine operators. Copper...W610 Tieton, automatic merchandise, machine operators. Figueroa...
Research and Markets Report: 2013 U.S. Vending Machine Operators Industry-Industry & Market Report
Entertainment Close-up; May 2, 2013; 525 words
...Vending Machine Operators Industry-Industry...U.S. Vending Machine Operators Industry...industries, including merchandise, food, beverage...cigarette, and candy machines. Barnes Reports...NAICS 45421 Vending Machine Operators This...engaged in retailing ...
Research and Markets Adds 2009 U.S. Vending Machine Operators Industry Report.(Report)
Health & Beauty Close-Up; August 23, 2009; 464 words
...Vending Machine Operators Industry Report...The U.S Vending Machine Operators Industry...industries, including merchandise, food, beverage...cigarette, and candy machines. Industry Definition...NAICS 45421 Vending Machine Operators This...engaged in retailing ...
AP seeks operators' input on food vender
Automatic Merchandiser; February 1, 1994; 427 words
...invitation of Automatic Products international...design a food machine that specifically meets operator needs while...price point operators can afford...first surveyed operators to determine...sales from food machines on location...to design a machine that will meet ...
A vending machine for iPods? American society has given birth to 'Generation P' (for plastic), and paying with plastic is good news for vending-machine operators.(FEATURES)(CURRENTS)
The Christian Science Monitor; January 18, 2007; 700+ words
...Systems, a vending machine seller in San Francisco...ticket kiosks, vending machines - you name it - if...for Mullins. A Zoom machine in the Atlanta airport...neighborhood of $50,000 in merchandise, Mullins says, without...figure. Before vending machines could expand into high...vending, ...

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